McGuireWoods Consulting - North Carolina General Assembly Week in Review

May 19, 2023

North Carolina General Assembly Week in Review

The North Carolina General Assembly returned to Raleigh following a brief hiatus last week, and tensions ran high as lawmakers delved into contentious issues on the agenda. The few bills up for debate this week ignited fiery discussions throughout the chambers. As expected, the Republican-controlled General Assembly successfully overrode Democratic Governor Roy Cooper's veto on a bill imposing limitations on abortions in the state. Protestors on both sides of the issue filled the legislative building, and following the vote, pro-choice protestors were ejected from the galleries in both chambers. Emotions further flared during a three-hour debate in the House on the topic of school choice. Meanwhile, the Senate devoted considerable time to deliberating their budget bill, which passed with bipartisan support and is now poised to enter conference committee with the House to work on a compromise proposal.

Abortion Bill Veto

At a rally held in Raleigh on Saturday, surrounded by over 2,000 pro-choice activists and Democratic lawmakers, Democratic Governor Roy Cooper vetoed SB 20: Care for Women, Children, and Families Act, a bill containing significant revisions to the state's current abortion regulations. Two weeks ago, the General Assembly passed the bill along a party-line vote. However, this week, the General Assembly swiftly overrode the Governor's veto by a narrow margin.

SB 20 will revise North Carolina's existing abortion laws, including reducing the time limit for abortions from 20 weeks to 12 weeks, with exceptions for cases of rape and incest, and in cases where the life of the mother is at risk. The bill also introduces additional provisions, such as requiring physicians to obtain their patients' signatures acknowledging the risks of the procedure and the gestational age of the fetus. Violations of these requirements could result in fines and disciplinary actions against physicians.

Republican lawmakers who supported overriding the Governor’s veto argued that the bill is a necessary step to protect the rights of the unborn and ensure the safety of women seeking abortions. They claim that the revised time limit will reduce the number of terminated pregnancies and emphasize that exceptions are included for cases of rape, incest, life-threatening situations, and severe fetal anomalies. Republicans also highlight the bill's inclusion of measures aimed at providing support for women facing unplanned pregnancies, such as paid parental leave for teachers and state employees, and funding for childcare facilities.

Democratic lawmakers, on the other hand, have strongly opposed the bill and the process by which it was passed. They argue that the legislation restricts women's reproductive rights and interferes with the doctor-patient relationship. Democrats have criticized the rushed nature of the bill's passage, pointing out the lack of committee hearings and limited time for thorough debate.

In response to the override, Governor Cooper expressed his disappointment, accusing the Republican-led legislature of violating the privacy of women. In a statement following the Senate’s vote to override his veto, Cooper wrote, "Strong majorities of North Carolinians don't want right-wing politicians in the exam room with women and their doctors, which is even more understandable today after several Republican lawmakers broke their promises to protect women's reproductive freedom."

After being overridden by both chambers this week, the law will go into effect on July 1 of this year.

Senate Budget

This week the Senate passed their long-awaited state budget proposal, sending HB 259: 2023 Appropriations Act back to the House to begin negations between the two chambers. HB 259 has budgeted state spending at $29.8 billion in the year 2023-2024 and $30.9 billion in the 2024-2025 fiscal year. Some of the main highlights of the bill include over $1 billion to the state savings fund for emergencies or crises, along with education spending, receiving an allocation of $17.2 billion in the first fiscal year and $17.6 billion for the year 2024-2025.

One of Senators’ key priorities in the budget was tackling North Carolina’s worker shortages in state agencies. The budget allows for salary increases for state employees and teachers and provides state agencies with salary flexibility to fill critical positions that are currently sitting vacant. Teachers would receive a 4.5% increase in pay in both years of the biennium, in addition to starting teacher pay being raised to $59,121 by the end of the 2024-2025 fiscal year. State employees are budgeted at getting a 5% increase in pay both years of the biennium. These salary increases are not as significant as what the House included in their budget proposal or what Democratic Governor Roy Cooper proposed in his. The House proposed a 4.25% increase in the first year of the biennium followed by a 3.25% pay increase in the second year. In his budget proposal, Governor Cooper proposed an average increase of 18% for teachers over the next two years.

