State of the State

Per NC Representative Edgar Starnes to the Caldwell County Board of Commissioners

1-24-11

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Rep. Edgar Starnes is available.  No one has a monopoly on solutions.  He wants to be a good partner with everyone.  We are all in this together.  Raleigh office 919-733-5931, email  Edgar.Starnes@ncleg.net

• NC Budget “revenue cannot keep up with spending”.  David Cross(?), NC Budget Analyst, reports that NC has a $3.7 billion deficit (our checking account is overdrawn $3,700,000,000).
  • There will be cuts to the NC Budget.  They won’t be pleasant.
  • Fiscal year ends 6/30/11
  • The hole is not getting any deeper; it is remaining static.
  • Sales Tax revenue is up.
  • Housing market is down.
  • Unemployment is up.
  • The unknowns of the budget are Tax Refunds and Capital losses.
  • There is always an April Surprise for the budget.  Suggestions are that this year’s April Surprise will be less money than estimated by the Governor coming into state coffers.
  • Federal Stimulus money was spent in unwise ways. It should have been used to pay down state debt.

• A “jobless recovery” is insulting.  We need jobs.  We need manufacturing back in NC. We need to attract business, which means we need to create a friendly business environment in NC.
  • September-November NC added 16,000 jobs.  We need 290,000 jobs to added to be at pre-2008 levels.
  • Government sector is beginning to shed jobs through attrition and retirements.  These jobs will not be filled.  We will do more with less.
  • NC needs the public sector (private business) to drive the economy.
  • It is estimated that it will take 2-3 years to get back to pre-recession levels of employment.
  • With unemployment so high in NC, we need to make community colleges the frontline for job re-training.  There is planning for ways to make this a reality.
• Temporary sales tax will not be extended this year.  It was extended twice, without any help to the NC budget.  Essentially, the money was wasted.  Not extending the sales tax will put $800 million to $1 billion back in NC taxpayers pockets. (You will keep more of your own money.)
• We need to abolish the corporate sales tax.  It only brings in $600 million, but it is a factor will businesses are looking to relocate to this region of the country.  We are not as competitive as any other surrounding state.
• We will be looking at reducing personal income tax rates also.
• Unemployment benefits – NC owes the federal government $2.5 billion.
• $700 million is needed to keep the state employees retirement fund solvent. NC doesn’t have this money.
• State health insurance plan for teachers and state employees is a $32 billion unfunded liability.  As a percentage, NC is in worse shape that CA.

• Schools – Per pupil spending is $8,500 per year.  Average of $170,000 per classroom.  Where is that money going?
  • There is too much money consumed by the administrators of schools.  Taxpayers want $170,000 to go to classrooms.  We could have state of the art classrooms, if the money reached the classrooms.
  • Caldwell County currently has 1,800 school employees.  Only 800 are teachers.  He will protect teachers and assistants, and force some cuts in administration, DPI and the bureaucracy of schools.

• Re-districting
  • NC House district requires 80,000 people
    • Caldwell County is currently 81,000 people. Philip Frye’s portion of the county will probably be eliminated, therefore Caldwell County will most likely be presented in Raleigh by one representative.
  • NC Senate requires 191,000 people.
    • Burke and Caldwell counties doe not have enough to keep it the same, so it will have a portion of another county added to it.  Or will be changed entirely.

• ABC (Alcoholic Beverage Control) will probably not be privatized.  NC can’t let the ABC control go to Wal-mart and Target to sell hard liquor.

• Annexation reform will be addressed this session to protect private property rights of NC residents.  House Bills 5, 8, 9.

Comments between Mr. Starnes and Commissioners: ==========================

• Caldwell County needs Mr. Starnes help to protect us from run-away Medicaid expenses.
• Mental health was reformed 2 years ago
• Lottery funds will not be taken away from schools and counties during this term.
• Is there any chance that the governor will take money back like she did with last year’s lottery money?  Edgar is discussing with new Speaker Tom Tillis about block grants for easier county use.
• There is a fundamental problem with state retirement plan.  We currently have a Defined Benefit Plan, but need to move towards a Defined Contribution Plan.  The first, defines what the employees are guaranteed to receive in their state benefit plans.  The second, defines how state employees will contribute to their own benefit plans (i.e., contributions to health insurance, pension funds, etc…).  [Currently, there is very little contribution made by employees.  This is out of step with the private sector, which relies heavy on employee contributions to support the retirement plans.]