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Vajda: Eszter Vajda, Host
McCullen: Kelly McCullen, Legislative Week in Review
Henry: Johanna Henry, Legislative Week in Review
Rapp: Rep. Ray Rapp, (D) Madison Co.
Ross: Rep. Deborah Ross, (D) Wake Co.
Bordsen: Rep. Alice Bordsen, (D) Alamance Co.
Carney: Rep. Becky Carney, (D) Mecklenburg Co.
Sherrill: Rep. Wilma Sherrill, (R) Co-Chair, Appropriations Committee
Hoyle: Sen. David Hoyle, (D) Appropriations Committee
Butcher: Veronica Butcher, N.C. Women United
Barber: Rev. William J. Barber, II, Ph.D., President, NC NAACP
Hunt: Sen. Neal Hunt, (R) Wake Co.
Winner: Leslie Winner, UNC V.P. & General Counsel
Allred: Rep. Cary Allred, (R) Alamance Co.
Hackney: Rep. Joe Hackney, (D) Majority Leader
Hall: Bob Hall, Democracy North Carolina
Stam: Rep. Paul Stam, (R) Wake Co.
Goforth: Rep. Bruce Goforth, (D) Buncombe Co.
Pate: Rep. Louis Pate, (R) Wayne Co.
Drennan: Jim Drennan, Faculty Member, UNC-CH School of Government
Avery: Ike Avery, N.C. Attorney General’s Office, Retired
Rudinger: Jennifer Rudinger, Exec. Dir. NC ACLU
Glidewell: Capt. John Glidewell, Asst. Dir. of Field Operations, NCSHP
Kinnaird: Sen. Ellie Kinnaird, (D) Orange Co.
Cheek: Joey Cheek, Olympic Gold Medalist
Rand: Sen. Tony Randy, (D) Majority Leader
Capps: Rep. Russell Capps, (R) Wake Co.
Malone: Sen. Vernon Malone, (D) Wake Co.
Howard: Rep. Julie Howard, (R) Davie Co.
Laviolette: Peter Laviolette, Carolina Hurricanes Head Coach
Owens: Rep. Bill Owens, (D) Co-Chair, House Appropriations
Hagan: Sen. Kay Hagan, (D) Co-Chair, Appropriations Committee
Robertson: Gary Robertson, Associated Press
Bonner: Lynn Bonner, News & Observer
[BEGIN VIDEO CLIPS]
McCullen: The House begins debate on opening local cable television markets to competition. Johanna Henry examines new proposals to strengthen DWI laws. The Senate votes to repeal mandatory kindergarten eye exams. And the Hurricanes storm the legislature, next.
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Vajda: Hello everyone, I’m Eszter Vajda. Thanks so much for joining us.
McCullen: I’m Kelly McCullen. Tonight we examine possible changes to the state’s DWI laws.
Vajda: Plus lobbying reform proposals are debated in committee. Also we will update you on the status of the state’s budget.
McCullen: We begin tonight by following the House debate on cable television deregulation where Thursday’s debate was dominated by Democratic House members. Many were promoting customer choice, others were asking for amendments to protect consumers better. Thursday’s vote on a second reading sets the state for a bipartisan vote as soon as Monday night.
CABLE TELEVISION DEREGULATION DEBATE
McCullen: The House debate on cable television deregulation opened with lawmaker concerns and praises about allowing competition between cable providers and possible choices for cable subscribers. The competition is shaping to be cable companies versus telephone companies itching to offer video services.
Rapp: Well I am going to vote for this bill folks for one reason, because I want to see the phone company at least has the opportunity to provide that service. They are the one utility right now that can provide an alternative to a cable company that we have in our community today.
McCullen: Some House Democratic lawmakers unsuccessfully fought to amend the bill. They want a guarantee that cable competitors would build out their networks and include unserved areas which may not be necessarily profitable and don’t necessarily have cable service today.
Ross: And the fact that we are not willing to put additional consumer protections in here for those who are not served troubles me a lot.
McCullen: Those amendments failed. Other unsuccessful amendments would have set aside 5% of a cable system’s bandwidth for public access channels or other video services deemed for the public good. So as bandwidth grew with technology so would that 5% portion of the set-aside.
Bordsen: It seemed to be almost a knee-jerk process to repel amendments that were thoughtfully done and had good intentions.
McCullen: The lines are drawn between opening North Carolina’s cable television industry and deregulating it but preserving certain aspects of regulation.
Carney: If you believe in fair market-driven, free market-driven economy, if you believe in competition for consumers, I can’t think of a greater industry than whose time has come. We are talking about television.
Bordsen: I think that we are leaving out some consumer protections that would not hurt this bill at all. It makes me sad but I am going to vote against the bill and I would urge those of you who are sort of on the fence to consider doing likewise.
McCullen: The House resumes debate this coming Monday evening. Speaker Black told the floor debate will not be limited.
Vajda: And that brings us to last week’s question of the week: Should cable television be open to competition? We had lots of you log on to our website to take our survey; 92% of you say “yes” while 5% say “no,” and 3% of you are not sure. Thanks to all who participated.
STATE BUDGET
Vajda: House and Senate budget conferees have been meeting day and night this week trying to iron out their differences. The members were appointed by the House speaker and Senate president pro tem to make adjustments to the appropriations bill for fiscal year 2006-07 [Senate 1741]. Some of the sticking points in the nearly $19 billion budget include Medicaid relief for counties, capital spending, tax cuts, and funding education. Members say the process has been smooth and they expect the bill out by the end of the fiscal year, which by the way is next Friday, June 30th.
