As expected, the Senate has adopted its version of the 2008-09 state budget, the House has rejected it, and the budget has gone to a conference committee to reconcile the differences.

The two versions of the budget are similar in many regards. They both spend about $21 billion. Neither contains tax increases, and both contain $50 million in tax cuts. Both agree on salary increases: a 3% average increase for public school teachers, community college faculty, and UNC faculty; most other state employees would get a raise of the greater of 2.75% or $1,100.

But there are differences, some of which will be of concern to the Raleigh Report Network and some of which will ensure that the conference committee will have some work to do. Among the differences:

· One of the House’s tax cuts is an increase in the state Earned Income Tax Credit, which the NC Council of Churches supports. The Senate does not specify what its tax cuts will be, preferring to leave that to separate legislation, but it has not looked favorably on the EITC increase. The Senate has passed a bill that would eliminate the gift tax; it would cost the state $18 million. Since gift taxes are paid only on amounts over $12,000 per recipient ($24,000 if the givers are a married couple), these taxes are paid mostly by wealthy taxpayers.

· The Senate authorizes the Governor to give additional salary increases later in the year, if funds are available.

· The House includes increased funding for domestic violence programs. The Senate does not.

· The House includes an additional $10.4 million for NC Health Choice, which would allow more than 10,000 more kids to be covered. The Senate includes only $1.7 million, which means that enrollment in Health Choice would be capped at the end of September. (Both houses include $645,000 for a change in how claims are processed, but it will not add coverage for any more kids.)

· The Senate includes more for More at Four: $41 million vs. $23 million in the House.

· The House includes more for the Disadvantaged Student Supplemental Fund: $7 million vs. $5 million.

· The House includes more for improved nutrition for elementary school students: $4 million vs. $2 million.

· The Senate includes more for the Home Protection Pilot Program: $3 million vs. $2 million. Both House and Senate include an additional $2 million for the Housing Trust Fund (far short of the amount sought by housing advocates).

First, a new bill: H 2794/S 2165, School Integration 50^th Anniversary, has been introduced by Reps. Womble and Adams and Sen. Graham. The resolution notes that previously all-white schools in Greensboro, Charlotte, and Winston-Salem first integrated in the fall of 1957, and the first African American to graduate from a previously all-white high school did so in June 1958. H 2794 has been calendared by the House; S 2165 is in the Senate Rules Committee.

H 388, Tax Credits for Children with Special Needs, has been re-referred to House Education.

H 964, Expand Definition of Home Care Services, has been amended in the Senate Health Care Committee to raise a fee paid by for-profit home care agencies. The Council’s primary interest in this bill has been to guarantee that changes in current law do not inadvertently affect churches and other faith communities providing volunteer, non-medical services to people in their community. Language containing that protection is now in H 964. It goes next to Senate Finance.

H 2189, Domestic Violence Victim Assistance, has been signed into law by the Governor.

H 2252, Smoke-Free Motor Fleet, has been re-referred to House Judiciary I.

H 2253, Smoke-Free State and Local Building Grounds, has been re-referred to House Judiciary I.

H 2254, Community Colleges/Tobacco Free, has been re-referred to House Judiciary I.

H 2288, Continue the Dropout Prevention Commission, has been passed by the House and sent to the Senate.

H 2339, Amend Child Abuse, has been re-referred to House Judiciary I.

H 2340, Transporting Children in Open Bed of Vehicle, has been re-referred to House Judiciary I.

H 2417, Crimes of Torture and Enforced Disappearance, has received a favorable report from the House Judiciary I Committee and been re-referred to House Appropriations.

H 2471, Require Carbon Monoxide Detectors, has received a favorable report from House Insurance and been re-referred to House Judiciary II.

H 2487, Change Format of Drivers Licenses/Under 21, has been passed by the House and sent to the Senate, where it is in the Commerce Comm.

H 2529, Extend Climate Change Commission, has been passed by the House and sent to the Senate, where it is in the Agriculture/Environment/Natural Resources Comm.

H 2532, Codify Energy Efficiency in Public Buildings, has been re-referred to the House Environment and Natural Resources Comm.

H 2687, Poverty Reduction/Economic Recovery Study/Funds, has been re-referred to House Rules, the committee that puts together the studies bill.

H 2720, Energy-Efficient State Motor Vehicle Fleets, has been re-referred to House Appropriations.

S 1669, Community College/Tobacco Free, has been passed by the Senate and is now in the House Health Comm.

S 1681, Smoke-Free Motor Fleet, has been passed by the Senate and is now in the House Judiciary I Comm.

S 1686, Smoke-Free State and Local Building Grounds, has been passed by the Senate and is now in the House Judiciary I Comm. It was amended in the Senate so that it now covers the area within 25 feet from an entrance, open window, or ventilation system of a state government building. The original bill had covered 50 feet from any part of the building.

S 1860, Amend Child Abuse, has been passed by the Senate and is now in House Judiciary I.

S 1988, Unlawful to Burn Cross/Hang Noose, has been re-referred to Senate Appropriations. A word of clarification about this bill: it is already a felony to engage in these activities for the purpose of intimidation. The effect of S 1988 would be to increase the penalty if the intimidation was because of race, nationality, religion, or ethnicity.

S 2081, Firearms/Mental Incompetence, has been re-referred to Senate Appropriations.

Suggested Action

It remains to be seen if the budget conferees can resolve their difference by the July 1 start of the fiscal year, but it seems more likely this year than in many past sessions. It is very possible that the session will adjourn within a week or two of the passage of the budget. So, again, whatever you are going to do on any of the bills that you are following, do quickly!

If you are looking for a bill/issue to work on, consider these:

· H 1291, the Racial Justice Act, passed last year by the House, now in the Senate Judiciary II Comm.

· Inclusion of the full House appropriation ($10.4 million) for NC Health Choice by the budget conference committee (see above).

· Inclusion of the House provision raising the Earned Income Tax Credit to 5% of the federal EITC. Again, this is a matter for the budget conference committee.

· H 2417, the anti-torture bill, now in House Appropriations.

· H 2688, Health Care Policy Council, which will be heard in the House Health Committee this Thursday.

· The second-hand smoke bills mentioned above (H 2252/S 1681, H 2253/S 1686, and H 2254/S 1669), which are likely to be heard in House committees this week.

Because of the possibility of a fairly quick adjournment, you should communicate with your senator/representative on a bill whether or not s/he is on the committee which has it, since anything to come out of a committee could go to the full Senate or House quickly. Go to the General Assembly website (www.ncleg.net) to find out who is on these committees and to get contact information for your senator and/or representative.

Suggested Action

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