This week, we Take 5 with the three state legislators who represent Lee County in the North Carolina General Assembly about the state’s budget and other topics. The three are Sen. Ronald Rabin, a Republican from Anderson Creek, who represents District 12 (Harnett, Johnston and Lee counties); Rep. Robert T. Reives II, a Democrat from Sanford, who represents District 54 (Chatham, Lee); and Rep. Brad Salmon, a Democrat from Mamers, who represents District 51 (Harnett, Lee).
You’re back in Raleigh this week, and at the top of your list of to-dos is the state budget. There’s a lot of uncertainty at this point about the budget, particularly for our schools, two weeks after the state’s fiscal year began. So this first: give us your take on your chamber’s budget proposal.
RABIN: The 508-page Senate budget proposal is fiscally responsible. It sticks to our commitments to control spending, reduce taxes and regulations, reduce debt, maintain a viable “rainy day fund,” invest in economic growth and job creation and continue teacher raises. The Senate plan includes the funding of infrastructure improvements without resorting to indebtedness by using bond issues. When we add Medicaid to the education budget, we account for about 80 percent of the total state budget (this does not leave much for meeting our other needs). This is compounded by the fact that Medicaid fraud and abuse by irresponsible users and providers cause huge Medicaid overrun issues annually. This makes Medicaid the “elephant in the room” in budget planning. Accordingly, the Senate budget provides a comprehensive action plan to reorganize and reform North Carolina’s Medicaid system – including addressing the fraud and abuse issue.
Here is some “bottom-line” data to provide insight into the major issues as I see them. The House proposed a 5.08 percent increase in spending while the Senate budget proposes a 1.83 percent increase. This is a significant difference that is more easily seen when you understand that this amounts to $700 to $900 million in spending differences between the two chambers’ budgets in each year of the biennium. That’s upwards of $1.5 billion (with a “b”)! In addition to this difference, the two chambers have very different approaches to taxes.
For fiscal year 2016-17, the Senate tax package would reduce taxes by more than $420 million. That’s money in individual (yours and my) pockets to spend and for businesses to invest in growth and job creation. By comparison, the House version reduces taxes by only about $89 million. That’s less money in our pockets to spend and less for businesses to invest. In my opinion, this will slow our economic growth. Now add in the problem of reorganizing Medicaid (which I believe is essential), and you can understand the magnitude of the problem. I believe the Senate version is more fiscally responsible, does more to foster economic growth and job creation, makes us more competitive regionally and nationally in terms of tax structure and makes us more attractive to businesses and business developers.
REIVES: The House leadership’s budget proposal wasn’t perfect, but it represented some measure of progress in bipartisanship and finding common ground, which is why I voted for its passage in May. Due to opposition from a small group of Republican members, the leadership had to welcome Democrats to the negotiating table. Of 18 amendments we offered, 12 were adopted — ensuring pay raises for teachers and state workers and a modest increase in education investments.
SALMON: The North Carolina House budget was not perfect, but it is much better than the Senate version. I voted to support this budget because it was a solid, moderate attempt to prioritize many important things such as adequate textbook funding for our students, pay raises for our teachers, pay raises for our community college faculty and other state employees, support for our early childhood programs, support for our overburdened court system and support for our rural counties.
How do you see negotiations going in the coming days and weeks — and maybe as importantly, how LONG do you think it’ll take to come to an agreement on a spending plan?
RABIN: Senate and House leaders recognize the consternation of voters regarding this biennium’s budget process and apparent lack of progress. Hopefully the discussion above will help them understand the complexity of the problem. These are not petty differences that can be resolved with the flip of a coin. There are magnitudes of differences that only can be resolved after serious deliberations. In my opinion, they represent two vastly different philosophies for managing North Carolina’s future.
The Senate budget plan keeps North Carolina on a course of growth and prosperity based on fiscal responsibility. The House version will appease more interest groups, but slow our economic growth. Despite these differences, I believe all members of the General Assembly want what is best for North Carolina. However, I cannot predict how long the resolution of these differences will take, but I am sure that the final product will be fair and beneficial to all North Carolinians.
