The legislature has been in a special session since January 10, however, lawmakers, who are awaiting rulings from the courts on redistricting suits, have been at a standstill for weeks. Interim committee meetings continued to meet this week, discussing topics including, produce handling regulations, data security and education finance reform. Additionally, the State Supreme Court issued a ruling striking down a merger of the State Board of Elections and the State Ethics Commission, and a US District Court judge ruled to restore some judicial primaries in 2018. According to House Speaker Tim Moore (R-Cleveland), votes are expected next Thursday and Friday.

Spotlight on Charlotte City Council Strategy Meeting

This week, MWC Vice President Tricia Cotham, based out of McGuireWoods’ Charlotte office, attended the Charlotte City Council’s annual retreat in Durham. Here is her report on the retreat’s biggest takeaways.

Snapshot of Charlotte:

  • 34 new residents a day
  • 17th largest city
  • Median age is 34
  • Unemployment rate is 5.4%
  • #1 city for millennials relocating
  • Median house value is $201,500

Charlotte City Council Holds Annual Strategy Meeting

The Charlotte City Council held their first retreat for the new council in Durham over the last three days. This “strategy session” is the first time council members have spent a long period of time talking, planning, bonding, and learning together. This is an important opportunity since over half of the council members are new. Additionally, the council has faced some early challenges so this time together is critical for working well together for Charlotte.

What were the main takeaways?

On day one, council members expressed their hopes for the council. There was an overwhelming theme and consensus around “leaving the community better than we found it.” Mayor Vi Lyles stressed the importance of her idea of holding monthly three hour strategy sessions. Councilman Braxton Winston reiterated the importance of being engaged within the community. Councilmember Greg Phipps discussed ways the council could take a more active role in helping citizens with day to day issues and concerns. There were some tense moments and exchanges during this segment. However, the exchange was categorized by members as “productive” and “needed.”

Council members were asked to share their big topics for the group to focus their time over the next 12-18 months. The topics suggested by council members were safety, transportation options, affordable housing, bike plans, litter complaints, economic development, and how to work well as a governing body. Staff will take these suggestions and provide more information and create a timeframe and plan to discuss these ideas.

In an open session, council members expressed some frustration with the two year term and stated they would like to have four year terms. This would require legislative action and is unlikely. It is apparent that council members are experiencing some learning curves with responding to the overwhelming amount of emails they receive, scheduling events and balancing work and family. This is a common dilemma faced by any public servant, and city staff offered their commitment to help the members.

What else did they discuss?

Senior Economist Mark Vitner of Wells Fargo presented to council and staff on the “economy today.” Vitner encouraged city leaders to not just view Charlotte as a banking town. He suggested that Charlotte must be seen an area with a wealth of high-tech jobs or the area will fall behind. Vitner stressed the importance of the city creating a stronger culture of learning to connect jobs into the workforce for the region’s future. Vitner also pointed out that the area has a lot of “low skill jobs” and “high skill, high paying jobs” but the problem is the lack of jobs in the middle. The council heard the trend of “building up,” bringing people back into uptown, is not going away and that the millennial population wants to live, play, and work in close proximity to uptown. As a result, the city will continue to see more apartments in uptown, a focus on “smart city,” and growing appeal of urban living. The board started a dialogue on how these economic trends impact upward mobility, affordable housing, and the values of the city. This dialogue will be on going over the next year.

The council also heard various presentations relating to smart cities, affordable housing, building healthy neighborhoods, workforce development, and creating unity through art. These presentations were presented to provide a general overview of these topics with the plan for council to take a deeper dive in the monthly strategy sessions.

Courts Weigh in on Redistricting, Elections

While the legislature waits on rulings from the US Supreme Court on legislative and congressional redistricting, two courts weighed in on other elections issues this week:

Ethics & Elections Merger

The NC Supreme Court issued a ruling over the weekend striking down a 2017 law that merged the State Board of Elections and the State Ethics Commission. The 4-3 ruling means that control of state and county elections boards will remain under the control of the party of the governor.

Judicial Elections & 2018 Primaries

On Wednesday, US District Court Judge Catherine Eagles issued an order to reinstate primaries for NC Supreme Court and Court of Appeals races in 2018. Primaries for all judicial races were cancelled by a law passed in 2017. This ruling leaves the cancellation intact for superior and district court races. House and Senate Redistricting chairmen Rep. David Lewis (R-Harnett) and Sen. Ralph Hise (R-Mitchell) criticized the decision, calling it “highly partisan.”

Agriculture Awareness Commission Discusses Changes to Current State & Federal Regulations

On Tuesday, the Agriculture and Forestry Awareness Study Commission held their first meeting to receive three presentations on current state and federal regulations. The committee discussed property tax abatement for aging farm equipment and state and federal regulations for the handling of produce.

Back up – property tax abatement?

