UNC-TV ONLINE
 
Legislative Week in Review
 
Transcripts Archives August 23, 2002
 
Scene at the General Assembly
 
 

Participants

Lindstrom: Coming up, the House starts debating an economic stimulus package.

Owens: I really wish we were not in the incentive game. I wish we didn't have to have that, but unfortunately you have to do it to stay competitive. You have to do that in business and you have to do that in government.

Lindstrom: Also tonight, the pros and cons of a video poker ban and an update on the debate over the Qur'án. That's next on Legislative Week in Review.

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Voiceover: This program was made possible by contributions to UNC-TV from viewers like you. Thank you.

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Crowley: Good evening and welcome to Legislative Week in Review. I'm Tim Crowley.

Lindstrom: And I'm Rebecca Lindstrom; thanks for joining us. This week lawmakers battled over a business incentives package. The measure is designed to create new jobs for North Carolina.

Crowley: Also tonight, a House committee renders a verdict on judicial campaign reforms, the governor speaks out about the state's credit rating downgrade, and lawmakers make a push for an alert system for kidnapped children.

Lindstrom: Plus tonight, the latest on a debate surrounding the Qur'án, and we put video poker In Focus, but first, creating jobs for North Carolinians.

Crowley: This week state lawmakers considered a business incentives package designed to stimulate the economy and bring new jobs to North Carolina. The same measure stalled in a committee last week after some stiff opposition. Backers say the incentives are needed to spur a staggering-an economic climate, but critics call the plan corporate welfare.

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M: The House resolves.

M: The Senate concurring..

Crowley: The House tentatively approved an incentive bill this week that would help North Carolina lure businesses to the state by paying cash grants.

Owens: I really wish we were not in the incentive game. I wish we didn't have to have that, but unfortunately you have to do it to stay competitive. You have to do that in business and you have to do that in government.

Crowley: Under the plan endorsed by the governor and top legislative leaders, the grants would be tied to the amount of income taxes generated by a company's new employees. Companies could receive 75% of income taxes paid by employees for up to 12 years. That's less than the original bill, which would have been 80% or 15 years. Only 25 companies could get a grant in a given year; however, there are no dollar caps, which critics are concerned about.

Pope: But all of you voted for a budget that had cuts in education, cuts in the health care. Are you going to turn around and vote to give blank checks to corporations through this grant program 12 years into the future? I hope not.

Crowley: One change some lawmakers are trying to push is a $250 million cap for the grants.

Nesbitt: If we are going to create a program on a week's notice, after we had to pass a budget that couldn't meet the needs of this state, and we had to use one-time money, and we lost our bond rating, I think a quarter of a billion dollars is enough.

Owens: The only problem is, if you gave $20 million to somebody like a BMW or a Mercedes or what, you'd be out of business from day one. You wouldn't be able to give any more grants under this program whatsoever.

Starnes: Our state is in a fiscal crisis. We don't have plenty of money to give away. Now yes, we want to do whatever we can to encourage business and industry to come to North Carolina because our people need the jobs. But there's still-this bill still comes with a price tag and no one can tell us what it's going to cost.

McMahan: And I think it's very important that we consider some type of program to try to reboost the economy for the next few years, and that's what this is really about-an opportunity to try to go out and find some new employers in the state of North Carolina to provide new jobs. We know that new jobs mean salaries and salaries mean a lot of money to a lot of different entities in North Carolina.

Crowley: There was no vote taken on this amendment before the Speaker called for a Second Reading vote. It will be debated again on Monday. Nesbitt tried to make a similar change in committee this week but it failed by one vote. One change that did pass in committee was changing the size of the group that would make the grants. Originally it was three appointees of the governor, but the community colleges president and Secretary of Labor were added.

Sherrill: As I said before, I believe that the community college system needs to be at the table. I think the Secretary of Labor, who knows our labor laws both state and nationally, needs a seat at the table, and I believe that when you think about who those five people are, I think they're all responsible. They're very interested in seeing North Carolina flourish and grow.

Crowley: Another amendment that sparked some heated debate was requiring a company receiving a grant to get certified in one of the state's workplace safety programs.

Goodwin: We all want good jobs; we want great paying jobs and particularly in our area. We need them statewide. But by goodness, we shouldn't sacrifice workplace safety for the job when we can do both. I think this is what this is about is that, if we're going to bring jobs here by offering state incentives from our taxpayers, we don't want to have the blood of these people who might get injured on the hands of all the taxpayers.

Arnold: We're trying to get industry to come in to some urban areas. Now this program is a wonderful program. They're going to do it anyway. But once you start tying these types of things to a agreement that makes it null and void if they don't do it, then you run the risk of running people out before you can even bring them into the state.

Crowley: The amendment failed in committee. One concern from critics is that the program does nothing for small businesses and businesses already in the state. Two business groups are on opposite sides of the bill over the issue.

Morgan: It is much more expensive to do business here and to live here in North Carolina than it is in South Carolina, Virginia and our neighboring states. Clearly, businesses who are looking at the long-term will find North Carolina to be unattractive indeed, and that's why we've become non-competitive.

Kirk: Passage of this bill would be a tremendous boost to small business, no matter what you've heard. When a community lands a big or mid-sized industry or business, every business benefits-car dealerships, real estate agents, retail merchants, restaurants, daycare centers, gasoline stations, convenience stores, and the list goes on.

Crowley: When the incentives package reached the House floor late this week, only one other possible change received a vote, and it was over "potty parity."

