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Schools, HB2, roads, spending issues for NC lawmakers in '17

There was talk of cooperation, service to your fellow man and bipartisan friendship when members of the North Carolina General Assembly were sworn in during the ceremonial opening of their 2017 session Jan.11.

The state Legislative Building in Raleigh.

There was talk of cooperation, service to your fellow man and bipartisan friendship when members of the North Carolina General Assembly were sworn in during the ceremonial opening of their 2017 session Jan.11.

The honorables' return to Raleigh Wednesday to get down to the nitty-gritty of governing will begin the period when they risk being sworn at.

In a state where allegiance to the two political parties has been roughly evenly split in recent years and control of state government is divided between a Republican-controlled legislature and a Democratic governor, the sweetness and light of the first day surely can't last forever.

And they don't call it the "long" session for nothing. In odd-numbered years, the General Assembly typically meets from January through early or mid-July or later. They'll adopt a two-year state budget, debate most of the major bills legislators will discuss during their two-year terms and linger long enough in Raleigh for the heat, humidity, disagreements and difficult choices to bring at least some tempers to a boiling point.

Here is a look at some of the key issues the legislature may take up.

HB2. Republican legislators are in a difficult place on this issue, at least according to some of their Democratic counterparts.

The legislation passed in a one-day special session last March prohibits cities from extending protection against discrimination to LGBT people and became a focus of opposition from around the country. Polling suggests it was a key factor in Republican Gov. Pat McCrory's narrow loss to Roy Cooper in November in what was otherwise a good year for North Carolina Republicans.

The GOP's legislative leaders, Senate President Pro Tem Phil Berger and House Speaker Tim Moore, have said they are willing to repeal the bill. Repeal is a priority for Cooper.

But Sen. Jeff Jackson, D-Mecklenburg, and many other political observers suggest that the failure to repeal the law in a special session in December demonstrates that even though a majority of the total membership of the legislature wants to strike the law, a majority of GOP lawmakers do not.

Most represent suburban or rural districts where voters are more supportive of the law than is the state as a whole. In past sessions, Republican leaders have been very reluctant to move bills that most GOP members oppose. Leaders and rank-and-file have also taken a relatively restrictive view of what powers local governments should have, and repealing HB2 could be seen as empowering cities and towns to adopt pro-LGBT measures or take other steps Republican legislators might oppose.

Cooper said recently he and legislative leaders are still talking about a deal. Predictions as to what will happen vary widely.

Money matters. HB2 got lots of attention last year from the news media, activists and the public and will again in 2017, but legislators are likely to spend more of their time deciding how to spend state revenue and whether to make more changes in tax laws.

During remarks Jan. 11, Berger and Moore both mentioned the possibility of tax cuts or other changes. The General Assembly has reduced income tax rates while extending the reach of the state sales tax in recent years, adding some services like auto repairs to the list of things subject to taxation.

John Hood, a conservative columnist and head of the John William Pope Foundation, said legislators are committed to further pay raises for teachers and many see a need to increase pay for school principals. Their compensation lags even more behind that of other states than teacher pay does, he said.

A legislative committee has also recommended adding significantly more money to the state's rainy day fund.

"Once you decide that any fiscal scenario leads to a big pay raise for educators," he said, it is unlikely that there will be enough money left over for a lot of new spending or major tax cuts.

The state brought in about 3 percent more revenue than expected during the first half of its fiscal year as the state and national economies improved. But, Hood said, it is too soon to say what kind of shape the state's balance sheet will be in once tax returns come in over the next few months. And, he said, the national economic recovery won't last forever and legislators may consider what will happen to revenue if the economy cools.

The state chapter of Americans for Prosperity, a conservative group, will push again for constitutional amendments to limit the growth of state spending, said state director Donald Bryson. The Senate has previously voted to let state residents decide the question - a referendum is required to amend the constitution - but the House didn't go along.

Critics say the limits would not give the state enough budget flexibility.

Highway money. Both Cooper and McCrory proposed major bond issues to pay for transportation improvements - mostly highways - during the 2016 campaign.

Legislators debated in 2015 whether to include road bonds among the $2 billion bond issue for other state infrastructure voters approved last March, with the House favoring the idea and the Senate opposing it.

"What I'm hearing now is that lawmakers think it might be reasonable to issue more debt" that would pay for highway projects, Hood said, but he said that is not necessarily a consensus. Some legislators feel steps the General Assembly has already taken to end previous transfers from highway funds to the state's general fund to pay for transportation-related programs like the State Highway Patrol made a sufficient improvement in highway funding, he said.

