Lawmakers returned to Raleigh on Tuesday this week following a Memorial Day holiday this weekend.  Action at the General Assembly focused on a comparatively small number of significant legislative proposals and committees met on a regular schedule to consider a variety of legislation.  In the House, work continued on producing a State Budget as lawmakers struggle to cut programs to fill a $3 billion deficit.  In the Senate, legislation moved through committees and was considered by the full Senate at a regular pace.  The House observed Memorial Day by considering a resolution memorializing the servicemen and women killed in the current war in Afghanistan and Iraq. 

Although national economic forecasters say the worst of the economic crisis is behind us, North Carolina is continuing to see decreasing tax revenues that are driving House lawmakers to seek deeper cuts in the State Budget.  Reports this week that the majority party Democrats will not find support in their own caucus for an increase in taxes means that budget writers need to trim nearly $3 billion from a State Budget that totaled just under $21 billion last year.  Those cuts will bring a heavy impact on schools and universities, health and human services, and the elimination or reduction of services by nearly every agency in State Government.  House lawmakers are becoming anxious to have their budget completed, and this week published a calendar that moves up the date for passage of the budget by one week. 

That schedule directed House Appropriations subcommittees to submit their proposed budgets to the eight key budget writers appointed to chair the Appropriations Committee.  The Appropriations Chairs and other members of the House leadership would review the proposals, and the subcommittees would be expected to receive feedback and take a formal vote on their proposals by the end of next week.  The following week would bring consideration by the full Appropriations Committee and action on the floor of the House.  Under that schedule, the budget legislation would be sent to a conference committee between the House and Senate by the 11^th or 12^th of June, leaving just over two full weeks to produce a compromise between the chambers before the end of the State fiscal year on June 30. 

The House passed a revised version of legislation (Senate Bill 575) that would offer millions in tax incentives to an unnamed company that invests over $1 billion dollars in a facility in North Carolina.  The proposal, widely regarded as an offer to attract Apple Computers, was revised to include a sunset provision, requirements that the location be in a economically depressed area, wage and benefit standards and other reporting requirements.  The bill passed the House on Wednesday, and Thursday the Senate agreed to those changes and sent the bill to Governor Perdue's (D-Craven) desk for executive action.  The Governor, through her Commerce Department, has signaled support for the legislation, and an announcement of the bill signing and possibly the first official naming of Apple as the target for the incentives is expected in the coming days. 

The Senate has made major revisions to legislation (House Bill 1508) that authorizes the use of debt financing for large State owned building projects.  When House Bill 1508 was approved by the House, it was a short and straightforward bill authorizing the State Treasurer to issue bonds totaling $107 million.  The Senate Finance Committee adopted, and the Senate approved, a version of the bill that ups the total authorization to $347 million and specified the two projects where the bond proceeds should be spent.  Those projects include the Green Square Project, requiring the original $107 million, and a Biomedical Research Imaging Center at UNC Chapel Hill, requiring the remaining $247 million.  Also new in the Senate bill is a series of reductions in the authorization of special indebtedness that reflects a more favorable bond market and to keep the State under the debt limit set out in the Debt Affordability Study authored by the State Treasurer.  House bill sponsor and House Rules Committee Chair, Representative Bill Owens (D-Pasquotank), signaled that the bill is headed for a conference between the chambers. 

In related action, the House debated at length this week a bill (Senate Bill 703) that would give the State Treasurer greater latitude in making investments on behalf of the State pension funds.  Republican House members assaulted the legislation as allowing investments that are too risky, investments that they say will jeopardize the pension fund and the markets at large by encouraging speculation.  State Treasurer Janet Cowell (D-Wake) defended the proposal by admitting that more risk is involved, but so too are greater returns expected.  The changes will allow the pension fund to reach its target return rate and recover some of the losses sustained over the last 6-9 months, Treasurer Cowell told the House Finance Committee.  The bill passed the House by a vote of 64-53, after several failed attempts to amend the bill. 

Also in the House this week, approval was given to legislation that would exempt from the road building equity formula funds that are transferred from the Highway Trust Fund to the Turnpike Authority for debt service (Senate Bill 750), that would allow Counties to rescind advanced property tax appraisals (House Bill 1530), and that would reform the process of appealing a ruling from the Banking Commission (Senate Bill 669).  In the Senate, approval was given to bills that would amend the Private Protective Services Act (Senate Bill 584), enact changes to the energy efficiency contracts program (Senate Bill 304), increase limit on the size of raffle prizes (House Bill 85), eliminate the senior project as a requirement for high school graduation (House Bill 223), and require pet ferrets to be vaccinated under the rabies laws (Senate Bill 674).