Sherrill: There is a lot of flags and a lot of—we need to have a lot of discussion. I think which prompts the reason we are going to be here most all weekend trying to make those hard decisions. You know there is so much need out there. And I think that every; both sides are really trying to address those needs in the most equitable, fair manner.
Hoyle: I think the sticking points are just the minimum; they are small amounts here or there. It is nothing huge that I believe will keep us here. But Medicaid maybe is a huge issue. But I think what we are trying to do is do a little help now and look at what we can do down the road.
Vajda: Budget writers say they expect the budget bill to be rolled-out and passed by the end of next week. The governor still has to approve the bill before it goes into law.
McCullen: Over 100 advocates tell lawmakers to remember women’s issues during the ongoing budget negotiations. The group called North Carolina Women United say gains for women have occurred in recent years but work still lies ahead. They are considering these ongoing budget conference committee discussions a prime opportunity to express women’s needs.
Butcher: Because we have so many issues that are so impacting women across the state today we are still fighting for a minimum wage that we have rightfully earned, we are still fighting for stable funding of rape crisis centers. We’ve made great progress in the past year on women’s issues but there is still a lot of work that we have left to do for women and families in North Carolina.
McCullen: North Carolina Women United reports that 51% of our state’s population is female.
Vajda: A coalition of child advocates is demanding that the General Assembly fully fund education for all children in North Carolina. The House budget that passed last week did not include funding for the student supplemental fund but it did allocate money for low-wealth schools and replace discretionary funds. The Senate on the other hand left out low-wealth funding but appropriated money to the other two. The coalition is also asking for special funds for the high schools identified as low-performing under the Leandro court case. Some of the members in the group include El Pueblo, the North Carolina Council of Churches, and the NCNAACP.
Barber: Our Constitution, because illegal in the system, does not guarantee assigned basic education for children. And we are here because the first order of business, the first expenditure of money before anything else is done ought to be dedicated to our children. And the morals of our faith demand that we care for the least of all God’s children.
Vajda: This week the group filed an amicus brief which is a friend of the court calling on the courts to take immediate action and demand that the General Assembly fully fund all sectors of public education in the state.
A provision added to last year’s budget to require mandatory eye exams for kids entering kindergarten is unanimously repealed by Senate members [Senate 1210]. The section was put in last session by Speaker Jim Black who is an optometrist. The speaker said the goal is to catch kids with eye problems early on. The cost of the test is $100. But some eye doctors say that the exam puts an undue burden on parents. Along with the bill to repeal the provision the Senate also cut funds for the program from this year’s budget. The House meanwhile did not. The provision is one of the issues being debated by the budget conferees.
VARIOUS BILLS
McCullen: Wake County Senator Neal Hunt sponsors legislation requiring criminal background checks for all incoming University of North Carolina system students [Senate 2002]. His bill would require state and national criminal background checks for all applicants entering the Fall 2007 semester and thereafter. Each UNC system campus would submit a student’s fingerprints and a consent form allowing a background check.
Hunt: To me it is incredulous that the university would oppose something like this when your children, your sons and daughters, are going to school with the potential of somebody as violent as what we’ve seen at UNC-Wilmington would be their next-door neighbor. Your child has no idea that somebody this violent could be in school with them.
Winner: It is very marginally effective to do a criminal background check on our particular group of applicants. Remember the vast majority of them are in high school when they apply to us, means they are probably 17-years-old, and most of them are not going to have a criminal record that we can find because we can’t access the juvenile records.
McCullen: The cost of the background test could become the applicant’s responsibility. This bill is still moving through Senate committees.
Vajda: There will be no more smoking in the legislative building. The Senate passed a final vote earlier this week [House 1133]. Co-sponsors say the ban is needed to protect visitors from second-hand smoke. The law includes the offices next to the legislative building. Smoking on the floor of the chambers is already illegal. The ban takes effect immediately.
McCullen: The House passed legislation forbidding candidates from shifting campaign funds toward their own personal use [House 1845]. Current state law does allow a candidate to use leftover campaign money for personal purposes but House Bill 1845 would tie contributions solely to business expenses. Leftover campaign money under this bill may be given to political parties, another candidate’s campaign, or offered as a refund to contributors.
Allred: It implies that legislators have been selling their votes so that they can put money in the bank so that at the end of their time they can spend it on their personal preference.
Hackney: When we looked into it we found that most other states have some restriction on this to bring us, and this bill brings us in line with the other states.
McCullen: The Senate gets the bill next.
Vajda: Another campaign reform proposal is still in the works. It is a bill that would set up a pilot program that would give candidates an option to finance campaigns through public funds. Political watchdog Bob Hall says lawmakers need to get to the root of the problem which is money and campaigns, also suggests a pilot program for public financing. It is much like the one being used by some judicial candidates. Under the program candidates receive small contributions and then qualify for public funding.
Hall: If they got a lot of grassroots supporters to give them small donations they could get access to a public fund. That would relieve them from the pressures of the special interest saying you know we’ve got the money, you need the money to run an election and then when it is time for us to ask a favor we will have our foot in the door. That is the system that we have now but a lot of people think of it as a pay-to-play system. These folks don’t like that; they don’t like it to be viewed that way. But they are under tremendous stress to keep their campaigns going and we think there is a better way to do it.
Vajda: This pilot program is one of the many proposals made by the House Select Committee on ethics and governmental reform.
McCullen: Lawmakers continued work on lobbying reform this week. One provision out would ban gifts from lobbyists to lawmakers [House 1849]. It also outlines the definition of a lobbyist. Several amendments were proposed during a House Judiciary Committee meeting but none were acted on.
