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NCACC Legislative Brief
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Week of May 28, 2018

Throughout a busy week at the General Assembly, House and Senate leaders released the conference report on the budget, individual legislation affecting counties moved through committee, and 200 county commissioners and leaders attended County Assembly Day to advocate for county governance and discuss key issues facing counties.

Full Budget Released and Passed in One Week

The third week of the 2018 short session saw release of the budget conference report, approval of the budget in the Appropriations Committee, and approval of the budget by the Senate and House all in the span of five days. This year’s budget bill, Senate Bill 99, moved through both chambers as a conference report which expedites the process, but limits opportunities to change policies or adjust spending numbers since conference reports cannot be amended. NCACC staff is analyzing the budget and will release a full report next week, but included here are some highlights affecting counties:

Education

  • $100 million in the Public School Capital Fund and $117 million in the Needs-Based Public School Capital Fund, which is awarded to tier one and two counties through a competitive grant process —$217 million in total brings the lottery contribution to school capital up to 29% of lottery revenues.
  • Allows the use of the Needs-Based Public School Capital Fund for operational leases. The NCACC has expressed concerns with unintended and potentially negative consequences from diverting school capital funds to leases.
  • Provides an average 6.5% raise to teachers and an average 6.9% raise to principals.
  • $28 million for school safety initiatives including behavioral health professionals ($10 million), school resources officers ($5 million) and capital upgrades ($3 million).
  • Authorizes cities to use property taxes to fund public schools including charter schools.

Broadband
  • New $10 million grant managed in the state’s Broadband Infrastructure Office to help with broadband access in tier 1 counties. Grants will go to private internet service providers, and cooperative entities including energy co-ops.
  • Limits county use of broadband lease agreements to “competitively neutral” projects that “shall not be used to subsidize the provision of competitive service.”

Disaster Relief
  • $60 million in new funds for disaster planning and response, including $10 million to Golden LEAF to help local governments.

Justice and Public Safety Funding
  • Doubles the line-of-duty death benefit for public safety employees including county law enforcement, emergency services, and corrections officers.
  • Additional funding for costs associated with implementing Raise the Age including up to 65 new juvenile court counselors.

Health and Human Services
  • Increases block grant funds available for county child welfare training and advocacy.
  • Shifts $50 million in block grants around between the Child Care Development Fund Block Grant and the Temporary Assistance for Needy Families Block Grant to move funds from child care subsidies to NC Pre-K services.

Commerce and Economic Development
  • Eliminates the adjustment factors in the tier system that automatically place some counties in development tier 1.
  • Lower thresholds for economic development incentives to help attract projects lead to large scale, transformative investment.

Budget Enables Cities’ Ability to Fund Public Schools; Bill Authorizes Four Municipalities to Establish Charter Schools


Signaling a major shift in public policy concerning public school funding, the 2018 budget contains a provision granting cities a new power to use their property tax revenue to supplement education funding. The provision, found in Section 38.8 of the budget, allows both charter schools and traditional local board of education schools to request appropriations directly from a municipality. Municipalities and towns could earmark any funds allocated for specific uses or specific schools. Innovative schools, lab schools under the UNC system, and regional schools could also request education funding from a municipality.

Funds appropriated from cities to a school within city limits may be used for capital or operating expenses, including financial or operating leases for real property, or for other specific uses directed by the municipality. Municipal funds cannot be used to incur debt for the purchase of real property and municipalities may not pledge their taxing power for this purpose. Funds appropriated from a municipality to a school outside of city limits follow municipality residents who attend that school, and may only be used to supplement operational funding or other specific uses directed by the municipality.

Closely related to this budget provision, and also signifying an education policy shift, legislation granting four cities the ability to open charter schools moved through three Senate committees this week. House Bill 514 authorizes the Mecklenburg County towns of Matthews, Mint Hill, Huntersville, and Cornelius to apply to open charter schools and grant priority enrollment to residents of those cities. Though currently a local bill impacting one county and four cities, the bill, along with the above budget provision, sets a precedent for municipal charter schools across the state. The bill was given preliminary approval in the Senate on Thursday with a 30-20 vote and is set for final Senate approval early next week. The bill will then go back to the House for an up or down concurrence vote.

The NCACC is currently analyzing how these two separate, but tightly interwoven, policy changes could impact county authority and funding. It is important to note that the budget provision granting municipalities the ability to levy and use property tax funds to supplement public school funding applies to municipalities statewide and is not limited to charter school spending. This creates many unanswered questions as to how these pieces of legislation play out in practice statewide, such as how the provisions impact the relationships and tensions between counties, school boards, and cities regarding public school funding. Which local government entity is responsible for funding capital and operational funds for schools located within a city limits? Does the authorization for municipalities to provide funds to public schools relieve the State of its primary obligation in public school funding of providing for operations costs? What governmental entity is party to a funding dispute if there is a disagreement over sufficient funds? How will municipal authorization to raise taxes for public education impact the county’s ability to tax and raise revenue?

As these two pieces of legislation are fast moving and on their way to final legislative approval within the next week, the NCACC asks you let us know your concerns with them and how you see it impacting county government. In the interest of time, we also suggest you contact your legislators directly and express any concerns you may have with these legislative provisions. 
 

Elections Security and Transparency Act is Amended, Passes Committee

The proposed committee substitute to S486, now called the Elections Security and Transparency Act, passed the House Ethics and Elections Committee Wednesday afternoon. During committee discussion, members shared concerns from their local boards of elections about the provision requiring criminal background checks for election workers and the unfunded mandate it poses to counties. Several amendments were introduced, including one that clarified criminal background checks would be required only for county board of elections workers who have or will have access to the statewide computerized voter registration system. Counties that do not already require criminal background checks for these employees may apply for HAVA (Help America Vote Act) funds through the State Board of Ethics and Elections Enforcement. The House is expected to vote on the bill on Monday.
 

