During the 2012 legislative session, House Republicans made a promise to fix government — a government which had left North Carolinians struggling under a faltering economy, crushing state debt, a bloated and inefficient bureaucracy, costly and over-burdensome regulations, and an outdated and confusing income tax structure. After 140 years of near-unilateral control of state government by the other party, some serious reforms were in order.
Representative Szoka and his colleagues in the legislature have kept that promise. Certainly, some difficult decisions had to be made along the way. But as a result, more North Carolinians are going to work now than ever before — and the State has a balanced, fiscally responsible budget that will preserve our “Carolina Comeback” for years to come.
What follows is a brief synopsis of the significant accomplishments of the last two years; the General Assembly has passed more than 500 new pieces of reform-centered legislation in the last biennium session alone. To learn more about individual subjects (too numerous to mention here), click on any of the hundreds of links located down the right-hand side of the website (we’d also urge you to click on the individual category links at the top of each story). There are also useful links in the menu bar under the website’s masthead.
Economic Recovery & Tax Reform
- The General Assembly restructured North Carolina’s uncompetitive tiered tax rates to a lower, flat rate. Among all neighboring states, North Carolina now has the second lowest personal and corporate rates;
- As a result of these significant tax cuts, we are beating national employment trends for the first time in years and putting money back into our citizens’ pockets. Unemployment rates since Republicans took over the legislature have declined by almost 40 percent;
- According to Americans for Tax Reform, North Carolina’s state business tax climate ranking jumped from 44th to 16th after cutting more than $1 billion in taxes over the next five years — the most improved in the nation, according to The Wall Street Journal;
- North Carolina’s five percent corporate rate in 2015 will be among the lowest in the Southeast;
- These pro-business tax cuts have helped North Carolina secure fourth place in the Forbes Magazine’s “Best States for Business” rankings.
Streamlining Government Regulations
- For years business costs in North Carolina had been steadily rising due to unnecessary compliance expenses, legal fees, and red tape — without improved safety and service to communities;
- Agencies are now required to regularly review regulations in order for them to remain in effect;
- Unless approved by unanimous vote, local governments are restricted from creating regulations more stringent than state and federal laws determining employer’s benefits, worker transportation, or environmental controls.
Prioritizing Teacher Pay
- Five years ago, Democrats froze pay and put teachers on unpaid furloughs. The Republican-controlled General Assembly passed a budget containing one of the largest teacher pay raises in a generation;
- North Carolina teachers are now among the highest paid in the region after receiving an average seven percent raise;
- Classroom funding flexibility has been maintained, allowing superintendents to spend allocations according to their district needs — giving them the final say in Teacher Assistant and classroom funding decisions;
- Every teacher in North Carolina will be making more money than he or she did last year, and starting pay will be among the highest in the Southeast.
Section 1: Jobs and the Economy
After reforming our outdated tax code, streamlining unemployment payments, reforming the state’s unemployment insurance system, and cutting costly regulations on businesses, we have experienced real improvements in our economy. Thanks to Representative Szoka’s low-tax and pro-growth policies, North Carolina is now beating national unemployment trends for the first time in years. Throughout 2013, North Carolina realized a 24 percent drop in the unemployment rate as compared to a 16 percent drop in the national figure. Additionally, we finished 2013 as one of only four states reporting meaningful job gains. Representative Szoka was key architect of the tax reform law.
Thus far 2014 is proving to be another year of economic progress for North Carolina, with the state unemployment rate finally going below 6.5 percent – almost 40 percent lower than when Republicans first gained control of the legislature. Our progress has not gone unnoticed on the national stage. According to Americans for Tax Reform, we now rank among the top five states for improved economic outlook. Business owners and employees can finally feel confident about North Carolina’s business climate and economic future.
“This is one of the most impressive state tax reform effort we’ve seen in the last 10 years,” said Tax Foundation Economist Scott Drenkard. “While other states might reform one or two elements of their tax code, North Carolina leapt over 28 states by passing reforms on corporate, individual, and sales taxes. This level of reform — both in scope and craftsmanship — is rare.”
North Carolina has cut taxes, streamlined government and lifted job-killing regulations to spur economic growth. Our unemployment rate and job gains are outpacing national trends for the first time in years and we are confident that the business climate will continue to improve due to sweeping reforms.
- Since taking control of the General Assembly in January 2011, Republicans have been credited with creating more than 200,000 new jobs;
- According to Americans for Tax Reform, North Carolina’s state business tax climate ranking jumped from 44th to 16th after cutting more than $1 billion in taxes over the next five years and enacting the first meaningful reform of the state tax code in decades;
- For these extraordinary accomplishments, The Cato Institute gave North Carolina an “A” grade this year based on our efforts to restrain government and cut spending;
- Representative Szoka and the leadership of the General Assembly led to the largest percentage drop in unemployment among the 50 states in 2013, with a 24 percent drop in the unemployment rate as compared to a 16 percent drop nationally;
- Since reaching a high of 11.4 percent in February of 2010, North Carolina’s unemployment rate has been cut to 6.5 percent;
- As a result of these pro-business reforms, North Carolina finished in the past year as one of four states with significant job gains and has reduced the unemployment rate to around 6.5 percent in 2014;
- In 2015, North Carolina will implement a 5 percent corporate tax rate, which will be one of the lowest in the Southeast.
Representative Szoka’s continuing focus on Regulatory Reform is boosting North Carolina’s economy by giving the private sector more freedom to invest, expand, and create jobs in our State. Regulatory Reform legislation, passed in both the 2013 long session and 2014 short session, is eliminating overly aggressive, unnecessary and subjective regulations on businesses. With our State’s job creators in mind, the primary focus of House Bill 74 (passed in 2013) and Senate Bill 734 (passed in 2014) was cutting red tape and reducing bureaucratic barriers for business owners.