REIVES: The Senate offered a much more austere proposal, which members in the House roundly rejected. Negotiations have been tough, and I expect that to continue for some time. Not being a member of the House leadership negotiation team, it’s difficult to make a prediction about exactly how long that will take. A continuing resolution funded government through Aug. 14, so it is certainly my hope — and that of many other members — that the committee can come to an agreement before that time.
SALMON: The House budget and Senate budget are worlds apart both from a funding perspective and policy standpoint. We passed a continuing resolution that will fund government until mid-August. I am reasonably sure that we will see another continuing resolution before we pass a budget. I am hearing it may be September or later.
Gov. McCrory has been openly critical of the General Assembly’s budget work, so how about him? Give us your assessment of the job the governor is doing.
RABIN: The governor has the prerogative of disagreeing with the General Assembly, and vice-versa. Actually, this is at the base of the notion of separation of powers. Of course, these “differences” sell newspapers and media time — and that’s OK. However, based on my personal interactions with Gov. McCrory, I believe that no matter the differences, we are in accord with regard to the core values of conservatism.
I learned a long time ago that it is not possible to assess someone’s job performance unless you have walked in his or her shoes. I have learned from experience what the job description of a North Carolina senator entails and can assess my performance accordingly, but I have never been a governor, and so I cannot assess Gov. McCrory’s performance. There is a big difference between the scope of being a senator, responsible to the people of two-plus counties, and governing an entire state. Do I agree with all of his decisions? No. But neither do I know all of the factors that lead to his decisions.
REIVES: I understand the governor’s frustration with his party members in the General Assembly, but they seem to also have found him inconsistent. On the one hand, he vetoed what was popularly described as the ag-gag and magistrates’ bills, and on the other, he’s again violated his campaign promise not to enact any further restrictions on the medical choices of women. His fellow party members have shown no hesitation to override his vetoes when they feel he is out of line with their desires, so he cannot even begin to address issues like incentives and infrastructure, which are issues that are imperative that we settle.
SALMON: To be specific, Gov. McCrory has been critical of the Senate’s budget. The House budget includes many of his priorities, including JDIG money for the Commerce Department. I think the primary criticism of him as a governor is that he lacks power and authority. Each day, it seems that an example emerges of Gov. McCrory getting run over by Republican leadership in the legislature.
I support many of his initiatives, including his economic development plan and statewide transportation bonds, but I feel he lacks the effectiveness of stronger executives like Jim Hunt.
One issue that’s gotten a lot of attention lately is redistricting, particularly as the North Carolina House voted down a bill regarding districts for the Greensboro City Council. With the state’s climate being so politically divisive, what’s your perspective about making sure people in the state have a voice in local and state governance?
RABIN: Redistricting, or gerrymandering, has been part of the political scene in the United States since Jeffersonian Democrats introduced it in a Massachusetts election in 1811-12. Political parties view it as a good thing when they win and a bad thing when they lose. But regardless of which party is doing the gerrymandering, it is erroneous to think that the voice of the people is not being heard. In a republic, which by our Constitution is our form of government, it is the voice of the majority of the people that elects those who do the gerrymandering.
In my opinion, the divisiveness in our state and nation is caused less by political differences than it is by those who use the basic “Rules for Radicals” tenant of using every opportunity to divide us in order to gain power. Gerrymandering is simply one more topic progressives can use to divide us — if we let them. In the Senate floor debates on the Greensboro redistricting issue, there were charges of racial discrimination. I can tell you that in my three years in the conservative majority caucus, I have never heard race mentioned during the decision process on any bill — including the Greensboro redistricting case.
REIVES: Like the bill before it that redrew the Wake County voting districts, and the bill before that which made partisan elections for the Sanford City Council and the Lee County Board of Education, the bill that gerrymandered Greensboro’s city voting districts for partisan advantage served no good purpose. State government faces pressing problems in so many other areas. Violating the rights of people to decide how their local governments are elected does nothing to address those problems.
