Legislative Update – URGENT ACTION
NEED on BUDGET ITEMS
House members continue to deliberate over their proposed budget, your action is
desperately needed to ensure House budget writers take action to both restore
funding cuts contained in the Senate budget and include some provisions that
are favorable to the engineering industry.
Senate budget proposal, adopted by the full Senate two weeks ago, contained
sweeping changes which many have criticized as being too policy oriented and
not more appropriately focused on appropriation changes. Some of the significant policy changes
contained in the Senate budget include the shift of entire divisions within
state agencies to other state agencies – moving the Rural Center to Commerce,
creating a Rural Economic Development Division, for example.
the House appropriations subcommittees review the Senate budget, it is clear
that they have some major disagreements with the Senate proposal and it is
likely there will be significant amendments proposed. The House is expected to begin voting on
their budget June 10th so there is a small window of opportunity this week for Professional
Engineers to take action to let the House members know the changes we would
like to see made to the Senate budget.
is a list of significant provisions in the Senate budget. In some cases there are items that we would
like for the House to amend, reject or adopt.
And, there are some items on which we have not taken a position.
contact your House members immediately to ask them to consider these recommendations.
Environment and Natural Resources
- The Senate budget creates a new Water and Land Conservation Fund and
Grant Program which combines the former Natural Heritage Trust Fund and
the Clean Water Management Trust Fund.
The appropriation in the first year of the biennium is $12 million and the second year is $14 million. The members of the newly appointed Authority
board will decide how grants are allocated between land conservation and water
current year appropriation for the Clean Water Management Trust Fund alone is
$10.75 million – close to the entire appropriation for the two funds combined
in the first year. Therefore, given that the combined total of the two programs
has now been rolled into one fund, it is reasonable to assume that the Senate
is proposing a cut to grant programs currently being administered by both
funds. CWMTF grants are used to fund
engineering projects and the need
for these projects continues to increase.
Trust Fund staff state that their application requests for this past
year exceeded $50 million.
- The Senate budget creates a new Division of Water Infrastructure in DENR
which combines the former Division of Water Quality and the Division of Water
Resources. The budget also creates an
Authority to oversee grants and loans provided by the new Infrastructure
Fund. One of the gubernatorial
appointments to the Authority shall be a Professional Engineer from the private
Water Infrastructure Authority will receive a General Fund appropriation of $4
million in the first year and $5.5 million in the second year to fund a water and
sewer database and planning and supplemental grants to assist local
governments. The WIA will also
administer the Drinking Water and Clean Water Revolving Funds (state match is fully
funded) and the Community Development Block grant Infrastructure Grant Program
(all federal funds)
- The Senate budget creates a new Division within the Department of
Commerce for the purpose of addressing the economic development needs of the
State’s rural Counties. The Rural
Center, as we know it, will be eliminated but its duties and funding will be
administered under the newly created division in Commerce.
new Rural Economic Development Division
will be responsible for administering the economic development grants and loans
awarded by the Rural Infrastructure Authority.
Rural Economic Development Division will receive an appropriation of $7 million
in the first year and $10.4 million in the second year of the biennium. The current annual appropriation is $21
million. Up to 3% of these funds will
cover administration. Additionally the
Division will oversee the Industrial Development Fund – Utility Account and the
Community Development Block
grant for Economic Development funds (federal).
FTEs and additional funding from the regional offices will be reallocated to
the Rural Economic Development Division in an effort to enhance regional office
presence in rural areas.
ACTION ALERT: All of these actions combined have the net
effect of reducing funding for Water and Wastewater infrastructure grants to
local communities in desperate need of these projects.