Hackney: What we are trying to do is strike the proper balance between regulating those who are lobbying and excluding those who are just doing business with the state or who are attorneys having hearings with the state or just regular practice of law.
Stam: There are four or five issues with the bill that we hope to resolve next week. What is a lobbyist? How much do you have to be, how often do you have to be here at the Assembly before we call you a lobbyist? Are lobbyists prohibited from involving themselves in politics? I don’t think they should be but perhaps they should have a more limited role than some of them do now. Those are the issues we will be trying to resolve.
McCullen: One issue still under debate is whether lobbyists should be able to contribute money to a candidate’s campaign. That brings up our question of the week.
QUESTION OF THE WEEK
McCullen: What do you think, should laws concerning lobbyists be more strict? Log onto our website at unctv.org/legweek. We will have a poll and read your responses next week.
Vajda: Legislation to protect military personnel and veterans from ID theft is quickly making its way through the General Assembly [House 2883]. This after a computer containing veterans’ personal information was stolen from an employee of the U.S. Department of Veterans’ Affairs. The mandate would allow veterans to freeze credit information at no charge. The bill includes active and inactive National Guard members, the Armed Forces, and survivors or spouses of veterans.
Goforth: Eight hundred thousand people in North Carolina are either veterans or serving actively so we’ve got a lot of people that could be hurt by the identity theft and so we are here to try to do a precaution on that.
Pate: Sometimes we feel like things creep along very slowly in our legislature but this day we have an example of something that has an afterburner behind it. This bill is very, very important.
Vajda: The legislation would become law immediately and expire on January 1st of next year. The House passed the bill this week and it is now in the Senate.
UPDATED DRINKING AND DRIVING LAWS
McCullen: It has been two-and-a-half years in the making but an update to our state’s drinking and driving laws could be just around the corner.
Vajda: More than a decade ago North Carolina led the way in tightening the net around violators. Other states caught up. Johanna Henry tells us how North Carolina is leading the way again. Johanna?
Henry: Eszter and Kelly, this is a 40-plus page bill overhauling the state’s laws governing drinking and driving. We don’t have time to go over every provision so we picked out a few of the major changes.
This is a DWI citation captured on a highway patrolman’s dashboard camera. What you see here is just one step in the long process that starts with a traffic stop and ends in a conviction or a dismissal. That process is in the midst of a major overhaul.
Drennan: What this does is at every stage of that process it really sort of tinkers with and tightens up those procedures. And that is why you’ve got 40 pages.
Henry: Jim Drennan is a faculty member with the UNC School of Government. He has been following the bill closely through the House and Senate. After any changes become law Drennan will help educate judges, magistrates, and other officials on the changes. But overhauling the state’s DWI laws started long before Drennan got involved.
Avery: Streamline the process and make it simplified so that those people who are actually guilty will in fact be convicted.
Henry: Ike Avery is a retired prosecutor with the State Attorney General’s Office and spent his life trying to keep impaired drivers off the road. He was appointed to Governor Mike Easley’s DWI Task Force. Avery was away on business but spoke to us by phone.
Avery: Everybody on the task force has spent lots of unpaid hours dealing with this issue and trying to come up with the best set of recommendations we could and we think if the General Assembly enacts these that we will take another step towards reducing the carnage caused every year.
Henry: The task force recommendations made their way into a House bill last year. It stayed in committee more than three months. This year the Senate is going over the bill with a fine-tooth comb and they aren’t the only ones keeping a close eye on the legislation.
Rudinger: What we want to be sure is that any legislation that is passed in an attempt to achieve that goal of protecting public safety does not go too far in terms of eroding individual liberties.
Henry: Jennifer Rudinger is the executive director of the North Carolina American Civil Liberties Union. She says they’ve worked with lawmakers on specific provisions and she says for the most part they are happy with changes made to the bill. For example the legislation calls for anyone buying a keg of alcohol to first get a special license or permit, creating a record of the purchase and their identifying information. Privacy isn’t the only reason the ACLU doesn’t want the records made public.
Rudinger: And we also want to be sure with the keg issue that law enforcement is not going on a fishing expedition by showing up at stores, finding out who has kegs and then cruising those neighborhoods and putting those homes under surveillance.
Henry: The North Carolina Academy of Trial Lawyers is also following the legislation closely. They said in a statement, quote, “Criminal defense attorneys do not condone drinking and driving but they do believe those accused of drunk driving have a right to have their cases fairly judged in a court of law. We must protect the legal rights of those accused and ensure that the innocent are not wrongly punished,” end quote.
In another provision the bill streamlines the paperwork for law enforcement agencies setting up road blocks or checkpoints. Rudinger and her staff ask that in addition the bill require officers to submit a written plan for the placement of checkpoints.
Rudinger: So that we the people can be sure for example there isn’t racial profiling or ethnic profiling going on in determining where those road blocks are, when they are set up, and who gets pulled over. So there needs to be again written standards to make sure that we can safeguard these procedures that are put into place.
Henry: The bill also says any law enforcement agency cannot set up repeated checkpoints in close proximity to a bar or restaurant selling alcohol. It might have a negative impact on business.
Moving on to the sentencing part of the process, the proposed legislation requires prosecutors to put in writing exactly why they reduce or dismiss a DWI charge. It doesn’t change their options, just puts everything on the table.
Drennan: If they do decide to dismiss an impaired driving case, they have to go into really significant detail about why they did that so that there is a written record for them or anyone who is interested in what they did to see after that case is over.
Glidewell: There are a lot more teeth in this legislation than the old, so if there is an excellent chance that first-time offenders won’t get off maybe as easily as they have in the past because of attorneys finding loopholes and those kinds of things.