- House Bill 74 requires that state agencies regularly review regulations for them remain in effect and carefully determine the economic impact of new proposed regulations. It also provides a mechanism for the public to weigh in and participate in that process;
- Unless adopted unanimously, local governments may not pass regulations more stringent than state or federal laws regarding benefits, transportation, or environmental controls;
- Farmers can no longer be forced to hire union labor by their purchasers and private employers may now maintain a preference policy for hiring disabled veterans;
- Senate Bill 734 clarifies the process for State agencies to readopt rules that have undergone periodic review, as provided in last year’s regulatory reform legislation;
- The law eliminates duplicative and redundant boards and commissions to ensure proper stewardship and oversight of taxpayer resources;
- Entrepreneurs building new communities have been given increased regulatory flexibility. If an ordinance or rule changes after a developer submits a permit application, they may choose between compliance with the original rule or the newly adopted rule;
- This legislation requires that prior to an offer to purchase real property, a prospective seller must disclose any oil, gas and mineral rights related to the property.
We continue to focus on commonsense legislation that eliminates and streamlines burdensome regulations for individuals and businesses. Regulatory reform was a necessary step in creating an environment that accommodates entrepreneurs and business owners rather than stifles them.
- Regulatory reform was necessary due to a steady rise in the cost of doing business caused by compliance expenses, legal fees, and red tape — without improved community services;
- This regulatory reform effort is streamlining government operations, eliminating burdensome or overly aggressive regulations and creating a level playing field for North Carolina business owners;
- Through this legislation, State leaders are giving employers more flexibility to hire employees, bid on government contracts, comply with regulations, and operate in multiple communities;
- North Carolina is countering failing federal policies with reduced regulations and lower taxes, which now has the state outpacing national and regional employment trends.
Farm Act of 2014
North Carolina’s agriculture industry is one of the largest in the nation, generating over $70 billion in economic activity annually. In order to maintain this national leadership role, policy makers must ensure that farmers operate under reasonable laws and regulations. Through House Bill 366, Representative Szoka and State leaders are providing uniformity under North Carolina law, encouraging regulatory efficiency and protecting farmers from unscrupulous practices. This legislation also reforms overly aggressive local regulations, reinforces the rights of property owners, and strengthens the Department of Environment and Natural Resource’s commitment to investigate environmental complaints fairly. Reducing regulatory barriers and protecting the property rights of farmers remains a major priority for the General Assembly moving into the 2015 General Assembly.
Agriculture is North Carolina’s top industry, accounting for over $70 billion in economic activity statewide. The Farm Act protects our longstanding reputation as a premier agricultural state by streamlining burdensome regulations and providing uniformity in State law.
- The law allows the Department of Environment and Natural Resources (DENR) to flag frivolous complaints and develop rules for receiving, investigating and responding to environmental complaints on farms;
- In order to increase responsiveness, the Commissioner of Agriculture may now appoint law enforcement officers to carry out duties on behalf of the agency;
- Crafted with assistance from the NC League of Municipalities, Farm Bureau and Department of Agriculture, this law ensures statewide uniformity in the regulation of fertilizer;
- This legislation amends North Carolina statute to provide that trespassing at an agricultural facility is a first degree trespass punishable as a Class A1 misdemeanor;
- The NC Farm Act requires that individuals obtain written consent from property owners before operating an ATV on the private property of another. Additionally, liability protection has been extended to property owners in this circumstance;
- House Bill 366 specifies that investigations relating to agricultural operations are confidential until charges have been brought.
Tax Simplification and Reduction Act
Personal Taxes: House Bill 998 lowers the Personal Income Tax rate for all North Carolinians and modernizes our 1930’s era tax code. Tiered personal tax rates, which peaked at 7.75 percent, have been replaced with a flat 5.8 percent rate in 2014 and a 5.75 percent rate in 2015. The most vulnerable North Carolinians will retain an effective tax rate of 0 percent and will continue to benefit from traditional exemptions for items like food, prescriptions and Social Security.
The law allows for a combined deduction of up to $20,000 for mortgage interest and property tax, while deductions for charitable contributions remain unlimited. Standard deductions have been increased to $15,000 (MFJ), $12,000 (HOH) and $7,500 (Single). Additionally, the child credit has been increased from $100 to $125 per dependent for families making less than $40,000 annually.
Corporate Taxes: This legislation begins the process of repealing industry tax loopholes and lowers the rate across the board. The corporate income tax rate drops from 6.9 percent to 6 percent in 2014 and to 5 percent in 2015. Additionally, sales taxes are only expanded to services where the provider already collects and remits part of sales tax, like warranties and service contracts.
Tax reform is helping our economy by simplifying outdated laws and cutting tax rates across the board. Among all neighboring states, North Carolina now has the second lowest personal and corporate rates. As a result of these tax cuts, we are beating national employment trends for the first time in years, putting money back into our citizens’ pockets and creating a business-friendly tax climate.
- House Bill 998 updates North Carolina’s antiquated tax code, which was ill-prepared to account for industries like information technology, biotechnology, banking and pharmaceuticals;
- Tiered personal income tax rates, which peaked at 7.75 percent, were replaced by a flat 5.8 percent rate in 2014 and a 5.75 percent rate in 2015. Our most vulnerable citizens retain an effective tax rate of 0 percent, while exemptions for Social Security, food purchases and medicines remain untouched;
- The law increases standard deduction amounts, allows for a combined deduction of up to $20,000 for mortgage interest and property tax and allows all charitable contributions to remain fully deductible;
- As a result of this tax cut, North Carolina’s state business tax climate ranking jumped from 44th to 16th according to Americans for Tax Reform (ATR);
- The corporate income tax rate drops from 6.9 percent to 6 percent in 2014 and to 5 percent in 2015. Additional reductions in the corporate income tax rate are possible if revenue targets are met in the next several years.
NC Economic Partnership Modifications
North Carolina needs to maintain a competitive advantage in attracting and retaining businesses that are looking to expand or relocate. Before the passage of House Bill 1031, North Carolina relied upon an outdated model that solely depended on the bureaucracy within the Department of Commerce to compete for jobs with other states. Following the lead of several other forward-thinking states, we have restructured our economic development strategy to better capitalize on job creation opportunities.
HB1031 allows for the creation of a non-profit organization whose sole purpose is to retain and attract jobs, grow international trade, oversee marketing, and promote travel and tourism. The new entity will contract with the Department of Commerce and will have greater flexibility to pursue potential economic development opportunities, gain private sector support and close deals. The organization will still have comprehensive State oversight and accountability. Additionally, the legislation creates eight distinct prosperity zones that will collectively promote and pursue regional economic development interests.