Saunders: One issue would require that if a company receives one of the grants that they would have what is commonly called "potty parity:" that they would provide the same facilities for women as they do for men in the bathroom area to be able to get in, do their business and get out as quickly as men can.

Arnold: Representative, are you serious with this amendment?

Saunders: I'm serious as a heart attack.

Arnold: This is inane and ridiculous. This is micro management at its absolute worst. We've already learned our lesson when we micromanaged education. Let's stay out of the toilets. Vote no.

Crowley: The amendment went down the drain because it didn't get a majority of the votes.

Crowley: The House still needs to take a final vote on the incentives package. House leaders say that could happen Monday when they will take up more amendments.

Lindstrom: The debate on the Job Creation Bill is where we get our Quote of the Week. South Carolina was brought up several times this week as competition for this state. That prompted a call from South Carolina's governor to House Speaker Jim Black:

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"He asked me to ask you to vote against this bill if you would. He also wants you to vote against the lottery." House Speaker Jim Black

Crowley: For more on the debate surrounding the incentives program, Rebecca Lindstrom sits down to talk with the bill's sponsor and one of his opponents. They are this week's Newsmakers.

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Lindstrom: Representative Bill Owens and Representative Art Pope, thanks so much for being with us. Certainly quite a bit of discussion this week on what has been called the North Carolina Economic Stimulus and Job Creation Act. This is something that you sponsored, Representative Owens. Tell us a little bit about how you see this bill, if it does pass through, actually creating jobs for North Carolina.

Owens: Well first of all, I'd like to say that I don't believe any of us, on both sides of the issue, like incentives. We love to compete on an equal basis and not have to deal with this. Unfortunately, 18 other states across the nation have this form of incentive, and we feel that we have not been competitive. A lot of jobs are being lost to other states, especially some of our neighboring states. So right now, we're the third largest unemployed state in the nation, and that's not something to be proud of. We're paying over a billion dollars a year for unemployment. Just like in business, you have to spend money to make money. In this case, we have to spend money to put people back to work rather than pay them to stay off work. So we feel that this is the tool that the State Economic Development Board, along with the Department of Commerce, studied the issue. We've reduced the Bill Lee Act credits by about $35 million over a five-year period of time. So we've made some adjustments there and we realize that this costs something, but the one criterion is that these jobs would not be in North Carolina without this grant. That is one of the criteria for getting this grant.

Lindstrom: So in a nutshell though, how do you see this grant program working?

Owens: Well, this grant program would, as some consultants have told me, put us back in the game. They eliminate us from the get-go because we do not offer as many incentives as other states. It used to be livability and schools and a lot of other things. The bottom line to the stockholders, unfortunately, is the main thing when you choose a new site selection. So with this tool, we can be more competitive with other states.

Lindstrom: Representative Pope, I know you wouldn't disagree that we've lot a lot of jobs in this state. Certainly, trying to find ways to get some of those jobs here is something everyone wants to work toward, but yet you still have some concerns with this approach to doing it. Why?

Pope: I have major concerns on many fronts. First and foremost, yes, we would like to create jobs. One of the reasons North Carolina jobs are being lost is because North Carolina has a very high tax burden on its families and on its businesses. Comparisons were made to South Carolina. South Carolina has a corporate income tax rate of only 5%. North Carolina is 6.9%; our taxes are 38% higher than South Carolina. So yes, when everything is equal-which sometimes happens, not often-a company will choose a lower tax state. What we need is to lower the tax burden on all employers. One of the major problems with this bill is that it only benefits, or claims to benefit new employers. Whether all the small businesses across North Carolina, all the businesses have been paying taxes and paying employees good salaries for decades or years, they get no benefit from this. It's the new kid on the block who may be coming to North Carolina any way who gets corporate subsidies-it's corporate welfare for the existing North Carolina taxpayers. That's what's wrong with this bill. The third thing, for the first time in the history of our state, we're authorizing a five-member committee in the executive branch to obligate future citizen taxpayers to pay millions of dollars in benefits and grants to corporations. Right now, the state cannot even obligate the citizens to pay a $250 bond issue for public schools without a referendum of the people. Under this bill, this five-member committee can obligate the state to pay $250 million or more over 10 or 12 years to private corporations-no accountability. It's irresponsibility, it's shirking its duty and that's just wrong.

Lindstrom: Representative Owens, you may have several comments to those statements, but I also want you to specifically address why is this program not extending to existing businesses?

Owens: Well, right now the Bill Lee Act, which is our major economic tool to recruit and expand industry, as well as new industry-85% of that money over the years has gone to existing business here in North Carolina. We need to continue to do all we can for the people who got us here. I agree with Representative Pope, corporate income tax, personal income tax are things we need to address. First year, Representative Lyons Gray and myself did the Bill Lee Act-we reduced corporate income tax, we reduced personal income tax and we need to do more of that. Unfortunately, with our economic times, we don't have the money to do that right now, and that's the long-term fix. The short-term fix is this. It was studied, we looked at the ten most prosperous states, what they're doing, how they're being successful, and tried to pick the thing that gets the most bang for the buck at the least cost, and this is what we found.

Lindstrom: And because of our economic times, I know that that has been the reason why some lawmakers have suggested putting a cap on how far this program can extend. That was something on the House floor that you showed some support for. How do you think this helps the program?

