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League Bulletin

May 31, 2019

​The Weekly Recap
​​WHAT HAPPENED: The Senate's state budget proposal came out, and it includes support for a number of legislative priorities that North Carolina's cities and towns collectively set ahead of the 2019 session.
 
WHAT IT MEANS: We're thick into some of the session's biggest, hottest moments of debate and observation between parties and chambers.  See a WRAL news report for an NBA Playoffs analogy.​
 
ON TAP: The Senate approved its plan mostly on partly lines Friday. Because it differs from the specifics of the House version (as is normal), the chambers likely will have to negotiate a compromise (as the House is unlikely to concur with the Senate changes straight-up). That final, agreed-upon edition from the legislature would go to Gov. Roy Cooper for consideration -- for another high point of interest. Unlike in recent years, Governor Cooper doesn't have a veto-proof majority to contend with in the legislature this time. ​​​​
 
THE SKINNY: It's an interesting moment. Will the governor (who has asked for a Medicaid expansion plan and other things​ not in the legislature's budgets) veto whatever the General Assembly approves? And what happens then, in terms of putting a consensus budget in place? Stay tuned.

​Senate Passes Budget Proposal; Municipal Goals Addressed
Early this month, the House passed its proposed state budget plan​. This week, the Senate came out with its own, featuring several differences but, like the House version, also with attention to numerous advocacy goals of​​ cities and towns across the state. Among key proposals addressing municipal goals in the Senate's version of HB 966 ​2019 Appropriatio​ns Act​, ​which the chamber approved on Friday, are:
 
-clarification regarding the application of the sales tax to online sales, which will ensure that the state and local sales tax on sales made over the internet is collected and remitted by the seller;

-the creation and funding of a Viable Utility Reserve, which will provide grants to local governments to assist them in assessing the condition of their water and wastewater infrastructure;

-providing disaster recovery funding, including funds to assist local governments with cash flow issues in the wake of natural disasters; and

-f​​unding for grant programs utilized by local governments, such as the Clean Water and Drinking Water state revolving funds, Clean Water Management Trust Fund, and Parks and Recreation Trust Fund.
 
Details on these proposals, along with many others impacting communities around the state, are found in an easy-to-digest, League-prepared document breaking it all down by budget category (such as information technology; transportation; natural and economic resources; and so on). 
 
Among statewide items in the Senate plan is a $46.8 million transfer for the Hurricane Florence Disaster Recovery Fund, some of which would support grants and loans to impacted local governments.
 
The historic rehabilitation tax credit would be extended by four years to Jan. 1, 2024. (See related piece in this Bulletin.) 
 
It would put $10 million in each fiscal year of the budget (non-recurring) into the Workforce Housing Loan Program to help with multifamily affordable unit development, and $2.5 million toward matching grants to nonprofits for the planning and construction of affordable housing.
 
It would appropriate $48.3 million in Community Development Block Grant money for neighborhood revitalization, economic development and infrastructure. ​
 
Specific projects around the state would get $7.5 million in Parks and Recreation Trust Fund support.​
 
Powell Bill funding would be maintained at $147.5 million in each year of the budget.
 
Commercial airports would get $75 million in support for each year of the biennium.
 
There's plenty more to inspect, again as made easy by our breakdown document. 
 
The League previously released a House budget analysis, and now also has a comparison chart between the governor's budget, the House version and the Senate version for your perusal. The Senate approved its version on a mostly party-line 30-16 vote Friday morning and sent it to the House for concurrence. Typically, with differing budget details, the chamber would vote not to concur and subsequently would begin special negotiations toward a compromise plan that the General Assembly can send to the governor's desk. We thank all of our state leaders for their time on this difficult task and for supporting for North Carolina's communities.

Separate Historic Tax Credit Bill Continues to Move

The House Finance Committee this week approved separate legislation that would extend the state Historic Preservation Tax Credit through 2024, even as the Senate agreed with a House position by also including the four-year extension in its budget plan. HB 399 Historic Preservation Act of 2019​ was approved quickly by the committee without any dissent following an explanation by primary sponsor Rep. Steve Ross of Burlington. The tax credit – so crucial to local economic development projects – is now scheduled to expire on Jan. 1, 2020. 

HB 399, in its current form, differs from the four-year extension included in the House and Senate budget only in that it would increase caps on project costs for which the tax credit is eligible by $5 million and includes an additional 5 percent credit level for projects in declared disaster areas. The separate bill, though, is important because it will remain a viable vehicle for the extension should the budget bill be caught up in a potential gubernatorial veto and subsequent negotiations. 

