Legislative Update Jan. 2015

With the beginning of a new year comes a new General Assembly legislative session. On January 28, I will take my seat in Raleigh to address the issues, some new some old, facing our state.

Education

Education funding and reform will continue to be a priority for the General Assembly in 2015. The implementation of tax reform legislation will yield less revenue to fund text books, teacher salaries, and growth at our flagship university system. A new grading scale will go into effect this year for students, and for our public schools. Additionally, more charters schools, on-line charter schools, and vouchers for private schools have been approved, competing with traditional public schools for much needed funding.   

Privilege Tax

In May of last year, Governor McCrory signed an omnibus tax law that will reduce revenues for cities and towns by a projected $62 million via a repeal of the privilege license tax. The privilege license tax permitted local municipalities to levy a privilege tax on “all trades, occupations, professions, businesses, and franchises physically located within the city.” In reality, the law signed in May is a continuation of an effort made by the legislature in 2013 that would have phased-out the privilege tax in July, 2014. A legislative mistake compelled legislators to amend the original plan, which was contained in the 2013 tax bill, to allow local municipalities to continue to utilize the privilege tax for one more year.

When the 2013 tax bill was signed, Governor McCrory expressed an interest in working with House and Senate leaders to formulate a plan to replace the expected loss in revenues for cities and towns. At the North Carolina League of Municipalities legislative goal-setting conference, held in December 2014, Governor McCrory reiterated his intentions to make local budgets whole. “We're interested in figuring out how to make up that revenue and how to give you more options at the city and county level,” McCrory said during the conference. Time is of the essence because local governments will begin formulating their budgets in February ahead of the June 30 deadline. Thus, local government leaders are keenly interested in the Governor’s promise to remedy the projected loss of revenue.

Medicaid and Mental Health

As the “long-session” approaches, legislators are preparing to reignite the debate on the proper direction for the Medicaid program and we will undoubtedly look to address concerns about the Division of Mental Health.

Medicaid reform has been a top issue for the General Assembly.  The budget passed in the summer of 2014 cut Medicaid’s budget by $135 million but left reforms as a question mark. While the administration has indicated a willingness to consider some form of expansion, House and Senate leaders have expressed no support to reverse the decision not to expand eligibility for an estimated 500,000 North Carolinians.

The salient issues involve how best to reform the Medicaid program to alleviate issues with cost. Recently, Medicaid personnel from DHHS have informed House and Senate leaders that estimates suggest that Medicaid will remain within the projected budget. They attribute the projections to changes made in recipient tracking that have been implemented to better forecast utility and costs.

With Medicaid already the recipient of so many budget cuts, any more could drastically reduce the number of options and care provided to 1.7 million North Carolinians who rely on Medicaid.

Legislators were informed that, once again, the Division of Mental Health will experience a shortfall. Officials have stated that more than $11 million would be needed to resolve the structural deficit, and more money would be needed to make the agency financially stable. According to Dale Armstrong, State Operated Healthcare Facilities Director, there have already been significant cuts and cost saving measures taken. He worries that any further cuts would require the agency to dramatically reduce the types of services they are able to render which would impact thousands of North Carolinians and their families.

Please continue to contact my office to share your concerns on issues or if my office can be of any assistance to you.  Thank you for allowing me to represent you in Raleigh.

 

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