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Rep. Ray Russell’s Raleigh Report: Newsletter Highlighting Info from NC General Assembly


NC Budget Impasse
North Carolina’s State Budget runs on the fiscal year (July 1 through June 30). We are now nearly a month into the current 2019/2020 fiscal year with no State Budget. The State Budget is the roughly $25 billion plan for how state government raises and spends money.
What does it mean to not have a State Budget?
The good news is North Carolina is not the federal government. We have a state law in place that provides funding to state government services at the same recurring level as last year until a new State Budget is passed. So there are no disruptions yet to state parks, government offices, state services, etc.
What are the downsides to not having a State Budget?
North Carolina is growing and so is our economy. That means we have growing spending needs and also growing tax revenue. Relying on what we did last year allows us to muddle along, but does nothing to address problems like the need to increase teacher and state employee pay and closing the health care coverage gap.
What is the hold up?
The General Assembly passed a State Budget that had good parts, but also some significant shortcomings. The main problems were:
  • Failure to use federal tax dollars we send to Washington to expand Medicaid and close the health care coverage gap here in North Carolina.
  • Additional corporate tax cuts that diverts money away from public education.
  • Expansion of private school vouchers that diverts money away from public education.
  • Refusal to use statewide bond package to fund local school construction and clean water projects across the state.
Governor Cooper vetoed the budget because of these problems (and others). House and Senate Democrats have enough votes to sustain Governor Cooper’s veto which means we do not have a State Budget unless both sides compromise.
On July 7, Governor Cooper, Senate Democratic Leader Dan Blue, and House Democratic Leader Darren Jackson sent a compromise proposal to legislative leaders. Legislative leaders rejected the proposal and have so far refused to make a counter proposal. So we are at an impasse with no State Budget.
I support the efforts to close the health care coverage gap, stop the corporate tax cuts, and use those funds for public education, teacher pay, and state employee compensation. We also need a statewide bond referendum for voters to consider that would take advantage of low interest rates to provide a guaranteed stream of funding for local school construction and clean water projects across North Carolina.
I call for the Governor and General Assembly leaders to come together soon to solve this impasse.

