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From Chapel Hill, a not so pleasant view of the session

Posted on March 10, 2011 by Staff

By Kirk Ross
Staff Writer

CHAPEL HILL — The air went out of the room about five minutes in.

Last Friday, shortly after gathering around a conference table in the basement of Chapel Hill Town Hall for a legislative briefing, a delegation of three state representatives and two senators quickly moved to reel in any members of the Chapel Hill Town Council with high hopes for this year’s General Assembly session.

When Mayor Mark Kleinschmidt made references to this year’s “challenge,” he was politely chided by Rep. Joe Hackney, the former House speaker, who now describes himself as a “junior backbencher.”

“Worse than ‘challenge,’” Hackney said.

Then in turn, Sens. Ellie Kinnaird and Bob Atwater and Reps. Larry Hall, Verla Insko and Hackney – all Democrats – proceeded to describe in their own words life in the minority in a legislature that is fully in Republican hands for the first time since 1898.

Kinnaird, hands down one of the most liberal North Carolina senators in recent memory and in the home stretch of her last term, was particularly candid in providing guidance on requests from the locals.

“Unless it’s something really bland and really ordinary, it’s not going anywhere,” she said.

Hackney said the new majority is not likely to be a friend of local governments.

Action this week underlined that view, with plans to take away local revenue options offered by previous legislatures and a moratorium on annexation moving quickly.

The former speaker, who used his power in the past to steer the House away from divisive social issues, told council members that the GOP has shown a willingness to get into the “culture wars.”

Kinnaird agreed and warned the council to brace itself.

“What everyone thinks can’t possibly happen,” she said, “is going to roar through like a freight train.”

All members of the delegation expressed feeling somewhat in the dark about the actual budget. Hall said he is hearing that budget targets the various committees have been given are far lower than even the Republicans want to go. He urged Kleinschmidt and council members to keep up the pressure and encourage their colleagues throughout the state to do the same.

The delegation also cautioned getting hopes up that Gov. Beverly Perdue’s veto will always come to the rescue or that the House Democrats’ four-vote margin against overrides will always hold.

“She’s going to have to choose her battles,” Atwater said.

Question marks
In times in which the governorship and one or more chambers of the legislature are controlled by one party, it has been much easier to predict the general direction of the state budget.

But when Perdue’s budget emerged in mid-February, it was not even given the status of starting point. Perdue’s projections included close to $1 billion in revenue not being counted by Republicans.

Orange County Manager Frank Clifton said he’s keeping an eye on Raleigh, but is waiting for budget writers in the House to come out with their plan. “That’s when the real negotiation begins,” he said.

Clifton said with so much of the county budget in education, what the state does in that category will have the biggest impact.

“We’re looking primarily at what the state does to education and how much damage is there,” he said.

Shifting lottery funds, which are targeted at school construction, could have a significant impact for the county in future years.

Clifton also said how the state handles social services money and deals with Medicaid policy could have a big impact. If the state decided not to cover dental expenses to save money, the county, which has a dental program, would have to consider picking up the cost. Certain mental health services may be affected in a similar way, he said.

UNC prepares
UNC is one of the most practiced institutions in the state in dealing with fluctuations in the state budget.

But even with belt-tightening already part of the routine, the oldest state university in the country is preparing to take a hit.

Bob Lowman, the university’s director of research, said in meetings with department heads there is an understanding that this year will be different.

“Everyone knows we’ve got to take our share of the cuts and our share of the pain,” Lowman said.

With the university determined to protect its core mission of instruction, that means that research and support are likely to see a larger share of the cuts.

To stay ahead of the curve, Lowman said researchers have been increasing their efforts to win grants and outside support. That’s beginning to pay off, he said.

“We’re seeing an uptick in grant activity,” he said, adding that Carolina, which took in about $803 million in research dollars last year, is slightly ahead of that total despite the drop off of $100 million in stimulus funds.

“So far we’re running just a little ahead,” he said, “which is amazing to me and a credit to the creativity of the faculty.”

But there is some concern that the state may be eyeing at least some of that grant money to balance its books. University officials have expressed concern that the state may try to tap funds set aside in grants for facilities and administration, a practice the General Assembly phased out in the late 1980s. This year, more than in years past, legislators have shown a willingness to tap into funds such as the Tobacco Trust Fund and the Clean Water Trust Fund.

Lowman said he has not seen a specific plan to do so, but the concern is there, in part because the so-called “F&A” funds can appear to have large unspent balances.

He said newly hired researchers are often given time to spend their F&A funds in setting up new facilities and that departments might build up funds toward the purchase of new equipment.

“It may look like unspent or un-obligated money, but it’s not,” Lowman said.

The university spent $141 million in F&A funds last year, with the bulk of it split between paying for facilities and personnel.

“Taking even a portion of that would be a huge gap in our budget,” Lowman said, adding that he’s confident that once legislators are briefed on the funds and what they’re used for, they won’t be on the table.

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