Please contact your House
members today incorporating some of the key points below within your own
Every North Carolina citizen
is entitled to clean water - it is a basic right that we should all enjoy
equally. However, the Senate budget
seriously compromises the public health, safety and welfare by further reducing
funding available for local water and wastewater infrastructure projects. At a minimum, all funding sources currently
being used for these projects should be increased up to their current year
Professional Engineers oppose funding reductions for rural economic
development grants currently administered by the NC Rural Center. The changes proposed for the
NC Rural Center require further evaluation – especially given the restructuring
of the functions of the Department of Commerce under the direction of the new
Secretary. Absent a thorough and
thoughtful study of how rural economic development should be incorporated under
the new administration, the change to how the state administers this critical
economic development funding through the Rural Center is premature and should
- The Senate budget transfers the Energy
office from the Department of Commerce to the Department of Environment and
Natural Resources under the Division of Energy, Mineral and Land
Action Alert: The changes proposed for the NC Energy Office require further
evaluation – especially given the restructuring of the functions of the
Department of Commerce under the direction of the new Secretary. Absent a thorough and thoughtful study of how
the Energy Office should function under the new administration, the change to how
the state administers its Energy programs, which are vital to the economic
welfare of the state, are premature and should be reconsidered.
- Increase DOT Privatization. The Senate budget seeks to further increase
the outsourcing of DOT’s Preconstruction and Technical Services Units.
year’s adopted budget mandated that NCDOT increase its outsourcing to 60%. This requirement would remain in effect. However, an additional provision would exclude the cost of
activities performed by the Turnpike Authority, the Structures Design and
Management unit, and the Bridge Program.
Excluding these activities would increase the privatization percentage
by an additional 5%.
the Senate budget requires that the Right of Way, Project Development and
Environmental Analysis and Roadway Design units increase their total cost of
outsourced activity by 5% in 2013-14 and by an additional five percent the
following year from the current baseline from 2012-13.
ACTION ALERT: Please contact your House members today and ask them to support the
Senate budget provisions that increase the percentage of activities outsourced
to the private sector. (Part XXXIV.
- The Strategic Mobility Formula (HB 817)
allocations have been included in the Senate budget proposal. Some of the differences from the House
version of HB 817 include:
- Mid-Currituck, Garden Parkway and Cape
Fear Skyway can only be available for StatewideTier funding if they become
interstate designated routes. The “Red
Route” is eligible.
- “Economic competitiveness” is deleted
from the funding criteria at all levels:
Statewide, Regional and Division Tiers.
- Public transportation and passenger
rail cannot be considered at the Regional Tier Level – only at the division tier level.
- No state money is included for bike and
pedestrian improvements but Powell bill money can be spent on these projects.
funds received by MPOs
(frequently used for Bike/Ped projects) for regions with over 200,000
population are included in the funding allocation even though this
funding has always gone directly to the MPO and qualifying regions have
used this at their discretion.
For Engineering firms that
work on Bike/Pedestrian projects:
Please contact your House
Members today and ask them to restore the $1.2 million in state money for
Bike/Pedestrian projects as this allows for a more favorable federal
match. This is a better investment than
if the $1.2 million is rolled into the larger pool of funds available for
highways where the federal match is considerably less.
Please also ask House budget
writers to exclude the STPDA allocation from the Division category under the
new Strategic Mobility Formula. The
House did this when they passed HB 817 so they should be receptive to this
recommendation. STPDA has been used
to fund many local bike/pedestrian projects.
If the STPDA funds are included in the Division allocation and the
Division is getting less money under the new formula, local governments will be
forced to now use their STPDA funds for roadway projects.
Transportation items include:
- $2.2 million is appropriated from the
Highway Fund for a Shallow Draft Navigation Channel Dredging Fund.
- Fees for Electric/Hybrids have been
included for a total of $1.5 million per year.
- Reduces NCDOT staff by 339 positions –
all of which are vacant.
- Adds $3.1 million in the first year and
$4 million in the second year for Economic Development.
- Allows for tolling as long as it does
not reduce the number of existing general purpose lanes.
- Eliminates the Turnpike Authority Board
but creates a Turnpike Committee of the NCBOT.
you have any concerns over other provision in the Senate budget that have not
been mentioned in this update please contact me immediately as time is running
out for PENC to influence any changes.
additional update, including a review of legislative tax proposals and other
significant legislation affecting engineers will be provided later this