Under the old Department of Commerce model, economic developers were subject to numerous restrictions and administrative hurdles that slowed responsiveness and ultimately killed many economic development opportunities. This new structure will allow North Carolina’s economic developers to quickly respond to time-sensitive opportunities and leverage private dollars to attract new businesses.
The Public-Private Partnership economic development model provides North Carolina with the speed and flexibility to consistently attract new businesses and grow our State’s existing businesses.
- The provisions allow Commerce to contract with a nonprofit corporation to retain jobs, open development opportunities, grow international trade, implement marketing and promote travel and tourism;
- Eight prosperity zones have been created for regional economic development activity, resulting in a one-stop shop for business development and recruitment operations in each zone;
- The law’s language ensures that the nonprofit corporation is subject to State ethics regulations, compliance requirements and regular audits by the Office of State Budget and Management;
- Restrictions have been placed on the amount of State funds that can be used to compensate employees and officers of the nonprofit corporation;
- The board of the nonprofit corporation will be comprised of stakeholders representing a diverse range of industries, interests and regions in North Carolina.
Omnibus Tax Law Changes
Building on last year’s tax reform effort which reduced tax rates, simplified the tax code and broadened the tax base, the General Assembly implemented additional tax law changes in 2014 through House Bill 1050. This legislation modifies and clarifies laws regarding tax collection, tax calculation and tax applicability in North Carolina. It streamlines and simplifies certain tax collection procedures applied to North Carolina businesses and clarifies several other sales tax provisions. Most importantly, this legislation aims to prevent the continuation of inconsistent, subjective and potentially abusive Privilege License Taxes (PLT) that cities levy on local businesses for the privilege of operating within their jurisdiction.
PLT rates and amounts vary from city to city and from industry to industry, making it highly subjective and prone to inconsistent and unfair application. They vary from just a few dollars to tens of thousands of dollars per business site. This inconsistency in the application of PLT rates discourages business investment.
Aware of potential revenue disruptions for cities as a result of these changes, the General Assembly left the current PLT rates in place until July 2015. In addressing these concerns, State leaders have highlighted that municipalities will experience additional revenues due to an expanded sales tax base from the passage of House Bill 998 in 2013. The General Assembly will continue to work with local governments on local taxation authority throughout the tax reform process.
As part of an ongoing tax reform effort that broadens the sales tax base for municipalities, HB 1050 streamlines and clarifies various parts of North Carolina’s tax law. A central piece of this legislation is the Privilege License Tax provision, which aims to transition an inconsistently applied local tax to a more equitable system for taxpayers and business owners.
- These changes are consistent with the House’s goal of maintaining fair and consistent tax policies state-wide as well as implementing reasonable regulations on North Carolina businesses;
- The law simplifies and streamlines taxes on individuals, farmers and businesses to encourage investment;
- Privilege License Taxes on businesses are capped at current rates until July 1, 2015, giving certainty to local governments through the end of the fiscal year;
- The current Privilege License Tax structure, which serves as a consistent barrier to economic development at the local level, will sunset on July 1, 2015;
- In place of this outdated and subjective system, State leaders will engage the NC League of Municipalities and the business community to develop a plan that favors economic development and growth.
The Job Maintenance and Capital Development (JMAC) fund was initiated in 2007 under the Department of Commerce with a goal of maintaining jobs in North Carolina. The program targets private businesses that make substantial capital investments to support job-creating activity within the State. Previously, only projects in tier 1 counties, the most economically distressed, could qualify for JMAC project funds.
This year, the General Assembly expanded the eligibility criteria to qualify for JMAC funds. Senate Bill 3 changes the qualifying threshold for a company’s capital investment from $65 million over three years to $50 million over five years. It also expands the number of counties where JMAC funds may be utilized to include small tier 2 counties. Large tier 2 counties and tier 3 counties are still ineligible for funds under the JMAC program.
Republicans in the General Assembly are prepared to fight for every job we create or keep in North Carolina. We’ve given more flexibility for economic developers to secure jobs and help employers comply with aggressive, over-reaching EPA regulations.
- The JMAC fund targets private businesses that make substantial capital investments that support and maintain jobs within the State;
- This law expands the number of counties where JMAC funds may be utilized to include small tier 2 counties in addition to tier 1 counties;
- It changes the investment threshold for companies receiving JMAC funds from $65 million over three years to $50 million over five years, allowing increased eligibility for more companies.
Energy Exploration & Development
Through the passage of practical, measured legislation, North Carolina is now positioned to join America’s domestic energy revolution. Previously unrecoverable natural gas resources in North Carolina can now be developed in an environmentally sound manner. Over the last four years, State leaders have prepared North Carolina to engage in energy exploration and development. Throughout this time, extensive research and stakeholder input has produced a set of comprehensive industry standards that will guide the industry’s development. Senate Bill 76 (passed in 2013) and Senate Bill 786 (passed in 2014), serve as the foundation for these standards and for the birth of an industry in North Carolina.
- Senate Bill 76 kept the current hydraulic fracturing moratorium in place while the Mining and Energy Commission (MEC) worked to develop a set of comprehensive industry regulations;
- SB76 required the MEC to study a coordinated program to permit energy exploration activities, study tax structures for natural gas production, and set appropriate bonding levels for well drilling;
- The new law directed the Governor to accelerate offshore energy development with neighboring states;
- Senate Bill 786 established the NC Oil and Gas Commission to regulate industry operations within the State;
- This legislation provided that water from wells within a half mile of drill sites must be tested both before and after drilling. This is one of the strictest standards in the nation;
- The new law further protects public health by requiring that confidential industry formulas are maintained by the Department of Environment and Natural Resources, MEC, and the Division of Emergency Management and will be made available to first responders;
- SB 768 requires the study of property rights issues associated with the pooling of natural gas resources and instructs North Carolina’s community colleges to examine an industry training program for students.
Opening up energy exploration and development will allow North Carolina to compete in a dynamic, new industry. Energy exploration can bring high-paying jobs and move our country towards energy independence. We have spent nearly four years studying best practices in other states and creating strict rules to govern the industry. As a result, North Carolina will have one of the most comprehensive regulatory environments for energy exploration in the country, enabling a safe way for the industry to grow and provide needed investment.
