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House | May 14, 2014 | Committee Room | Opening Press Conference

Full MP3 Audio File

00:00 Good morning everybody welcome back we're ready to get the short session started today and I'm gonna make a few brief comments and then if there're any questions I'll either respond to them or have the appropriate member we've done a lot of work in the into-rum to prepare for the short session and I expect it to be a short short session there are some things that we have to deal with first among them is the budget we've received the Governor's budget this morning I believe the Governor will be making a public announcement today at the one o'clock we like what we see in the budget we think it's great progress we think it's something we can build on we look forward to collaborating with the Governor and the Senate and to get the budget past in a timely fashion as a part of the budget we will absolutely place a priority on fulfilling the promise that we made back in the February time frame for teacher raises and for state employee raises I think if you could if you ask me to answer the situation with the budget in one word the word would be manageable and the reason that it's manageable is for the past three years we've actually asked balanced responsible sustainable budget so that I know that the press has made much of the short fall but it was within the margins of what we had anticipated and it's why this budget is manageable and it's why we'll be able to fulfill the promises that we've made another matter that will come up that I think is of importance is the Cohosh issue if there're questions about that we'll have the members who have been on point for that to provide you with an update and then probably the last thing I'll talk about in terms of important bills or important measures would be the tax reform that we've done the tax reform is working the tax reform has helped us in accommodation with tax cuts back in 2011 create two hundred thousand jobs over the last three years it's had us have the greatest drop in unemployment over the last five quarters of any state it's responsible for our ability to go from the state with one of the three or four highest unemployment rates in 2011 to an unemployment rate that's below the national average that was done through the great work of the members that I have with me today and I'm very proud of them. and it was also through collaboration with the Senate you know a lot of people want to talk about the differences between the Senate that's a natural part of the process the legislative process we come in with different opinions we discuss it we go with it in a professional manner and we produce results and what we're gonna do in the short session is no different from what we've done in the last three sessions that's to come in keep the priorities at the forefront sound fiscal management budget decisions things that get out of the way of businesses through regulatory reform and not much else that I'm happy to answer any questions. [SPEAKER CHANGES] [??] I've been talking to some of the folks gathered outside you requested of the chamber to revisit some of the issues from last year including medicate expansion unemployment benefit do you see any moves to dial back the rite wore shift from last session in this current short session. [SPEAKER CHANGES] well I think the shift was to fiscally sound policy not necessarily rite wore shift you need to recognize that we had almost three billion dollar debt to the federal government because the democrats had failed to step up and address the unemployment problem when they should have we're saying people go back to work it's no coincidence that between our tax regulatory and unemployment reform that we've seen the precipitous drop in unemployment we're creating jobs we need to build we'll look at anything to make adjustments if there's valid recommendations we welcome the democrats to make a proposal in terms of medicate expansion john you would never in business you would never put more money into a failing business until you got the business on the right track the daily elected democrat auditor said that hundreds of millions of dollars were being wasted she told governor Perdue that governor Perdue did nothing nor did democratic leadership that came before us now you're gonna see in the budget we went from a 750 million dollars shortfall in 2010 to approximately 70 million this year the difference is leadership once we figure out how to stabilize things and we make sure the maximum amount possible is going to help people that really need help then we can talk about expanding it but it's irresponsible and it's causing us to not be able to provide the care that we should be able to provide and these folks just need to understand we want to do that but we want to do it in a sustainable way deeds versus words and nelson I don't know if you're here if you'd like to make any other comment. [SPEAKER CHANGES] you mention leadership someone say that running for senate is a full-time job and leading the NC house is a full-time job how do you do both? [SPEAKER CHANGES] well if I ran the North Carolina house the way harry. 05:00