Henry: Captain John Glidewell is the assistant director of field operations with the North Carolina Highway Patrol. He was also on the Governor’s DWI Task Force and worked to get wording in the bill to make it clear that even a blood alcohol level at the legal limit of .08 is against the law.
Glidewell: And if you meet the elements it is frustrating when you go to court then the case is dismissed. But that is the judge’s discretion. That is the law as it is and we work around that or through that.
Henry: So in addition to establishing a permit for buying a keg, streamlining the paperwork to set up a roadblock, requiring prosecutors to document why a DWI offense is reduced, reinforcing the at-or-above the legal limit part of the law, the bill also calls on judges to get training about the finer points of DWI law and it sets up three new felony offenses.
Finally the bill outlines a special provision for first offenders under 21. If the driver meets certain criteria, they can work with prosecutors and avoid a conviction. I spoke by phone with a father whose son was killed by a drunk driver. This driver had been arrested for drinking and driving before but never convicted. The father says these changes are a step in the right direction. Back to you.
Vajda: Thanks Johanna. This bill is being discussed in the Senate Judiciary Committee. Members say they are taking their time to make sure it is done right.
North Carolina amateur wine makers could soon see an industry ripen for them. The Senate is debating a House bill creating winemaking on premises permit [House 1025]. The permit would allow businesses to help customers make wine for personal consumption. Customers would buy the ingredients, rent the equipment, and make their wine inside the store. The business would not be able to make its own wine and customers must take their wine home when it is ready. The proposed winemaking on premises permit would cost $400.
McCullen: Proposed legislation could raise the payout limit of North Carolina’s Victim Compensation Fund [House 2060]. A House Judiciary Committee favorably endorses raising a $3,500 maximum cap up to $5,000. This payout would cover a victim’s funeral, cremation or burial. This money is released only after other payouts like insurance or Medicaid are exhausted.
Kinnaird: Some of the funeral homes demand the money upfront and this has meant that a lot of people are really suffering from this and so it is just increasing that amount which is not a great deal of change but will make a great deal of change to the victims’ families.
McCullen: In the greater scope of this bill it would limit victims’ compensation payouts to a survivor if a victim does not fully cooperate with law enforcement investigators.
Vajda: Registered sex offenders could face felony charges for living too close to schools under a bill being considered by state lawmakers [House 1896]. Sex offenders who knowingly live within 1,000 feet of a school, daycare center or public swimming pool could also face charges. The bill requires sex offenders to register in person at the County Sheriff’s office. The Senate takes up the measure next.
McCullen: Star-studded appearances make for an exciting week at the General Assembly. Olympic gold medalist Joey Cheek visited both chambers; he is a Greensboro native who won the gold medal in the Olympic 500-meter speed skating race. He took silver in the 1,000-meter speed skating race.
Cheek: I haven’t been to the state capitol really since I was in the 7th grade doing, you know, North Carolina history. So for me to now be someone who is honored on the floor and be able to have a chance to speak on some of the causes I believe in, it is a huge honor and I am a lucky kid.
McCullen: Cheek also spoke about a charity he has been promoting to help war-ravaged Udaipur. He donated his entire Olympic winnings to a group called Right to Play.
Vajda: Also the legislature honored the Carolina Hurricanes for their Stanley Cup victory. It is the first major league professional title ever brought to North Carolina. Supporters lined downtown streets, the capitol grounds were jammed and North Carolina leaders say the Tarheel State is officially hockey country.
Rand: Winning the Stanley Cup of course is the absolute pinnacle in the hockey world and the fact that it is in North Carolina I am sure gives us all more pride than we know how to express. Thank you so much.
Capps: I observed one of the most meaningful moments as the cameras closed in observed the players shaking hands, hugging the other players, congratulating each other in a very sportsmanlike manner. I commend you for it.
Malone: There were those who said it couldn’t happen and wouldn’t happen but Coach Laviolette and those fine gentlemen who sit before us proved all of them to be wrong.
Howard: And it is with great pride and with much thanksgiving that we the people of North Carolina express our sincere appreciation for all of your hard years of dedicated work to become who you are and we are so delighted and thankful that you are part of North Carolina.
Laviolette: It is a pleasure being here. Thank you for today, the proclamation, and honoring the Carolina Hurricanes, the 2006 Stanley Cup champions. Thank you very much.
Vajda: And congratulations to them. By the way Carolina finished its regular season with 52 wins.
McCullen: House and Senate budget writers expect to work straight through the weekend on the compromised appropriations bill. Eszter speaks with two co-chairs on what the final bill may look like.
APPROPRIATIONS BILL
Vajda: Representative Bill Owens, Senator Kay Hagan, thanks so much for being here after a very busy week. Let’s start talking about the education differences between the two budgets first. The House restored the discretionary funds for the schools and also funded the low-wealth schools. Meanwhile the Senate put money into the Disadvantaged Students Supplemental Fund and also discretionary but not to low-wealth schools. Where do negotiations stand?
Owens: Well I think it is fair to say that both sides want all three things we did. It is just a matter of having enough money to do them. The school systems, the discretionary cuts were their number one priority. And the other two issues were very important to both of us. And right now we are trying to negotiate and see that we can adequately fund both of the other two issues.
Vajda: Will all three be funded?
Hagan: In some manner yes. We have worked together to fully fund the discretionary cuts back to the counties and that is about $40 some odd million which they will now have to spend. And the DSSF funds, we are working on that one very, very closely as well as the low-wealth.
Vajda: Medicaid, the House gave relief to counties for Medicaid, the Senate did not. Is there a middle road in this?