- Legislation passed in 2013 and 2014 was designed to promote efficient energy exploration, effectively regulate the industry, protect water resources and ensure public safety;
- Energy exploration potentially represents an entirely new sector for our State’s economy. It is time to join other states that have seen significant and steady growth due to active natural gas exploration;
- Natural gas development serves as an opportunity to bring additional revenue into our communities. More investments at the local level will ultimately support infrastructure projects and local government budgets;
- Ripple effects from high-paying energy jobs expand to hotels, restaurants, retailers, equipment dealers and more.
For more information on the process of hydraulic fracturing (“fracking”), be sure to read this informative article.
Section 2: Balancing the Budget
As is the case with each year’s budget, Senate and House proposals contained significant differences. Gradually, the two chambers pieced together on a budget compromise that adequately and responsibly funds State government. Thanks to difficult but responsible decisions made in 2011 to get our fiscal house in order, we were able to provide an average seven percent pay increase to teachers, fulfilling a promise State leaders made to increase teacher pay in February. Early career teacher pay was also boosted to $33,000 – making North Carolina a leader in the Southeast. Pay increases have also been provided to nearly all state employees in addition to five bonus leave days. It’s a striking contrast to the nearly $3 billion in budget deficits left to taxpayers by the Democrats.
This year’s budget also includes provisions that will protect North Carolina against future financial risk. We have dedicated nearly $186 million to the risk reserve fund for Medicaid without cutting Medicaid eligibility, ensuring that this critical safety net will be available despite unpredictable and rising costs. The General Assembly has also maintained funding at current levels for the State’s university system and has given the UNC system more flexibility to keep tuition costs down for in-state students. Additional investments in justice, public safety and school security aim to further secure communities in need throughout North Carolina.
The $21 billion biennium budget represents a responsible spending plan that rewards state employees, fully funds our financial obligations and heavily invests in education. Our $282 million teacher salary increase represents a tremendous financial commitment to our educators and moves North Carolina significantly higher in national teacher pay rankings. This plan fulfills our promise to our States’ educators, parents and students.
Summary of 2014-15 Provisions:
- This $21.25 billion budget agreement will provide public school educators an average 7 percent raise;
- The biennium budget appropriates $15.97 billion for K-12 education, representing nearly 38 percent of all state spending this year;
- Our investment of $282 million towards teacher pay raises moves North Carolina significantly higher in national teacher pay rankings;
- The plan boosts early-career teacher pay in the 2014-15 school year to $33,000 – making North Carolina a leader in the Southeast;
- It provides for the reform and replacement of an archaic 37-step teacher pay system with a 6-step schedule and a transparent compensation package;
- School based administrators are receiving an average salary increase of 2 percent while class sizes have been reduced in grades K-3;
- This budget fulfills the commitment to extend supplemental pay for teachers with Master’s degrees who have completed at least one course in a graduate program as of August 1, 2013;
- The Center for Safer Schools, which provides safety and crisis response training to educators, parents and law enforcement agencies statewide, has been funded;
- Most state employees have been provided a $1,000 pay raise and five bonus vacation days;
- Flexibility has been given to the UNC system to keep in-state tuition rates down by allowing for increased tuition rates for out-of-state students;
- The budget allocates $5.9 million to offer veterans and dependents in-state tuition rates through the Yellow Ribbon program within the UNC and community college systems;
- Over the course of two years, an additional $1.5 billion in funding was provided for rising Medicaid costs, including $186 million towards a Medicaid Contingency Reserve;
- Current eligibility criteria for poor, disabled and elderly citizens enrolled in North Carolina’s Medicaid system has been preserved through this budget;
- The plan invests $30 million towards opening the new Broughton Psychiatric Hospital and keeping North Carolina’s three Alcohol and Drug Abuse Treatment Centers in service;
- Pay increases of up to six percent have been awarded to eligible Highway Patrol Troopers, as well as funding for 69 additional state trooper positions and 175 probation officers;
- Representing a first in North Carolina history, $10 million was allocated to compensate victims of North Carolina’ now-defunct forced-sterilization program.
Section 3: Raising the Bar for Education
Frozen under Democrat leadership in 2008, teacher pay became one of the highest priorities when Republicans assumed legislative majorities in 2011. Since that time, Republicans have implemented a number of highly effective cost-saving and efficiency measures aimed at restoring financial certainty to state government.
It was just five years ago that North Carolina faced teacher furloughs under a Democratic administration. Due to North Carolina’s economic resurgence, we are building upon 2012 teacher pay increases by giving substantial raises to both early-career teachers and veteran educators. Additionally, the General Assembly has reinstated the Master’s supplements for individuals who had enrolled in a class by August 1, 2013.
The biennium budget increased education spending by over $600 million and sets aside $282 million this year for increased teacher salaries. We are committed to fostering a high performing education system and making the sacrifices necessary to ensure the success of future generations. We are also dedicated to implementing additional flexibility and accountability in our classrooms.
- The budget provides an average 7 percent pay increase for teachers and raises entry-level pay to $33,000 this school year;
- All teachers will receive a much-deserved raise this year – every teacher will make more this year than in 2013-2014;
- Teachers will not lose their longevity pay — under the new salary schedule, longevity pay is incorporated into a teacher’s compensation throughout the year rather than being paid in one lump sum. The raises we are providing teachers are on top of their total compensation, including longevity pay;
- School-based administrators’ salaries were increased by an average of 2 percent and funding for classroom resources was maintained. Noncertified public school employees receive a $500 raise, which aligns with the $1,000 for state employees at approximately 2 percent;
- Master’s supplements for teachers who began or finished graduate coursework by August 1, 2013 have been restored through an $18.7 million budget allocation;
- The plan provides for the reform and replacement of an archaic 37-step teacher pay system with a 6-step schedule and a transparent compensation package.
Clarifying Read to Achieve/School Performance Grades
The “Read to Achieve” program was implemented in the 2011-12 budget to ensure that North Carolina’s third grade students are reading at grade level before being promoted to fourth grade. Studies show that reading levels of third graders can be an indicator of future educational success. For example, one in six children who are not reading proficiently in third grade fail to graduate from high school on time, four times the rate for children reading proficiently in third grade. Last year, only 45 percent of North Carolina’s third graders passed grade-level reading standards.