"It's not as if they haven't done anything. They've done quite a bit," Hood said.

Transportation has the potential to become an area of disagreement between Cooper and legislators for other reasons, too. Some Republican legislators have been hostile to the idea of spending much on alternative forms of transportation like light rail or bicycling, and a measure to limit local governments' ability to provide bike paths got consideration in 2015 before ultimately failing.

Cooper may have other ideas. He has also said he will look at a contract with a private company to add toll lanes to Interstate 77 in Mecklenburg County, strongly opposed by many residents there, but has stopped short of saying he would cancel it.

Education. Recent moves by the General Assembly to direct more state funding to private schools and charter schools have been particularly controversial in recent years.

Rob Schofield, director of research at the liberal N.C. Justice Center, said legislators may consider more ways to push alternatives to traditional public schools.

"It remains a front-and-center issue. ... Every time I think they have run out of ideas they want to push, they come up with new plans," he said.

However, he said, even some lawmakers typically supportive of charter schools have become concerned about "the lack of accountability we have in the system right now."

A state panel earlier this month recommended that a Durham charter school stop offering high school classes after it was found that as many as 160 of 399 graduates in recent years may not have met graduation requirements. There have been other problems with charter schools closing for various reasons and some have performed poorly on state measures of school performance.

The General Assembly will at least consider concerns about a 2016 legislative directive to reduce class sizes in early grades beginning with the 2017-18 school year. School board members and superintendents say that since the measure came without additional state funding, it will crowd out non-core offerings like music, art and foreign language and create space issues unless the legislature makes changes.

Districts. A coalition of liberal and conservative groups will renew a push to hand off much or all of the job of drawing districts for state legislators and U.S. House members to a nonpartisan commission, said Rep. Susan Fisher, D-Buncombe.

That effort has gotten a boost from court decisions finding fault with districts the General Assembly drew up in 2011, but Berger has opposed the idea in recent years and, "It's still an uphill fight," Schofield said.

Proponents have some hope that Senate Republicans uncertain of their chances in the 2020 election - under current law, whoever controls the legislature in 2021 will draw up new districts for the following decade - might relent in their opposition, he said.

It is possible that the courts will still force the General Assembly to redraw 28 legislative districts and hold a special election in the new districts this November. That's unlikely to have an effect on districts in Western North Carolina, but it would take up a lot of legislators' attention early in the 2017 session and could affect the balance of power in the General Assembly.

Child care. Both Rep. Chuck McGrady, R-Henderson, and Sen. Terry Van Duyn, D-Buncombe, said at a recent Asheville Area Chamber of Commerce event that the state needs to spend more on its subsidies for child care for lower income families and reconsider the way the money is allocated. The need for funding far exceeds availability, child advocates say.

Fisher expressed a similar concern last week, saying legislators should do more "to make sure that people out there trying to make a living have a quality place to leave their children."

McGrady said, "The question now will be whether the General Assembly is willing to put up the money to do something we know we need to do."

Schofield said the funding shortage belies assurances that state government has enough revenue to meet needs after tax cuts of recent years.

"We keep hearing these stories that the state budget's in great shape," but they ignore problems like the need for child care, he said.

Local. An effort to institute district elections for Asheville City Council died in the House on the last day of the 2016 regular session and the state Supreme Court in December struck down a 2013 law that would have handed over the city water system to the Metropolitan Sewerage District.

It's possible that those issues could come up again in 2017, or that efforts by city government to defuse both controversies will succeed. Council is asking city residents what they think about districts and McGrady said he and Mayor Esther Manheimer have been talking about concerns about water. He didn't rule out introducing another water bill.

Beer rules. Craft brewers want changes to a limit on how much of their product they can sell before they have to hire a separate company to distribute it, and they'll get backing from Americans for Prosperity.

"If we allow those breweries to make even more (beer), that's more jobs," said Bryson, the AFP head for the state.

Distributors like things the way they are. McGrady will play an important role in the debate as chairman of the House committee on alcohol laws.

Etc. Other topics the legislature is likely to consider include:

--Easing or eliminating state requirements that a certain percentage of electricity sold in the state come from renewable sources.

--Keeping 16- and 17-year-olds in the juvenile justice system when they accused of some crimes instead of trying them in the adult court system.

--Improving high-speed internet connections in rural areas.

--Directing more money toward Hurricane Matthew relief, and possibly improving the state's ability to fight wildfires.

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