Sales Tax Debate is Needed

Despite the charges of socialism, redistributive economics, or a so-called Republican war on urban and more Democratic counties, the debate over sales tax distribution is actually needed at the General Assembly, and has been for a long time.  

Senator Harry Brown has not only showed courage and tenacity on this issue, but the Jacksonville Republican teed up a policy debate that until now has largely been confined to campaign stump speeches.  

Senator John Edwards and "two North Carolinas" comes to mind, but can anyone think of the presidential hopeful's proposed solutions?  I didn't think so. 

Don't get me wrong:  I'm not convinced Senator Brown's bill, in its current form, is exactly what we need, but I see both sides of the argument.  In fact, I've lived it.

I was born in Kenansville, North Carolina, the county seat in Duplin, about an hour-plus east on interstate 40 from Raleigh, and I still have extended family living there.  You've likely stopped at our rest stop in Warsaw on your way to the beach and spent a little money at a gas station and fast food restaurant.  

When I was a kid growing up there in the 1970s, downtown Kenansville retail was a hardware store, where I got my first Western Flyer bike, the local IGA grocery, and a Tastee Freeze.  For major shopping, most families bypassed downtown and headed up to the Vernon Mall in Kinston, a thriving metropolis if there ever was one, at least in my eyes at the time.   

And we weren't alone.  My parents, along with our hard-working friends and neighbors in Duplin County, one of the poorest counties in our state, took their hard-earned pay checks out of our county on weekends, purchased goods in a more developed county with shopping centers and malls, and left our sales taxes behind to be re-allocated for improved infrastructure, schools, and economy.  The problem is we weren't investing in our county.  

This transfer of sales tax money from counties like Duplin still occurs today and it's the economic development gap that widens with every purchase in an urban county by a rural taxpayer that Senator Brown is trying to fix.    

You can see these gaps in the way smaller counties fund, or struggle to fund, local school systems, infrastructure, public safety, parks and recreation, and even workforce development.  

Today, I live in Wake County, with Starbucks on every corner and shopping centers built everyday it seems.   I understand the negative effect Senator Brown's bill would have on Wake, a county that subsidizes teacher pay at a high rate, competes for top talent, provides a menu of options for our parks and recreation programs (cricket, anyone?), and keeps us safe with police and a professional fire and paramedic department.  

Just last week, I joined a group of Raleigh police officers for a meeting with a city council member and discussed the need for pay raises for the men and women who patrol our streets in the state capital.   The council member was sympathetic, but laid out the budget deficit, $3.3 million, the City of Raleigh would lose if Senator Brown's latest version of his bill passed.   We will have to wait and see, she said.  

Governor Pat McCrory has already promised a veto of Senator Brown's bill in its current form, either as a budget item or a stand alone bill.  The House is backing the governor on this one.  And with budget negotiations going long, it's probably best that such an extraordinary tax policy shift not occur immediately.  

But this issue deserves debate and we need to have the discussion now.  And like many issues we give enough time and attention to at the General Assembly, legislators and stakeholders can come up with a balanced solution for our state, one that invests in our rural areas without burdensome budget deficits for urban areas.  

 

 

  

 

 

Give the General Assembly a Pay Raise

Ok.  That got your attention.  And, yes, I'm serious.

And if you want policies and budgets representative of you, regardless of your political party affiliation, you would be serious about it, too.  

I've been a lobbyist at the General Assembly for nearly 15 years now, and it's common for me to hear from my clients and their constituents that we should slash legislator pay as they lament the fact that the General Assembly is under-represented by younger families, single parents, public school workers, and those who have to work 40 hours per week to make a living.

I give a standard reply in such conversations that usually disappoints:  Cutting legislator pay does nothing to attract the desired representative and senator to our state legislative branch.  Then I drop this idea on them:  The General Assembly should double, triple, even quadruple legislator pay and it needs to happen now.     

Giving legislators in the North Carolina House and Senate a significant and permanent pay raise would be a transformative policy/budget shift that would shift more power and leverage to current legislators of both parties representing everyday citizens while attracting new middle class voices to the chambers.