The Read to Achieve program provides that if a student is not proficient and does not qualify for a “good cause exemption,” (limited English proficient students, students with learning disabilities, etc.) the student may enroll in a state-funded Summer Reading Camp/Workshop. Once the camp has been completed, the student may be re-evaluated for promotion to the fourth grade. Superintendents can make final decisions on whether or not a child qualifies for a good cause exemption. The North Carolina Department of Public Instruction allows a school district to measure proficiency in the following ways:
- Pass the Beginning of Grade Test;
- Pass the End of Grade (EOG) Test;
- Pass the state developed alternative assessment;
- Pass at a 70 percent rate the 36 passages in the student portfolio. It is not recommended that all students be required to complete the portfolio as defined by the General Assembly. Based on judgment, teachers should determine which students will need the portfolio passages;
- Pass a State Board of Education approved assessment, developed at the local level.
In the 2012-2013 school year, only 45 percent of North Carolina’s third graders passed grade-level reading standards. Read to Achieve addresses this troubling trend by allowing school districts flexibility in examining third grade reading skills. House Bill 230 makes clarifying changes to the Read to Achieve program including providing flexibility for LEAs when implementing reading camps, alternative assessments, and student reading portfolios. Additionally, it clarifies that students with individualized education programs (IEPs) would be exempt from mandatory retention.
- House Bill 230 allows flexibility in implementing summer reading camps, a key request of many school districts;
- The law provides that the State Board of Education will implement literacy and mathematics screening throughout North Carolina schools by the 2015-2016 school year;
- The language specifies that not all students are required to complete the portfolio evaluation as defined by the General Assembly.
Opportunity Scholarships (2013 Budget)
The North Carolina Opportunity Scholarship Act, passed as part of the 2013-14 budget, was designed to assist low-income students and families who have difficulty in accessing critical educational resources. The law allows these students to receive Opportunity Scholarships of up to $4,200 per year to attend qualified non-public schools. In the first year, only students who qualify for the Free and Reduced Lunch program are eligible. In following years, students from households with incomes up to 133 percent of the qualifying level for Free and Reduced Lunch will be eligible. All scholarship students would qualify for grants of up to $4,200, not to exceed to the cost of tuition.
Although a North Carolina Superior Court Judge initially ruled that the program was unconstitutional (despite objections from many parents and supporters of the program), the North Carolina Supreme Court has allowed payments to students participating in the program to proceed while the constitutionality of the program is ultimately decided.
Every child deserves access to a sound and effective education. This bipartisan legislation provided the opportunity for all of North Carolina’s families to choose the best educational option for their child, regardless of their income. The decision by a single court to stop this program will continue to trap underprivileged children in low-performing schools where they will continue fall behind their peers.
- The best way to expand opportunity in North Carolina is to give citizens in disadvantaged communities the same educational choices as wealthier citizens;
- The 2014-15 budget provides $840,000 to expand Opportunity Scholarship Grants for the Spring 2015 semester, bringing total funding for the program to $10.8 million. It also ensures that Opportunity Scholarship Grants will not draw from existing K-12 funding;
- Currently there are 13 states and the District of Columbia with similar school scholarship programs;
- North Carolina provides hundreds of millions of dollars in funding for a host of other programs involving private nonprofit organizations that serve North Carolina students – including private university scholarships, Pre-K, Smart Start, aid to disabled and deaf children and Teach for America.
Charter School Modifications
In 2013, the General Assembly dissolved the Department of Public Instruction’s charter school board and replaced it with a Charter School Advisory Board. Members of the legislature have expressed concern over a slow approval process for charter school applications. This legislation is designed to broaden access to a quality education by giving greater opportunity for successful and proven charter schools to expand within North Carolina. If a charter school entity is performing at a high level and showing progress among its existing students, that school should be building on its success.
Senate Bill 793 broadens access to a quality education by allowing for the replication of high performing charter schools with a proven track record of success. It also provides more flexibility for charter schools to expand grade levels. Senate Bill 793 received broad support in the House and Senate before being signed into law by the Governor.
- Senate Bill 793 broadens access to new and existing high performing charter schools by streamlining the process for charter school approval;
- Greater flexibility will be given to charter schools in operation for less than 3 years, allowing them to expand by one grade level if certain conditions are met;
- The State Board of Education must adopt a process for the fast-track replication of high quality charter schools operating in North Carolina already;
- The deadline for the State Board of Education to make decisions regarding applications and appeals for charter schools has been extended.
Replace Common Core with NC’s Higher Academic Standards
Adopted in 2010, the Common Core State Standards Initiative seeks to align education curricula across the 50 states through standards-based metrics. The plan was developed through the National Governors Association and the Council of Chief State School Officers. Members of the House of Representatives have maintained concerns about Common Core implementation in North Carolina. Chief among these concerns are lack of curriculum flexibility and overwhelming administrative requirements for teachers.
The General Assembly has developed the 11-member Academic Standards Review Commission to advise and propose Common Core modifications to the State Board of Education. In the coming months, members of this body may address a variety of issues put forward by parents, educators and the public regarding the program. We will continue to work with educators, parents and students to maintain the integrity of North Carolina’s academic standards. Ultimately, we must pursue and enact policies that are in the best interests of our students.
While North Carolina recognizes the need for rigorous academic standards, we must ensure that these measures are appropriate and beneficial to our students. Many parents and educators are concerned over Common Core’s lack of curriculum flexibility and overwhelming administrative requirements on teachers. We will review the current standards, make improvements where necessary and implement the pieces that truly reflect North Carolina’s educational priorities.
- North Carolina is implementing education reform that rejects a “one size fits all” approach and provides classroom flexibility for our teachers and students;
- An 11-member Academic Standards Review Commission has been established to guide the State Board of Education in proposing modifications to North Carolina’s academic standards. The commission must consider the impact on educators when making any recommendations;
- This law reasserts state authority over the adoption and review of academic standards and reaffirms local control over classroom curricula;
- Current standards will remain in place to avoid burdening North Carolina educators with rapid change; however the commission may issue recommendations on specific subject areas that require immediate changes;
- Repealing Common Core outright would result in educators teaching without standards this school year and risk $400 million in federal grant money.