Pope: Well, the cap not so much helps the program as it helps the citizens of North Carolina. We have three busted budgets in a row. Moody's just downgraded North Carolina's bond rating, citing the fact that we have a structural deficit-operating deficit-in our budget. We already know that next year's budget, while it balances on paper, uses non-recurring money on recurring expenditures. Under this bill, this five-member committee would essentially say, "Here's the check for the North Carolina taxpayers to pay. We may not have enough money to fully fund education or fully fund health care, but we entered a contract to give $10 million to the Acme Corporation. Well, if that is not capped, it could be an obligation with $250 or $500 million over the future years, and that will further endanger our bond rating. It will further endanger the burden put on North Carolina taxpayers to meet that obligation. So that's why we think a cap is reasonable, and if, by chance, there is a great company or great program that would call for $250 million, then with the General Assembly convened, we can act on that and approve it with the voters' elected officials rather than this five-member committee doing this.

Lindstrom: Concerns about a cap?

Owens: Well, we have a cap-only 25 businesses a year can receive this. Now if you have someone like BMW-which South Carolina gave $130 million to come there with a $4.1 billion economic impact and a net-a net-amount of taxes going to the state coffers after all expenses of almost $28 million a year. You spend the money, you make the money, you get a lot more money in than you give out. It's kind of like giving a rebate, and that's exactly what we're doing-giving a rebate as so many people do. So it's-it's just that we've got to meet the competition head on. North Carolina has always been competitive. We've lost our competitive edge.

Lindstrom: Representative Owens, Representative Pope mentioned the five-member committee and the power that this would give them potentially. Any concerns about that-letting five people decide what to do with such large amounts of money?

Owens: Well, he said they were all executive branch. That's incorrect. Two of the members-one of them is the president of the community college system and the other is the elected member-Secretary of the Department of Labor..

Pope: They're both members of the executive branch.

Owens: But once again, they are elected by-one by the Community College Board and one by the people of North Carolina. The-right now, most of the grant money is being giving away by one person-Secretary of the Department of Commerce-so this expands it quite a bit. You need to have people who are close and can make quick decisions and be here in Raleigh, and also have a financial interest in the budget, such as the Budget Director, Secretary of Revenue-those are two of the people on the committee as well.

Lindstrom: Representative Pope, we have just a few more moments, but we talk about jobs-people can embrace that. We start talking about the numbers and some of the ways with which we want to implement this program, and I think a lot of people kind of lose the perspective of what we're trying to do. As this debate continues, what is the one thing that you would want people at home to really understand about your concerns relating to this bill?

Pope: My concern is that their hard earned tax dollars are being used for corporate welfare, going to businesses and corporations who would have been coming to North Carolina anyway. There is the requirement and hope that but for this grant, they wouldn't come to North Carolina. All the independent studies show that the business leaders make their decision on where best to find a qualified workforce, good education and quality of life. The rate incentives and grants are at the bottom of the list. Will they take advantage of it? Yes. When you go to your grocery store, if you have a coupon for a rebate, will you take advantage of it? Yes, but does that mean that you're not going to go to the grocery store? We need across the board tax relief in order to have prosperity for all North Carolina families, all North Carolina businesses-not tax subsidies, not tax handouts to a few big corporations with good lobbyists to pass this bill and then get the grants handed out to them by this five-member committee.

Lindstrom: Representative Owens, your closing remarks?

Owens: Closing remarks that these big businesses locate here-anywhere from one to six small jobs are developed around these businesses. We need to do those types of things. One of the things that we talked about earlier was, you know, that we're having difficulties financially and we are because we're not willing to-like the sales tax has been proposed, then a lottery-letting the people vote on a lottery to bring in the needed revenue so we don't lose the Triple-A Bond Rating. But the bottom line on this is we're not using the taxpayer's money to fund this grant. The business that comes in here-you take a portion of the withholding tax from the employee of that new company that wouldn't have been here and you give them a portion of that money back. The important thing-part of that money, if it's a Tier 4 and 5 county goes back to infrastructure grants to the Tiers 1, 2, and 3 counties that so desperately need water, sewer and other infrastructure needs. It's the only way they're going to be successful in economic development.

Lindstrom: Well, this passed Second Reading in the House this week. We know that it's going to be coming back up for discussion on Monday, possibly several amendments that we will be hearing some discussion from, so we know that there's a lot more to be said on this issue. We thank you both so much though for coming on and sharing your opinions with us.

Pope: Thank you.

Owens: Thank you.

Crowley: So tell us your opinion on the issue. Do you believe the state should use taxpayer money to attract new jobs and businesses to North Carolina? You can cast your vote on our website at www.unctv.org. You can also call record your response by calling 919-549-7830 or at legweek@unctv.org.

Crowley: We're covering all branches of government in this week's Journal. The executive branch weighs in this week on the downgrade of the state's credit rating, and the legislative branch focuses on the judicial branch this week.

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Crowley: A Judicial Campaign Reform Bill that included a public financing component was debated over two days this week in the House Finance Committee. The bill would create public financing for State Supreme Court and Court of Appeals candidates if they agree to spending limits. It would also change the elections to nonpartisan. The system would be funded through a voluntary tax check off and attorney's fees.

Morgan: But it's time that I think that we do something about money in judicial elections.

Culpepper: What this bill is doing here is drawing a line between judicial elections, which are different than the political partisan races that we are running. We are saying they should be different and they are different. They are held to different standards in their campaigning and things of that nature.

Crowley: The issue was a partisan one in committee. Republicans made attempts to get rid of the nonpartisan provision in the bill.

Blust: We want the public to be able to elect the candidates they want at the ballot box based on good, sound information. Now that having been said, as unknown as most of these candidates are for the appellate court and for the Supreme Court, the only information that most voters have about these candidates is what their political party is.

