NC Legislative Update

August 17, 2020

By Lexi Arthur

NC DOT Board & Cash Floor Updates

 On Thursday, the N.C. Board of Transportation elected a new vice chair before receiving an update from Secretary Eric Boyette about the Department of Transportation. Andy Perkins joined the board in 2003 and serves as N.C. A&T State University’s assistant vice chancellor for facilities and engineering. Perkins holds a master’s degree in architecture, previously served as the university engineer, and is a retired U.S. Army Corps of Engineers colonel. The previous vice-chair, Nina Szlosberg-Landis, wasn’t reappointed after the legislature restructured the board.

During the meeting, Boyette also addressed budgetary issues that have been looming over the department after an audit showed DOT overspent its budget by $743 million. He told the board the department’s finances have now stabilized, and to expect a conservative spend plan this year. The budget will be based on revenues in hand. Boyette said many projects will show as delayed as the division works with local staff and metropolitan and rural planning organizations on project revisions. He said that if revenues return to pre-COVID-19, pre-storm levels, the state they will be ready to reactivate projects as money becomes available. According to DOT’s weekly “Cash Watch” report early this month, the agency has a cash balance of $425.6 million, well above the cash floor set by law, which is currently $267.3 million.

September Session

 The NC General Assembly (NCGA) will return to Raleigh for what’s expected to be a very quick session on September 2^nd to address matters relating to COVID and Hurricane Isaias damage. Lawmakers have been hopeful that Congress would pass legislation before September to allow CARES Act funds to be used for government lost revenue. The approximately $540 million in CARES Act money available to North Carolina would help with next years $4B General Fund budget shortfall, along with $300 million for DOT that has been allocated for it’s revenue losses. Neither the Senate or House congressional COVID bills have the flexibility that the legislature and Governor have been wanting.

It is expected during the special session that there will be a COVID bill allocating the approximately $900 million remaining CARES Act funds to COVID-related expenses such as healthcare, childcare, residential utility customer grants and grants for individuals facing foreclosure or eviction.  By federal law, all of these funds must be spent by December 31, 2020.

By Presidential executive order an additional $300 weekly unemployment insurance benefit will be available for several weeks.  Governor Cooper has indicated he will apply for the benefits for the state’s unemployed, but the question remaining is what funding source will be used for the $100 weekly state match requirement. Currently there is $2.9 billion in the Unemployment Trust Fund and $552 million in unencumbered CARES Act funding. There are concerns from the employers community that using the Unemployment Trust Fund as a source could result in increased UI taxes for employers in the near future if the high unemployment with COVID continues for an extended time.

Campaigning

Candidates have been busy campaigning as they face new fundraising challenges. PACs have become more important to many candidates who are unable to organically raise their usual campaign money through social events like attending church and going to neighborhood cookouts. Strengthening relationships with legislators that have supported the industry, as well as building relationships with candidates on both sides of the political aisle, are crucial to the industry as the political makeup of North Carolina may continue to shift.