NC JUSTICE NEWS: The Budget "Compromise" + Unemployed Workers' Struggle + "Safe Student Act"

June 1, 2011

SENATE BUDGET: Education, public services slashed and burned

Legislative leaders unveiled a "compromise" bill on Tuesday that would devastate North Carolina's economy and future.

Last week, the Senate released a state budget proposal that all but eradicated funding for early childhood programs and called for cuts that would result in the loss of 13,000 teacher assistant positions across the state. It slashed funding for mental health, developmental disabilities, and substance abuse services, and placed restrictions on Planned Parenthood.

Republican leaders presented a new budget proposal yesterday that on the surface seems to respond to many of the criticisms of the last week’s version. The new $19.7 budget, designed in the hope to withstand a veto from Gov. Bev Perdue, deleted some of the deep cuts to teacher assistant jobs and made slightly lower cuts to Health and Human Services.

Yet the budget proposal would still force local school districts to find $120 million in cuts – and that's on top of $300 million in cuts to public education already in the budget. Although the “compromise” restored funding for teacher assistants, such restorations were offset by continued cuts to central office administration in schools, meaning that countless school principals, custodians, and other key education personnel will lose their jobs. The alleged “compromise” also included devastating cuts to juvenile justice education, indigent defense, a continued 20 percent cut to More at Four and Smart Start, and further unspecified cuts to Medicaid.

The latest budget proposal attempted to use minor improvements to distract from what continues to be an inflexible approach to managing North Carolina’s resources. It's time for Gov. Perdue to veto the proposed budget and take a stand against a "compromise" that would only abandon North Carolina’s traditional commitment to education, economic growth and innovation.

UNEMPLOYMENT BENEFITS: Stand-off becomes life or death matter

Last month, Fay Walton – a Salisbury woman who has been unemployed since 2009 – wrote out a suicide note and spent a moment thinking it might be easier to let go and leave insurance money behind for her husband than continue the struggle that plagues thousands of North Carolinians.

Although Walton hasn’t worked since August 2009, her plight has become that much more acute due to the impasse between state leaders that has left nearly 46,000 long-term jobless North Carolinians without federal benefits. There is no telling of when Walton may work again, and yet she tries to keep her head above water, applying for jobs and even volunteering to help tornado victims in Joplin, MO. Even at her darkest moment, Walton continues to reach out to others in need.

It’s time that North Carolina’s lawmakers do the same. Last week, legislators offered a “compromise,” saying that in order to extend unemployment benefits, Gov. Beverly Perdue would still have to sign off on deep state budget cuts, but for a slightly shorter duration than previously offered by GOP lawmakers. Yet benefits are already fully funded with federal dollars and have nothing whatsoever to do with the state budget.

Lawmakers should pass a clean bill that extends the jobless benefits and reject a compromise that not only insults their constituents and fellow state leaders but puts the lives and livelihoods of North Carolinians at risk. Visit NC Policy Watch to get the latest updates and read the stories of the individuals most affected by the political stand-off.

CONSUMER FINANCE: House committee approves bill to unleash predatory lenders

Despite the cacophony of public disapproval from North Carolina's banking commissioner, consumer groups and military commanders, the House Banking Committee approved House Bill 810 last week in a staggering 15-6 vote.

HB 810, which should be called "The Predatory Consumer Finance Lenders Relief Act," would more than double interest rates and fees that consumer finance companies can charge their customers. The bill would inject new fees, higher rates and other troubling provisions into the law that governs these loans, and it would allow storefront lenders to increase interest and fees—which under current law already can add up to 54% APR—into triple-digit percentage rates.

In recent weeks, military leaders from around the state, representatives from the Department of Defense and consumer groups have delivered passionate, fact-driven testimonies to members of the committee, and signs seemed to point to their powerful effect. Yet the pressure from GOP leaders and the industry seems to have overpowered even the most convincing arguments.

Passing this legislation was not only an insult to the majority of voters who oppose the legislation but also the members of the military and their families who often fall victim to these types of high-interest predators when they return from deployment. On the eve of Memorial Day, state lawmakers chose to pass legislation that will benefit out-of-state financial institutions and cause irreparable harm to the military members and North Carolinians who struggle to get by.