Crowley: No vote was ever taken on this amendment in committee. The other criticism centered on the tax check off. Republicans contend that Democrats are pushing a new way to do the tax check off to gain more money for the program than other check offs have received.

C. Wilson: I know all of us in here work with polls and I think that's probably one of the best polls we've seen on what public support is for using their tax dollars for political campaigns. When you only have 8% of the people who make a decision that, yes, I want just $1 dollar-I mean, we're not talking about big bucks here-they're saying, "I want $1 of my taxpayer money going into these funds." I can understand why the proponents of the bill want to have what's called a "reverse check off," which is a sneaky way of making sure they get a heck of a lot more money than they've got right now with a legitimate check off.

Crowley: The bill passed the finance committee on a party line vote. It now moves to the House floor. One judicial issue that had made it to the House floor was sent back to committee earlier this month. The issue is also highly partisan. It would let voters decide to change the constitution to allow District Court judges to have eight-year terms instead of four-year term. Proponents say that could attract more qualified candidates to the bench.

Rader: Someone who has been in practice for a while, or been in the DA's office for a while and is now a felony prosecutor, who is making good money, they are not as willing to do it for a four-year term as they would be for an eight.

Crowley: Currently Superior and appellate court judges have eight-year terms.

Sutton: I view it as a degree of fairness. If Superior Court judges get the eight-year term, I think it is only fair that the District Court judges have it.

Crowley: Republicans contend the bill will help judges already on the bench and the majority of District Court judges right now are Democrats.

Arnold: The incumbent, particularly in a judges race, has a distinct advantage. You win elections by name, approvability, and name recognition. As you're going to get someone to run for a race against someone who has been in office eight years, that's almost insurmountable.

Crowley: The committee didn't vote on the measure. The issue could be in trouble since it would require a three-fifths vote in the House instead of a majority since it changes the constitution. And this week, the state's coveted Triple-A bond rating was reduced by Moody's Investor's Service. A letter from Moody's says that downgrade reflects the state's continued budget pressure, its reliance on one-time money instead of recurring dollars, and the state's weakened balance sheet. The rating agency wrote that a state lottery could help the structural balance of the state budget. That caused Governor Easley to renew his call for lawmakers to approve a state lottery.

Easley: You can't hold anybody at gunpoint to make them vote. We can explain it to them and let them see that failure to act will hurt their state. The failure to act will be a responsible failure to act and will result in this state sliding backwards and losing so much progress that we have gained over the years, and that this is indeed a critical year.

Crowley: The governor also says the state's credit downgrade could lead to downgrades for local governments and could reduce the pace at which the state issues more than $3 billion in bonds for university and community college construction and water and sewer infrastructure.

Crowley: House leaders say they're working on the budget and an economic stimulus package before dealing with a lottery. Lottery backers say they're still several votes short of the number needed for passage.

Lindstrom: This week freshmen at UNC-Chapel Hill completed a controversial summer reading program. But some say the issue is far from over. In a unanimous vote on Thursday, a UNC Board of Governors committee passed a resolution reaffirming its support for academic freedom and university leaders say they're trying to help legislators try to understand their position. Tonight Shannon Vickery takes a look at the debate and what led to this week's vote.

Voices: C-A-R-O-L-I-N-A..

Vickery: New students were greeted with cheers last week when they arrived at UNC-Chapel Hill for a special orientation called "Freshman Camp." As these students got familiar with life on campus, their new home was under the glare of the national spotlight.

M: Down at the University of North Carolina at Chapel Hill they're trying to raise Islam awareness by requiring all 3500 incoming freshmen to read a book called Approaching the Qur'án: the Early Revelations.

Vickery: CNN's program is just one example of the extensive coverage the summer reading program has garnered over the past couple of weeks. Chancellor James Moeser says he isn't surprised by the reaction to the book, but that he was caught off guard by the direction the debate has taken.

Moeser: We knew there was an element of controversy, obviously. These are highly charged times, but surprised by some of the vitriol and some of the really kind of violently hateful responses we've gotten.

Vickery: The debate has even made its way into the state budget, where the House of Representatives approved a special provision in the spending plan which prohibits state funds from being used for the summer reading program unless it includes all religions. Moeser says this move crossed over an important line between the lawmakers' responsibility for appropriating money without dictating curriculum.

Moeser: In point of fact, it's-we're talking about a few thousand dollars. We have 180 discussion group leaders that are volunteering their time. This is not about money. This is about a principle.

Vickery: Religion professor Carl Ernst recommended Michael Sells' book for the summer reading program. He says the aim of the program is to introduce students to the types of material they'll be reading in their classes.

Ernst: We want to let people know that the university is not a trade school where you just go in to get a few technical pieces of information so you can get your first job, but we want to impart a liberal education which is designed to educate people for a complex society and world.

Vickery: But not everyone agrees with the university's position. Representative Larry Justus sponsored the special provision regarding the summer reading program in the House's version of the budget.

Justus: It just seems to me that teaching this particular subject at this time in history was insensitive to those people who lost their people-their loved ones at the World Trade Center, in the Pentagon, on the aircraft and certainly to our people in uniform.

Vickery: But not all lawmakers agree with the special provision.

Lee: I'm deeply concerned because I think it injects the Legislature too deeply into academic decisions at the university. I think it's imperative that we as a state protect our universities and ensure that they have academic freedom to educate our students and our leaders for tomorrow.