SALMON: Our most fundamental problem dealing with good government in North Carolina is how gerrymandered our districts are. You cannot achieve good policy when most districts are hugely skewed toward one party or the other. Many of our state’s 170 districts (120 House and 50 Senate) are not at all competitive. They are ranked at plus 12 or higher favoring either Democrats or Republicans. This means that the battle for the seat is in the primary election and not the general election. To win, a candidate only has to be more extreme than his or her primary opponent. We should strongly advocate moving toward an independent commission to oversee the drawing of districts.
The legislature is considering changing the state’s sales tax distribution method. Can you explain, from your viewpoint, whether a change is necessary and how it might impact counties like Lee and Harnett and Chatham, which have much lower retail sales than Wake County?
RABIN: The Senate budget plan includes provisions for distributing sales taxes in a way that benefits Tier 1 and Tier 2 counties. The formula is complex, but the logic is fairly straightforward. The logic says that because people from “County A” buy many of their goods and services in “County B” (because those goods and services are not available in “A”), then part of the sales tax collected by “B” should go to “A.”
Keep in mind that much of this sales tax revenue is used to fund schools. Is this kind of distribution necessary? Maybe, but certainly action is needed to help our more depressed counties. This is one path to helping our rural communities and less affluent counties compete and grow. All of the counties in District 12 (Lee, Harnett and Johnston) will benefit under this plan.
REIVES: Lee and Chatham counties certainly would win under the plan to distribute sales tax revenue to counties based on population rather than economic activity. One analysis by the News Observer showed that Lee County would see between 14 and 50 percent growth in revenue; Chatham’s increase would be between 50 and 100 percent.
SALMON: The Senate budget includes a plan to redistribute sales tax revenue by taking a larger percentage of money from urban counties with large commercial hubs and giving an increased percentage to rural counties. This is interesting and could be very advantageous to most counties in North Carolina, including Lee, Harnett and Chatham. It is going to be very controversial because urban areas, as you might expect, very much oppose the proposal. The policy goal it seeks to accomplish is to help fight the growing disparity in rich and poor counties. I think this idea is a good start to help address rural economic hardships.
Aside from the budget, what other legislation do people in your district need to know about? What key issues are lawmakers set to deal with before the session ends?
RABIN: There are, of course, other legislative issues the Senate is dealing with that may be of interest. Work is in progress to move our primary date forward. Primarily, this puts us in the mainstream of presidential races rather than having presidential primaries decided before we vote. In addition, we are examining a “winner-take-all” outcome. All of this will spotlight North Carolina in the media and get more candidates to [the state].
We also are looking at legislation that will put more transparency in our state and local elections so that voters will know more about those they are electing to set the laws they abide by, spend their tax dollars and teach their children. In support of economic development, we are beginning to structure a one-stop website that will help businesses get organized in North Carolina.
The first phase will be to register sole proprietorships and general partnerships so that we can get a better handle on the profile of our small business community. Current estimates suggest that there are between 500,000 and 600,000 small businesses operating in our state that are not registered with the Internal Revenue Service or the N.C. Secretary of State.
REIVES: Along with Reps. Salmon and Boles, I’ve introduced a bill that would allow Sanford to levy an occupancy tax of 3 percent in order to fund a local tourism authority. This will provide an important economic development tool without any additional tax burden on Lee County’s residents. Additionally, I’ve been proud to be a part of successful legislation recently signed into law that protects victims of elder abuse and allows expanded treatment options for terminally ill patients.
SALMON: One key issue all should be aware of is our attempt to modify the occupancy tax in Sanford. This change will allow the Sanford City Council to levy a tax on hotel rooms of 3 percent. This would fund a tourism bureau and help to promote all the great things Sanford has to offer.
Most of the hot-button issues are buried in the respective budgets. Among the most important are incentives, educational funding for teachers assistants, Medicaid reform, sales tax reallocation and changing the process of obtaining a certificate of need in North Carolina.
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