Extended Unemployment Benefits Held Hostage
The House and Senate passed legislation on Thursday extending unemployment insurance benefits for 37,000 North Carolinians, but passage came with a catch. The provision extending benefits also mandated that Gov. Perdue’s proposed budget would be reduced by 13 percent and serve as a continuation budget for one year if a biannual budget is not finalized by June 30.
The Governor vetoed the bill on Saturday.
Democrats opposed the bill for several reasons. Budget negotiations should not be tied to the extension of unemployment benefits. The Republican majority is holding the extension of unemployment benefits hostage to force an agreement to their budget proposals. The two issues are separate and distinct.
The unemployed citizens of our State who immediately need these benefits do not deserve to be enmeshed in the larger debate over budget priorities. The new majority simply put the two provisions together to quash debate over the best way to fund the budget in these difficult times. They are forcing on the State a budget without proper input from citizens that would put thousands of State employees out of jobs and cut services drastically.
A Democratic amendment was offered to separate the two issues, but was rejected along party lines. Gov. Perdue has vetoed the bill. The General Assembly needs to immediately focus on extending unemployment benefits on its own merits.
A Proposed Budget
The GOP has published their proposed State budget for the 2011-13 biennium. It includes an 8.8 percent cut to public schools, 10 percent reduction in funding for community colleges and slashing a whopping 15.5 percent from the university system. In the second year of the proposed budget, the decreases will remain at the same levels for community colleges and universities, but public schools funding will be reduced an additional 8.5 percent. In total, the education budget will shrink by $1.25 billion over two years.
The cuts eliminate teachers’ assistants from grades two and three. More at Four would be moved to the Department of Health and Human Services with a $30 million cut in funding. Smart Start is cut by 20 percent.
Senior citizen centers across the State are cut by 47 percent. Funding for critical local health care centers is cut to 2006 levels.
Fortunately, Butner Public Safety was spared the chopping block.
To look at the proposed budget in detail, click on the appropriate department:
Senate Overrides Veto on State Health Plan
The Senate overrode the Governor’s veto of the State Health Plan in a 30-17 vote along party lines. Gov. Perdue vetoed the bill because the General Assembly did not include teachers and retirees in negotiations on the bill.
I oppose the plan because it includes premium co-pays for the first time in the health plan’s history. I offered an amendment to the bill that would exclude retirees from paying premium co-pays, but it was defeated, also along party lines.
I also oppose the current plan because the State covers only 29 percent of expected cost increases for employees and retirees who have to pay for 71 percent of the increase. Last year, the state’s portion was 61 percent. While the State’s current financial condition dictates that State employees and teachers must pay a greater portion of their health care costs, placing most of the cost on employees is unfair as the increases come at a time when state employees and teachers have not received an increase in pay for three consecutive years. Teachers’ salaries are ranked 45th in the nation.
Veto of Student Loan Bill
Gov. Perdue vetoed a bill this past week that allows community colleges to opt out of a federally subsidized loan program for low and middle income students. The loans, through the Ford Direct Student Loan Program, will have an interest rate of 3.4 percent next year. Loans through the private lending markets carry interest rates of up to 12 percent.
Last year, the General Assembly mandated that all community colleges offer the program because 55 percent, some 177,000 students, seeking a degree or certificate had no access to federal student loans. Of the state’s 58 community colleges, just 20 offered access to the loans. Some community college leaders were concerned that the loan program could jeopardize other federal funding programs. The program allows the federal government to withhold funds from other financial aid programs if 25 percent of students in a graduating class default on loans for three consecutive years or 40 percent default in any one year. However, the default rate of most NC colleges currently offering the program is below 10 percent and none have experienced a default rate above 25 percent in any single year, much less over three years.
Sen. Josh Stein, a Raleigh Democrat, offered a compromise by amendment to the bill that would require schools to participate in the program, but would allow them to opt out if the default rate on the loans became so high that it would endanger the school receiving other important federal financial aid, such as the Pell Grants. The amendment, however, was defeated by Republicans.
The reality for students and their families is that the cost of higher education is rising, by 17 percent since 2005. Without the Ford Direct Student Loans, many students from low and middle income families will struggle to put their children through school in the face of these increases. Private loans saddle students with much larger repayments that can generate high levels of debt that cannot be repaid in the current economic environment. The Ford Direct Student Loans help reduce the cost of education and will give more students and opportunity to advance.
Before the Governor’s veto, I sent a letter to the Vance-Granville Community College Board of Directors, urging them to consider participating in the loan program and then reviewing the program after a few years if the default rate is too high. VGCC opted out of the loan program in 2003. I believe that allowing schools to opt out of the program moves North Carolina education in the wrong direction, when there is a low risk alternative that offers every individual a more economical path to the best education possible.
As it stands now, a 2010 bill requiring all of North Carolina’s 58 community colleges to participate in the low-interest federal loan program will be the law. If the State House overrides Governor Perdue’s veto and the Republican bill becomes law, North Carolina will be last among the 50 states for access to the loans.
Senate votes to pardon Holden
The General Assembly held a rare meeting in the Old Capitol Building Tuesday to commemorate the 235th anniversary of the Halifax Resolves, in which the provincial leaders of the colony of North Carolina decided to oppose British rule. In the same capital building where the Senate voted to remove William Holden as governor of North Carolina 140 years ago, the N.C. Senate voted unanimously to pardon him. Holden was the Reconstruction-era Republican governor impeached in 1871 for standing up for the rights of his newly-emancipated black neighbors by sending the state militia to counteract a violent rampage by the Ku Klux Klan. Holden was the first American governor ever to be removed from office, marking a dark period our state’s history.
The pardon came after consideration of the resolution was nearly derailed three weeks ago on the anniversary of Holden’s removal, when a legislative staffer violated Senate rules and anonymously distributed passages from an early 20th century historian known as an apologist for the KKK, denouncing Holden just before the Senate vote.
It was fitting that while commemorating the great achievement represented by the Halifax Resolves in the history of our State that the Senate moved to correct a historical injustice. While the posthumous pardon is purely symbolic, it is an important statement by our generation that our State is committed to learning from our past mistakes and moving beyond them toward a future in which all our state’s citizens share in a just and inclusive society.
View proceedings from the Old Capitol Building.
From: Senator Douglas E. Berger
Office: 516 Legislative Office Building
300 N. Salisbury Street
Phone: (919) 715-8363
Fax: (919) 754-3159