Vickery: Senator Lee says the special provision will be scrutinized by the Budget Conference Committee and probably will not make it into the final version of the budget. And while that may end this part of the debate, the question of academic freedom has surfaced outside the General Assembly-this time with the university's own Board of Governors. On Friday, August 9th, the governing board held its monthly meeting, and Ray Farris of Charlotte entered a resolution to reaffirm the board's commitment to academic freedom.

Farris: Resolved that the Board of Governors support students, faculties and administrations of its 16 campuses and their commitment to freedom-religious, academic, and political-to their fair exchange of ideas, to their examining different cultures and conflicting values of all kinds, always in the light of day and with the confidence that thoughtful study and intellectual inquiry are fundamental for this university and the goal of this board.

Vickery: According to university documents, this resolution largely mirrors the Board of Governors Policy on Academic Freedom; however, Board Chairman Brad Wilson says the resolution failed to garner the number of votes needed for passage because the way it was brought to the board violated the organization's policy.

B. Wilson: That is, it did not come to the floor, if you will, through a committee, and as a result thereof our rules require that a two-thirds standard be met in order for the resolution to be adopted. So I want to stress the resolution proper had a vast majority of board members supporting it, but it did, in fact, fail by one vote to meet that higher standard by virtue of the way it was brought before the Board of Governors.

Vickery: Former UNC President William Friday says the Board of Governors must act quickly to reaffirm its commitment to academic freedom.

Friday: Historically, this university has been the advocate of academic freedom all of its life. We've had many arguments about it-the teaching of evolution, the Speaker Ban Law, athletics-we've been all over the map. And in every instance the basic fundamental point is that people can come teach or speak here in a responsible way and be accountable for what they say and have the freedom to do it. About every generation I've learned, studying the history of the university, that you have to go through a process like this to really define what you really are. But the public of this state created this place to do that for them.

Vickery: And that is what's really at the heart of this debate according to Chancellor Moeser: the question of what role the university plays in exploring the world. That's why he says a book about the Qur'án was chosen in the first place.

Lindstrom: The full Board of Governors is expected to take a vote on the resolution when it meets in September. There's no word yet on whether the House's special provision relating to the issue will make it into the final budget report.

Crowley: Speaking of the budget, the Conference Committee chairs reportedly met twice this week to look at differences between the House and Senate spending plans, but it appears there has been little progress in reaching any compromise in the $14 billion spending plan. As a result, the Senate remained in recess this week.

Lindstrom: Dealing with a deadly school outburst is not part of the job description for most educators, but that's just what they learned while gearing up for the new school year. More than 600 public schools reportedly assembled critical incident response kits which include architectural layouts and evacuation routes at the schools as well as emergency contact information. Teachers and administrators also watched a video demonstrating what they should do in case of a school shooting. More schools are scheduled for training this fall.

Crowley: Schools could also take on more responsibility for the care of students with diabetes. The legislation sparked days of debate in the House but after a few changes, it seemed to sail through a Senate committee. Here are the key differences. The House bill wanted each school to work with parents and health care providers to created individualized care plans for its diabetic students. The Senate's version pushes for more general guidelines to be created by the State Board of Education. The Senate also eliminates any funding for the program in hopes of getting the bill passed in this tight budget year.

Lindstrom: Preventing high school dropouts and improving the state's educational system: this week the House passed out of committee a bill designed to do just that. It encourages school systems to put their best teachers in middle school grades, rewards those able to reduce dropout rates, and looks to community colleges for help in increasing technical training opportunities. The bill also mandates teacher training reading methods, and if that weren't enough, the legislation also clarifies the State Board's power to take control of low-performing schools.

Arnold: You got the whole world in this bill. Why are you putting all these things in one piece of legislation instead of separate bills?

Lindstrom: Supporters of the legislation say it's a combination between recommendations made by the Education Oversight Committee and reaction to the Leandro decision which orders the state to ensure all children receive quality education.

Crowley: A program to help find kidnapped children could get a legislative boost. The House unanimously passed a joint resolution allowing it to consider a bill to expand the state's child alert notification system. Because of the rules regarding the types of bills that can be introduced during the session, the resolution is needed to pave the way for discussion. The House did approve a special provision giving the Justice Department $125,000 to expand the alert system, but some want to strengthen the program further by making it part of state law.

Lindstrom: It appears the West Nile Virus has spread in North Carolina. Surveillance teams have been testing dead birds and mosquitoes throughout the state and say the virus has now been found in 12 counties, including two new ones: Wake and Durham. The Public Health Department says so far, no humans have been affected in the state and encourages everyone to take basic precautions.

Cline: The message is that the best thing to do is prevention-to try to keep our people-keep the breeding places for mosquitoes at a minimum in your communities, and to wear long sleeves and use insecticide, repellant-insect repellant-when you're outside.

Lindstrom: You might also remember earlier this week the Public Health Department announced a visitor to the state had been treated and released after reporting symptoms of the West Nile Virus. Public health officials maintain he did not become infected in North Carolina.

Crowley: Earlier this session the Senate voted to ban video poker machines from North Carolina. Now the topic is in the House where lawmakers, business owners, and sheriff's departments are jumping into the debate. Bruce Snyder reports.

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Snyder: Video poker: harmless pleasure or harmful pastime? Should it be allowed in North Carolina or forced to fold? That is being debated by both North Carolina politicians and residents.

Griffin: Well it's a good pastime. I'm home most of the day and I get a little bored; I just come out and visit with my friends and play the different games.

