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Legislative Update - June 12, 2009

House Budget Proposal Moves Forward

The House is currently working on the budget and expects to have one passed Saturday morning. The House proposal includes nearly $800 million in new taxes and fees along with $1.3 billion in stimulus money to help bridge the nearly $4.5 billion budget shortfall.

Proposed House Increases

Income tax on earners making more than $200,000
$257 million
Combined Reporting
$18.5 million
Sales Tax on Warranties, Installations, Repairs
$176 million
Sales Tax on Courier Services
$25 million
Sales Tax on Digital Products
$13 million
Sales Tax on Amusements/Movies
$24 million
Franchise Tax on LLCs
$59 million
Modify Corporate Income Tax Formula
$6 million
Change Bank Interest Deduction
$2.6 million
Increase Liquor Tax by 1.5%
$8 million
Increase Sales Tax by .25 cents
$195 million

The House’s tax proposal differs from the plan currently being worked on in the Senate by Senator Daniel Clodfelter. The Senate proposal would expand what items can be taxed, but at the same time would lower the income and sales tax rates.

While the increase in taxes in the House budget does not restore funding for all job cuts, it helps avoid almost 2,600 teacher layoffs in kindergarten through third grade.

Restored Education Funding

2,590 K-3 Teacher Jobs
$139 million
600 University System Jobs and 1,300 Course Offerings
$75 million
350 School Counserlo and Social Work Jobs

$19.4 million

350 Principal, Assistant Principal Jobs
$17.6 million
At-Risk Students
$70 million
Low Wealth Counties
$4.8 million
Tuition Waivers for Public Safety Personnel, Senior Citizens
$16.3 million
Community College Jobs
$10 million
Flexibility for Local Education Agencies
$2.9 million

Restored Health and Human Services Funding

Smart Start
$20 million
Medicare Provider Rates
$65.8 million
In-Home Personal Care Services
$34 million
Medicaid Physical, Occupational, and Speech Therapy
$15.6 million
Adult Optical Services and Supplies
$3.2 million
Adult Dental Coverage
$15.9 million
Dental Services (Medicaid)
$3.7 million
Prthotics and Prosthetics (Medicaid)
$2.3 million
Eliminate Emergency Room co-payment
$2.9 million
Greater Medicaid Case Management
$23.4 million
Eliminate Enrollment Fee for Medicaid Providers
$1.5 million
Child Care Subsidies
$4 million

We are hope to have a budget sent to Governor Perdue before the start of the new fiscal years, which begins July 1.

Texting While Driving

The Senate this week passed House Bill 9, banning texting or emailing while driving. The popularity of text messages among young drivers and the prevalence of “smart phones” with email capacity have created potentially deadly driver distractions. An April 2008 study by Nationwide Insurance found that 73% of drivers admit using a cell phone while driving and 20% of drivers admit to texting while driving.

A 2007 study by Clemson University found that drivers who are texting or are distracted by MP3 players are 10% more likely to leave their lanes then drivers who are not. 80% of all car crashes and 65% of near-collisions occurred when the driver was distracted, primarily by the use of cell phones or other electronic devices, according to a 2008 study by Virginia Tech Transportation Safety Institute.

In passing this legislation, North Carolina is joining a growing list of states that have already outlawed texting while driving. Thirteen states plus the District of Columbia either have a ban in place or a ban will go into affect by the end of 2009.

House Bill 9 now heads to the Governor to sign before it will go into law.

Drug Paraphernalia

We also passed House Bill 722, which strengthen drug paraphernalia laws. Convenience stores throughout our state have been selling harmless-looking little roses and pens in glass tubes, which can then be turned into pipes to smoke crack or methamphetamine. Under this bill, these “tube roses” must be placed behind the counter.

The legislation also moves “splitters” behind the counter as well. Splitters are small plastic tubes in which a cigar is inserted and a small blade inside the tube slices the cigar lengthwise so that the tobacco can be removed and replaced with marijuana.

Under this bill, retailers must keep a record of individuals who purchase tube roses or splitters. This bill passed the Senate unanimously.

Emergency Management and Disaster Mitigation

We also approved a wide range of Emergency Management and Disaster Mitigation legislation this week. These are all pieces of legislation that was developed between the Division of Emergency Management and the Joint Legislative Study Committee on Emergency Management and Disaster Recovery, of which I am a member.

These bills will help North Carolina, the second most hurricane prone state, be better prepared for and deal with emergencies and disasters when they arise. It is all part of a wide modernization of the State’s emergency management capabilities.

House Bill 377 – Authorize Emergency Management Certification Program. This bill creates an emergency management certification program to help train local authorities to better prepare them to deal with emergencies and disasters.

House Bill 379—Allows Mutual Aid Between State and Local Government. The Governor of North Carolina already has the authority to establish mutual aid agreements between North Carolina, other states, and the Federal Government. This bill allows the Governor to establish similar agreements between the State and local governments. The agreements allow for the exchange of supplies, equipment, personnel among other items in the event of an emergency.

House Bill 380—Strengthen Local Emergency Management Capabilities. This bill allows counties and municipalities to create joint emergency management agencies between the counties and municipalities, or between two or more counties.

House Bill 381—Expand Division of Emergency Management Authority. This establishes the Division of Emergency Management as the lead agency for the coordination of information and resources in the event of an emergency or natural disaster.

It is important that we improve the State’s capabilities to act in the event of emergencies or natural disasters, especially now as we enter into the start of Hurricane Season.

Well Testing

Earlier this week, the Senate voted for confer with the House version of Senate Bill 141, Limit Well Water Testing for Volatile Organic Compounds (VOC’s). VOC’s are chemical compounds found in landfill leachates, leaks for underground storage tanks and some naturally occur in soil. While VOC’s are hazardous to our health, it is not necessary to test every newly constructed well for their presence. Under this legislation, new wells will only need to be tested for VOC’s only if the local health department finds the need to do so pursuant to the rules created by the Commission for Public Health.

The bill now heads to the Governor to be signed into law.

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