Hagan: We have now made an offer to the House to do about $20 million in Medicaid relief and we are negotiating that right now. We, that is one of the county’s main priorities and we really need to help those counties that are hit so hard. You look at a county like Scotland, they pay over $100 per recipient versus somebody like in Wake County; the county here pays $33. So there is a huge discrepancy. And the state really needs to come to the aid to help those counties that have a lot of medical, Medicaid-eligible in their counties.
Vajda: Where does the House stand on this?
Owens: Well we are, this is really an important issue for me being a former county commissioner. And it is so important to counties across the state that we freeze them at the current level of spending on Medicaid and in the House budget it was $18 million to do that. We are now told it will take $27.4 million to do it. We also had $35 million of relief to the very poorest counties with high poverty rates that are really impacted so we will do all we can. We appreciate the Senate’s step forward. We would just like to get them to step a little further.
Vajda: All right, let’s move—
Hagan: We are coming to terms on that one.
Vajda: Still up for debate, then, the Medicaid?
Hagan: We are still working on that.
Vajda: Let’s move on to the tax cuts. Both have ruled back the sales tax but there is some discrepancy in terms of the upper-income earners taxes. The House went a little bit less than the Senate. Where do negotiations stand?
Owens: Well I’d say that the way some of our finance folks talked to us about it, if you gave one-eighth of a percent on the higher income it was the same as giving a quarter percent because it impacts the whole year when you file your tax return. Whereas a sales tax relief is just for half-a-year.
Hagan: These taxes both came on at the same time and we strongly feel that when one gets cut the other gets cut at a like amount. The Senate’s tax package reduction was about $225 million in tax cuts to the public. The income tax really affects about 30,000 small businesses throughout North Carolina and it is so important that we help provide relief to the small businesses.
Vajda: Republicans say both these taxes were implemented in 2001 during tough economic times but times are better now in North Carolina. Why not roll back all the way?
Owens: Because we have a lot of important things we need to fund such as full funding of our rainy day, our savings account of $323 million, paying back the retirement system $90 million, the Highway Trust Fund, paying back $195 million to that, setting up $20 million in emergency funds in case we have storms or other emergencies that come up. There is a lot of money in this budget that is either in savings or payback of responsibilities that we had to borrow money when we didn’t have any and now we have to be responsible and pay it back.
Hagan: I agree totally. We are investing in the infrastructure to set our state on the right foot going forward.
Vajda: Now special provisions, the House stripped the budget bill of all special provisions. What stays and what goes during negotiations?
Hagan: What we are doing right now is if it is—we are talking about that back and forth. If a special provision follows the money in the budget then it obviously needs to be spelled out and some of the other provisions such as the minimum wage provision, we both agree that it needs to be done. It is whether it is in a stand-alone bill or it gets put into the budget.
Vajda: And talk about stand-alone bills, will we expect some bonds coming out next week to help fund some of those provisions?
Owens: Well we certainly hope so. I am one of the primary sponsors on the water and sewer bonds. And it is very important. We have run out of other bond proceeds that we had a number of years ago. Without water and sewer we can’t progress and we are one of the fastest growing states in the nation. We’ve got to have water and sewer for our people. Likewise plan for tomorrow, the bond issue and things like housing trust, all of these things need to be considered and finance teams are looking at those. Hopefully we will do it—there is some discussion about how much we are able to borrow and still maintain a Triple A rating and we don’t want to jeopardize that but likewise we don’t want to not be a progressive state and go forward.
Hagan: It is very important to maintain that Triple A bond rating because that allows us to borrow at a cheaper amount so that we can ultimately borrow more money and spend less on interest payments for it. But we are also looking at Certificate of Participation bonds whereby we need to build things like the hospital at Central Prison. We need to build a Public Health Lab. Areas like that that once again are very important to the citizens and at some point in time it is going to have to be done. The question is what year is this going to take place?
Vajda: Now Republicans also say some of them that did not vote for this budget, the budget overspends and does not pay, does not save in the rainy day fund. What can you assure, or how can you assure some of the Republicans or people who did not vote for the budget that you spent—
Owens: Well the other day like I just pointed out all of the savings and all of the paybacks we have in this, I mean we’ve both got over $200 million apiece in renovations and repairs. That is being responsible, trying to maintain our buildings that we have. We finally are able to give our employees and teachers an adequate salary increase; we haven’t been able to do that in recent years because of lack of funds and it was almost $700 million in salary increases in the budgets. And it is certainly well-deserved.
Vajda: What are some of the other highlights?
Hagan: Education is the key. In order for North Carolina to grow and prosper we’ve got to have a good workforce, well-educated. Our teachers are the keys to that. This budget gives them an 8% raise as well as community college and then our university professors are at 6%. Our state employees are getting a 5% raise and you’ve got to go back and look at in the past some years they got zero. And we are playing catch-up. When you think of $700 million for a total salary package that is a huge number. But it is once again well-spent money. And we are saving, we are saving in our reserve account and our rainy day fund so that when the next hurricane comes we will now have somewhere around $650 million in our reserve account to help towards an effort like that.
Vajda: The governor had a different budget version, not much different but how does he play into the negotiations?
Owens: Well his staff and his people are constant, as far as being in touch with us, letting us know the governor’s feelings and we certainly respect his feelings but we have members from across the state and people across the state, it is sometimes different opinions so we have to add those and get the pros and cons and then make a decision of what’s best.