As directed by SB 615: North Carolina Farm Act of 2017, the Department of Revenue’s Property Tax Section Director Tony Simpson presented on the feasibility of enacting property tax abatement for aging farm machinery including the potential fiscal impact on local governments and the state. The Department estimates that an 80% exclusion would result in a $14 million impact on the state. Simpson also noted that existing property tax form and software programs used by counties would require updates to accurately gather data.

What about produce?

The committee also received presentations on state and federal produce handling regulations. The Department of Agriculture and Consumer Services’ Assistant Commissioner for Agricultural Services Richard Reich presented to the committee on the NC Handler’s Act, which was passed in 1941 and last updated in 1994, and affects 19 companies. Sen. Brent Jackson (R-Sampson) raised a concern that because the Act only covers produce handlers with written contracts, it is not regulating the industry in a uniform way and should either be updated to cover all handlers, in a similar fashion as neighboring states, or removed from state law.

Disaster Relief Committee Updated on Hurricane Rebuilding Efforts

On Monday, the House Select Committee on Disaster Relief held their second meeting of the interim to receive updates from the Golden LEAF Foundation and the NC Housing Finance Agency on efforts to rebuild infrastructure damaged by hurricanes in 2016.

Tell Me More

First, Golden LEAF Government Relations Liaison Kasey Ginsberg presented to the committee on grants awarded to local governments by Golden LEAF. To date, the organization has awarded $174.5 million to 71 projects in 21 counties.

Then, the NC Housing Finance Agency’s Executive Director, Scott Farmer, reported that 49 multifamily homes and 381 single family homes are under repair.

Education Finance Reform Committee Receives Feedback from School Administrators

On Wednesday, the Joint Legislative Task Force on Education Finance Reform met to hear feedback from local school administrators on the existing school funding system and recommendations on what changes should be made and how they should be made.

Any themes?

Overall, presenters requested greater flexibility in managing their budgets, more funding for students with disabilities and less of a role in distributing money to area charter schools.

NC School Board Association Government Relations Director Leanne Winner addressed the Association’s concerns, including charter school funding. She argued that charter schools receive parts of allotments for purposes they may not cover and recommended that school districts and charter schools should be “financially disentangled” at the state and local level. Winner also addressed concerns with special education funding, the use of allotments for teaching positions and low wealth and small schools funding.

To review the remarks and presentations made to the committee, click here.

What next?

Lawmakers want to hear from more stakeholders, including charter schools, at a future meeting. NC’s funding model has not been overhauled in decades, and this is likely to be a major topic for several years. The Task Force is set to recommend changes to the legislature in October.

IT Oversight Committee Talks Data Security, Enterprise Resource Planning, Health Information Exchange

The Joint Legislative Oversight Committee on Information Technology held their third meeting of the interim yesterday. The committee heard a presentation on data security, updates on the implementation of enterprise resource planning in state agencies, an update on the implementation of the Health Information Exchange and industry presentations from Microsoft and Adobe.

What about data security?

The Department of Information Technology’s State Chief Information Risk Officer Maria Thompson presented to the committee on insider threats. According to Thompson, 60-70% of attacks come from organization insiders, such as contractors and current or former employees. Most insider attacks stem from employees looking to establish a second stream of income.

Enterprise Resource Planning Updates

The committee also heard presentations on the implementation of enterprise resource planning in two state agencies. State Controller Linda Combs presented on behalf of the Office of the State Controller, and Community College Senior Vice President for Technology Solutions and Distance Learning Jim Parker presented for the NC Community College System. Combs and Parker both updated the committee on where their individual projects are and funding needed for next steps.

Health Information Exchange Update

The executive director of the Health Information Exchange Authority, Christie Burris, updated the committee on implementation of NC HealthConnex, the state-designated health information exchange. NC HealthConnex is live, with more than 1,200 health providers currently connected, and it is expected that 98% of NC’s health care providers will be connected by June 2020.

A Look Ahead to Next Week

Monday, February 5, 2018

1:00 PM House Select Committee on Strategic Transportation Planning and Long Term Funding Solutions

Tuesday, February 6, 2018

9:00 AM Joint Legislative Oversight Committee on General Government

10:00 AM Child Fatality Task Force – Intentional Death Prevention Committee

10:00 AM Joint Legislative Education Oversight Committee

11:00 AM Permanency Innovation Imitative Oversight Committee

12:30 PM Legislative Research Committee on Intellectual and Developmental Disabilities

1:00 PM Joint Legislative Commission on Energy Policy

Wednesday, February 7, 2018

10:00 AM Joint Legislative Oversight Committee on Unemployment Insurance

1:00 PM House Select Committee on Implementation on Building Code Regulatory Reform

Thursday, February 8, 2018

1:00 PM Joint Legislative Economic Development and Global Engagement Committee