"Susie": All these retired people where I live-they live at these convenience stores, and they're not spending $10. They're-I watched a lady that has cancer and she puts hundreds in this poker machine every day.

Snyder: Video poker machines are legal in North Carolina at least for now. They can be found in every corner of our state from truck stops to convenience stores, from the beaches in the east to a mountain casino. With the exception of the Cherokee Indian Reservation, no location is allowed to have more than three video poker machines, and no machine is allowed to pay more than $10 of merchandise-not cash. But not everyone is following the rules.

Hege: It's supposed to be a game of chance. You know, different things like a slot machine, except you're punching buttons, just lining things up-cherries and whatever-then you get a pullout. You should get eight to ten credits or-you get eight more games. What happens is, instead of getting a coupon, the guy goes behind the cash register, gets him out 200 bucks-just like that.

Snyder: Gerald Hege is the sheriff of Davidson County. His office looks like a bunker-a bunker in which to wage a war against video poker machine owners not following the law.

Hege: The man-hours you put in and you're losing investigators on this type of crime when they could be doing breaking entries, robberies, and different things. If you lose the time that you have to sit in here with these victims and deal not only with the victim, but you have to deal with their families as well. People have to pick up the tab for all of this and go take out bank loans. You have to watch them cry right here in front of you. It's a very sad situation to do.

Snyder: Hege says what owners do is give their winning customers not merchandise, but cash payouts.

Hege: There's one truck stop here locally-we just hit it last week. We sent in our undercover team to a local truck stop and we played the machines. We observed people playing the machines, we observed people paying off on the machines. We went in and won 200 bucks.

Snyder: Hege's deputies recently raided this truck stop. They found that the three video poker machines had each done $1500 worth of business-that's $4500. The store is open 365 days of the year. Do the math and you'll find the three machines brought in an extra $1.5 million of untaxed money. The state estimates video poker as a $115 million industry.

Hege: It's not the playing of the machine. It's the people-if that person wants to play all day, that's fine. But if that person who is paying him off-that store owner or manager who is paying him off and enticing him to come back-letting him put up his car title for a check, which he knows is no good, he loses his car title. That's the problem.

Snyder: A problem "Susie" has experienced firsthand. Susie's using a fake name to tell a real story. She says her parents got addicted to video poker and in a span of 18 months lost over a half million dollars, maxing out close to 100 credit cards.

"Susie": Mortgaging properties to the max and then the new house to the max. And they were getting these loans. They're retired people. How are they going to pay this back? It was awful.

Snyder: Fortunately "Susie" was able to pay off her parents' debts, although the ordeal has strained the relationship.

Hege: Usually the people whom it deals with are the elderly people-people who are retired, people who are in their golden years, everything's paid for, they're getting ready to go have a good time and enjoy life, their kids are grown and gone..

Snyder: The State Department of Revenue says there are over 10,000 video poker machines in our state. Now according to the law, they're not allowed to payout in cash and not allowed to pay out more than $10 in merchandise. Some venders chose to break the law; some choose to play by the rules, like Bernard O's coffee and cappuccino shop.

Edwards: Adults like to get away and have a little bit of quiet time too and that's basically what they do. They sit in here and hit a little button and play cards when they can't go to that-that family card game or whatever. They're just enjoying themselves away from home.

Snyder: Kaytie calls her store a "mom and pop" operation. Her coffee shop plays by the rules as she struggles to pay the bills. The video machines help bring in a little extra money.

Edwards: Enough to pay the rent and enough to pay the electricity and sometimes a little bit extra for something fun.

Snyder: But some North Carolina lawmakers want the industry to cash out their chips. The Senate recently voted to pass a bill that would outlaw video poker. Now the House is debating the measure, but with the gaming industry making campaign contributions to many politicians and the debate still raging over the North Carolina lottery, it's difficult to calculate the odds of video poker staying in the state.

Hain: I don't feel that this is as much a danger to society as someone who goes out there that drinks. If somebody's going to hurt by gambling, all they're hurting is themselves, and yes, they are hurting their family, but it's a choice they make and it's a choice the family makes if they stay within that family unit. But with alcohol, you're hurting not just your family, you're hurting everyone out there because most people that drink will drive eventually.

Crowley: House Speaker Jim Black says they're still considering whether to take up the bill. He says the House has been tied up with the budget and an economic stimulus package.

Lindstrom: It's time now for our Analysis of this week's hot topics. For that, Tim Crowley joins two members of the Capitol Press Corps.

[THEME MUSIC]

Crowley: Paul O'Connor with the Capitol Press Association, Julie Donnelly with North Carolina Public Radio, thanks for joining us.

Donnelly: Thank you.

O'Connor: Thank you.

Crowley: One of the major issues of the week: the job creation/economic stimulus package that House Democrats are pushing. Legislative leaders are on board, the governor is on board. Paul, is this a program that can work?

O'Connor: Well sure, they'll find somebody who will take their money and bring some jobs here. The question is whether this will bring jobs here that wouldn't have come otherwise. Everything that the people who are pushing this bill are saying is that the economic development world keeps changing and this is the kind of new things that we need to do to bring jobs here. All of their other economic development ploys have tended to concentrate the new economic development in the prosperous counties and not brought it out to the poorer or more remote areas. I don't see what's different about this one that it will work any better than the others.

Crowley: Julie, there are obviously some criticisms of this. What are the critics saying about this package?