State Health Plan Update

I know many state employees are worried about proposed changes in the State Health Plan after a vast majority of hospitals this year did not signed on to the new plan introduced by the State Treasurer. I want to update you with all the information I have at this time.
Last year the State Treasurer announced the Clear Pricing Project (CPP) with the stated goal of saving the state $300 million in medical costs. He has full authority to determine benefits and pricing for the State Health Plan. I do, however, have concerns about the process.
The CPP tied provider reimbursements to a percentage of Medicare reimbursement rates. I have two concerns about the plan. First, the proposal would mean a significant loss of revenue for rural hospitals such as Appalachian Regional and Ashe Memorial. I’m also concerned that not all affected parties were properly consulted in creating the CPP.
In an attempt to deal with the controversy, the House in April passed the bipartisan HB184 https://dashboard.ncleg.net/api/Services/BillSummary/2019/H184-SMTU-37(e2)-v-4 that required all parties to come to the table to develop a better plan that would save the state the same $300 million in health care costs. Rep. Josh Dobson of Avery County was the primary sponsor, and I voted in favor of the bill. The Senate, however, has failed to act on it, so the bill has not become law.
Under the CPP, health care providers had until July 1 to sign up as “in-network” providers to the State Health Plan. Few hospitals did. The Treasurer recently announced that reimbursement rates would be modified slightly and that the deadline extended to Aug. 5. There are no signs any major hospitals will agree to the modified plan.
HB184 provides the best path forward to negotiate a reasonable solution, and there is still time for the Senate to act on it. Hospitals across North Carolina have pledged their willingness to find a better way to save the State Health Plan $300 million if brought to the negotiating table.
Thankfully there is still time to find a solution. Any changes in the State Health Plan will not go into effect until Jan. 1, 2020. I hope serious negotiations begin soon.
Most importantly, this issue is about the health of state employees and their families as well as their livelihoods. We must also find a way to protect the financial health of our rural hospitals.
ABC Changes Coming, But Not Anytime Soon
I’d rather write about more pressing matters, such as the NC budget impasse, the need for Medicaid expansion, and providing more support for our teachers and public schools. But few state government issues generate more interest than Alcoholic Beverage Control (ABC). I want to share a first-hand account of what is happening in Raleigh on this topic.
The House ABC Committee met Tuesday (July 23) to discuss a bill that would privatize liquor sales in North Carolina. I will share the gist of the discussion but the main takeaway from the meeting is this: Relax; no significant changes will be proposed or enacted in the foreseeable future.
The bill’s primary sponsor Rep. Chuck McGrady (R-Henderson) unequivocally stated during the committee meeting that a privatization bill will NOT pass this year and “probably not next year.” Rep. McGrady is a widely respected legislator; we can trust him on that point.
The bill came about after the NC General Assembly requested a study of ABC laws be conducted by the Program Evaluation Division. The study determined what would happen given specific scenarios (limited changes in ABC law compared to complete privatization). The study’s recommendations included limited changes to modernize ABC laws in the state.
The bill in its current form goes further, however. The bill would:
  • Close state-run ABC stores and dissolve local ABC boards.
  •  License private businesses for liquor sales.
  • Create a new process for appropriating and distributing tax revenue to state and local governments.
  • Revise which government agency or agencies enforce ABC laws.
In the committee meeting on Tuesday, the bill was put forth “for discussion only.” No motions were made or voted on. From the discussion it’s clear strong support and strong opposition to the bill exists. Rep. McGrady stated that nothing would be done without an extensive public comment period.
Counties and municipalities are concerned about revenue and control over liquor sales. Rep. McGrady handed out a fiscal memo during the meeting that showed overall local revenue increasing if privatization is passed. However much work remains to ensure that county and town budgets would not be adversely affected if the bill were passed.
Eight states currently have state-controlled liquor sales (including North Carolina). The other 42 have privatized sales.
Much work remains to be done on this privatization bill. Until that work is complete, I cannot know if I would support it. I will follow the process closely and keep you informed.
Again, I wrote this column to allay concerns that major changes are underway in how sales of liquor are carried out in this state. We have many immediate issues: the budget, Medicaid expansion, and support for schools head that list.
Beech Mountain Couple Receive High Honor
I presented longtime Beech Mountain residents Marjorie and Fred Pfohl with the Order of the Long Leaf Pine recently at the town’s Sunday Evening Concert.
The award is the highest civilian honor conferred by the Governor of North Carolina. Since its creation in 1963, it has been awarded to persons for exemplary service to the State and their communities that is above and beyond the call of duty and which has made a significant impact and strengthened North Carolina.
Among the recipients, you will find the familiar names of the following North Carolinians: Maya Angelou, Charlie Daniels, Dale Earnhardt, Morton, Richard Petty, Earl Scruggs, Arthur Smith, Dean Smith, Randy Travis, and “Doc” Watson.
Marjorie moved to Beech Mountain in the late 1970’s – a single mom with five children. Through the Property Owners Association recreation programs she met and married Fred Pfohl. Together, they saw a need in our community for a general store and subsequently opened Fred’s General Mercantile. This store has been the heart and soul of Beech Mountain ever since.
Tending the counter, she became mother to this community. Extending credit, cosigning notes and mortgages, mentoring young people, and so much more.
She was a part of virtually every community event here: July 4th Pig Roast, Arbor Day, Street Dances, Kite Festivals, Sunday Concerts, Cool 4 Run, Winterfest, Town Birthday, Garbage Day, Spring Clean-up, active in her church, and Property Owners Association summer programs. She was the unofficial fire department lady’s auxiliary, providing food and drinks at fire scenes, and she organized socials.
She has been a part of every good deed I listed about Fred, and vice versa.
Fred Pfohl grew up in Greensboro, went to Appalachian State, and moved to Beech Mountain around the time the community was established. A student internship brought Fred to Beech Mountain. The Property Owners Association hired Fred after college to develop programs for summer residents. Fred’s General Mercantile store has been featured in magazines and newspapers throughout the South. It not only the heart of this community, it is a tourist destination. Fred’s General Mercantile has been open every day for more than 40 years.
Fred was the first elected and longtime mayor. He has spearheaded town beautification and park projects as head of the town Recreation Committee: the Parkway Overlook, Pine Ridge Road and Beech Parkway Fraser fir planting, the Mile High Kite Field, the Town Bark Park, Fulgham Park, Santis Lake and Park, stocking of two trout lakes and development of the state trout fishing program, Perry Park, Firemen’s Park, 23 miles of town hiking trails, Emerald Outback cross country mountain bike and hiking trails, the town sledding hill and snowmaking, town white light decorations at Christmas, the Buckeye Recreation Center and 43-acre Park. Many of these were developed and worked on with his store staff.
Fred helped start many town events and volunteers annually: the Annual Roasting of the Hog, Street Dances, Sunday Evening Concerts, and Crafts on the Green. He is a founding member of the volunteer fire department and served as board president for many years, a founding member and past president of the Beech Mountain Chamber of Commerce, a founding member and past president of High Country Host. He served as chairman of the Town Tourism Development Authority. He served on the fundraising committee that raised money to build Cannon Hospital and YMCA in Linville.
He was a long-time board member of the Blue Ridge Rural Land Trust and put 43 acres of land into a permanent recreation easement. He ushers and greets members at St. Bernadette’s Catholic Church in Linville, NC. Fred has been the official U.S. Weather Observer for over 30 years.
Fred hires teenagers and mentors them in his store and in the community. Fred, Margie, and their employees pick up roadside trash and work on countless community projects. The couple has loaned people money to buy homes and cars.
Fred is a longtime member of the High Country United Way Board and served as both vice-chair and chair of that board.
Fred served in Vietnam and was assigned working in a Vietnamese village helping improve living conditions for the community through improved agriculture and healthcare. It was more like a Peace Corp mission than a combat assignment. He recently revisited Vietnam and has helped other veterans do the same.
Fred is an avid lover of trains. He volunteers at the Jonesboro, TN, railroad museum and raised money for the museum.
There are many great people in Beech Mountain, but no one has done more for the community than Fred and Margie. The town thanks them both for their service, .appreciates all of their accomplishments, cannot imagine what the community would be like without them, but most importantly, loves them both dearly.