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League Bulletin

January 8, 2016

More than 450 people joined Gov. Pat McCrory and legislative leaders at a rally held Tuesday to kick off the campaign to pass the $2 billion Connect NC Bond package. Governor McCrory cited specific examples of decaying class and research buildings at Western Carolina University and North Carolina A&T State University in laying out the case for the bonds. "We have a choice: Do we prepare for the future, or do we want the leaders of the future to have to react to what we didn't do?" Governor McCrory said. Joining him in speaking were former state Supreme Court Justice Bob Orr, who is a co-chair of the bond campaign; House Speaker Tim Moore; Senate Minority Leader Dan Blue; N.C. State University trustee Ann Goodnight; and N.C. State University Chancellor Randy Woodson.

The kick-off event comes a couple of weeks after the League's Executive Committee voted to endorse and support the bond initiative. Read the resolution passed by the committee here. The bonds will provide $310 million in water and sewer system assistance, as well as grants to upgrade local parks to improve access for those with disabilities, and also upgrades for state parks whose visitors often benefit municipalities by patronizing local businesses. A big part of the bond will go for university system and community college construction.

The League staff is assisting members in their individual capacities as they help to promote the bond plan, as well as directing municipal governing bodies to educational and background materials regarding the proposal. The bonds go before voters on March 15. We remind you that public funds cannot be used to promote this campaign, and encourage you to consult with your city attorney about how you can support the proposal. You can find extensive information about the bond package here and find information on the effort to support its passage here. Read earlier League coverage here. Contact Vickie Miller or Rose Vaughn Williams      

With an eye toward revamping how the state measures a community's level of economic distress, a legislative committee reviewed a report yesterday that suggested a total overhaul of the current three-tier rating system. Committee Chair Rep. Susan Martin told the Joint Legislative Economic Development & Global Engagement Oversight Committee that its charge was to make recommendations for replacing this system with a different tool to evaluate and designate areas of economic distress in North Carolina. The report that prompted this move toward an overhaul, completed last month by the legislature's Program Evaluation Division in conjunction with organizations such as the League, concluded that the current ranking system no longer accomplished its original purpose of targeting state tax credits to businesses locating in poorer areas. (See this December LINC'ed In article for more details about that report.)

Presentations to the committee yesterday gave a hint as to the new direction of how the state might measure economic distress. The N.C. Department of Commerce, which would use any new formula as part of its various infrastructure investment programs, suggested to legislators the new formula should emphasize the factors that caused economic distress: a large unemployed population, low-paying jobs, a high percentage of low-wealth households, and a low level of education. Other groups suggested that the legislature adopt a more flexible tool, such as an index. And legislators themselves indicated interest in looking at data on a sub-county basis to capture pockets of economic distress that exist in all of the state's wealthiest counties. Contact: Erin Wynia

North Carolina's rural areas do not uniformly share the same economic performance characteristics, nor do its urban areas, an economic analyst told legislators yesterday. In a presentation to the Joint Legislative Economic Development & Global Engagement Oversight Committee, economic development consultant Ted Abernathy highlighted the differences in the economic performance of both rural and urban areas across the state. While noting that nearly 85 percent of the gross state product was generated in the state's top six urban job centers, he said the jobs actually held by a particular rural county's residents can depend  on commuting and proximity to urban areas, as well as other factors such as tourist activity. For the state's urban areas, he provided evidence showing that job growth is not evenly distributed or robust.

Picking up on those points, legislators discussed what the General Assembly and N.C. Department of Commerce could do to assist areas losing jobs. Abernathy suggested that the commerce department could serve a quasi-consultant role for economically distressed rural areas, helping them to identify assets to build on and deficiencies to improve upon. He also noted that investments in infrastructure -- like those that municipalities typically make with water, sewer and transportation projects -- were often at the top of business' lists of considerations when choosing where to build or expand. And finally, he stressed the importance of creating communities of all sizes with the character and amenities people value, stating, "If you don't have a community where people want to be, you don't have a place where companies want to be."

Senate Majority Leader Harry Brown emphasized one of Abernathy's points, saying state officials may need to focus more on water and sewer system development as a means of promoting economic development in rural areas of the state. "You've got to get infrastructure in the ground to make a difference," he said.    

A number of new laws took effect at the start of the New Year, including a 1-cent per gallon drop in the state motor fuels tax that was part of the legislative deal struck early last year -- with the help of the League -- to create some long-term stability for transportation funding. SB 20 IRC Update/Motor Fuels Tax Changes led to the 1-cent decrease gas tax decrease on Jan. 1 and will lead to another penny drop on July 1, but allowed the state to avoid more precipitous decreases -- and a corresponding drop in transportation dollars -- due to declining gas prices.

The legislation dropped a volatile formula that had tied gas tax revenue to the price of gasoline. The League immediately became involved in advocating for the changes because of the importance of road-building dollars, including state Powell Bill funds, to cities and towns. Responding to legislative scrutiny of Powell Bill spending by municipalities, League staff and members are now involved in discussions intended to protect sources of local transportation funding for the future. Read earlier League coverage of passage of SB 20 here. Also, find media coverage about this law and others that took effect on Jan. 1 here.

The state Board of Transportation this week voted to add new transportation projects and accelerate the construction of some others as a part of an amended State Transportation Improvement Plan. The move was made possible by state budget changes that created additional money for the projects. These included the elimination of a transfer from the State Highway Fund to the General Fund, as well as higher motor vehicle-related fees. The changes will result in an additional $1.6 billion in transportation dollars over 10 years. Read about highlights of the project changes here and find the full STIP list here.

Applications in the next round of Clean Water Management Trust Fund grants are due Feb. 1. The grants are awarded to local governments, state agencies and non-profit groups to restore and protect North Carolina natural resources. The awards are made in four categories: restoration projects, innovative stormwater projects, planning, and land acquisition for protection of riparian buffers, greenways, natural heritage, historical and cultural sites and military buffers.

Find out more about the grants at the CWMTF website here. The previous round of grants totaled $19.3 million, including $400,000 for a stream restoration project in the Town of Pilot Mountain and $101,000 for a stormwater project in the Town of Morrisville. See the full list of those grants, which were made in November, here.

A new study from the National Conference of State Legislatures and the Pew Charitable Trust measuring legislatures against their overall state population demographics finds that the North Carolina General Assembly is older and much more male than the population in general. The study showed that the average age of North Carolina House members is 58.6 and North Carolina senators is 59.3, while the average age for North Carolinians is 46.7. Women make up just 22 percent of legislators here, compared to 51 percent of the population. When it comes to race and religious beliefs, the North Carolina General Assembly's make-up is similar to the population as a whole. Read the full report here.

State Budget Director Lee Roberts and Secretary of Revenue Lyons Gray are stepping down from their positions. Gov. Pat McCrory announced the departures on Thursday. Roberts is joining a new investment management firm, while Gray has been appointed to a seat on the state Utilities Commission.

The McCrory administration announced that Andrew Heath, chairman of the State Industrial Commission, will become the new budget director. Gray will be replaced by Department of Revenue Chief Operating Officer Jeff Epstein. The League would like to thank Roberts and Gray for their service in those positions, and congratulate Health and Epstein on their appointments.