Section 4: Health Care Policy
Hope for Haley (CBD Extract)
House Bill 1220 is named in honor of 6 year-old Haley Ward from Carteret County, who suffers from CDLK-5, a disorder which causes dozens of intractable daily seizures. After being prescribed over ten medications with little progress, the Ward family began seeking alternative treatments that might allow Haley to improve her cognitive and physical development. The most promising alternative treatment discovered to-date is known as CBD oil, a substance extracted from cannabis that has minimal levels of THC and causes no psychotropic effects. This substance is engineered to maximize therapeutic qualities and negate the psychotropic qualities associated with recreational drug use. Extremely promising results have been reported in other states and Haley’s parents have seen dramatic improvements through the use of CBD oil.
Prior to the passage of this law, the use of CBD oil to treat seizure disorders was illegal in North Carolina. This legislation, through cutting-edge research and careful use by approved medical facilities, allows families to pursue treatment through CBD oil.
This legislation allows for the innovative research and use of CBD oil in children suffering from uncontrollable seizures. Through cutting-edge research and development, this law allows desperately needed relief for children with these disorders so that they don’t have to travel to other states for treatment.
- CBD oil is hemp extract engineered for maximum therapeutic qualities and minimal levels of THC, which causes no psychotropic effects. It is scientifically not possible for patients to get “high” from consuming CBD oil;
- The Food and Drug Administration (FDA) recently granted orphan drug designation to GW Pharmaceutical’s cannabis-based drug, Epidiolex. While this is not FDA approval, orphan drug status is granted to drugs that are intended to treat rare disorders;
- House Bill 1220 encourages the University of North Carolina at Chapel Hill, East Carolina University, Duke University, and Wake Forest University to conduct research on the hemp extract development, production, and use for the treatment of seizure disorders;
- This law directs the Department of Health and Human Services (DHHS) in conjunction with Department of Public Safety, to develop an Intractable Epilepsy Alternative Treatment Pilot Study database registry to document pilot studies, neurologist, caregivers and patient programs using hemp extract to treat these disorders;
- Participation in the registry would exempt neurologists, caregivers, and patients from State criminal liability for the possession, use, and administration of hemp extract for the limited purpose of treating intractable epilepsy.
Rejection of Medicaid Expansion
The Affordable Care Act (ACA) is one of the largest expansions of the federal government in recent history. The Obama Administration sold Medicaid expansion as a simple way to provide health insurance to previously uninsured individuals. However, leaders in many states held major concerns about the ripple effects of this provision and other controversial portions of the law. Under the Medicaid expansion provisions in the ACA, states can choose to expand their Medicaid eligibility to people earning up to 138 percent of the federal poverty level, which would add just over 300,000 people to North Carolina Medicaid rolls alone. The Federal government would fund 100 percent of the expansion costs through 2016 and 93 percent of expansion costs through 2023. However, Medicaid expansion money is not “free” money, as it comes out of all taxpayers’ pockets, and many states remain uncertain over whether the Federal government will even honor its promise after 2016.
Thus far the benefits of Medicaid expansion in other states have been far fewer than advertised – and the ACA is still expensive, inflexible, and bureaucratic. Through the passage of Senate Bill 4 last year, North Carolina became one of 23 states to reject Medicaid expansion. Decreasing reimbursement rates for providers and unpredictable cost overruns currently hinder the State’s budgeting process and the program’s ability to continue providing high quality services to those who truly need care. A further expansion under the ACA would introduce serious concerns about the long-term financial viability and stability of the Medicaid system. The General Assembly is working to get control over Medicaid spending rather than simply expanding an already flawed system.
North Carolina could not afford to expand a Medicaid system already plagued by inefficiency, mismanagement, cost overruns, and substandard health outcomes. Rather than counting on the Affordable Care Act to solve our problems, North Carolina is looking at real program reforms that focus on correcting system inefficiencies, providing accountability, and lowering costs while improving the quality of care.
- Medicaid expansion would have added over 300,000 people to our Medicaid rolls alone, despite already rising costs and limited access to providers;
- As reimbursement rates for Medicaid patients decrease, many doctors have stopped accepting new Medicaid patients even as new patients pour into the system. Medicaid expansion would have simply doubled down on a faltering system;
- The Federal government would have funded 100 percent of expansion costs through 2016 and 93 percent of the costs through 2023. This money is not “free” and comes with strings attached. These federal funds are borrowed from future generations and taxpayers are extremely skeptical that the Federal government can honor their cost- share promise after 2016;
- Due to concerns about unsustainable costs and mismanagement of the program, North Carolina became one of 23 states to reject the expansion of Medicaid pushed by the Obama Administration;
- Audits of the North Carolina Department of Health & Human Services revealed that our Medicaid system is broken due to years of mismanagement. The General Assembly stepped in to fill Medicaid shortfalls totaling $2 billion in the past four years, and this would only intensify in a larger system;
- The General Assembly has two interim committees examining the best path forward on Medicaid Reform.
Abortion Facility Standards
Senate Bill 353 strengthens a variety of standards and requirements for abortion clinics operating in North Carolina. Laws governing abortion facilities had not been changed in over 20 years prior to the passage of this law. Some abortion facilities across North Carolina had fallen into disrepair and had not been inspected in over five years. Following a series of debates in both chambers, the House held a public hearing to discuss this bill. Based on advisements from the Department of Health and Human Services, adjustments were made to the legislation before being sent to Governor McCrory.
New regulations, which mirror rules for similar facilities, are designed to ensure a safer environment for patients. Procedures and equipment not relating to women’s reproductive health are not subject to these strengthened safety standards. New protocols require that a doctor must be present during certain portions of the procedure and clarify that health care workers may object to participation in abortions on moral grounds. The legislation also prohibits abortion coverage availability on North Carolina’s public health exchanges and prohibits abortions in cases when the sex of the unborn child is a determining factor. Inspection provisions will also allow health officials to effectively and appropriately supervise these facilities. Taken together, these measures will prevent substandard facilities from endangering the safety of patients.
North Carolina abortion clinic standards remained unchanged for 20 years, but the days of negligent oversight in our medical clinics are over. This law ensures that clinics are as safe as other surgical centers and that no North Carolinian can be forced to participate in an abortion procedure.
