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League Bulletin

January 15, 2016

A discussion on Wednesday by a legislative panel examining Duke Energy coal ash ponds and the clean-up around them veered into the topic of overall drinking water safety, including that of public water systems. The focus on local drinking water systems by the Environmental Review Commission came after state environmental regulators at the Department of Environmental Quality expressed frustration that state health officials had set a water pollutant standard for drinking water wells around Duke Energy power plants at a much higher level than the standard set by the federal government for public water systems. The standards affected two substances, hexavalent chromium and vanadium.

As a result of the state standards, 400 well owners were advised not to drink their water. Just 12 would have been deemed unsafe under the federal standard used for public water systems. Arguing that the levels set by state health officials for the wells were unrealistic, DWQ Assistant Secretary Tom Reeder noted that several local drinking water systems in North Carolina would be out of compliance if they applied to those system. Legislators responded that the different standards, and results from them, are likely confusing to the public. 

Reeder also used the meeting to lodge complaints about delays by the U.S. Environmental Protection Agency in issuing permits to remove water from coal ash ponds. The dewatering is required to begin excavating and cleaning up the sites. He said his agency is considering issuing permits without the required federal approval.

The wide-ranging benefits of the Connect NC Bond should translate into a wide array of supporters, Alastair Macaulay of the Connect NC Bond committee told a group gathered at League offices on Wednesday. The group, largely made up of the same coalition members who supported passage of a new historic preservation tax credit, attended the meeting to discuss plans for support or education around the bond plan. 

Macaulay discussed the importance of the investments to the different public institutions that will receive them, and how they will be used to build infrastructure that will last decades for a growing population. He also noted how state leaders who backed the plan had recognized that borrowing makes sense now because interest rates are low but have started rising. Secretary of Cultural Resources Susan Kluttz, who was in attendance, took a moment to thank all of the stakeholders in the room for their work on behalf of the historic tax credit. She made the case that the legislation's passage would not have occurred were it not for the coalition's building of public support.

Voters will decide the Connect NC Bond in a referendum to be held during the March 15 primary election. The League's Executive Committee has passed a resolution in support of the bond plan. You can find out more about the plan here and here.

A top Department of Transportation official told legislators late last week that the agency plans to begin monthly meetings with utility companies to improve communication ahead of road construction. Mike Holder, DOT's chief engineer, also told members of a legislative study committee that he would bring back recommendations to them regarding how to reduce delays in road projects caused by utility line relocations. 

Holder was encouraged to do so by Reps. Nelson Dollar of Cary and Dana Bumgardner of Gastonia. The same issues cited by Holder have also been a major cause of delays in municipal street projects, so these discussions may represent an avenue to address them as well.

State revenues are about 1.2 percent ahead of projections for the first six months of the fiscal year, the N.C. Insider state government news service reports. State Budget Director Lee Roberts told the Insider that the initial surplus may have little effect on how the budget year ends. Individual income tax receipts are up over $489 million, or 10 percent, over the first six months of last year, while sales tax revenues are up about $129 million, or 4.1 percent. Corporate income taxes are down $46 million.

A legislative study committee was told Tuesday that the state should consider eliminating a capital stock tax on businesses and  further broadening of the sales tax base. Scott Drenkard of the Washington, D.C- based Tax Foundation addressed members of the Revenue Laws Study Committee. Drenkard also called for eliminating more tax deductions, exemptions and incentives.

Last year, the state Senate pushed for additional tax changes, two years after a major re-working of the state's tax structure that included lower income taxes and an expanding sales tax base. The House largely resisted additional changes, but the two sides did agree to some further reforms. Starting in March, the state will tax repair, maintenance and installation services on vehicles, appliances and other personal property.