This week, we saw the beginnings of the budget process, as the House hosted a series of Appropriations subcommittees. Nearly all of the committee rooms were packed with visitors attending to see if an unannounced House budget would be introduced, however, no such legislation was introduced. The legislature will continue to wait for the Senate to unveil their first version of the state budget. In the meantime, we will review the activities that took place this week in the General Assembly.
As of this morning, in the state of North Carolina, there were 481 confirmed cases of the coronavirus, 613 individuals hospitalized, and sadly, 13,130 confirmed deaths. There have been 8,345,764 doses of the vaccine distributed in NC, which is about 53.6% of the total adult population.
As we all continue to feel the effects of the global pandemic and adjust to a new normal, we want to highlight a few ways our clients across North Carolina have worked to support residents and make this time a little easier for those throughout the state. Read more about what our clients are doing to help by clicking here.
For more information on COVID-19 in North Carolina, click here to visit the Department of Health and Human Services website, and be sure to stay up to date on the latest federal guidelines issued by the Centers for Disease Control and Prevention (CDC) by clicking here.
Budget Meetings
This week, the House pre-emptively began conversations about the budget, as Senate leaders continue to work on their version of the budget. Each chamber in the General Assembly traditionally takes turns introducing a budget each biennium, and this year it is the Senate’s turn. The House of Representatives announced last week that they would begin budget discussions with various House Appropriations Committee meetings despite the fact that the two chambers have not reached an agreement on the overall spend amount.
No spending proposals materialized from the House meetings. In the Education Appropriations subcommittee Wednesday morning, representatives from the Department of Public Instruction (DPI), Office of Charter Schools and N.C. Community College system gave presentations about their specific budget requests. Visitors to the other three Appropriations subcommittees that met Wednesday, General Government, Health and Human Services, and Agriculture and Natural and Economic Resources, saw no presentations but instead were conducted to hear feedback from Representatives. Health and Human Services Chair Rep. Larry Potts (R-Davidson) began the committee by explaining that the reason for meeting is to hear some budget requests and priorities while the Senate works on their budget.
On Thursday morning, the Appropriations subcommittees for Agriculture and Natural and Economic Resources (AgNer), and Information Technology (IT) met to hear from presenters. During the AgNER meeting, legislative liaisons from the Departments of Natural and Cultural Resources, Agriculture, and Department of Environmental Quality, as well as Department of Labor Secretary Josh Dobson (R) took turns explaining their respective requests. At the IT meeting, West Virginia Delegate Daniel Linville spoke about lowering the regulatory burden on service providers.
The House and Senate are currently at an impasse over the total spending level. On Thursday afternoon, Senate leader Phil Berger (R-Rockingham) told reporters that the Senate is ready to advance “mini” budget bills by mid-June. In the House Thursday, Speaker Tim Moore (R-Cleveland) told members the House would move forward with their own budget. House Appropriations Committee Chair Rep. Jason Saine (R-Lincoln) announced Thursday that the full Appropriations committee will meet next Wednesday.
According to The News & Observer, the final Senate budget offer on May 27 was $25.6 billion for 2021-22, and $26.4 billion for 2022-23. The House’s last counteroffer on June 1 was $25.9 billion for 2021-22, with no available offer for 2022-23. At Tuesday’s Council of State meeting, Governor Cooper reminded legislators that he was also part of the budget negotiations. Cooper’s proposal, announced in March, was $26.6 billion.
If the state does not pass a new budget by July 1, it will continue to operate at the previous budget spending level until a budget is adopted.
Nominations
This week, the Senate held final votes on Governor Cooper’s (D) nominations for three key posts:
Department of Environmental Quality (DEQ)
The confirmation dispute that received the most attention this week was the Governor’s selection for DEQ, Dionne Delli-Gatti, being rejected in Wednesday’s Senate Energy and Environment Committee, which first heard from Delli-Gatti in a two-hour meeting on April 27. After this week's committee meeting, Senate President Pro Temp Sen. Phil Berger (R-Rockingham) and Sen. Paul Newton (R-Cabarrus) gave a press conference to explain that the Senate would not consent to Delli-Gatti’s confirmation because she could not articulate Governor Cooper’s stance on natural gas, and because she was unfamiliar with the MVP Southgate Pipeline. Since the Colonial Pipeline hack last month that caused nearly every gas station in the state to run out of fuel, Senate leaders have frequently discussed pipeline infrastructure and natural gas supply.