… runs his Senate where all the decisions are made in his office, then I probably couldn’t do this job, but you can see I’ve got 119 members, including some Democrats, that I actually rely on to move policy. See, that’s the great thing about a chamber that functions versus a chamber that doesn’t. Last three years, we’ve passed three balanced budgets, right? We’re going to pass another one here in about four or five weeks. Harry Reid hasn’t passed one in three years. I don’t need to take leadership lessons from somebody like that. [SPEAKER CHANGES] Speaker, this morning there was another dust up over this insurance mandate moratorium, that you support the mandate for autism services. What role did you have in derailing that Bill, or…? [SPEAKER CHANGES] Well I want to go back and talk about the Affordable Care Act because I don’t want the Affordable Care Act oversight committee. I don’t want this to go to a single issue that was discussed there. We need to go back and review all the other information that’s been shared in these committees – the devastating impact that Obamacare is going to have in North Carolina, the increases in premiums, the threat to having quality, widespread access to healthcare. Now on the mandate issues, those are things that need to be taken in isolation. There’s got to be a clear benefit to it. We can’t do things that simply add cost; they have to add benefit. And what I’ve directed my members to do is look at these is a way to where you can have on a piece of paper a compelling reason for doing this because there’s a downstream benefit that accrues a benefit to the citizens of North Carolina and the tax payers, and that’s where the rub is, and I think we’ll see that worked out fairly quickly. [SPEAKER CHANGES] ?? Legislative Services Commission is meeting on building rules. Is that in response to the court decision on the ?? [SPEAKER CHANGES] Is Tim here? [SPEAKER CHANGES] I’m right here. [SPEAKER CHANGES] Tim, you want to field that? [SPEAKER CHANGES] Barry, the rules need to be updated. They haven’t been dealt with in many years, and so we want to make sure that the rules are clear on public gatherings as well as a number of other matters, and I think you’ll see the Legislative Services Commission recommendations come out with building rules that are updated. This building’s been here a while, there have been a lot of changes that have been in place since those rules where done however many years ago, so we’re going to deal with those issues and some others. [SPEAKER CHANGES] Other questions? [SPEAKER CHANGES] Mister Speaker, where do you get the money? You said you support the pay raise for teachers and for state employees that are in the Governor’s budget. Where do you guys get the money to do all that in the face of the shortfall? [SPEAKER CHANGES] I’m going to defer to Nelson to cover some of the details, just because when you pass a budget, unlike the Democratic Leadership that came before us – they lived far beyond their means. They funded the budget with two and a half billion dollars in 2011, and recurring obligations with non-recurring money. Well one of the things we did is we eliminated that practice, so that’s one of the ways that you create I think a more sustainable budget scenario. The other thing you do is reserve. If you look at the budget, we did have some reserves that we can call on. The Governor’s done a great job of trying to manage the spending this year so that we’ll have some money carried over from end year budget obligations. And Nelson, where are you? You want to add onto that? [SPEAKER CHANGES] Republicans know how to budget and we take a fundamentally different approach. We don’t believe on spending every dime. We believe in making sure that we have sufficient reserves. We knew that going into tax reform, that we needed to have a cushion in the budget. We provided for that cushion. We have reversions and over-collections that have also come into the budget, and I would say the administration’s done an excellent job of managing the revenue shortfall over the last several months and has put us in an excellent position to fulfill our number one priorities and move forward with a very sound and responsible budget. [SPEAKER CHANGES] In order to bring in these pay raises and all that you claim, will you have to perhaps postpone the forthcoming tax decreases? [SPEAKER CHANGES] No, not at all. [SPEAKER CHANGES] Why not? [SPEAKER CHANGES] The reduction of those tax rates is key to our long-term economic growth and job growth in this state. This Republican majority has been focused on economic development and growth of jobs in this state and prosperity in this state since we came in in 2011, and we’re very grateful to have a governor that came on board last year that shares our vision, and we look to do more reform, whether it’s taxes, regulations – keep North Carolina’s economy moving and growing. [SPEAKER CHANGES] Yeah, and to add to that, the personal income tax, which was 5.8 this year, 5.75 next year, is a hard commitment. It will move into place, but it’s another example of responsible…