The Senate proposal also includes $10 million for UNC Health to form a clinically integrated network with ECU Health intended to connect UNC Health and ECU Health providers and facilities under the same clinically integrated network in support of the North Carolina Care Initiative. $40 million in each year of the biennium was included to fund loan repayment and practice incentives for primary care physicians and other health providers who agree to practice in rural and underserved communities.

One of the biggest expenditures in the Senate budget is the allocation of $1.4 billion to a reserve for NCInnovation to invest in UNC System schools to improve their research. The bill calls for the state to work with NCInnovation to promote state funded research by making it more commercialized. North Carolina currently ranks second for research but twentieth for commercializing that research. The Senate added measures to the plan so that there are accountability metrics for the funds and additional claw back provisions to encourage businesses who benefit from the research to remain in North Carolina.

Senate Republicans also proposed accelerating the decrease in the state’s personal income tax rate. Their budget would decrease personal income taxes to 4.5% by the year 2024 and down to 2.49% by the year 2030. During the last legislative session, lawmakers passed a budget that would ratchet the personal income tax rate down to 3.99% in 2025, but this year’s proposed budget would accelerate the decrease in the immediate reduction in 2024 and reduce to 3.99% in 2027. Senator Brent Jackson (R-Sampson), who is a chief budget writer in the Senate, said they were speeding up the tax cuts to “ease inflationary pains” being felt by taxpayers.

The budget bill passed Thursday with bipartisan support, by a vote of 37-12. Since passing the Senate with significant changes from the bill that initially passed the House, it will return to the House for a concurrence vote. The House is unlikely to concur with all of the changes made by the Senate, meaning the bill will go to a conference committee consisting of budget leaders from both chambers. A final budget is expected to be passed by the General Assembly next month.

Private School Funds

A bill aimed at expanding eligibility for private school vouchers in North Carolina passed the House this week, marking a significant step forward for school choice activists. HB 823: Choose Your School, Choose Your Future would allow families at any income level, rather than just the poor and middle class, to receive taxpayer funds for their children to attend K-12 private schools.

The Opportunity Scholarship Program, a nearly decade-old initiative, has undergone several changes in recent years. Initially, program grants were available to those who qualified for free or reduced-price lunch or had slightly higher incomes. However, under HB 823, income eligibility limits would be eliminated, and a new sliding scale would be implemented. The lowest-income applicants would receive scholarships equivalent to the per-pupil amount allocated to public schools in the previous year, while higher wage earners could receive awards equal to 45% of the per-pupil allotment. If the bill becomes law, these changes would take effect starting the 2024-25 school year.

Representative Tricia Cotham (R-Mecklenburg), a chief sponsor of the bill, highlighted the importance of providing families with options in education, stating, "This is the largest and most expansive school choice bill that the state has seen." Rep. Cotham emphasized that education should not be a one-size-fits-all approach and that the bill empowers families to act in the best interest of their children.

The proposal has faced opposition from Democrats who express concerns about the potential consequences for traditional public schools. Critics argue that the bill would divert state funds away from public education, exacerbating financial challenges. Opponents of the bill also raised concerns about the varying standards and accountability between private and public schools. Representative Julie von Haefen (D-Wake) questioned the bill's provisions allowing students currently enrolled in private schools to take advantage of the funds, asking, "Whose children are really getting meaningful choice from this bill?"

The passage of HB 823 in the House sets the stage for further discussions and negotiations as the bill moves to the Senate. The bill passed the House by a 65-45 vote, with all Republicans and one Democrat voting in favor. A companion bill, SB 406, has already been introduced in the Senate. The final outcome will depend on the deliberations between the two chambers and potential action by Democratic Governor Roy Cooper, who has previously voiced opposition to private school vouchers.