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Perdue Signs Budget
On Wednesday, June 30th, Governor Beverly Perdue signed a budget for fiscal year 2010-11 – the first time in 7 years that a budget has been approved before the start of the fiscal year on July 1. The budget of almost $19 billion offers no raises for state employees, protects many public school teachers from losing their jobs and is predicted to create or protect 20,000 jobs over the next three years through a small business tax credit and the creation of the NC Mobility Fund. Perdue praised the budget as “doing more with less”.
Republicans, who mostly voted against the budget, were not as impressed with the new spending plan. Republican leaders in the House and Senate voiced their opposition to a budget that they say is “fiscally irresponsible” by not preparing the state for a potential $3 billion shortfall the following year. Republicans are also critical of a plan to underfund the state pension plan if Medicaid funding does not arrive from Washington – leaving a potential hole of almost $500 million in the current fiscal year.
The Governor’s signing of the budget now paves the way for the General Assembly for adjournment which is expected next week. A detailed analysis of legislation affecting engineers will be provided shortly after adjournment.
Budget highlights of interest to Professional Engineers include:
JOBS Commission Schools $200,000 Recurring Provides funding to support the creation of two school sites in Wake County and Cumberland County recommended by the Joint Legislative Joining Our Business and Schools Study Commission.
PENC President, Pam Townsend, served on this task force and PENC will be involved in helping to establish a STEM early college high school at NC State University.
Energy Production Infrastructure Center
$3,000,000 Recurring
Completes the staffing and operational needs of the Energy Production
Infrastructure Center opening at UNC-Charlotte in the Fall of 2011. These funds
will enable the hiring of research faculty in electrical power, power system
infrastructure, and power plant engineering. These funds are in addition to the
$2 million appropriated in 2009.
NC A&T/UNC-G Joint School of Nanoscience and Nanoengineering
$1,000,000 Recurring
Continues the phase-in of faculty and staff for the NC A&T/UNC-G Joint School of
Nanoscience and Nanoengineering located at the Gateway University Research Park
in Greensboro.
NC A&T State University College of Engineering
$1,000,000 Recurring
Provides funds to NC A&T State University’s College of Engineering to strengthen
its research profiles in the three targeted areas of energy, network security,
and aviation safety.
NC State University College of Engineering
$3,000,000 Recurring
Provides funds to enable faculty hiring in the areas of health systems, energy
and environmental systems, and advanced materials and engineering. A portion of
the funds may be used to provide matching support to hire research faculty for
the recently awarded US Dept. of Energy Modeling and Simulation for Nuclear
Reactors Energy Innovation Hub as well as the NSF Engineering Research center
for Distribution and Management of Renewable Energy Sources.
Environment and Natural Resources
Division of Environmental Assistance and Outreach
($230,000) Recurring
Consolidates the Division of Pollution Prevention and Environmental Assistance,
the Customer Service Center, and the Small Business Ombudsman into one Division,
the Division of Environmental Assistance and Outreach.
Office of Conservation, Planning, and Community Affairs
Consolidates the office of Conservation and Community Affairs and the Natural
Resources Planning and Conservation Division into the Office of Conservation,
Planning and Community Affairs.
Office of Environmental Education and Public Affairs
Consolidates the Office of Environmental Education and the Office of Public
Affairs into the Office of Environmental Education and Public Affairs.
Sediment and Erosion Control
($101,357) Recurring
Eliminates aid to local governments for the establishment of sediment and
erosion control programs.
Dam Safety Fee
Provides for a one-time assessment on utilities to pay for 1.0 two-year
time-limited Environmental Engineer position to manage and conduct dam safety
inspections.
Water Quality Monitoring Ferry Vessels $250,000 Non-Recurring Provides funds for the FerryMon Program, which evaluates water quality in the Pamlico Sound and its tributary rivers using equipment attached to ferry vessels.
River Basin Commissions ($35,000) Recurring Reduces funding for the river basin Commissions. $5,000 will remain to support the work of these commissions.
Clean Water State Revolving Fund $6,398,128 Non-Recurring Provides funding to meet the 20% state match requirement for drawing down the maximum available federal funds for the Clean Water State Revolving Fund. In addition to the amount appropriated, $935,271 in interest earned on the Clean Water State Revolving Fund will be used to reach the full match amount of $7,333,399.
Drinking Water State Revolving Fund $6,201,872 Non-Recurring Provides funds to meet the 20% state match requirement for drawing down the maximum available federal funds for the Drinking Water State Revolving Fund.