Donnelly: Well, what I find really interesting is that nobody really likes this-nobody thinks this is good policy. The sponsor, Representative Bill Owens, said, "You know, I don't really like incentives either, but if we don't do this, we're going to lose these jobs to surrounding states." And I think that's what really pushed the vote. You know, it was a vote that was not along party lines, that had Democrats and Republicans voting for it and the margin was probably wider than, I think, a lot of people thought it would be because there were a lot of criticisms and there were a lot of amendments to really scale back the effect of this bill.

O'Connor: You hear that all the time, that nobody really likes this. If nobody really liked this and people were willing to act on this, we would have legislators and governors from across the country going to the US Congress and saying, "We need to rewrite the tax laws, we need to rewrite the interstate commerce laws to outlaw this kind of stuff." This stuff is nothing more than a rip-off of the American taxpayer. It is-it is corporate welfare, yet what we're going to have with this law, Tim, is that somebody's going to go to work in the morning and they're going to work all day and they're going to have their taxes withheld from their paycheck. Instead of those taxes going towards the support of the schools, it's going to come right back to the boss man, and I can't believe that people who work in North Carolina and live in North Carolina-or who live anywhere in this country-want that kind of a policy, where the boss man is getting their withholding back. It's a horrible policy. Of course nobody likes it, but it's got to be up to the Congress to step in and stop this. That's not going to happen.

Crowley: Julie, the other criticism is we just don't know how much this is going to cost at this point.

Donnelly: Right. The tax incentives would last for 12 years and it would be limited to 25 different companies, but nobody knows what the total effect of this is going to be on the state. It really depends on how many jobs are created. And another criticism that's been brought up is that it doesn't keep jobs in the state that might leave. So you could have a situation where you have a company who comes to the state and takes advantage of these incentives, and when they run out, they shop around to another state and leave.

Crowley: What kind of signal do you think this sends in a time where there are budget struggles going on in the House and the Senate, and there are people without jobs? Does this send a mixed message to them or not?

O'Connor: It continues to send the signal that this General Assembly has been sending for four to six years now, and that is that "we are going to tax consumers and we're going to give tax breaks on the business side." We've talked about this when I've been on this program before-the imbalance that we have been seeing now for a couple of decades, of the shift in the tax burden to the consumer and to the individual taxpayer. That's the signal it's sending-that business can threaten the Legislature and they'll get-they won't get tax increases and they can threaten the Legislature and they'll get tax incentives. That's the signal I see it saying.

Crowley: Let's switch real briefly to the budget, and briefly because not much has gone on this week with the budget, has it?

Donnelly: I think people have said before, and I know Paul has said this, that the Legislature cannot chew gum and walk at the same time, and I think this week was a great example of that. This corporate incentives bill held them hostage all week. They would go into session and then they wouldn't debate any bills. They'd recess and go back into committee to discuss this one bill. Really no substantial progress was made on the budget. They said that the big chairs had been meeting and working things out, but we've seen nothing on the floor and we're up to two months late for the budget.

Crowley: Is this any different than any other year, Paul?

O'Connor: No. No, this-I'm starting to sound like an old politician here, but this particular group of 170 people just can't-it doesn't-just can't get the work done. They're all locked up. It's exactly as Julie said, although I think you overstate what they accomplished last week. I don't they accomplished anything. I don't think they are working toward a budget. I'm getting ready for Halloween with the Legislature in session, which no one would notice the difference, you know, if they're here or not, but they're going to be here for a long time.

Crowley: Let's talk about one of the other stories this week: the state covets their credit rating. It took a hit this week. They dropped it down to Double-A1, which I guess is a little bit better than Double-A. What kind of effect, Paul, does this have on the state?

O'Connor: I think this really hurts the state. It's millions of dollars a year in lost interest savings. North Carolina still has a very high interest rate credit rating, and its interest rates are very low right now. So we're still going to spend less on interest than we might have anticipated when we passed those bonds a couple of years ago, but we could be paying even less than we're going to pay. That will come up to millions of dollars. More importantly, I think, it's really kind of a whack at our pride. This is something that North Carolina has always prided itself on-or long prided itself on-that it's a fiscally sound state, stable government. It's not any more-not when they're pulling passing tax incentive packages that they can't explain how much it's going to cost, and when they're passing budgets that are full of one-time money. I mean, this-I think, and I've written this, that this is just the first downgrade, in that more-we're on the fast slide.

Crowley: We have just about a minute left, but the governor took this opportunity to hammer away at the lottery again.

Donnelly: Right. He met a few weeks before the letter came from Moody's Investor Service and talked to them, and they specifically mentioned in their letter that measures like raising the sales tax and instituting a lottery might help to restore some confidence in the North Carolina economy.

O'Connor: A bunch of Wall Street types wanting us raise the tax on consumers and it gibberish. The lottery, the governor has said repeatedly, will go toward new spending. Any money they add, they're going to spend it on something new. The lottery will do nothing to get this state's books back in balance.

Crowley: We're going to leave it right there. Paul O'Connor with the Capitol Press Association, Julie Donnelly with North Carolina Public Radio, thanks for joining us.

Donnelly: Thank you.

O'Connor: It's always fun.

Lindstrom: Tonight we Profile Representative Julia Howard from Mocksville. Representative Howard says she has a special way to read to her grandchildren and wants to leave a good impression on the state.

[THEME MUSIC]

Howard: I have always been interested in helping people and been very involved in civic projects in my home town, in my community, and I love people. I love helping people. You know, I think that being in politics or a part of that process, you have an opportunity to help people, and that's the most important thing that I do as a legislator-is to help people.

