It was the Senate’s turn this week to propose adjustments to the state spending plan, coming out with a $22.2 billion proposal that equals the overall total approved by the House two weeks ago but differs in policy and detail. Most of the headlines focused on the Senate plan’s pay raises for teachers (giving more than what the House proposed), its increase in the standard deduction for taxpayers, and modifications to sales taxes on services. But several additional items in the Senate budget are of interest to municipalities, including a maintained level of Powell Bill funding -- something the House budget agrees with. Other Senate budget items of interest:
Meanwhile, some local-government-related items in the House proposal are absent from the Senate’s, including the House’s one-time $25,000 provision to community colleges to create a continuing education program for local government and public authority finance officers. For another, the Senate plan wouldn’t increase receipts for the Local Government Commission to fund an additional position to assist local governments with financial matters, as the House plan would.
But there are many shared provisions, too. Both plans maintain Powell Bill funding at the level budgeted last fiscal year ($147.5 million), for which the League thanks both chambers. It would also give the Clean Water Management Trust Fund an additional $5 million in non-recurring funds; provide additional funds for the State Broadband Plan; and direct the Department of Environmental Quality to allocate funds for certain water resources programs, including projects in several municipalities.
The Senate approved its version along party lines after floor debates Thursday and early Friday. The two chambers will have to compromise on a final draft before they can send it to the governor for signing. Click here for the Senate’s version and here for the companion spending report.
The Senate's proposed budget is calling for the review -- with possible revision or repeal -- of the state’s Nutrient Management Strategies entirely, along with any other rules imposing riparian buffer requirements for the purpose of nutrient management. (Details of Sec. 14.13 can be found here.) The provision would allocate funds for UNC to study all of the state's nutrient rules, which affect hundreds of cities and towns across the state, and would direct state regulators to use the results of that study as the basis for a rewrite of those rules. This effort would require that rulemaking be completed by December 2020, or would require a full repeal of the rules if the rulemaking remained incomplete by that date. Finally, the provision would further delay any components of the Jordan or Falls Lake Rules that have not currently taken effect.
Although League members likely have differing opinions about this proposal -- evidenced by senators’ comments during the floor debate -- it introduces a level of uncertainty to municipalities regulated by these rules. Further, the proposal does not provide reimbursement for local investments already made, such as wastewater treatment plant upgrades, in reliance on existing rules.
Municipalities, collectively, share the biggest part of the burden of cleaning up and protecting water bodies subject to nutrient management, and face the greatest risks -- with imperiled drinking water supplies -- when they are not protected. Due to the obligation cities have to provide clean drinking water and reduce pollution to water supplies, the League prioritized flexible water body impairment solutions as its top regulatory goal.
Two senators offered amendments during the chamber's floor debate on Thursday. The first, by Sen. Mike Woodard, would have completely removed the provision from the budget. Sen. Woodard noted that nutrient management strategies have reduced nitrogen and phosphorus pollution where actually implemented. In contrast, Sen. Trudy Wade noted that Greensboro and Burlington had already invested more than $125 million in wastewater treatment upgrades to comply with the Jordan Lake Rules with little results shown in the lake. Senators ultimately adopted an amendment offered by Sen. John Alexander and supported by the City of Raleigh that included, among other items, timeline extensions and increased funding for the study.
The League appreciates senators' many comments recognizing the large investment that several municipalities have already made to comply with the existing rules. Read more coverage of this budget provision here and here. Contact: Sarah Collins
It’s hard to overstate the value of participating in the League’s annual Town Hall Day – the premier opportunity for municipal officials to connect in-person with legislators in Raleigh. And it’s just ahead, on June 8. While pre-registration is closed, you can still join in. On-site registration is available bright and early on the day of the event at the Quorum Center, 323 W. Jones St., in downtown Raleigh. Click here for details.
