League Bulletin

May 25, 2018

The Weekly Recap
Legislature Keeps Focus to Budget, School Safety
Legislators Announce Broadband Grant Program
Federal Gov't Certifies 'Opportunity Zones' Across N.C.
Federal Spending Proposals Include City Priorities
Public Comment Period Opening on Transportation Projects
New Municipal Population Estimates Released

WHAT HAPPENED: The General Assembly's short session was in full swing, and while bill filing and committee business carried on at a fast clip, most anticipation was on state budget development. House and Senate budget writers have been working to align on spending items for passage, ideally, in the very near future.

WHAT IT MEANS: If budget adjustments keep to the pace described in media reports, then the conference report for Senate Bill 99 (a former insurance bill made into a vehicle for the budget) could be publicly released and up for its first votes next week. State budget writing is a tedious process with a lot of moving parts, but outlets as of late Thursday were quoting chief House budget writer Rep. Nelson Dollar as keeping with a June 1 approval target. Nothing is certain.

ON TAP: There are plenty of proposals moving through the channels, including a broadband measure that legislative budget writers touted on Thursday. You can read more about that in this Bulletin.

THE SKINNY: Soon we'll know the specific contents of the legislature's budget and what they'll mean for cities and towns. But beyond the aforementioned, insiders don't anticipate a crush of other lawmaking as legislative leaders seek a shorter-than-usual short session.

Legislature Keeps Focus to Budget, School Safety

In a broad sense, the short session hasn't surfaced much in the way of surprise, and that continued in this week's bill filing. A number of local and pensions-related proposals were in the mix along with some transportation recommendations. Among proposals were HB 1010 Build NC Bond Act, which would authorize the issuance of state "Build NC" transportation bonds. The proposal is modeled after the federal GARVEE bond program and would allow the state to borrow money for local transportation priorities and repay the bonds using future state transportation dollars allocated to the Highway Trust Fund. Build NC bond proceeds would fund transportation projects prioritized at the regional and division levels of the state’s transportation funding system. These projects are suggested by local officials, who also have the most input in deciding which of these projects to prioritize. Includes borrowing limitations, including an overall program cap of $300 million.

With a focus on school safety leading legislative priorities, SB 756 School Security Act of 2018 followed. It would create a new class of teacher employee, called a "teacher resource officer," which would be a teacher who had become a sworn law enforcement officer with arrest powers identical to those of municipal and county officers. The Associated Press reported also that the state budget would include a $35 million school safety package, though Gov. Roy Cooper said more is needed. The governor had similar comments for legislation on deck in the House and Senate to deal with emerging water contaminants such as GenX. Meanwhile, deadlines are ahead for new bills -- June 5 for pensions-related bills and June 7 for the filing of local bills -- coinciding with the legislature's intent to work quickly and adjourn as soon as possible. The League's Bill Tracker lets you see what bills we're following, with analyses and current status.

Legislators Announce Broadband Grant Program

Legislative leaders have announced that they plan to include a provision in the state budget bill creating a new $10 million grant program to expand internet access. Senate Majority Leader Harry Brown, R-Onslow, and Rep. Dean Arp, R-Union, announced the plan to reporters late in the day on Thursday. A news release issued by the Senate later announced the plan as Growing Rural Economies with Access to Technology, or GREAT. The program would make grants available to internet service providers and utility cooperatives, with grants made based on a point system taking into account a number of factors including the speeds offered, local support and service provider. The actual language of the provision has yet to be made public. Senator Brown acknowledged the program is primarily aimed at bringing standard broadband service to those without it.

The League, with its report on broadband access in North Carolina, Leaping the Digital Divide, has been advocating both for measures that will bring last-mile service to those without it as well as make high-speed internet available to towns and businesses that require those higher speeds to remain economically competitive. The NC Insider State Government News Service quoted NCLM on the issue as follows: "The League appreciates legislative leaders' efforts in this area and their recognition that funding is needed for this crucial infrastructure. North Carolina needs a quality state broadband grant program to encourage these investments. At the same time, policymakers must recognize that a grant program alone is not enough to address the digital divide, that this divide is not only about rural homes without minimal connections, but also about small and even mid-sized towns without the fiber infrastructure so that their businesses can have the internet speeds needed to compete in a global economy." The League has been advocating for a public-private partnership approach to accomplish that goal.

Federal Gov't Certifies 'Opportunity Zones' Across N.C.

The U.S. Treasury has certified 252 areas (full downloadable list) of North Carolina as Opportunity Zones, "potentially opening a new source of investment capital for regions of the state that need it the most," the state Department of Commerce said in a press release this week. Although federal officials have yet to finalize specifics for the program's rollout, state officials call the new certifications "an important milestone." "We're pleased that communities in every corner of our state will be able to utilize this new development tool," Deputy Commerce Secretary Napoleon Wallace said in the press release. "With the certification of our proposed zones, our local and regional partners can accelerate their work to identify and prepare projects and investments in their areas suitable for equity capital." The program started with the recently passed federal tax plan, which gives a tax benefit to qualified investors wanting to reinvest realized capital gains into Opportunity Zones, which are low-income areas certified for the program. The 252 newly certified tracts are spread across North Carolina and represent a total population of more than 1.1 million people, according to the Department of Commerce. Previous League Bulletins provide additional background.

Federal Spending Proposals Include City Priorities

On the federal front, the National League of Cities is reporting that municipal priorities are kept alive in the U.S. House and Senate's first-draft fiscal 2019 spending bills. There are a dozen annual spending bills pertaining to federal programs and operation, and Congress generally has until October 1 -- the start of the federal fiscal year -- to present them to the president for signing. NLC believes factors including time constraints in the congressional calendar could mean the deadline is moved past the midterm elections. One of the House spending bills "would increase funding for affordable housing and transportation programs that, according to committee documents, would represent another significant down-payment on infrastructure," says NLC. A $1.7 billion increase in highway grants to states represents the biggest budget boost in that category, bringing that proposed funding to $4.25 billion. Meanwhile the Better Utilizing Investments to Leverage Development, or BUILD, program (the new name for TIGER grants) would be cut from $1.5 billion to $750 million. House proposals also include $447 million for grant programs to help slow the pace of opioid overdoses. More details are in NLC's latest Federal Advocacy Update.

Public Comment Period Opening on Transportation Projects

North Carolinians can submit comment to the N.C. Department of Transportation (NCDOT) starting June 4 on which regional and local transportation projects should be among the state's priorities. It's for the State Transportation Improvement Program, or STIP, a 10-year plan for the funding and scheduling of specific projects. According to a news release, NCDOT's 14 local divisions will host informal meetings to discuss proposed projects and record residents' feedback. "At each meeting, citizens are invited to stop in and provide input on how the division plans to rank its project priorities," the agency says. "Please note that these meetings are not for maintenance projects, such as patching potholes, resurfacing roads or improving ditches." NCDOT's website has a complete schedule for the public sessions ahead. For anyone unable to attend in person, the state will accept comment and survey input online.

New Municipal Population Estimates Released

The U.S. Census Bureau has released new population estimates for North Carolina, broken down by locality. The News & Observer has made available a detailed table that includes estimates at the county and municipal levels. You can view that here.