Meanwhile, this week a resolution passed jointly by the N.C. Mayors Association and N.C. Metropolitan Mayors Coalition, along with individual letters from mayors, supporting passage of the extension began being delivered to key legislators. The letters thanked legislators for their support of the extension and included specific information about projects in individual legislators’ districts. But they also urged legislators to pass separate legislation if needed to avoid any delays due to budget negotiations.

Letters to House Speaker Tim Moore and Senate leader Phil Berger​ – signed by the chairs of the respective organizations, Greensboro Mayor Nancy Vaughan and Franklin Mayor Bob Scott – urged "final passage of an extension of the tax credit, whether in these (budget) bills or separate legislation, and that the extension not become caught up in extensive budget negotiations."

Governor Signs Electric Co-Op Broadband Bill

A bill to clear statutory barriers and allow electric co-ops to expand rural broadband service is now law. SB 310 Electric Co-Op Rural Broadband Services, from Sens. Harry Brown, Paul Newton and Mike Woodard, received the governor's signature on Thursday. "No matter where they live, North Carolinians should be able to depend on high-speed Internet access they need to run businesses, do their schoolwork and stay connected," Gov. Roy Cooper said in a statement​. "I’m glad to sign this bill to make Internet access a priority." The new law specifically allows co-ops to partner with private entities in rolling out broadband service. The legislation's passage again shows how better broadband service is a key priority for legislators and their constituents this legislative session. Meanwhile, negotiations continue regarding HB 431 FIBER NC Act​, which would achieve a key League goal of allowing local governments to enter into public-private partnerships to further broadband access and reliability. The League is optimistic that the bill will receive a House committee hearing in coming days. 

​Hearing Ahead for ABC Privatization Bill

Lawmakers next week may discuss a House bill that would privatize the system of selling and distributing liquor in North Carolina. HB 971 Modern Licensure Model for Alcohol Control​, from Rep. Chuck McGrady, currently sits with the House Alcoholic Beverage Control (ABC) Committee and may come up for review among committee members at its regularly scheduled meeting Tuesday afternoon (though it has not been added to the legislature calendar at the time of this writing). The proposal would end the state ABC system to make way for a privatized system overseen by a new state commission. The bill would abolish all local ABC boards and remove many related authorities from the ABC Commission’s current powers. A League analysis has more as it relates to local governments and sales regulations. Tuesday's discussion would precede further committee-level stops for the bill, if given ABC Committee approval. In other beverage news, Gov. Roy Cooper on Thursday signed into law HB 363 Craft Beer Distribution and Modernization Act​, also from Representative McGrady, which among other things seeks to promote the growth of small and mid-sized independent craft breweries. 

​

​Here We Grow: Wadesboro, Statesville Share Their Stories
​Wadesboro and Statesville are the latest to share their stories of homegrown economic development work at Here We Grow, a special initiative highlighting community-level wins across the state and what they collectively mean to North Carolina's economic health. The League-launched Here We Grow, at herewegrownc.org, is brought to you and shared statewide in partnership with WRAL TechWire. The service is free to League-member cities and towns.
 
In Wadesboro, it's the story of municipal, county and state government partnering to land a big private investment and jobs from the recruitment of an adhesives and finishes supplier. "We felt we had an available building that was a good fit, but knew it was very competitive across two states. We absolutely needed Anson County and the Town of Wadesboro to step up and help us close the deal and they did," Anson Economic Development Partnership Executive Director John Marek said.
 
Statesville, too, tells a story of regional cooperation, resulting in business expansions at Statesville Business Park. The latest is Florida-based Cheney Brothers, which celebrated an expansion to its food distribution center there with 100 new jobs created. Cheney Development Director Warren Newell said local leaders and community members alike have been warm. "Once we connected with the local community, we said, 'Let's spend the money and expand here,'" Newell said, as reported by​ the Statesville Record & Landmark newspaper.
 
Wadesboro and Statesville are among municipalities across North Carolina telling us how they're making economic develpoment work at home. We know your municipality has a story to tell, too. Send an email to about@herewegrownc.org if you have not yet obtained login ​​credentials for the site. Here We Grow is free, easy to use and delivers great impact to the economic development narrative. Explore the site, herewegrownc.org​, today to find inspiration. 

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