Currently, rank-and-file members in the House and Senate earn an annual salary of, wait for it now, $13,900.  Legislators are also given a modest $104 per day while the General Assembly is in session to cover their food and lodging costs in Raleigh, not exactly a cheap market to rest your head and get a bite to eat three times a day.

And although it's supposedly a part-time citizen legislature, and many think deserving of part-time pay, serving in the General Assembly is nothing short of full time gig and has been so for as long as I've been a lobbyist in the General Assembly.  

When not in Raleigh, legislators meet with small businesses trying to persuade them not to relocate to other states (I'm looking at you, Georgia), confer with local governments and constituents to learn the needs of a community, and are on call constantly as they serve as a navigator for many citizens in the maze of state government.  Most legislators also use their time away from Raleigh to craft and negotiate bills for current and future sessions with stakeholder groups.   

While a $13,900 salary may seemingly attract selfless community leaders and average citizens, the reality is that paltry legislative salary actually deters many everyday people from being able to serve in the General Assembly while leaving the policy and budget reins in the hands of those who can afford to pay bills on $1200 a month, mainly the wealthy and the retired.  

And for those middle class legislators who do serve, and there are a struggling few in both parties, they often find themselves scraping to make ends meet, keep their jobs back home, and compete for leadership positions in the General Assembly with those who are of endless means and time on their hands.   

Now let me be very clear on this.  I have no problem with the financially successful serving in our General Assembly.  These individuals often bring a business, taxes and job-creation perspective that is needed in our legislative branch.  We also need retirees to serve and benefit from their wisdom and experiences.  But we also need more legislators from both parties who are on the trickle-down side of business, taxes and job-creation plans.  

This isn't about Republicans and Democrats.  Raising legislator pay would benefit both caucuses.  It would attract younger conservatives to serve, who may have young children in the home, and could champion the power of early childhood development in the Republican caucus or the need to invest in higher bus driver pay.  It would attract progressive small business owners who could be a powerful voice within the Democratic caucus on job creation and lower taxes.   

Think about the North Carolinians from both parties you want serving, or retaining, in the General Assembly.   Then think about that pay raise again.  It makes sense.

 

 

 

 

  

 

General Assembly is Right to Go Slow on Budget Talks

It might be good politics for Democrats and partisan interest groups, far right and left, to paint the Republican-led General Assembly as lackadaisical about negotiating a final budget, but good politics doesn't always make good policy, or state budgets for that matter.

And it's not like budget negotiators were ever doing wind-sprints at the General Assembly.   Back in 2009, when Democrats controlled both chambers, hundreds of non-tenured teachers were given pink slips from local school districts because the continuing resolutions failed to protect these positions.  (Most of the teachers were hired back after a final budget was signed by Governor Perdue but only after collecting unemployment for 2 months.)  

While groups beat the political drum, those of us concerned about crafting a politically balanced budget applaud the General Assembly for its deliberate negotiations.   I would even hazard that the very groups complaining -- especially those wanting more balance in our state politics -- are relieved as well.  

Rep. Rick Glazier, a respected Fayetteville Democrat, said as much to the News & Observer last week when he applauded his chamber's approach to negotiations: "The House is showing admirable patience in negotiating and working toward what I hope will be a good deal for the public."  

Senate's Bold Approach Needs a Deliberate House

Despite the broad brush used to describe the General Assembly, the House and Senate have very different approaches to lawmaking.  The House takes a more moderate and deliberate approach while the Senate tends to act more boldly.  

To see this play out, take a look at Senate Majority Leader Harry Brown's tax reform proposal in which rural counties reclaim the tax revenue spent in more urban counties.   The Senate plan is politically bold, it addresses a long-term, often ignored, problem in the way North Carolina funds low wealth counties; but it has negative economic repercussions for the point-of-sale counties.  

Senator Brown, a Jacksonville Republican, concedes his plan has problems and House members know full well our state is really two states:  the haves and have nots.  However, discussions, negotiations and compromise solutions to the disparity problem takes time and balance, and that requires patience in negotiations.  