Hagan: I think from the governor’s perspective by getting the lottery in place that has helped towards education. We are looking at anywhere from $400 to $425 million of new money that will be going into education and I think the governor has done an incredible job going across the state talking about the lottery. And then there are other areas where it will really help by reducing class sizes, by helping more of the young kids get into the More-at-Four programs. And another area that he is very interested in is what is called literacy coaches and these are specialists that will help in the middle schools from a reading perspective. If you look at where North Carolina performed in math in the eighth grade, fourth and eighth grade, we are at the top tier. If you look at reading I think we are like 39th in the nation. So he is really trying to concentrate on how to help our students from a reading perspective. And there is a big push at these reading coaches. And this was in the Senate’s budget.
Vajda: What are some of the other sticking points?
Hagan: Some of the other sticking points?
Vajda: Sounds like there aren’t that many.
Hagan: Salaries.
Owens: Money.
Hagan: Yeah, salaries, we always need more money and we also are obviously trying to save and give tax cuts.
Owens: Well I have, you know, didn’t the senator mention all the good things about the lottery? She didn’t mention $170 million going into school construction to help have our own taxes stay down across the state. It is a very important point that the locals are not having to pay that $170 million that will go into the lottery this year. I’d just like to say this, I am proud of what the governor and the Senate and the House have done this year. I think the governor got his budget out right on time, the Senate turned it around in a couple of weeks, we turned it around back to them in a couple of weeks, and we hope to negotiate this thing out in just two or three weeks. That is as fast as I have ever seen in my adult lifetime.
Hagan: Me too.
Vajda: What—
Hagan: June 30th is our fiscal year-end. And our counties are counting on us so they will know what we are paying our teachers so they’ll know what they need to be putting in their budgets, which they’ve already done. But we have a commitment to our citizens to have that budget done by the fiscal year-end. I think one of the sticking points we really haven’t spent a lot of time negotiating on yet is the capital budget, what of the buildings across the state will we actually be building and investing in.
Vajda: What do you foresee as some of the priorities?
Hagan: Well what the Senate did, we actually constructed the buildings. We did an engineering school at N.C. State, several facilities at Chapel Hill and other places around the state whereas in the House budget it was a lot towards the university from a planning perspective which then would be built in the years to come. So we are working on those things and we will be working around the clock.
Owens: And I believe we are probably both right, some of these projects need to be done right away but likewise we need to spread the wealth around the state with the university system and not concentrate it all right here in Raleigh and Chapel Hill.
Hagan: I agree with that.
Owens: We’ve got two flagship universities and we’ve got to protect those but we do have a lot of other good universities and community colleges and other public facilities across the state that have got to be protected at the same time.
Vajda: What led to the quick crafting this year of this session of this budget?
Hagan: The Senate was in charge of getting the budget out first. We take turns on a biennium and it was our turn this time. We knew from the standpoint that if we wanted to meet a June 30th deadline we had “X” amount of—two weeks, three weeks—to get it done so that the House would have a sufficient amount of time also to get their bill out so then we could get together in the place where we are right now called conferencing to finish the differences between the two budgets. And it just takes time and in the short session when we came in I believe May the 9th, May the 9th to June 30th is not a lot of time. In years past we have been here through October getting the budget out like that. And as a legislator I don’t think that is responsible to our citizens.
Owens: Well we have developed a calendar and timetable together and we’ve stuck right to it so far and we just hope that next week we will do the same. And we are working hard, I think it is fair to say day and night, trying to get this budget conferenced out and I sure hope we will be able to do it.
Hagan: One part on that is that we have opened the doors. The press comes in, lobbyists come in, advocates come in, John Q. Public can come in, and we invite that. This is a very open process so you can see exactly what it is we are negotiating about and what we talk about.
Vajda: Can we expect the first budget bill by Monday, Monday night? Tuesday next week?
Hagan: Maybe Wednesday.
Owens: Wednesday.
Hagan: Wednesday is our target.
Vajda: All right. Representative Owens, Senator Kay Hagan thanks so much for stopping by at this busy time.
McCullen: As a matter of full disclosure, 45% of UNC-TV’s budget comes from the General Assembly.
Vajda: For more analysis Kelly sits down with two members of the Capitol Press Corps.
ANALYSIS SEGMENT
McCullen: Joining us tonight is Lynn Bonner with the News and Observer and Gary Robertson with the Associated Press. Miss Bonner it has been a big week. There are lots of issues out there. I guess the one that no one is talking about yet we all know is going on is the House budget and the Senate budget negotiations. What is the status this week?
Bonner: Well they are still working hard at the chairs, the people who put the budget together are negotiating trying to resolve their differences, hoping to get a budget finalized or start finalizing it early next week.
McCullen: From what you are hearing Gary, how are things looking? Are they talking positively as far as getting this thing done?
Robertson: They were talking positively, particularly earlier this week when the subcommittees were meeting and hashing out some differences that were usually, you know, the easy differences, you know split the difference in terms of money or stuff like that. But now we are getting into the more difficult parts where some significant issues related to Medicaid, related to mental health, related to education money is delaying some things, just a lot of hard work and they are trying to find a place where they can both be happy with.
McCullen: Do you see these issues being more delays or just straight roadblocks or do you think these will be easily overcome?
Robertson: I don’t know if easily is the right word I would put in there but I would think, I think they could get it done by Tuesday it is just a matter of, for instance on the Medicaid issue, Medicaid relief, how important is it for the Senate to find a long-term solution for the counties so that they won’t have to continue to provide their share of the Medicaid expenses for example. And on the salaries there is that issue. It appears to be just an issue right now of whether or not to give rank-and-file state employees a $300 bonus or not.
McCullen: So it doesn’t seem like big sticking points. What they are saying publicly seems to be holding up behind closed doors, Lynn?