fiscal policy. The corporate income tax triggers are based on, they're based, the reductions are based on triggers. So if the national economy goes in the wrong direction, as it has a couple of times, then we have a safety valve for that through the triggering mechanism. If we continue to hit our revenue targets then they'll go in to place, if they don't then they'll simply slip until we're certain that we have baseline funding for government operations. It's a good example of good policy, never been done before, to my knowledge, in North Carolina. [SPEAKER CHANGES] The speaker told us, back to the senate race, the legislature is under more scrutiny now than ever before nationally and in the past, the last couple of years, especially because of the race you're running. How do you feel about all the scrutiny? Especially during this session, I think people are really going to be watching the bills that get passed, what initiatives get made, or all of that. [SPEAKER CHANGES] We're gonna stay on strategy. You know, my primary job right now is to run an efficient legislative session and I have the utmost confidence in my members to do that. To me, the scrutiny is good and the reason for that is the enormous success that we've had over the last three years. I want the national media to know what we've done in terms of economic recovery. I want them to know that we're the first majority that's actually created any substantial increase in teacher salaries. I want them to know that our unemployment debt is going to be gone next year. I want them to know all those things so I think we run a good discipline session. This is good for North Carolina. It puts us on a stage and lets them know that North Carolina has made more progress in the last three years than any other state on economic policy, we're proud of that, the more the merrier. [SPEAKER CHANGES] Mr. Speaker, there was a recommendation coming out of the legislative research commission regarding Common Core ??. Will the House be taking that up this year? [SPEAKER CHANGES] Yeah, and Craig, where are you? Come on up here. By the way, everybody wish Craig happy birthday. ?? [SPEAKER CHANGES] Thank you very much Mr. Speaker. Common Core recommendation coming out of the legislative research committee committed this state to maintaining high, rigorous standards, which are in place right now and created a commission that will look at those and find out how we can expand them and prove them and have them applied to everyone. Our concern, as a legislature, is federal intrusion. We believe that North Carolinians should take control of North Carolina education. [SPEAKER CHANGES] But, I'm sorry, because I remember that bill. Actually it said that we were going to do away with Common Core standards? [SPEAKER CHANGES] No, the bureau did not, in fact, say that. Titles of bills and first paragraphs are not necessarily reflective of bills. The bill clearly- [SPEAKER CHANGES] They're supposed to me. [SPEAKER CHANGES] Well, unfortunately the reality is that the bill said that we are going to create a commission to look at our state standards to recommend improvements and take into consideration how they impact the student and the teacher and that that's how we're going to go forward rather than be susceptible to a mandate that comes from the federal government. [SPEAKER CHANGES] And Laura, just as a follow-up, the problem with Common Core is, you want me to get that? The problem with Common Core is not unlike problems that passed legislatures have had. We're having Washington and Raleigh overreach in the classroom in my opinion. I, for one, have come to a place where I believe that there is, there is, we can do better in North Carolina than Common Core and I think if we go back to the teachers, the principal, superintendents, and parents that we can do a much better job that's been done and we can actually use that as a competitive advantage against other states and actually perform better than other states that may continue purely with a Common Core model. And the whole process here was to understand that, based on the decisions made before we came into power, how we do that in an orderly fashion. Because if you were just to come in and repeal Common Core this year than what's the underlying plan for the classroom next academic year? So I would really encourage the next legislature to continue to find out how we build a better standard in North Carolina. How much of that is based on empowerment of the local school districts and the classroom unless people in Raleigh and Washington telling us what to do. You know, the average salary of a bureaucrat in Washington and Department of Education is $102,000 a year. I'd like to see some of, all that work that they're doing in Washington kind of condensed so that more money can stay in the state and go back into the classroom. [SPEAKER CHANGES] So if the U.S. military said that North Carolina standards are producing below par recruits, what do you do? [SPEAKER CHANGES] I think that we always, first off we've got a community college system, university system that are two of the best in the nation. Our K-12 system needs to cont-

They need to improve, and that’s exact… and we’ve seen improvement. The fact of the matter is I don’t want anybody who’s watching this to think that we don’t have great examples of school systems producing quality students. Go to Morresville Graded School district, go to Chapel Hill. Go to any number… go to Greensboro. There’s a number of great examples of how to get education right. We just have to do a better job of making that pervasive across the state, and that’s what we mean, you know, when we go back to standards. How can we go back to Morresville Graded School District, or what we’re doing with Project L.I.F.T over at Mecklenburg County, or what we’re doing with digital conversion, and use those as examples to help these other school systems really improve the outcomes? And I’m very confident that we’ll do that. I also think that the pay raises that we’ll have to improve the pay, but also retention of the teachers will also be a key part in us having that success, and I think that we’ll see steady progress over the next several years as a result of what these folks are doing. Folks that haven’t asked a question first. Yes Sir? [SPEAKER