New Speaker, New Approach

The House did not always live up to its role as a "cooler" in budget negotiations under the leadership of now US Senator Thom Tillis.  Final budget negotiations were hurried, and as a consequence, the back and forth of compromise was often unbalanced.  

Public proclamations from then Speaker Tillis that he would grow a beard unless the Senate capitulated at the budget table did nothing to balance talks but rather reflected his urgent need to adjourn session so he could campaign for the US Senate.  Senate Pro Tem Phil Berger, who was less concerned about Speaker Tillis' political ambitions and more concerned about governing. seemed to enjoy seeing Speaker Tillis scratch his itchy whiskers in the summer heat.  

When former Rules Chairman Tim Moore, a Tillis lieutenant in the back budget room, assumed the Speaker's gavel this session, he made it clear that negotiating the House's position in the budget, not its adjournment date, would be the priority of the House.  

Of course, it means slower negotiations, and even threats of spending Christmas together.   

Some will criticize the process, after all it's not a pretty one and never has been, but I'm willing to bet you a $5 shave that these groups also see the wisdom in balance and deliberation.

 

 

 

 

Governor Expected to Run the Football

They say politics is a full contact sport, and I believe it.   It’s a combination of three-dimensional chess, a game of illusion, and hard-hitting football without pads.

And while actual football season is done until late summer, political football is scheduled to kickoff in earnest with the budget proposal from our first term governor in his second long legislative session.   

Over the last 6 months, Governor Pat McCrory seems to have gotten more settled and acquainted with the game in Raleigh as he has figured that deliberately maneuvering down the field is easier and more productive than the big play.  And while he’s not lighting up the scoreboard with razzle-dazzle end arounds and flea-flickers, he is doing an effective job of running the ball and moving the chains with short passes, a sort of West Coast offense down on Jones Street.  

This was evident when he brokered a deal with the City of Raleigh around the sale of Dorothea Dix, his moderate proposed rules for abortion clinics, and the general capital-improvment outline of his State of the State address delivered earlier this month.  

I predict we'll see similar play-calling in the coming week when Governor McCrory releases his budget proposal to the General Assembly.  While the governor’s budget really has no official legislative role in the budget making process, it does serve as a spending and tax benchmark, or starting point, for legislators to begin their work.  Moderation will likely be that starting point, although some in the public will cheer or jeer because of its moderation.  

I estimate the House will get behind Governor McCrory’s wish list of capital improvements, historic tax credits, raising beginning teacher pay to $35,000, a modest and equitable pay raise for our public employees, and greater investment in building and maintaining roads.   In other words, we’ll likely see a budget that builds modestly on last year’s spending, but not something that will light up the base on either side.  

We are likely to see some philosophical disagreements, especially around tax credits, in the Senate where a growing number of legislators want to go deep on tax reform, an idea that’s been kicked around in one form or another in the General Assembly for decades, even when Democrats were calling the plays.  Tax credits just don't jive with conservatives' end goal to significantly lower taxes across the board while broadening the base of what is taxable.  

Business incentives are also out of fashion with legislators in both chambers and a strong, bipartisan coalition has formed between conservatives and liberals on the idea.  We saw that disdain play out painfully with film tax incentives and we'll likely see it play out with the governor's request for money to recruit industry to the state.  We'll see if Governor McCrory can get a fluke turnover on this one, and this lobbyist would also like to see that turnover include help for an ailing film industry. 

In the meantime, if you enjoy short passes and running the ball through the hash marks, you’ll enjoy the budget game this spring and early summer.  

It may not be as entertaining as the long throw down the seam, but I certainly prefer it.   

And who knows…we might even see short running play turn into something exciting for North Carolina to get behind.  

'Home Alone' at the General Assembly

Monday night’s winter weather put the General Assembly on ice this week as most legislators found themselves back in home districts dealing with icy road conditions, school cancellations, and scraping driveways.  

Out of concern for travel safety, North Carolina House Speaker Tim Moore and President Pro Tem Phil Berger announced a General Assembly shutdown on Tuesday while committee chairs were urged to use caution and discretion on Wednesday.  I predict the entire week is a bust.

