05/13/2008

By GARY D. ROBERTSON  / Associated Press

The North Carolina Legislature returned to business Tuesday for their budget-adjusting session on the same day a blue-ribbon transportation panel asked lawmakers to consider a bond of at least $1 billion for roads and public transit projects.

The 21st Century Transportation Committee's recommendations include providing seed money to build North Carolina's first toll roads in recent history and giving local government more options — including new taxes — to pay for public transportation needs.

With little appetite in the Legislature for approving any new taxes this year, a large bond likely would have the best chance to get approved and presented to voters in a statewide referendum, possibly this fall.

But that debt would probably have to paid back through existing funds, not new sources.

"They're not interested in entertaining much revenue enhancement provisions," committee chairman Brad Wilson said of lawmakers. "It's hard for me to see how the Legislature is going to be able to be very aggressive on our funding recommendations. Therefore, the only option available to them ... is a bond."

The recommendations were completed two hours before the Legislature gaveled in its "short" session, when legislators' primary job is to adjust the second year of the two-year budget approved last summer.

Budget-writers arrived in Raleigh with a revenue surplus for a fifth consecutive year. But the amount is $150 million, much less than the past two years, and will require more creative spending reduction to meet a myriad of competing needs.

The debt proposed by the transportation would be repaid by ending a $172 million annual transfer from a transportation fund to the state's general operating fund. But it's unclear exactly how the hole created by ending the transfer would be filled.

Gov. Mike Easley's budget, released Monday, would phase out the transfer over time, beginning with $25 million this year — an idea with which one powerful senator agrees.

"I think we'll begin to do something about the transfer but I don't think we have the resources to do it completely one full-fell swoop," said Senate Majority Leader Tony Rand, D-Cumberland.

Unlike the pomp and circumstance of odd-numbered year sessions, where the House speaker and Senate leader are elected by peers, Tuesday's opening was more subdued, with the two chambers adjourned within a half-hour.

In the House, Rep. Sandra Spaulding Hughes took her seat for the first time since being sworn into office in April. Hughes, D-New Hanover, is filling out the term of Thomas Wright, who was kicked out of the House in March for ethical misconduct. He is now in state prison after a fraud conviction.

Senators accepted the return of a state flag they had given in 2006 to a legislative fiscal staff employee who served in Iraq in the North Carolina National Guard. The employee, Brig. Gen. Jim Trogdon, returned it framed with pictures of his unit's activities while overseas.