Bonner: Yes, I think they are close to resolving some of the bigger education issues, low-wealth schools and funding for disadvantaged students. So for some of the bigger items I think they are getting close.
Robertson: You know talking about behind closed doors, Lynn was talking about this week they said that they were going to open up some of the subcommittee meetings and they indeed did that and also what we call around here the big chairs in which the top budget writers are meeting around the table and discussing the issues. Usually those are not public meetings. They haven’t been in the years but in this year of transparency apparently for House Speaker Jim Black and Senator Marc Basnight they have opened that process up. But there are limits to that at least according to the budget negotiators. Some of the meetings, what they call strategy sessions in which the separate chambers’ budget writers are meeting privately, will remain private.
Bonner: So it is really a year of opaqueness.
Robertson: Or translucency, right.
McCullen: As experienced journalists down here I mean really even by opening these meetings up how much do you learn from the process and what they are doing as opposed to being behind closed doors, Lynn?
Bonner: Well it was interesting to me to see how the process actually works. I mean there is a huge amount of information that staff has to have on hand and just to see the, what it takes to get the whole thing together. I mean it is a complicated process and just opening up a little bit of that shows what actually, or some of the things that actually happen. Actually one staff member said to me that when the public enters the room he, the quality of the questions change. But I don’t know how much day-to-day news comes out of it but it is interesting what is going on.
Robertson: And there are certainly a feeling there that the details of those arguments generally are being held back and what you will often hear is just a legislator’s, when they are unhappy about a particular provision will just say, “Flag it,” meaning let’s talk about it later. And we assume it is probably behind closed doors.
McCullen: And you said Tuesday, maybe Tuesday we could see a compromise? I put you on the spot.
Robertson: They are shooting for Tuesday and I know that they intend, at least right now as of this taping they intend to work part of the weekend and I assume Monday so they seem to be optimistic about finishing by June 30 so that the second year of the budget would be adjusted on time.
McCullen: Another big bill out there, two bills, actually cable deregulation. Lynn what exactly does this do? Here are, I mean simplify it?
Bonner: Well what it means is, and what the telephone companies want, is to be able to go into cities and counties, places where they would have to negotiate contracts with the local governments to go in, apply for a state license rather than negotiate all of these local agreements, and start to provide people with television service. It means that for some areas at least, and perhaps within a year from now, there might be some neighborhoods that would have more options than the cable TV service or satellite dishes or antennas.
McCullen: Are there, we hear the debate on the floor and it is theoretical—it is also a lot of rules and regulations—but are there any guarantees that come along with deregulation? Are we guaranteed lower prices? Are we guaranteed more competition, Gary, from cable TV and video services?
Robertson: I don’t think there are many guarantees. What the supporters will say is that we need to have a market that is, that encourages the competition so that a Bell South or Embark which is the old local Sprint phone company, would come in and want to participate because they can make a profit. Some people would say thought that the very fact that there aren’t regulations to protect consumers, for instance to make sure that rural and isolated areas also get this type of service, may not lead to better prices. It may actually increase prices. So it is an interesting dichotomy on the floor where you see some people say this is going to benefit the consumer tremendously and others who say it may not benefit them at all; it may make it worse.
Bonner: Yeah you hear a lot about cherry picking and the idea that the telephone companies want to come in and go to certain areas where they can sell lots of bundled services or they can sell broadband and TV and telephone all at once and in those places there will be competition they say. But in rural areas where you know it might not pay to go out and offer services then those people won’t see competition and they might see their prices go up. So that is the argument.
McCullen: Now I’ve read your article about deregulation and some, a lot of this was pushed by telephone companies. What makes them loom so large as a competitor?
Bonner: Well it is, it has a lot to do with who is offering now and what technology has allowed. There are no longer these strict guidelines between telephone and TV and Internet; everybody wants to do everything eventually so that is what is driving this. And telephone sees, well, we want television; we can, there is technology now to offer it and let’s deregulate, let’s make it easier for us to get in.
Robertson: And they just have a huge infrastructure already, the Bell South and Sprint from the old days where they are a monopoly phone service that they are just large companies and they are losing revenue to cell phone services and cable and they just see this as a way to basically recoup some lost revenue. So it is—I know that there are many lobbyists that are supporting this and many of them who are opposed to it.
McCullen: Based on the debate you’ve heard on the House floor and in some of the Senate committees, who are potential winners and losers as they are being labeled by the supporters and the opponents of this bill?
Bonner: Potential winners? The telephone companies. Potential losers? Well the cities would say that they might be losers and there are a lot of people who are saying that the consumers are going to be losers. The cities apparently—it has been worked out that the cities would not lose any money that they gain now from franchise fees. They would be distributed statewide but there is also a question about whether there is enough support for what people call the PAC channels, the public access stations, whether as we said whether some rural areas and poor people are going to lose out to wealthier customers to the preferred customers. So there are a lot of issues.
Robertson: One potential loser is a misnomer here but Attorney General Roy Cooper’s office is going to be asked now to take on the complaints of all of these cable TV, or video programming customers who normally otherwise would go to their local government and complain. And the problem is that Cooper’s office hasn’t been given additional money to handle those complaints so maybe down the road they will get some additional money but at least when it starts out they are, you know their consumer protection division may be stretched.
Bonner: He does make one point though is that not many states have this yet. And so there is sort of a question about what will happen if this law is passed. I mean I don’t think there is a state that has shown a really sustained track record so we don’t know.
McCullen: If the state endorses this and passes legislation and it is signed, what do they hope will happen in so many bullet points if they deregulate cable TV as it regards consumers?