TABOR: Don't let NC follow Colorado's bad example

There’s a bill currently in debate at the General Assembly that would weaken North Carolina’s ability to recover from the Great Recession and undermine the viability of some of the state’s most vital structures. And yet by going under the disingenuous name of “Taxpayer Bill of Rights,” or TABOR, the bill’s supporters would have you believe such a bill would be for the common good of all North Carolinians. In fact, TABOR would be a disaster for North Carolina, literally robbing its citizens of everything that makes this state great.

House Bill 188, or TABOR, would put in place an artificial and restrictive formula to cap public investments in schools, health care, public safety and infrastructure, thereby crippling the structures essential to rebuilding North Carolina’s economy. The bill would limit growth in state spending to “population growth plus inflation.” Yet the costs of some budget items – like health care and education – increase more quickly than inflation. So the only way to keep within TABOR’s limitations would be to make cuts to such public investments year after year after year.

Last week, the N.C. Budget and Tax Center’s Edwin McLenaghan summarized the damage that TABOR would cause in North Carolina in front of House Judiciary A Subcommittee. McLenaghan described how Colorado passed a TABOR constitutional amendment in 1992, the only state in the nation ever to do so. Colorado has been paying for that decision ever since. The budget constraints weakened the state’s public structures to such an extreme degree that Coloradans voted to bypass the bill in 2005 to allow state revenues to grow with the economy. More than five years later, Colorado’s public structures have yet to fully recover, placing the state at the bottom of national lists regarding investments in public education, universities, and health care.

“TABOR’s fiscal straightjacket would eliminate the possibility of restoring critical public investments in North Carolina as the economy recovers,” McLenaghan told the committee. “Instead, TABOR would permanently lock in the budget cuts made during this recession and further starve the state’s public structures of the resources necessary to put North Carolina and its economy on the path to recovery and future prosperity.” Watch more of the testimony here.

"SAFE STUDENT ACT": Immigrant families threatened by proposed bill

State legislators heard from numerous advocates for children, immigrants, education, justice and fairness on Tuesday – all of them opposed to House Bill 744, the outrageously named "Safe Student Act." This bill would mandate that public school principals require parents to provide students’ citizen or legal status when enrolling in school.

Plyler v. Doe, a 1982 Supreme Court decision, protects the right of an undocumented student to attend public education through high school in the United States. The new law would not technically deny a child admission from a public school. But according to the U.S. Department of Education, the mere act of requesting a child’s legal status is unconstitutional and violates federal law in regard to the confidentiality of a student's personal information. In addition, although the bill claims this information would be collected for "fiscal analysis," it's unclear what that means.

The big concern is that the "Safe Student Act" would be used to frighten or discourage parents from enrolling their students in school, and revealing a child's – and by extension, the parents' – immigration status could result in discrimination, harassment or exclusion. If the bill were to become law, school principals would have the burden of requesting the nationality and immigration status of all students and keeping record of such information, almost in the vein of an official federal officer.

HEALTH INSURERS JOIN EXCHANGE: Benefit exchange bill passes

The bill backed by every health care industry group and opposed by every single consumer group passed its first round in the House last Wednesday, with every Republican and enough Democrats voting to support it to override a veto.

The House voted 83-34 in support of the North Carolina Health Benefit Exchange, or House Bill 115, 115, which will allow industry to take over the new "health marketplace." If this bill becomes law, it will allow insurers to regulate themselves, give insurers special appeal rights, and tax individuals and small businesses instead of insurers. That means more profits for Blue Cross and fewer protections for consumers.

There were a few small bright spots in the proceedings, namely when two representatives were successful in passing two amendments to the bill in exchange for their vote of support. Rep. Angela Bryant’s amendment called for the removal of one insurance agent from the board overseeing the exchange, and Rep. Rick Glazier pushed to add strong conflict-of-interest language to the board.

Yet it is industry leaders, not consumers, who would dominate the board, in spite of these amendments. The exchange would be stripped of any ability to make shopping for insurance easier – which is the primary function of the exchange.


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