CHANGES] There’s been differing reports on whether the film incentives in North Carolina have been successful. Your stance on whether they should be extended as is, potentially changed, modified, or let them expire? [SPEAKER CHANGES] We’ve spent a lot of time in revenue laws with that, and I’ve got our Chair of Revenue Laws here, so I’m going to turn it over to Julia. [SPEAKER CHANGES] Thank you for the question. The film incentive is set to expire. We will continue working with the Senate, and if there’s a different way that we can do incentives then that’s what we’re going to be looking at, but what we have right now is not acceptable for the body. [SPEAKER CHANGES] So you don’t see them being extended in the current fashion then? [SPEAKER CHANGES] No Sir, I don’t. [SPEAKER CHANGES] Thank you. [SPEAKER CHANGES] Can you tell us where the coal ash legislation is right now, and how comprehensive you think it’s going to be, and who’s going to pay for it? [SPEAKER CHANGES] Yes. Well first, I’m very proud of the work that has been done by a group led by Representatives Samuelson, Hager and McGrady, and I have them here and I’d… Chuck, if you’d like to step up and give an update? [SPEAKE CHANGES] We’re working quite collaboratively, first with the Senate and also with the Governor’s office. I think I talk to Senator Apodaca almost every day. We provided them with a set of principles that we hoped they would work towards, and Senator Apodaca says we’re there, we’re working through the details right now. He introduced the Governor’s Bill today – that’s an indication of the collaboration that’s occurring. We agree that we need to close the active coal ash ponds, we need to dewater them, and then we need to go through a remediation process, and that’s what our goal is in the legislation and the short session. [SPEAKER CHANGES] And I want to particularly compliment Chuck. Chuck was formerly president of the National Sierra Club. I think that he more than anybody understands the importance of us protecting our environment, and that’s why he’s played a very critical role here, and that’s why I believe that we’re going to have… we’ve got a great set of guiding principles and I think we’ll have very responsible policy that addresses the spectrum of issues that have come up as a result of the Dan ash spill. [SPEAKER CHANGES] Going back to health care, you’re saying that the state is making progress, but an annual report from the CDC came back yesterday that showed that North Carolina is slipping backward in a number of health indicators, and we’re one of the lowest… we’ve got one of the worst infant mortality rates in this state. How can you say that the state is making progress if folks in the state are sicker, less well? [SPEAKE CHANGES] Well the way that we are making progress is by trying to increase the amount of money that will be available to actually solve the problems, versus waste, fraud and abuse. The reason that we have the downward trends, trends do not occur in a period of months; they occur in a period of years, and it’s because of the mismanagement and the billions of dollars of waste. Keep in mind the duly elected Democratic state auditor told Governor Perdue that her department was wasting hundreds of millions of dollars a year. Imagine if those hundreds of millions of dollars a year had been spent on interventions to reduce infant mortality and to reduce some of the health care problems we have to deal with, how much further along we’d be today. Once we stabilize the situation and we’re freeing up the maximum money possible for providing the safety net, then we need to add to it, and I think you’ll see the positive trends coming from this legislature take root. [SPEAKER CHANGES] I noticed the Economic Development Partnership was already filed this morning by Representative Murray. Do you think that’s going to happen this year, and do you think by the end of the year we’ll have a private partner ?? partnership? [SPEAKER CHANGES] I don’t know. I don’t think Tom’s here but…

We were hopeful with trying to get the partnership done last year. We're working with the Senate and the house. I think generally speaking we would favor making progress with that because we're already seeing some positive signs coming from the governor's commerce department. We need to address concerns that some of the members may have in terms of rule and urban issues to make sure that it's fairly applied, that it's a code of benefit to the entire state but I'm reasonably optimistic we will make movement there. If there's any other member who would like to speak I'd be happy to have you [CHANGE SPEAKER] can we follow up on that? Do you support the disclosure of private donors anybody who might want to disclose or give money to the partnership, that their identities be disclosed. [CHANGE SPEAKER] I haven't specifically seen the provision but I think transparency is good and I would generally favor it. Is there anyone else who hasn't asked a question yet? Okay, well go back around the horn. [CHANGE SPEAKER] just to quickly go back to the budget issue ?? You mentioned that they're ?? This year. What are the assurances that this won't be a recurring problem? [CHANGE SPEAKER] As long as Republicans stay elected I can assure it won't be a recurring problem. If the Democrats come into power I can assure you it will. The fact of the matter is you have to take a look at the last three years we have done an extraordinary job of a structural deficit of two and a half billion dollars in our freshman year as a leadership. We came back had a manageable situation in the short session. We came back last year, we had a manageable situation. We wanted to do teacher increases last year but Medicaid gave us a surprise. This cycle Medicaid whole is less than one hundred million dollars. 