Commissioners Push for School Capital Revenue during 2018 County Assembly Day

About 200 county commissioners and staff from 65 counties converged on the state capitol Wednesday to meet with their legislators and advocate for county priorities. President Brenda Howerton opened the meeting by telling commissioners how important their advocacy that day was to achieving county priorities such as a statewide bond for school capital needs and broadband access for all parts of the state.

Attendees heard from several County Caucus members – legislators who are former commissioners – on how counties can effectively work with their legislators and how being commissioners informs their work as legislators. Larry Phillips, the NCACC’s President Elect and Surry County Commissioner, moderated a panel including Sens. Jim Davis (Macon) and Valerie Foushee (Orange) and Reps. Becky Carney (Mecklenburg) and John Torbett (Gaston).

State government leadership officials also addressed county officials. Governor Roy Cooper spoke of difficulties in western counties caused by flooding this week. He also discussed his administration’s emphasis on workforce development and his Hometown Strong initiative, which helps less populous areas of the state take advantage of existing programs to grow their economies.

House Speaker Tim Moore shared how his experience as the Cleveland County attorney helps him understand county issues, and talked about the increase in the proposed budget of lottery funds for school construction. Senator Phil Berger, President Pro Tempore of the Senate, discussed new budget items such as teacher pay. He told the crowd that his son is a county commissioner in Rockingham County and regularly informs him of county issues.

Many commissioners and staff held meetings with their legislative delegation. A lunch on the lawn outside the legislative complex provided additional opportunity to visit with legislators.

Public School Funding Dispute Legislation Filed

This week, legislation was filed in the House based on the findings and recommendations of a study evaluating the process for resolving education funding disputes between boards of county commissioners and local boards of education. House Bill 1031 would repeal the statutory authority allowing a local school board to file suit against a county board of commissioners over county appropriations for education and replace it with a default funding mechanism triggered once a funding dispute is initiated and a joint meeting and formal mediation between the county and school board have been unsuccessful in resolving the dispute. The bill was referred to the House Judiciary I committee, where it is expected to receive a hearing in the coming weeks. The NCACC has heard concerns from counties about the default funding formula and continues to work to perfect the language. Timing of the session may be a factor in completing action on this goal before the end of the session.

House Committees Move Regulatory Reform Bill that Impacts Counties

This week the House approved legislation affecting county building inspections, passing House Bill 948 through the Regulatory Reform and Finance committees before voting 98 to 1 to approve the bill on Friday. House Bill 948, titled Building Code Regulatory Reform, would allow engineers to design parts of a residential home and inspect the installation or construction of the design without allowing the county to inspect either. The NCACC is concerned with unintended consequences from this change that will not fully relieve counties of liability for problems resulting from this engineered option of design and construction.

The bill also sets up a process for a county to request help with backlogs of inspections through a recently-created pool of inspectors in the NC Department of Insurance. Under the bill, a builder can also request an inspector from the pool if the county fails to inspect the building within two days of the inspection request. While some changes are still needed to address county issues with the pool inspector option, the latest version of House Bill 948 incorporates some improvements to the process at the NCACC’s request. The bill also adds some reporting requirements for county inspection departments. The bill now goes to the Senate for its consideration.

School Safety Legislation Moves in the House

In addition to the school safety related provision found in the 2018 budget, as outlined above, two other pieces of legislation concerning school safety moved in the House this week. House Bill 934 establishes the Center for Safer Schools in statute and codifies the Center’s responsibilities, which include serving as a resource and referral center on school safety concerns, providing training for public school personnel, and collecting, analyzing, and disseminating school safety data. The bill also requires all public schools have threat assessment teams to assess and intervene with individuals whose behavior may pose a threat to the safety of school students or staff, as well as requiring peer-to-peer counseling programs in all middle and high schools. The bill passed the House K-12 Education committee this week and was re-referred to the House Appropriations committee.

House Bill 938 would require charter, regional, and laboratory schools to develop a school risk management plan, hold school safety exercises, and provide school safety information to local law enforcement. These provisions are currently only applicable to traditional public schools. The bill also requires peer-to-peer counseling programs in all middle and high schools, defines “school resource officer” (SRO) and establishes SRO training requirements, requires an annual report on SROs by each local school board, and requires an annual facility vulnerability assessment for each public school building. It is expected that the House will take up this legislation on Monday.
 

North Carolina Counties' Five Priority Goals

  1. PE-1: Seek legislation to establish a new state-county partnership to address statewide public school capital challenges -- including but not limited to maintenance, renovation, construction and debt -- through a dedicated, stable funding stream that is consistent from county to county and sufficient to meet the school facility needs of all 100 counties.
  2. PE-2: Seek legislation to repeal the statutory authority under N.C. Gen. Stat. 115C-431(c) that allows a local school board to file suit against a county board of commissioners over county appropriations for education.
  3. TF-1: Support efforts to preserve and expand the existing local revenue base of counties, and oppose efforts to divert to the state fees or taxes currently allocated to the counties to the state. Oppose efforts to erode existing county revenue streams and authorize local option revenue sources already given to any other jurisdiction.
  4. GG-3: Seek legislation, funding, and other efforts to expand digital infrastructure/broadband capability to the un-served and under-served areas of the state.
  5. PE-4: Support legislation providing flexibility to align K-12 and community college calendar.
Copyright © 2018 North Carolina Association of County Commissioners, All rights reserved.


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