- Following numerous cases of abortion clinics falling into disrepair and going uninspected for long periods of time, Senate Bill 353 will allow health officials to effectively supervise these facilities;
- This legislation mirrors rules applied to similar medical facilities, however equipment and procedures not related to women’s reproductive health are not subject to these strengthened standards;
- The law requires that a doctor must be present during certain portions of abortion procedures;
- Abortion coverage availability on North Carolina’s public health exchanges is prohibited through Senate Bill 353 and taxpayer dollars cannot be used to cover abortion procedures;
- Only months before passage of this legislation, an abortion facility’s license was suspended for 23 infractions involving failing emergency equipment, a lack of adequate staffing, and sanitary concerns. Prior to this review, its last inspection was conducted 2006.
Section 5: Environmental Policy
Groundwater Contamination Response
Senate Bill 58 and Senate Bill 574 stems from CTS Corp. v. Waldburger, a United States Supreme Court case centered on CTS’ ownership and operation of an Asheville-area electronics plant from 1959-1986. Nearby landowners alleged that activities at the facility contaminated local groundwater, causing latent harm and disease years after the sale of the facility. Earlier this year the United States Supreme Court issued an opinion halting area homeowners from pursuing a lawsuit against CTS Corporation. The U.S. Supreme Court concluded that federal law did not preempt State law, which currently limits contamination suits to 10 years.
The same day of the U.S. Supreme Court ruling, the Obama Administration’s U.S. Justice Department filed a motion to dismiss a similar case involving a group of North Carolina homeowners filing suit over water contamination at Camp Lejeune. The two cases present instances where North Carolina law could have prevented potential victims from pursuing legal recourse. Senate Bill 58 and Senate Bill 574 clarify the intent of North Carolina’s statutes to allow for legal action against potentially responsible parties.
The General Assembly has ensured that our citizens can pursue lawsuits against those potentially responsible for groundwater contamination. We have moved quickly to clarify State law to reflect the Legislature’s intent to protect public health in North Carolina.
- Senate Bill 574 and Senate Bill 58 stem from CTS Corp. v. Waldburger, a U.S. Supreme Court case that recounted CTS Corporation’s operation of an Ashville-area electronics plant from 1959 to 1986 which allegedly contaminated local groundwater;
- Another similar case involves homeowners suing the federal government over water contamination at Camp Lejeune in Jacksonville. The lawsuit claims that exposure to contaminated water at the U.S. Marine Corps base potentially resulted in birth defects, childhood cancers and other illnesses;
- Prior to this legislation, plaintiffs suffering personal injury or property damages were unable to pursue legal action beyond ten years of the incident under North Carolina law;
- These pieces of legislation clarify that the statute of repose, which limits contamination claims to ten years, does not apply to contaminated groundwater claims. This change allows individuals suffering from contamination- related illness or damages to pursue legal recourse.
Coal Ash Management Act
On February 2, a storm water pipe running beneath the coal ash pond at Duke Energy’s shuttered Dan River plant ruptured. The damaged section of pipe caused coal ash to leak into the Dan River. State, federal and Duke Energy officials have been investigating the incident in order to fully remediate environmental damage and assess related impacts.
In the aftermath of the incident, DENR officials responded to on-site environmental concerns while legislators began work on comprehensive legislation to address the issue. Through the Environmental Review Commission (ERC), the General Assembly was briefed on the situation and the House and Senate began working on legislation to solve this decades-old problem. Following months of research and negotiations, Senate Bill 729 passed the General Assembly. The law focuses on prioritizing the highest risk sites, addressing any potential groundwater contamination concerns and keeping our waterways clean for the future.
This legislation is the result of collaboration between the House, Senate and executive branch to address a decades-old problem that surfaced after the Dan River coal ash spill in February. Members from both chambers have worked proactively to create a comprehensive and sensible plan to neutralize the threat of coal ash contamination in every pond statewide. This groundbreaking legislation is the first of its kind across the country. We are confident that this plan will be the foundation for coal ash remediation across the nation and keep North Carolina’s surface and groundwater safe.
- A new, independent and specialized Coal Ash Management Commission has been formed to review and approve risk classifications and closure plans proposed by owners of coal ash ponds and DENR. The commission will make policy recommendations to the General Assembly to ensure efficient and safe coal ash management statewide. It will consist of nine people with experience in areas such as public health, waste management and conservation;
- Senate Bill 729 sets a firm 15-year timetable for dewatering and closing all unlined coal ash ponds in North Carolina and eliminates the practice of wet ash disposal. The plan requires the Dan River, Asheville, Riverbend and Sutton coal ash ponds to be excavated and closed as quickly as practicable – and no later than 2019;
- This plan ensures that the cost of unlawful coal ash discharges, like the spill at Dan River, cannot be passed along to consumers and requires the development of emergency action plans in the event of another incident;
- Sites determined to be high-risk must be closed within five years (by no later than 2019), intermediate-risk sites by no later than 2024 and low-risk sites by no later than 2029;
- North Carolina will encourage creative and innovative coal ash re-use statewide while setting comprehensive standards for coal ash re-use as structural fill and in road projects;
- This comprehensive coal ash plan, with input from the Governor and the Senate, ensures that North Carolina will soon be out of the coal ash storage business;
Section 6: Government Integrity & Efficiency
Voter Information Verification Act (Voter I.D.)
Following public hearings, extended debate and expert testimony, the legislature passed Voter I.D. legislation that protects the integrity of North Carolina elections and restores public confidence in the process. With the passage of this law, North Carolina joined the majority of states already enforcing some form of Voter I.D. In order to give voters an appropriate amount of time to obtain a valid identification, the law’s requirements will not take full effect until 2016.
Additional changes introduced by the law include the elimination of straight party ticket voting, same-day registration and pre-registration for youths. Early voting will remain in place, although the law modifies early voting hours to ensure consistent access to polling locations across county jurisdictions. Additionally, the practice of paying individuals to register voters has been prohibited under the legislation. This commonsense legislation has approximately two-thirds support among our citizens, according to polls.
North Carolina passed election reform legislation in order to modernize our State’s election process and protect it from voter fraud, while preserving the rights of all voters under the U.S. Constitution. This law is about creating uniform and fair election procedures statewide, not creating a partisan advantage. And the United States Supreme Court agrees.
- Roughly two thirds of North Carolinians support showing I.D.’s to vote and this law puts North Carolina among the majority of states which enforce some form of voter I.D.