 Meanwhile a small group of legislators from outside Raleigh - Rep. Harry Warren, Senator Ralph Hise, Senator Tom Apodaca, Senator Jeff Tarte, Senator Jeff Jackson and others - found themselves in the General Assembly this week after making the trip to Raleigh on Monday.  

With little to do but update social media sites, Senator Jackson, a second year Democratic senator in his first full term, caught Facebook and Twitter lightening in a bottle Tuesday. 

In what could have been remade as Home Alone 6 (yes, there were 5 in the popular franchise), the Mecklenburg senator facetiously suggested he was using the Senate skeleton session Tuesday to bring a handful of bills to the floor for immediate debate and action, including Medicaid expansion, a contentious issue the Senate and House leadership oppose, while Governor Pat McCrory is open to it.  

By the way, there are no reports Governor McCrory contacted his hometown senator with other legisative suggestions, including a ban on puppy mills, a pet bill of the governor’s, and something Jackson took care of yesterday in a 1-0 vote.    

Sure, Senator Jackson’s updates suggested he was the only senator in the chamber — he wasn’t — but most of us understood he was having fun while playing with the idea of getting his legislative agenda through without objections.  

And we had fun as we checked in regularly to read of expanding early childhood education, increasing university funding and more, something we’re sure most legislators, regardless of political party, support if it wasn’t for that pesky requirement that we balance the budget.  

Sure, Senator Jackson conveniently side-stepped the $271 million shortfall in the budget in his lawmaking spree yesterday, but it was entertaining  to imagine bills sailing through the legislative process on a day when no one was around to object or amend or vote no.  

I have my list of bills, I’m sure you have yours, too.  And if you have kids, I bet your lists includes passing a law that kids must return to school immediately. 

Time & Money: Challenges on Jones Street

Recently, our lobbying team met with a client to discuss an idea for a bill.  A gap in state law is leaving financial despair for some families and this employee organization wants to fix the problem.    

In a legislative session in which a quarter-million dollar budget gap is a challenge for all interest groups, our clients correctly pointed out that a non-appropriation bill may be a lighter load than budget ideas. 

Yes, no, and maybe.  

In lobbying the General Assembly, the current deficit is a challenge for all spending bills, however, for policy bills, which is what this organization wants to advance, time is the challenge.  

Let me explain.

If you have legislative business before the General Assembly, chances are  May 6-7 is noted on your calendar with the words BLOCK THESE DAYS.

It’s an important couple days at the General Assembly, one of the most important days, in fact, because legislators, lobbyists, and staffers are working nearly around the clock in order to keep policy bills alive, or drive a dagger through bills unwanted.  

Either way, a bill’s fate is determined by what happens, or doesn't happen, by May 7.  

The date is set by the leaders in both the Senate and House and it serves as the first cut date by which policy bills must pass one chamber in order to survive.  Policy bills sitting in their originating chamber on May 8 are marked ineligible to advance in the biennium and are put on ice for two years barring any legislative maneuvers legislators and lobbyists can finagle, which I will cover in a future NFB.  

Note, this is not a new practice or at all uncommon.  It’s pretty standard for most state legislatures and actually serves a useful purpose in weeding out thousands and thousands of bills filed by legislators while streamlining an agenda and keeping a legislative body focused, mainly on adjournment.  

So how difficult is it to get a bill passed in the General Assembly?  Well, it’s like an act of Congress, really.  

Passage of a chamber usually includes at least one committee hearing before passing two chamber floor votes, called second and third reading.  This gives the bill at least three opportunities to be killed or changed.  If it survives, it advances to the next stage.  

Step 1:  Bill filed 

Step 2:  Bill referred to a committee(s) (First Reading)

Step 3:  Bill advances to a chamber floor for second reading with favorable vote in committee(s) 

Step 4:  Bill voted on for a third reading vote and advances to the other chamber for a similar process if favorable on 3rd Reading.  

It’s important to remember that most bills have opposition at every step of the way, with lobbyists and legislators working for and against the bill.  The four steps above give these detractors an opportunity to vote down the bill or have it amended.  