2010 it was seven hundred and fifty million, so the reason I feel confident is that we're moving, the trends for budgeting are moving in the right direction. I think that there are very few things that we've done as a matter of policy that would expose us to risk in North Carolina. If the federal government continues to fail to address the debt problem and regulatory issues that's the wild card but those are circumstances for right now that are outside of our control. [CHANGE SPEAKER] ?? Let me close a few gaps with quick yes or no questions. Will the house vote to repeal commoncore and do you personally support ending the ?? [CHANGE SPEAKER] I don't answer yer or no questions, next question. You can't do that, I mean obviously [CHANGE SPEAKER] can you answer where you stand on those two things specifically? [CHANGE SPEAKER] I'll tell you where I believe that commoncore is not necessarily where we're going to end up, that's what I said before, so let me restate what I said before. The average bureaucrat in Washington makes a hundred and two thousand dollars an hour. Many of them have probably never actually been a teacher. [CHANGE SPEAKER] A hundred and two thousand dollars an hour, wow. [CHANGE SPEAKER] Probably one or two of them an hour, but no a hundred and two thousand dollars a year, outside of a classroom, telling us how to teach our children. And then they put strings attached to it to makes sure they have control over. Teachers are frustrated with commoncore, they have to have lesson plans, they have to have curriculum development, but many of them would prefer to have things that they think best benefit their children. So we need to have a methodical approach to saying what's the best thing that we can do to improve the K through twelve situation in North Carolina. And I think if we do it in a methodical way, we don't answer the yes no questions, we don't bow to the pressure of one group or another we're going to come up with a policy that will be the best policy in K through twelve education in the country, and that's what I've asked our members to do. Be methodical, answer the questions honestly, but if there's an idea. You know, even a blind squirrel finds a nut from time to time, there's a couple of ideas that I think we should embrace, embrace them. But I think we're going to find that most of it is not adding value and improving outcomes in a way that we could do if we really sat down and try and work with the teachers, the superintendents, and principals, and do it the right way, do it the North Carolina way. One last [CHANGE SPEAKER] the second part, if you don't mind, on film, ?? do you support the sunset of those ?? [CHANGE SPEAKER] I defer to the leaders who have looked at it more closely, I for one think that we can come up with a policy that would reward job creation, but we generally speaking. You know, I don't think our members save a few are totally for or totally against incentives, were for things that create jobs and accrue a benefit to all tax payers. What we need to do is see if we can come up with a framework that fits those parameters, and were wide open to that. Hopefully we make progress before the end of the short session. Last question [CHANGE SPEAKER] I wanted to get back to the pay increases, do you have a number that you want to see hit either for teachers or rank and file state workers, and then how do you he lingering sense by some teachers and others that the numbers

Governor has proposed just isn't there. [SPEAKER CHANGES] I have confidence that over the next couple of weeks that you're going to see us fulfill the promise that we made when we did the first press conference with the Governor, and with Senator ??. I will tell you some of the people that are complaining and some of my colleagues in the minority, it's a bit disingenuous coming from people who in 2010 had unpaid furloughs for teachers and state employees. One thing that hasn't occurred over the last 3 years, when we had the worst fiscal crisis in 2011, we didn't do furloughs unpaid, but the Democrats who are now saying this is not enough are the people who sung the bass and played fiscal games, we're not done, we're not going to do that, we're going to see pay increases that get us to regional competitiveness next year, national competitiveness the following year for our starting teachers, we're going to see pay increases that recognize that state employees deserve a raise, and as for the details, stay tuned, we'll get the Governors budget today, and then we'll be making proposals over the next couple of weeks. But, make no mistake about it, these folks are coming out with words, but if you look at their deeds they have failed the teachers and failed the state employees for a good number of years before we ever came into power. We haven't been able to do as much as we've wanted to, but a part of that has to do with we inherited the leadership in the worst fiscal time since the Great Depression. But, we've made progress. I know people have forgot the 1.2% raise, it wasn't enough, but it was at least a show of respect and to let the teachers and the state employees know that they needed help and they're suffering like a lot of other people under the policies of the folks that came here before us. Thank you very much.