Clean Water Management Trust Fund $50,000,000 No change
Main Street Solutions
$1,500,000 Non- Recurring
Provides grants to active Main Street Communities and designated micropolitans
with populations between 10,000 and 50,000 people. Grants are to be used to
support downtown economic development, historic preservation initiatives, and
other public and private improvements projects that will support small
businesses and job creation.
Energy Research Grants
$1,000,000 Non- Recurring
Matching funds for US Department of Energy grants to support energy research and
green jobs.
Biofuels Center $5,000,000 Recurring
Research Triangle Institute
$500,000 Non- Recurring
Match funds for US Department of Energy grant for energy research and green
jobs.
Rural Economic Development Center – Home Grown Jobs
$3,125,000 Non-Recurring
Provides additional funding for the Rural Center’s Building Reuse and
Restoration Program to strengthen the capacity of rural communities to compete
for and attract new and expanding businesses. Funding for small-scale regional
community development projects is also included.
Eliminate 2.0 positions in State Construction Office
($233,914) Recurring
Eliminates salaries and benefits of two filled positions and one vacant
positions that have not yet been identified.
Vacant Positions
($1,902,004) Recurring
Eliminates 30 DOT positions supported by the Highway Fund and 400 vacant
positiosn funded through projects, receipts or through federal funds
NC Mobility Fund
See article below for additional Information.
See article three below for additional Information
Funding for NC Mobility Fund Falls Short
Despite the strong efforts of the Governor’s Office, the Department of Transportation and transportation advocates, funding included in the final budget for the NC Mobility Fund is barely enough to complete the Yadkin River Bridge Project and it will be many years before any other projects can even be considered.
The Governor’s budget proposal aimed to create the NC Mobility Fund to provide funding for projects of statewide significance – such as the Yadkin River Bridge Project. The fund was proposed to grow to $300,000 by the year 2013 and, once the first project was complete, a thorough process for soliciting and incorporating stakeholder input would be developed to determine future projects. The revenue to support the fund would be generated by the combination of the eventual elimination of the transfer from the Highway Trust Fund to the General Fund and minimal DMV fee increases.
The Senate budget proposal did not include the Mobility Fund at all. Although the Mobility Fund was included in the House budget the reluctance to raise any fees and create further stress on the general fund lead the House to propose that balances anticipated from the NC Turnpike Authority projects be used instead. The disagreement between the two chambers led to a negotiated compromise in the final budget package.
Key provisions of the NC Mobility Fund include:
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Establishes the NC Mobility Fund with $46 million in year one ($31 million from Highway Trust Fund Transfer and $15 million from NC Turnpike project balances)
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Provides $170 million in funding over the next 4 years
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Provides that the funds are not subject to the equity formula.
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Designates Phase II of the Yadkin River Bridge (the widening of I-85) to be the first project
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Requires the Department of Transportation to collaborate with “stakeholders” and the public in developing the project criteria and selection process for future projects.
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Provides that projects that qualify for grants under the intermodal bill be given preferential consideration for future funding.
Another key provision in this section of the budget bill exempts federal Appalachian Development Highway System Funds from the equity formula which means additional state transportation funds for these western counties.
New Engineering Buildings Not Included in the Budget
Capital funding for engineering buildings at NC State and NC A&T were not included in the budget signed by Governor Perdue on Wednesday. SB 1378, Build NC’s Future Act, proposed a $450 million bond proposal to issue Certificates of Participation over the next two years for engineering buildings at NC State and NCA&T, repairs and renovations at universities and state facilities and equipment at community colleges and universities. Although the bill has passed the Senate, because no funding for debt service for these projects was included in the final budget, the legislation cannot move forward for consideration in the House. Many legislators expressed concern over taking on additional debt in this struggling economy and targeting so much of the funding to only two schools.
The final budget did, however, include some capital funds and authorization for special indebtedness as follows:
Water Resources Development Projects $9,130,000 Non-Recurring Provides fund to allow the state to match $27.3 million in federal funding for Water Resources Development Projects and provides the state match to local grant projects.
Phase I of State Highway Patrol Training Facility $2,043,440 Non-Recurring Provides full capital planning funds.
Repair and Renovations
Authorizes the issuance of certificates of participation to be allocated equally
between the University of North Carolina System and state agencies. The total
debt authorized is $120 million.
Education Equipment
Authorizes the issuance of certificates of participation to be allocated to the
University of North Carolina system and the NC Community College System for the
purpose of acquiring equipment for education and research in fields related to
health, science, engineering and technology programs. The total debt authorized
is $55 million - $33 million for the NC Community College System and $22
million for the University of NC System.