Tall order for a short session

Basnight, Hackney to speak at County Assembly Day; budget deficit concerns county officials

By Kevin Leonard
Director of Government Relations

Two of the most influential legislators in the state will address attendees at the NCACC's annual County Assembly Day, which will be held May 19 in Raleigh.

Marc Basnight

Joe Hackney

County officials will hear from Speaker of the House Joe Hackney (Orange County) and Senate President Pro Tem Marc Basnight (Dare). Both legislators were ranked No. 1 in their respective chambers in the biannual effectiveness rankings of all state legislators compiled by the N.C. Center of Public Policy Research.

In addition to the remarks from Rep. Hackney and Sen. Basnight, Association staff will provide perspectives on the upcoming short session, highlighting several issues – including e-911 funds, secondary road funding and ABC (Alcoholic Beverage Control) system changes – that could be in play for counties this session.

In addition, all members of the General Assembly have been invited to the annual reception, which will be held following County Assembly Day activities at the N.C. Museum of History.

By attending County Assembly Day, elected officials earn three credits toward recognition for their commitment to lifelong learning through the LELA (Local Elected Leaders Academy) Recognition Program. Through LELA, the NCACC and School of Government have established for individual county commissioners a three-level recognition program, which will help the Association achieve one of its strategic goals, "strengthen county leadership and board development." Learn more at www.ncacc.org/lela.html.

For registration information, visit www.ncacc.org/countyassemblyday.html.

Issues impacting counties could include ABC reform, e-911 funding

The General Assembly will convene for its 2010 short session at noon on May 12. The feeling in the halls of the Legislative Building is that the session will be short, but perhaps not very sweet. State lawmakers will convene with the main objective of making adjustments to the second year of the biennial budget, which means they will be looking for ways to plug a significant revenue gap.

Legislators will also address other policy issues, but there is a limited scope of eligible legislation. At the end of the long session, the House and Senate adopted rules that govern which legislation can be introduced or considered during the short session. As a general rule, all appropriations, finance, pension and retirement, local legislation, and bills that passed at least one chamber the previous year are eligible for consideration. Issues that are considered controversial are traditionally not addressed by the General Assembly during the short session, although the definition of "controversial" sometimes varies depending on the leadership of each chamber.

A significant backdrop to the upcoming session is the number of resignations and announced retirements of current legislators. A notable change this session will be the absence of Sen. Tony Rand (Cumberland), the former Senate Majority Leader and Rules Chairman. For more than a decade, Sen. Rand helped guide legislation and the development of the state budget in the Senate.

In addition to these changes, Election Day looms on the horizon. Speculation abounds in the halls of the General Assembly that many members prefer to have a true "short session" so that they can return to their districts and constituents prior to the fall election. Almost every incumbent who is running for re-election this fall faces competition – a drastic change from previous years in which as many as half of the seats in the General Assembly featured only one candidate.

A main focus will be the budget and the fiscal environment facing the state. While it appears that the revenue shortfall for the 2009-10 fiscal year will fall in the $500 million to $700 million range, the required spending reversions set in place early this fiscal year should address a revenue gap of that size. However, revenue declines this year will require a lowering of the revenue base for next year, and it is likely that the revenue growth rate undergirding the 2010-11 budget will also be reduced. Fiscal analysts are predicting at least a $500 million shortfall, with some speculating that it may reach the $1 billion mark given the lackluster revenue collections.

It is generally accepted that there will not be an appetite for increasing or creating new taxes to raise revenues during the session, especially after the state increased the sales tax by 1 percent last summer and put a surcharge on personal and corporate income taxes. Discussion is likely to be centered on budget cuts, and legislative leaders are expected to deal with any shortfalls by making reductions.

While budget negotiations will take center stage during the short session, the Legislature will take up a limited amount of other important public policy matters. Some of these issues will directly impact our legislative goals. Specific issues counties are watching include:

ABC system reform: The Joint Study Committee on Alcoholic Beverage Control is currently hearing testimony regarding ABC ethics reform as well as privatization of the ABC system. The committee is expected to make recommendations to the House and Senate for changes to the system, and there is a high expectation that the General Assembly will take action.

E-911 funding: The House Select Committee on 911 Funding is expected to make recommendations to the House regarding 911 funding flexibility and the makeup of the 911 Board. The Association has been working with a group of stakeholders – including the 911 Board, the N.C. League of Municipalities, and representatives of the telecommunications industry – to work toward a position that will accomplish our legislative goals to increase flexibility and increase local representation on the 911 Board.

Annexation: At this time the status of annexation legislation is unclear. During the 2009 long session, H524 (Annexation – Omnibus Changes) passed the House and was delivered to the Senate, but technically was never received by the Senate and was not assigned to a Senate committee. The Association supports the current version of H524 because it includes many provisions that support our legislative goal. Those items include increasing the density standards for urbanizing areas, requiring the provision of water and sewer services in the annexed area within three years, establishing June 30 following the adoption of an annexation ordinance as the effective date, requiring the development of joint utility services plans, and establishing a procedure for a referendum if at least 15 percent of the total of the registered voters of the municipality and proposed annexation area sign a petition.

Water and wastewater infrastructure: The Water and Wastewater Infrastructure Study Committee has been meeting consistently since the General Assembly adjourned in August 2009. It seems that the group is currently focusing on possible funding models that would create a dedicated revenue stream for water and wastewater infrastructure projects. We anticipate a recommendation to be forwarded by this committee to the House and Senate.

State budget: As always when there is a revenue shortfall at the state level, the state budget is a concern to county officials. History indicates that the Legislature has often viewed local government funds as a reserve bank account for the state. The adopted state budget has already taken the county share of the corporate income tax – known as the ADM Fund – for 2010-11. The Association will work closely with state budget officials and legislators to make sure that no further damage is done to county budgets as the state works to revise its 2010-11 budget.

As always, there will be issues that arise during the session that are unanticipated. The Association's Government Relations Team will monitor these issues and report any concerns to the membership through our Legislative Bulletin, e-mail legislative alerts and our Web site, www.ncacc.org. Also look to the NCACC's Twitter site, twitter.com/ncacc, for notifications about issues of importance to counties when those issues are scheduled for legislative meetings.