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 N.C.
is Weathering the Storm
By: Rick
Handford
House Speaker Joe Hackney was introduced by Tod Thorne.
The speaker attended NCSU, graduated from UNC-Chapel
Hill with honors in Political Science, and received a J.
D. degree from UNC Law School in 1970. He was elected to
the State House of Representatives in 1980, and during
his 15 terms has served as Speaker Pro-Tempore, House
Democratic Leader, House Majority Leader, and Speaker of
the House since 2007. He has consistently been rated by
his peers as one of the ten most effective legislators
during those periods when the House has been controlled
by Democrats.
Beginning in 2007, when he was elected Speaker, Mr.
Hackney implemented aggressive reforms seeking to ensure
more civility and ethical behavior in the NC House of
Representatives. Ethics training is mandatory for
legislators and their staff; there is a no-gift rule for
lobbyists, a list of lobbyist principles, enhanced
reporting, and "a lot more rules than we used to have".
The rules are enforced seriously; and during his tenure
as Speaker three members have resigned under pressure
and one was expelled (non-partisan enforcement, the four
included two Democrats and two Republicans). He feels
that the reforms are working well, and that the ethical
climate is much better than it was.
He then moved to the topic of the economy and the NC
budget. His central message is that, "We are weathering
this storm well, and we are poised to come out on the
other side stronger and better than ever".
In the 2008-09 budget, the State appropriated $21.4
billion, and in the current year, 2009-10, the
appropriation totaled $19 billion, a $2.4 billion dollar
decrease (11.2%). The requirement for a balanced budget
would have limited the budgeted spending to $17 billion,
but the revenue side was increased by about $1 billion
from the federal government and $1 billion in new taxes.
Once the Legislature enacts the Budget, it becomes the
duty of the Governor to see that the budget stays in
balance. In anticipation that there could be a shortfall
in revenues, Governor Perdue has limited spending to
about $18.5 billion, $500 million less than authorized.
It was decided that the priority in establishing the
budget was to keep education strong at all levels. There
are currently 95,377 teachers in NC, down only 1.7% from
the 97,000 teachers in 2008. About 9,067 of these
teachers are in Mecklenburg County. At the university
level, aggressive efficiency efforts have held costs
down without significantly reducing the number of
teachers, and there has been no requirement to limit the
number of students to meet the budget. To date, we are
meeting the education goals with the budget.
To determine the revenue to be included in the budget,
the Governor's economist and the Legislature's economist
are required to reach a consensus on the expected level
of revenues. For the upcoming fiscal year, the current
forecast is for a 2.2% increase, as opposed to the
earlier 3% forecast used in the current budget. The
projection for this year is that revenues will be about
$350-$400 million under the budgeted amount, but as the
Governor has held back about $500 million on the
spending side, there should be no problem meeting the
budget for this fiscal year, which ends on June 30.
The Speaker is "very optimistic" about the economy. He
notes that Moody's has recently released a report that
includes North Carolina as one of 22 states that are
classified as being 'in recovery', an upgrade from
'moderating recession'. Within the State, ten of the 14
regions, including Mecklenburg, are 'in recovery', only
three are listed as 'moderating recession', and one is
actually 'expanding'. When subsequently asked which
region was 'expanding' and why, the answer was short and
sweet: Jackson County, the US Marine Corps". He expects
that all 14 regions will be moving into the 'expansion'
classification in the reasonably near future.
"North Carolina is in good financial shape. . .in
excellent shape when compared with other states." The
Speaker offered several facts in support of this
position, including that the State is one of only seven
states that maintains an AAA bond rating; total debt is
voluntarily held down to around 4% of General Fund
revenues; teachers have kept their jobs; no debt is used
to fund ongoing expenditures; and the State has used no
financial gimmicks in its budget, such as shifting
expenses from year to year. Additionally, the rainy day
fund still has about $150 million, pensions are well
funded (although not at 100% following the market
decline), and the State has continued to invest in
construction of roads, university buildings, etc.,
allowing it to take advantage of 20% lower construction
prices than formerly available.
On jobs, he stated that the State continues to lose jobs
in the manufacturing sector, a long-term trend, but is
making up some of those jobs in high-tech areas. The
State has lost some 250,000 jobs over the last few
years, and currently employs roughly the same number of
people that it did in 2000. The unemployment rate is
still around 11%, with job growth expected at 2.8% this
year, which means that unemployment will be slow to come
down. In spite of this, the commitment to education
remains strong, and we continue to work on maintaining
an excellent public system. Reducing the dropout rate
continues to be a priority.
He noted that the business climate in North Carolina
remains strong, and cited a number of statistics showing
NC ranking high among other states to support that
statement. He also asserted that North Carolina is doing
well on the taxation front, with relatively low per
capita total government and State government revenues
and debt, although our sales tax, income tax, and sin
tax rates are among the highest.
Head Table:
Dan Ramirez, Dumont Clarke, John Snyder, Tod Thorne,
Joel Ford, Ed McMahan;
Invocation: David Anderson;
Visitors & Guests: John Shell; Song: Pam
Jefsen; Piano: Thomas Moore; Photos: Bert Voswinkel |