Bonner: What the promoters would say is that it will open up to not just the big Bell South’s of the world but other entrepreneurs will want to come in and offer all kinds of telephone services, that it will be you know, Bell South and all of these other entrepreneurs. You know who knows?
McCullen: I saw some floor debate on Thursday with some House members and granted we looked; it was mostly, pretty much all Democrats discussing this I guess with different philosophies on the political spectrum. What kind of set-asides or guarantees did some of these folks want included in this bill that were defeated?
Robertson: Well one of the things that they wanted was what is commonly referred to as “bill out” where when a company would get a statewide franchise to, you know, say we are going to go into this community, one amendment I believe by Representative Jennifer Weiss would have said, “Now in a certain period of time you would have to agree to have 65% of that particular area covered or at least offer that type of service.” And the opponents to that amendment—and it was soundly defeated—were that these types of, these provisions would be obstacles to competition and in the long-term people, you know, we would still have our cable TV monopolies just like we have right now.
Bonner: They would also strengthen the anti-discrimination laws or provisions there. And the argument was that we have the language there but a company could say, “Well I didn’t go to this neighborhood because it, you know, I wouldn’t make a profit” essentially. So the omen is well is that really an anti-discrimination provision if you can say, you can weasel out so easily?
McCullen: Well you saw Representative Wainwright take to the floor as the point man and defend all of these, either the amendment, I think one passed but other ones that did not. Does that say something about the strength of how this bill is written, of what leadership, how they want it to pass the House?
Robertson: Well I think it may reflect just the fact that the traditional phone companies were so strongly behind this and they have done their homework and they have worked through this. And there is also a sense that the interim committee that looked at this spent months and months on it and I think its supporters feel like this is the best product they can provide, that they think provides a balance between consumers and the industry. But of course obviously a lot of people disagree.
Bonner: It is interesting too that the NAACP was critical of the bill yet Wainwright was the person who was defending it most strongly and I think all of the African-American House members voted for it. Am I right about that?
McCullen: That’s right.
Bonner: It had a pretty strong backing so I think that sort of sent a message, too.
McCullen: And of course the Senate is passing its own version of the bill or working it through its system. We will see a conference committee probably on this; I think that is safe to assume but we don’t, of course you don’t ever know.
Mental health reform, Lynn, you’ve written about this. What is the latest on that?
Bonner: Well there is a lot of mental health reform that is part of the budget and some of it is still in contention but I think some of that is being worked through. There is big money in the Senate capital budget for two new psychiatric hospitals, one in the east one in the west, money that the House did not have. The Senator in particular from the east says that a new hospital was needed out there. There is going to be a new hospital in the central region, why shouldn’t patients in his area have the same opportunity to go to a modern hospital? But the House is wondering about borrowing hundreds of millions of dollars when there really hadn’t been very much discussion and there are no real solid plans for building those hospitals. But this wasn’t something that was discussed last year, it really did come up this year and was, hadn’t been debated all that much.
Robertson: Well it was interesting; hadn’t been brought up last year. Of course there had been a lot of discussion about closing Dorothea Dix but it seems like to me that Senator Basnight took a visit of both the Morganton and Goldsboro mental hospitals in the spring, actually earlier in the year, and he was struck by just how aged they were and crowded and did not have modern conveniences so I think he has really made this a priority, at least for his side of the budget. And again the House hasn’t really, you know, it kind of came out of nowhere for them and so I think they are raising a lot of flack.
McCullen: And this will be something worked out during this conference committee with the expectation of a budget early next week. Eye exams, the Senate unanimously voted to repeal Gary. What does a unanimous vote, what kind of political statement does that make?
Robertson: Well I guess some people could look at this and say here they go again, the Senate is taking it to House Speaker Jim Black. We know that they went hard on him on video poker earlier this session and this is something that Speaker Black really feels strongly about that we need to have comprehensive eye exams for kindergartners. So the bill, the idea of the repeal is already in the Senate budget and it is part of the negotiations but I think there is a sense now that the House is standing firm to not wanting to make that an issue within the budget. So I think they had a stand-alone bill to repeal the eye exam, they decided to pass this week to keep it into play and either come up with some compromise with the House about how it should be run or to, maybe the Senate will want to stand firm and repeal it altogether.
Bonner: it is interesting if the requirement is not repealed what will happen afterward and whether any compromise they will come up with will satisfy school board associations or local school boards because there is still this pending lawsuit out there brought by the school board that claims that the requirement is unconstitutional. So even after this legislature adjourns, depending on what happens the story might not be over.
Robertson: And if they don’t resolve it I guess the legal battle is—I guess it is said that they needed to have a resolution by July 2007. But really they need it this year because January 2007 is when the next session will be and that will be within that, you know, will be right close to that six-month window where children will have to get those comprehensive eye exams. So pretty much seems to me it needs to be resolved now or there is going to be litigation.
McCullen; Is there any way we could know what this compromise could look like? It appears you are either for it or against the mandatory eye exams.
Bonner: I don’t know what a compromise could look like and talking to some of the school board people, they aren’t sure either. And neither are some of the House members so if there is a compromise it will be interesting to read.
McCullen: It is always good to have you on Legislative Week in Review. We have shot through numerous topics. We will be looking for this House budget coming out next week. There is little question we will all be quite busy but thank you so much for joining us here tonight.
Vajda: If you have any questions or comments call us at (919) 549-7830 or e-mail us at legweek at unctv.org. We love to hear from you. That is going to do it for our show. Thanks so much for watching, everyone. I am Eszter Vajda.
McCullen: I am Kelly McCullen. Have a great weekend and goodbye.
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