- Voters will be required to show a valid form of I.D. to vote beginning in 2016. Valid forms of I.D. include driver’s licenses, non-operator I.D. cards, tribal and military cards and passports. Registered voters without one of these forms of I.D. may obtain one free of charge through the DMV;
- House Bill 589 modifies early voting hours to ensure more consistent access to polling locations and prohibits the practice of compensating individuals to register citizens to vote;
- In 2012, only 10 counties used all 17 days of early voting; 90 percent did not use the full 17 days;
- Early voting has been maintained for our citizens, unlike states such as New York and Michigan which generally do not offer early voting;
- Provisions in this law place North Carolina among the vast majority of states that do not allow same-day registration. Based on our research, only 13 states and D.C. currently offer same-day voter registration;
- Holding a protest, buying a phone, renting an apartment, boarding a plane, applying for Medicaid or attaining social security all generally require photo I.D. Accountability and transparency at the ballot box, in the form of a free I.D. card, is simply a commonsense protection against voter fraud.
Strategic Transportation Investments
North Carolina has the second largest state-maintained highway system in the nation. This extensive roadway network connects hundreds of rural and urban communities with a diverse range of needs. Maintaining and funding these resources in a consistent and transparent fashion was one of the greatest challenges the General Assembly faced in 2013.
House Bill 817 accelerates state, regional and local transportation projects through a clear prioritization system. It replaces a subjective funding process with a transparent project funding formula. The formula takes into account cost-benefit analysis, congestion issues, safety needs, roadway uses, roadway condition, area connectivity and regional economic competitiveness. These project metrics allow for a clear picture of North Carolina’s most pressing projects and removes political considerations from the funding process.
House Bill 817 restructured North Carolina’s often arbitrary transportation funding structure with an improved, transparent funding formula. The plan replaces a politically-charged process with a structure that prioritizes projects based on clear and objective criteria.
- House Bill 817 accelerates transportation projects at the state, regional and local levels by 35 percent over the next 10 years as a result of improved efficiency;
- The new structure awards funding for state roadways in a prioritized, transparent and predictable fashion that reflects needs across North Carolina;
- This legislation overhauls the North Carolina Highway Trust Fund to increase transparency and improve system- wide efficiency of road funding and construction.
Amend Various Firearms Laws
In the 2013 long session, North Carolina passed legislation to clarify and address a range of concerns expressed by gun owners and the broader public. House Bill 937 balances a variety of public safety concerns with the rights of North Carolinians to lawfully carry firearms. The law broadens the number of locations and instances where individuals may carry a concealed weapon, defends against restrictions that unfairly discourage the issuance of handgun permits at the local level and cracks down on individuals who should not possess firearms. North Carolina has replaced a patchwork of inconsistent rules and regulations with a consistent, clear and fair standard that protects our citizens’ Second Amendment rights.
Legislation passed by the House during the 2013 session clarifies the concealed handgun permitting (CHP) process and ensures that individuals are not unfairly restricted from obtaining permits. Stringent penalties, revocation procedures and reporting requirements will also ensure that criminals and dangerous individuals are quickly identified and addressed in the system.
- House Bill 937 balances the rights of law-abiding gun owners with a number commonsense safety measures designed to protect the public;
- The law allows property owners to make the best decision for them and cracks down on dangerous individuals who should not have firearms. Despite an outside push to restrict the Second Amendment rather than defend it, North Carolina is protecting the rights of law-abiding citizens;
- Provisions in the bill clarify that there is no limitation on the number of handgun permits per individual, protect the personal information of applicants, and cap application fees at $5 to ensure reasonable costs;
- Under this legislation, Concealed Handgun Permit (CHP) holders may now lawfully carry a concealed firearm into restaurants that serve alcohol, provided that they do not consume alcohol;
- This carrying authority also extends to judicial officials in the court of law as well as locally-controlled parks, parades, funerals and venues where admission tickets are sold;
- Individuals have been prohibited from carrying weapons inside properties posting signs that forbid firearms;
- The law provides that CHP holders may transport handguns in motor vehicles while on all school property and store handguns in locked vehicles while parked on school property.
Section 7: Supporting Military Families & Veterans
Boasting eight military installations, North Carolina maintains one of the largest active duty military populations in the nation. The General Assembly considered military and veteran-related issues a top priority this session and passed several bills designed to assist North Carolina’s veterans and active duty population, all sponsored by Representative Faircloth. This legislation will enable military families to receive necessary educational support, allow service members to pursue higher education and provide veterans with a smoother transition to the civilian workforce. Improving employment and educational opportunities will be critical for North Carolina to retain veterans and soldiers currently residing here. Our businesses, schools and economy stand to benefit greatly from their continued presence in North Carolina.
The Brass to Class Act
North Carolina is helping veterans pursue a career in education through giving individuals credit for their military service (the “Corporal Pruitt Rainey Brass to Class Act“). Our students will be fortunate to see the dedication and commitment of our soldiers in the classroom.
- House Bill 767 outlines a process to award salary credits to educators who served in the Armed Forces. This process accounts for military transcripts, student teaching stipends and licensure requirement reductions;
- The law provides experience credit based on an individuals’ length of military service, attainment of a bachelor’s degree and leadership experience during service.
Military Student Identifier
House Bill 1060 will serve as a valuable tool to track the success of North Carolina students in military families. Educators can review long-term performance to ensure that students receive appropriate support despite frequent moves.
- The law defines a “military-connected” student and requires the State Board of Education to develop process to identify military-connected students throughout North Carolina’s public schools;
- Provisions of the bill ensure that school districts have a mechanism to be aware of military-connected students, which often face unique challenges resulting from frequent relocations.
Civilian Credits for Military Training
Senate Bill 761 aims to provide a clear path for veterans and veterans’ families who are transitioning to the civilian workforce or into higher education. This law will bolster our existing workforce by leveraging the skills of thousands of highly trained veterans
- Under this law, the governing bodies the UNC system and the North Carolina Community College System must develop a uniform system to grant education credits for experience gained through military training;
- The law requires that occupational licensing boards specify licensure requirements that can be met through military experience and ensures a prompt response for veterans seeking licensure from a board;
- This legislation builds upon the progress of the Yellow Ribbon program budget provision, which buys down tuition costs for active duty service members to in-state tuition levels.