It isn't the large things that we do in life that's important. Every individual in this building is important and important to me, as they are in my district. I would hope they would find me to be a very friendly, caring, compassionate person that always has time to listen to problems and try to find a solution if all possible. But I will certainly spend my time and energy trying to help folks. That's what I would hope that they would find.

I have six of the most wonderful grandchildren in the world. Two are eight, two are five and two have just turned three. They're pretty much my life, though three of them live in Pennsylvania, the other three in Seattle, Washington, so you can see they're spread out. I visit and I talk to them every day on the telephone-all six of them. When they were really, really young, I used to go to the bookstore and I would buy three books. I would send one to Seattle, Washington, I would send one to Pennsylvania, and I kept one. So I have read Good Night Mr. Moon by Ma Bell for many, many hours and we used to read on the phone. Now the interesting thing with those little grandchildren, the older ones can now read to me. It's so exciting to watch them grow up. The only connection I can have with them, because of the distance, is by phone. Of course, my phone bills are more than my house payment, but that doesn't really matter.

I think the right, particularly right now, as we are trying to go through the budget process, I would really wish that at some point in time-it may be in the Long Session, which begins in January-that we could go back to a zero base balance-you know, budgeting-provision, where we can literally sit down and look at every program that we are funding, where our dollars go. Is it a good program? Are we getting the best bang for our buck? Is it still necessary? I find that in government, once a program gets on board, it's hard to ever get rid of it. You may not need it or you may find duplication, but with the deficit that we're going to be seeing next year-to the tune of about $600 million on the first day-I think we're going to have to do that.

I would hope that when my grandchildren look back-and the young children that I have hopefully touched their lives in a positive manner-that they will say, "She made it easier for us. She cut a path for us that-She cared about us." I find-to go back to what we spoke about earlier, every human being that I meet is important to me. Everybody has a place and a station in life. I just hope that all young folks can reach their full potential as they move through life and I just hope that in the work that I do, publicly and privately, that I have made an easier path for those young folks to follow.

Lindstrom: Many people are growing frustrated as the session wears on with no apparent end in sight.

Crowley: That on top of a record breaking Long Session last year.

Lindstrom: So in our Question of the Week we asked, "Do you think the General Assembly should have session limits?"

Crowley: Of those who chose to vote online, 88% said, "Yes, there should be some time limits;" 12% said, "No." And remember to vote for our new Question of the Week on business incentives being paid for by taxpayer money. You can vote for the question by logging onto our website at www.unctv.org, emailing us at legweek@unctv.org or calling us at 919-549-7830.

Lindstrom: Something else without a clear end in sight: our state's drought, and that has created some clever ideas on how to conserve water.

Crowley: After receiving word from the governor that state agencies cannot water lawns, and flowerbeds, ground crews here at the General Assembly came up with this idea. They're catching the condensation off of the air conditioning units and then spreading it over the flowers by hand. By tapping into water that would normally run down the drain, crews are hoping to keep the plants healthy despite the drought.

Lindstrom: That's our show for tonight. Thanks for joining us.

Crowley: We hope you'll join us next week on Legislative Week in Review. Have a great weekend.

[THEME MUSIC]

Voiceover: This program was made possible by contributions to UNC-TV from viewers like you. Thank you.

 

Participants

Crowley: Tim Crowley
Lindstrom: Rebecca Lindstrom
Vickery: Shannon Vickery
Snyder: Bruce Snyder
Owens: Representative Bill Owens, [D] Pasquotank County
Pope: Representative Art Pope, [R] Wake County
Nesbitt: Representative Martin Nesbitt, [D] Buncombe County
Starnes: Representative Edgar Starnes, [R] Caldwell County
McMahan: Representative Ed. McMahan, [R] Mecklenburg County
Sherrill: Representative Wilma Sherrill, [R] Buncombe County
Goodwin: Representative Wayne Goodwin, [D] Richmond County
Arnold: Representative Gene Arnold, [R] Nash County
Morgan: Perri Morgan, National Federation of Independent Business
Kirk: Phil Kirk, NC Citizens for Business & Industry
Saunders: Representative Drew Saunders, [D] Mecklenburg County
Morgan: Robert Morgan, NC Center for Voter Education
Culpepper: Representative Bill Culpepper, [D] Chowan County
Blust: Representative John Blust, [R] Guilford County
C. Wilson: Representative Connie Wilson, [R] Mecklenburg County

Rader: Judge Robert Rader, Wake County District Court
Sutton: Representative Ron Sutton, [D] Robeson County
Easley: Governor Mike Easley
Moeser: James Moeser, UNC-CH Chancellor
Ernst: Carl Ernst, UNC-CH Professor, Religious Studies
Justus: Representative Larry Justus, [R] Henderson County
Lee: Senator Howard Lee, [D] Co-Chair, Appropriations Committee
Farris: Ray Farris, UNC Board of Governors
B. Wilson: Brad Wilson, Chair, UNC Board of Governors
Friday: William Firday, Former UNC President
Cline: Dr. Steve Cline, NC Division of Public Health
Griffin: Wilma Griffin, Video Poker Player
"Susie:" "Susie," Parents Addicted to Video Poker
Hege: Gerald Hege, Davidson County Sheriff
Edwards: Kaytie Edwards, Shop Owner
Hain: Jolayne Hain, First Time Video Poker Player
O'Connor: Paul O'Connor, Capitol Press Association
Donnelly: Julie Donnelly, NC Public Radio
Howard: Representative Julia Howard, [R] Davie County
M: Male Voice
F: Female Voice

 

 

 
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