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League Bulletin

August 28, 2015

Legislative leaders this week expressed optimism that the legislature will soon have a budget agreement, saying that significant progress was made as the House and Senate settled on spending targets for the different areas of the budget. Despite the progress, legislators approved a third continuing budget resolution to keep state government operating in the absence of a finalized budget. The earlier continuing resolution expires on Monday, while the latest one runs through Sept. 18.

After agreeing to overall spending of $21.74 billion last week, a remaining budget obstacle appeared to be some House spending priorities on public education that were difficult to meet under that spending target. Budget negotiations picked up momentum -- and that hurdle appeared to be cleared -- as legislative leaders announced agreement on pay increases for state workers that will include a $750 bonus for teachers and other state employees, plus some experienced-based raises for teachers. Earlier proposals would have provided state workers with an across-the-board 2-percent pay raise.

While legislative leaders now see a final budget deal as likely before the latest continuing resolution expires, House Speaker Tim Moore said that he still expects legislators to work through the month on business recruiting incentives, an infrastructure bond plan and Medicaid overhaul, issues that have been placed outside of the budget negotiations. Read about the budget negotiations here and here. Contact: Chris Nida 

The House has appointed its negotiators for a bill that includes both local sales tax reallocation and business recruiting incentives, and indications are that any compromise proposal will move only after negotiations on a budget bill are complete. League staff and members continue to press legislators for a plan that helps all cities and towns, and have discussed a number of proposals with House and Senate members that would provide municipalities with revenue flexibility.

These discussions began last winter and HB 903 County Tax Flexibility/Municipal Rev Opts, which would allow for a municipal-only sales tax, was filed in April. At this point of the legislative session, it appears that any local revenue flexibility proposals are likely to be tied to larger revenue and incentives packages, with HB 117 NC Competes Act being a potential vehicle. House members, though, have expressed overwhelming opposition to the plan in the form that it came out of the Senate, which would distribute local sales taxes on a 50-50 per-capita verses point-of-distribution basis. Currently, 75 percent of locally-authorized sales taxes are distributed on a point-of-distribution basis, with 25 percent based on a county's population.

The League encourages you to continue to contact legislators about the importance of revenue flexibility to municipalities. If you would like revenue proposals to provide to them, please contact the Government Affairs Team. Contact: Rose Williams

The state pension fund reported a 2.3 percent gain for the fiscal year that ended June 30, as a slow market in the first six months of the calendar year hurt gains. Investments in public equities, or stocks, rose only 1.1 percent for the year, while private equity investments gained 9.6 percent. Read the full report from the State Treasurer's office here and a statement from State Treasurer Janet Cowell regarding the pension fund here. The report and the performance shown reflect the investments for both the Teachers and State Employees Retirement System and Local Government Employees Retirement System.
After passing the Senate in late July, statewide regulations for ride-sharing companies such as Uber and Lyft passed the House this week with little debate and head to Gov. Pat McCrory for approval. Among other things, SB 541 Regulate Transportation Network Companies would place insurance and driver background check requirements on ride-sharing companies, and prevent airports from precluding ride-sharing companies from operating there. The statewide regulatory scheme would only apply to "Transportation Network Companies" (TNCs), which the bill defines as those using an online-enabled application or platform to connect passengers with drivers.
While the bill prevents local governments from imposing additional requirements on the TNCs, it achieves a statewide regulation system that will benefit cities and their residents. Rep. Bill Brawley of Matthews noted on the House floor that the bill was well-vetted by various stakeholders including cities. The League again thanks bill sponsor Sen. Floyd McKissick of Durham and Representative Brawley for their work on this legislation. Contact: Sarah Collins.
Gov. Pat McCrory has signed into law a bill that will allow all municipalities to use modern technology to collect parking meter payments. SB 52 Cities/Means for Activating Parking Meters authorizes all municipalities to permit activation of parking meters by a variety of methods including cash, credit cards, debit cards and other electronic means. Earlier local legislation had allowed only a handful of cities, including Raleigh and Wilmington, to utilize a full range of payment methods.
Have an interest in serving on one of the League's policy committees? Now is the time to let us know. Just fill out this form and return it to Government Affairs Coordinator Karen Waddell. Joining one of the  Legislative Action Committees (General Government, Tax & Finance and Planning & Environment) or the Regulatory Action Committee is a great way to be involved in League advocacy efforts. If you have an interest or a question, please contact us. Contact: Karen Waddell
A group that includes a former state legislator and former Greensboro Council member are asking a judge to allow it to intervene and argue on behalf of the changes to Greensboro City Council districts and procedures approved by the General Assembly. Former state Rep. Earl Jones and former City Councilman Jim Kee are among the group that has filed a motion seeking to intervene in the lawsuit challenging the Greensboro redistricting. U.S. District Court Judge Catherine Eagles has issued an injunction in the case, preventing the law from taking effect while concluding the City of Greensboro would likely prevail in its arguments challenging the law. Read more about the latest in the lawsuit here.

Despite multiple legal challenges, the Environmental Protection Agency and Army Corps of Engineers were scheduled to start enforcing their final rule to clarify the jurisdictional reach of the Clean Water Act (CWA) today. However, late yesterday, a U.S. District Court judge in North Dakota granted a request of 12 states to immediately block the agencies from implementing the rule. This action highlighted the continued uncertainty over whether federal district or appellate courts should have jurisdiction to hear the many suits challenging the rule.

Although North Carolina also filed a complaint with other states last month to challenge the rule, that suit was filed in the U.S. District Court in Georgia and the Obama administration stated that the decision Thursday only applies to the states requesting the injunction from the North Dakota court. The federal agencies plan to enforce the regulation in other jurisdictions, including the one that encompasses North Carolina.

Clean Water Act jurisdiction is an important issue to cities because it triggers CWA regulatory actions, such as permitting, that apply to projects that cities undertake including road-building, and construction of water, wastewater and stormwater infrastructure. Read more about the final rule in last month's edition of EcoLINC. Contact: Sarah Collins.