Town Hall Day is organized on behalf of the 540 municipalities represented by the League to ensure that key decision-makers recognize the challenges facing cities and towns. (VIDEO: Why you shouldn't miss Town Hall Day 2016.) The events that make up the day help legislators and state leaders understand that the League is working on behalf of all cities and towns, and help to continue the dialogue between municipal and state officials. Today, that dialogue is needed more than ever.
Town Hall Day will include:
Nothing can replace the positive impact of in-person conversation on legislators’ votes. More than 400 municipal officials had their say at last year’s Town Hall Day, which generated plenty of media coverage as well. Make sure you don’t miss this year’s opportunity.
The League succeeded in negotiating an amendment this week to protect water systems in the final approved bill addressing potential contamination of water supplies from coal ash. Thanks to the support of bill sponsor Rep. Chuck McGrady, the negotiated language emphasized that any electric power company owning a coal ash impoundment must secure a binding agreement with a public water supplier prior to state approval of the particular alternative water supplies. The clarification became necessary when legislators proposed a requirement for impoundment owners to replace the water supply of homes near coal ash ponds -- with a preference given to connection to public water supplies -- but did not include any opportunity for the public water system to evaluate its capability to serve those homes.
The amendment now ensures that a water system may negotiate favorable terms in these agreements, taking into account its financial capacity as well as availability of a raw water supply. As they are able, municipal-owned public water utilities often assist in similar situations that involve contaminated water sources, and the League supported the overall measure to provide properties with a replacement source of drinking water. The bill now awaits action by Gov. Pat McCrory, who has stated his opposition to the bill (for reasons unrelated to replacement water supplies) and has promised a veto. Contact: Sarah Collins
A House committee took action this week to amend HB 1134 Admin Changes Retirement System/Treasurer -- a bill that would make various administrative changes to the state’s retirement systems, including some that will affect the Local Government Employee Retirement System (LGERS). As filed, the bill included a proposal regarding when unreduced retirement benefits are payable to employees hired after Jan. 1, 2017.
A change in retirement eligibility of new hires in the state’s pension systems from service-based (the number of years worked) to an age-based retirement is needed to comply with IRS-proposed regulations. Those regulations define “normal retirement age” for governmental retirement plans and become effective for employees hired after January 1, 2017. However, the House bill originally proposed a minimum retirement age of 55 for general employees, which went beyond the federally proposed age of 50. Bill sponsors said they proposed the higher age because increasing life expectancy means retirees are receiving benefits for a longer period of time, which creates a larger burden on the pension systems. Committee members decided to amend the bill to move the age from 55 to 50, however, and also included a study that the Joint Legislative Program Evaluation Oversight Committee would conduct to examine the total value of retirement benefits for members of the state’s pension systems to those of other states that implement a normal retirement age.
The League knows that the benefits that city employers offer are important to recruitment of new employees and recognizes its member approved advocacy goal that any changes to the LGERS system need to defend its fiscal integrity; promote reasonable pension reforms; and meet the needs of local employees, employers, and retirees. HB 1134 was re-referred to the House Appropriations Committee. Contact: Sarah Collins
As a result of board member requests, the N.C. 911 Board staff has released a much needed update to guidance for compliance with the back-up capability requirement for public safety answering points (PSAPs), or 911 centers. Legislation from last year granted an extension to the 2014 statutory requirement that primary PSAPs have a means for taking 911 calls in the event that they cannot be received and processed in the primary PSAP. But the extension was only for one year and only if the PSAP has made "substantial progress" toward implementation of a back-up plan by the original July 2016 deadline.
In February, since the 2015 legislation did not define "substantial progress" and the board's distribution of funding to PSAPs depends on whether such progress has been made, the board took action to define the term as a PSAP having submitted (1) a back-up plan for approval and (2) a timeline for completion of the plan that accompanies a request for an extension. The new guidance document provides needed, consistent direction and includes information about back-up PSAP requirements, a checklist to assist in completing a back-up plan, a financial worksheet, and a sample letter for requesting an extension.