Fun and games in Raleigh

The General Assembly passed legislation on Thursday that would extend unemployment benefits for about 37,000 North Carolina residents, which are set to expire on Saturday.  However, in addition to the extension of benefits, Republican legislators have included a continuing resolution that, if a budget is not passed by the June 30 deadline, would fund the state at 87 percent of Governor Perdue’s proposed budget.  The Governor opposed this amendment and vetoed the bill. I expect the veto will be sustained in the house since the bill was passed along party lines.

The Governor also vetoed another bill this past week - S265 – Health Plan/Appropriations and Transfer.  This bill would have required state employees to pay part of their health insurance ranging from $11 to $22 per month.  The Governor vetoed the bill stating, “This bill is in effect a tax on teachers, who have not received a pay raise - and have effectively seen their pay drop - for the past three years.” House speaker, Thom Tillis offered to exempt teachers but this offer was rejected.  Let’s see if the Legislature will override this veto.  I would say chances are slim.

House budget subcommittees gave some indication last week as to how they were proposing to close the 2.6 billion dollar deficit. Efficiencies within state government will have to be achieved and some downsizing will have to occur in order to meet that target. The downsizing targets have been reported as follows: Education spending cuts 10%; Universities 15.5%; Elementary and secondary education 8.5% (largely protecting teacher positions, and cutting aids and administration); Community colleges 10%; DHHS 11%; state agencies such as environment and commerce 25%. Numbers related to employee salaries and the state pension plans have not been finalized.  We are getting down to the “nitty gritty”.  This proposal does not include any tax increases, but watch for increases in fees or other “nontax” revenue streams.

The House Select Committee on Tort Reform passed two significant pieces of legislation on Thursday that address several key issues important to the business community. H542 is a general tort reform bill that includes provisions to ensure that juries receive accurate information on the actual medical bills paid in a case; establish appropriate standards for expert witnesses; set reasonable limits on attorneys’ fees in small cases; and provide protection for pharmaceutical manufacturers that have received FDA approval of their products. The second piece, S33, would cap non-economic damages in medical malpractice cases at $500,000; bifurcate trials in civil cases; and provide for periodic payment of future economic damages in medical malpractice cases.   Both bills are expected to be heard by the full House as early as next week.