League Bulletin

June 28, 2019

The Weekly Recap
Governor Cooper Vetoes State Budget
What's in the (Now-Vetoed) Budget?
NCLM-Backed Municipal Omnibus Bill Clears House
In Other Bills: Short-Term Rentals, Performance Guarantees, 'Sanctuary Cities'
U.S. Supreme Court Rejects Census Citizenship Question

WHAT HAPPENED: Gov. Roy Cooper vetoed the $24 billion state budget approved by the General Assembly this week.

WHAT IT MEANS: "Back to the drawing board," according to Senate Minority Leader Dan Blue, who joined Governor Cooper at a Friday Morning press conference announcing the veto. While Medicaid expansion was a major priority of the governor's not found in the legislature's budget, Governor Cooper said he objected to the plan for numerous reasons. "This budget as written doesn't move us forward," he said.

ON TAP: The governor expects Democrats in the legislature to sustain his veto, as there is no longer a veto-proof majority across the aisle. House and Senate minority leaders agreed there would be no override. The governor added that his staff would spend next week analyzing the details for a counter-proposal he would give legislative leaders, likely in the week following. Firing back, Sen. Phil Berger on Friday he had already asked for a counter-offer and didn't receive one. "This is and has always been about Medicaid expansion," Senator Berger contended.

THE SKINNY: A vetoed budget means negotiation over the contents of the expansive plan, which as approved by the General Assembly fills out hundreds of pages of programming, including many pieces of interest to cities and towns. While we wait to see what happens on a compromise, we will in this Bulletin link to a full explainer document on where the governor, House and Senate have stood on specific budget items. Meanwhile, lawmakers continue to move priority bills, and we'll highlight some of the pertinent ones here. Read on.

Governor Cooper Vetoes State Budget

After weeks of work among House and Senate budget negotiators, the chambers on Thursday gave approval (by votes of 33-15 in the Senate; 64-49 in the House) to a $24 billion compromise spending plan and sent it to Gov. Roy Cooper. He announced his veto of the plan relatively quickly.

"This budget won't do," Governor Cooper said at a press conference at the Executive Mansion on Friday morning surrounded by supporters, including legislative Democrats. He explained that while he wanted Medicaid expansion in the plan, which doesn't include it, he had a list of other reasons for pulling out the veto stamp. In remarks, he described North Carolinians having a hard time with health care and students in inadequate learning environments, and declared that the budget doesn't do enough to help.

Just after the veto, Senate leader Phil Berger responded that the majority party's leaders in the legislature tried to work with Governor Cooper and had asked for a counter-offer to their positions, but never received one. "This is and has always been about Medicaid expansion," Senator Berger said before highlighting other parts of the budget, like raises for state employees and teachers. Earlier talks between the governor and legislature about Medicaid expansion in the budget did not produce an agreement.

What's next? Negotiation, just days before the start of the new fiscal year. "I promise to work hard on a compromise solution," Governor Cooper said Friday, adding he expects Democrats to sustain his veto, which Senate Minority Leader Dan Blue and House Minority Leader Darren Jackson backed up in their own remarks Friday. "We're going back to the drawing board," Senator Blue said.

What's in the (Now-Vetoed) Budget?

With the legislature's approved state budget vetoed, negotiation will begin on a compromise plan. It's of course uncertain what negotiators will do with specific funding items we’ve covered in recent Bulletins -- what goes, what stays -- but prior versions, including the vetoed General Assembly plan, have included items relevant to cities and towns. Please consult this League-prepared comparison chart between the governor's original budget recommendation, the House budget, Senate budget, and the compromise version between the two chambers that the governor ultimately vetoed. The plan totaled 395 pages and $24 billion, so it covered a lot of ground. Included were disaster recovery funds, grants for utilities, affordable housing resources, parks funding, direct support for municipal projects, continued Powell Bill money and much more explained in our comparison chart.

NCLM-Backed Municipal Omnibus Bill Clears House

A bill backed by the League and sponsored by Municipal Caucus co-chairs Reps. Gale Adcock and Steve Ross cleared the House in a series of floor and committee votes this week. HB 557 Municipal Omnibus Bill, which improves government efficiency on a wide variety of topics, now heads to the Senate for its consideration. The bill included provisions in support of several top goals of cities, including one that extends the notification a county must give the municipalities within it when the county commission switches the method it uses to distribute sales tax among the municipalities. The current window for notification is two months, and the bill would extend that time to five months prior to a switch. This change would allow affected municipalities more time to adjust their budgets for the different funding level. Read about the other items contained in this bill in a prior League report.

In Other Bills: Short-Term Rentals, Performance Guarantees, 'Sanctuary Cities'

Short-Term Rentals: The legislative week passed without any attempts to insert language into existing legislation that would preempt local regulation of short-term home rentals, such as Airbnb. League staff had received credible information last week that such an effort was underway and sent an Action Alert to that effect last Friday. We will continue to monitor and respond to any efforts to preempt local authority on this front.

Reg Reform: The House introduced changes to the Senate’s regulatory reform bill this week. The additions to SB 553 Regulatory Reform Act of 2019 were debated in two committees and still need to be considered by the full House. A provision that was ultimately removed from the bill would have changed the Coastal Resources Commission’s existing authority to approve land-use plans with local government requirements that are more restrictive than state guidelines by prohibiting that approval as it relates to docks, piers, and bulkheads. Among the remaining additions were provisions from HB 77 Electric Standup Scooters that were recommended by an interim legislative committee and were reported on previously in the Bulletin.

Utility Safety: The House also gave full approval to HB 872 Underground Utility Safety Act/Changes that would make various technical changes to the Underground Utility Safety and Damage Prevention Act. The bill was the result of a broad stakeholder process and now goes to the Senate for consideration.

"Sanctuary Cities": Another House approval went to HB 135 Enjoin Sanctuary Cities, which provides a private cause of action for people who claim their municipality or its police agency isn't complying with state immigration law. The League has been and still is unaware of any violation of the state's sanctuary cities law. The bill would also nullify any local "policy, ordinance, or procedure" hindering immigration law enforcement.

Land-Use Litigation: Covered in this Bulletin last week, SB 355 Land-Use Regulatory Changes received final approval from both chambers and went to the governor for signing.

Performance Guarantees: Also outlined last week here, SB 313 Per. Guar. to Streamline Afford. Housing has been approved and presented to the governor.

U.S. Supreme Court Rejects Census Citizenship Question

The U.S. Supreme Court on Thursday spurned efforts to include on the 2020 Census a citizenship question, which census experts had feared would disincentivize participation from some communities. "The ruling throws into doubt whether the administration can offer an adequate explanation to address the court’s concerns in time to include the citizenship question on the 2020 census," according to coverage from Route Fifty. Census forms are essentially on their way to the printer. The citizenship question created inflamed conversation last year over whether it would hurt participation and had honest motives, though the Trump administration has argued that it's important data to collect. It brought about lawsuits to block the question, leading to Thursday's Supreme Court opinion that the question seemed "contrived." The hard effects of the court decision are unclear, according to analysts.

Regardless, the general challenge remains of encouraging participation in the headcount, which local- and state-level officials across the nation have taken up per the results' impact on how communities receive federal funds. "While we celebrate today’s tentative victory, local leaders know there is still more work to be done to ensure our communities are fully counted next year," said a statement from the National League of Cities, which offers resources at www.nlc.org/census. A past episode of the League's podcast, Municipal Equation, examined the citizenship question among many other aspects of the 2020 Census.