At the direction of our clients, our team is working with key legislators to fill in the gap in state law that is unfairly and unknowingly hurting working families in North Carolina.  And while the fix doesn’t cost money, the clock is ticking ever so loudly.  

 

Make Checks out to 'State of North Carolina'

As legislators continue to file appropriation bills - expansions on last year's state budget - revenue news continues to be bleak in the halls of the General Assembly.  

Legislators were informed this week that the budget deficit currently sits at $271 million, a 25% higher number than when the 2015-2016 legislative session gaveled in early January.  However, nothing is final with the $21 billion budget revenue picture until April 16 or 17th when the late income tax filers pay tax bills (postmarked by April 15) to the state and all revenue is calculated. 

In the meantime, Governor Pat McCrory is taking a stab at a budget proposal based on current revenue projections and will get it over to the General Assembly, possibly within the month.    The NC House will respond with its proposal sometime in April and then on to the NC Senate, which will likely come in May.

Expect some streamlining, also known as cuts, to balance the budget in all three spending plans in the 1%-3% range, mainly by not filling personnel vacancies.  While $270 million is gobs of money to this writer, it's important to know that it's just a few percentage points in the grand scheme of the state budget.  

The chambers have until June 30 at midnight to reach a final budget compromise or else the state prison doors open because the state shuts down.  Just kidding about the prison doors, but talk about a possible motive to get the budget done.  

Most political observers, myself included, expect the Governor and the NC House to offer similar budgets with pay raises for state employees, including those working in public schools, to be modest yet equitable.  We'll see where the Senate comes out.  

I also expect the Governor to make his mayoral budget mark by addressing buildings and maintenance in his spending plan, something he's often mentioned as a peeve in his public comments.  I get the sense the Governor misses the relatively new Charlotte downtown compared to the aged downtown buildings comprising state government.  

Interest groups and lobbyists continue to file into 8:30AM appropriation committee hearings in the Legislative Office Building - ranging from education, health and human services, justice and public safety and more - and hear revenue projections and spending reports from last year's budget.  

If you have legislation pending before the appropriations committees in the House and Senate this session, our lobbying team encourages you to file those taxes, think twice about taking the deductions, and make your check out to the 'State of North Carolina' today.  

Subscribe Now to the New Frame Briefing

The number of emails, Facebook messages, and texts I received over the last day has been incredible and humbling.  Thank you.  I am so relieved to hear we share an excitement for the New Frame Briefing.

Many of you asked for a mechanism to subscribe to the NFB and here it is.  We just need a name and email address and you'll get a delivery to your email as NFB is published.   

Thanks again for your support and I look forward to seeing your subscription.   Visit http://eepurl.com/bdN1lP to subscribe today.  

Welcome to the New Frame Briefing

For 6 years (2008-2014), I wrote the Daily Political Briefing, a daily e-publication I created, wrote, and distributed for a former employer.  When I left the organization so did the DPB, much to my disappointment, and from what I hear on a regular basis, to many who relied on DPB for news and information.  

DPB had a readership that ran into the thousands each day (Monday-Friday), including legislators, two governors, political reporters, and everyday North Carolinians wishing to stay up-to-speed on the happenings at the General Assembly.  

It wasn't always chocked full of news, sometimes it was a photograph I posted or video or a cartoon, but each and everyday I received feedback from readers who appreciated the time I took in crafting a message, informing of the legislative process, or sharing moments of levity.  

The New Frame Briefing is our attempt at bringing the DPB back to life, although we make no promises at being daily, and the content will be on a variety of issues within the General Assembly.   And as much as it may disappoint a few, it will also be bipartisan in our observations, praises, and criticisms.  

We, mainly me, will jot down our thoughts on happenings in North Carolina politics on a somewhat regular basis, reflect on where our policy debates are going, and hopefully readers will take the time to enjoy this as much as they did past writings.

So here's to old friends, new readers, and trying to catch lightening in a bottle twice.   

PS - Many of you have written about signing-up for the NFB, and we are grateful for the outpouring of support in just the few hours since our announcement.  We will have a link this week allowing you to sign-up.