On Thursday, the Senate made their decision final after a lengthy floor debate that inevitably led to Delli-Gatti’s confirmation being rejected along party lines. Shortly after the Senate session, Governor Cooper announced that Delli-Gatti would be hired as North Carolina Clean Energy Director. At DEQ, Cooper announced that Chief Deputy Secretary John Nicholson will serve as Interim Secretary.
Department of Administration (DOA)
During their session Thursday, Senators did approve another of Cooper’s nominees. After receiving a unanimous vote, Pamela Cashwell will serve as Secretary of DOA. She was most recently the Chief Deputy Secretary of the Department of Public Safety and has served in various other roles in state government. Cashwell will also be the first American Indian woman to head a state cabinet department in the state’s history. She succeeds Machelle Sanders who now leads the N.C. Department of Commerce.
Department of Information Technology (DIT)
Another of Cooper’s nominees, Jim Weaver, was nearly unanimously confirmed this week to lead the state’s Department of Information Technology. Weaver brings vast knowledge and experience to the roll having served as State CIO and other roles in states that faced challenges similar to NC's DIT. He comes to NC from Washington State, where he was the State Chief Information Officer. Before that, he was the Chief Technology Officer for Pennsylvania.
Municipal Redistricting
Senate leaders and the Board of Elections and representatives for municipalities across the state have spent the last several weeks negotiating a fix to the state’s current municipal election timetable. Earlier this spring, the US Census Bureau announced they would not be delivering apportionment data from the 2020 Census until September 30. This presented a problem for municipalities with elections scheduled for 2021, who are required by law to hold their local elections in population-based districts.
To provide clarity, Sen. Warren Daniel (R-Burke) filed S722: Revise Municipal Redistricting/Census. After consultations with stakeholders, the final version passed the Senate floor on Thursday. The bill would only impact elections for municipal offices scheduled for 2021 by delaying the municipal elections in affected towns until 2022. The bill also would require the affected municipalities to redraw electoral districts using decennial census data by November 17, 2021.
Sen Daniel introduced an amendment that passed on the floor Thursday that would extend the deadline for redrawing districts and scheduling filing deadlines. With the amendment, municipalities are still required to redraw lines by November 17, but if they are unable to get it done by then, they will have until December 17, 2021. Cities who meet the November deadline will have a filing period beginning on December 6 and closing on December 17. Cities who meet the December deadline will have a filing period beginning January 3, 2022 and closing on January 7.
The bill now goes to the House for consideration.
Unemployment Reform
As the Senate finally passed their version of unemployment reform, which has been discussed for three weeks, the House quickly passed their own version after first introducing it in the Finance committee Wednesday afternoon.
As a recap, the Senate version, H128: An Act to Reemploy NC's Workforce, would direct the Division of Employment Security (DES) to use the funds from the Federal Pandemic Unemployment Compensation (FPUC) program to provide one-time bonuses to current unemployment claimants. The bill would authorize $1,500 bonuses to individuals who enter the workforce by June 1 and work for at least 60 days. The bill would require Congress to pass legislation authorizing the state to use FPUC dollars in this way.
House leaders converted a Senate bill into S116: Putting North Carolina Back to Work Act. Their bill would withdraw the state from the FPUC agreement, which provides an additional $300 per week to unemployment insurance claimants through September 6, 2021. The bill reintroduces an idea formerly passed by the House to allow individual and corporate taxpayers to deduct taxes for expenses paid using forgiven Paycheck Protection Program (PPP) loans. The bill would also exclude from taxes a claimant’s income received from unemployment benefits in 2020.
During the House session Thursday, Speaker Tim Moore (R-Cleveland) introduced an amendment to direct $250,000,000 in federal Child Care and Development Block Grant funds received from the ARP to subsidized child-care. Both the amendment and the bill passed with bipartisan support, though a majority of the Democratic caucus voted against the bill.
The bill now goes to the Senate for consideration.
Upcoming Legislative Meetings
Monday, June 7
4:00PM House: Session
4:00PM Senate: Session
Tuesday, June 8
8:30AM House: Appropriations, General Government
8:30AM House: Appropriations, Education
10:00AM Senate: Agriculture, Energy and Environment
10:00AM House: Health
2:00PM House: Pensions and Retirement
