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Tax reform, bonds, health insurance for children and more...

10 more to watch 

Other big issues the legislature will consider this year

See also: The progressive prescription | Expensive insurance for serious health problems | Big-money campaign contributions | Oil addiction | Holes in the Latino safety net | 10 more to watch | No ordinary day for 'HK on J'

Tax reform

The state faces a $1 billion budget shortfall thanks to the expiration of temporary tax hikes, inflation and the increasing burden of Medicaid. There's simply not enough money to pay for everything the legislature needs to do this year. So how will lawmakers update an antiquated tax system?

The senate leadership is proposing a complicated sales tax swap, agreeing to take on the Medicaid costs currently absorbed by the counties in exchange for a portion of the sales tax they currently collect; according to the plan, counties would then be authorized to raise their sales tax. Gov. Mike Easley wants to avoid the swap business but authorize all local governments to raise sales taxes and to impose a real estate transfer tax—a sales tax on homes, essentially—which currently only a few counties impose.

Lt. Gov. Beverly Perdue and State Treasurer Richard Moore have proposed an earned income tax credit, which would reduce or eliminate payroll taxes for low-income workers. Moore estimates this statewide tax break would relieve the burden on the state's lowest-income earners by $136 million, affecting some 700,000 North Carolina families.

Billions in bonds?

There's a lot of work to do before those tax reforms can bear fruit. Short on cash, long on need, the legislature is mulling some $10 billion worth of bond initiatives to fund basic infrastructure needs: roads, water projects, land acquisition to protect open space, and school construction. (It turns out the "education lottery" is bringing in less than projected revenues—so much for that sure bet.) Not all of those bonds can pass, so lawmakers will be deciding which ones to bring to voters.

Health insurance for children

The number one goal of Action for Children North Carolina this legislative session is to create affordable health insurance for the approximately 49,000 uninsured children in the state by filling the gap between Medicaid and the state's Health Choice program. The group proposes a supplemental state program that would cover children in families that earn up to 300 percent of the federal poverty level (in other words, $60,000 for a family of four). Families above the 300 percent limit could buy into the program on a sliding scale. The full monthly premium would be $160 per month; the sliding scale cost would average $65.50. "We don't care if our plan is the one adopted," says Executive Director Barbara Bradley, "as long as a health insurance package with the same low cost and benefits is provided."

Child care subsidy

Also on Action for Children N.C.'s agenda is an increase in the state's child care subsidy. There are 39,000 children on the waiting list. "We have a survey that shows one out of six low-income working families had to make a decision to leave a job, not take a job or change a job because of lack of access to child care," Bradley says. Wages have been declining or stagnant for the past five years, and so have reimbursement rates for child care, meaning many child care centers are struggling to stay open.

Mental health

Chris Fitzsimon of N.C. Policy Watch wants the legislature to pass mental health parity legislation, which would require insurance companies to cover mental illness the same way they cover physical illness. And he says the state needs to follow through on long-overdue increases to its mental health budget. Last year saw a $100 million increase, but that's not nearly enough, Fitzsimon says. He cites a state-commissioned study that calls for $2.5 billion over the next five years to expand mental health services in order to keep up after years of stagnation.

Comprehensive sex education

Getting the state's public schools to provide medically accurate sexuality education is the biggest item on the pro-choice agenda this year, and there's reason to believe the proposal will find public support: A 2004 survey published by the Department of Health and Human Services and the Department of Public Instruction showed that more than 90 percent of parents surveyed in North Carolina thought sex education should be taught in schools; of those, more than 98 percent thought that education should include discussion of sexually transmitted diseases, including HIV/AIDS, and pregnancy prevention.

NARAL Pro-Choice North Carolina's "Prevention First" campaign, which aims to reduce unintended pregnancies, also includes an effort to provide emergency contraception for rape victims in emergency rooms.

Affordable housing

The main push will be for a $50 million allocation to the N.C. Housing Trust Fund. Last year, the legislature appropriated $19 million to the fund, which covered the construction of apartments for people with mental health disabilities.

Advocates are also hoping to expand the Home Protection Pilot Program to help laid-off workers avoid foreclosure on their homes; foreclosure reforms to better protect homeowners; and increased consumer protections for those who purchase manufactured or modular housing.

Moratorium on executions

Do they have the votes? That's the burning question for advocates of a death penalty moratorium. A moratorium bill passed the Senate in 2003, and it nearly passed the House in 2005. But even with a strong Democratic majority, the issue doesn't seem to have enough supporters to push it forward. Once a new speaker is installed in the House, that body will have to fill seats on the study committee that is examining how the death penalty is administered in the state. The co-chair of that committee, state Rep. Joe Hackney, is the Dem's choice for speaker, but it remains to be seen whether that will help the moratorium.

The N.C. Coalition for a Moratorium supports several other death penalty reforms, including new trials and sentencing hearings for death row inmates who were tried before the creation of the Indigent Defense Services in 2001; the elimination of felony murder as a sole basis for a death sentence; and the requirement of scientific or physical evidence in death penalty cases, so that no one is executed on the basis of witness testimony alone.

Juvenile justice

North Carolina is one of only three states that sends 16-year-old criminal defendants to adult court—and adult prison. The N.C. Sentencing and Policy Advisory Study Commission recently recommended that the state should raise the age to 18, and a handful of legislators are lining up behind this recommendation. This would affect about 5 percent of the state's convicted felons, according to the study, which also found that those 16- and 17-year-olds who went to adult prison were more likely to end up back in jail three years later than those who went through the juvenile justice system.

Arts funding

Amid all these heavy issues, Arts N.C. is vying for a $5 million increase to the North Carolina Arts Council's grants program, the primary source of grants for many visual, performing and educational arts programs. The group will also lobby for an additional $5 million for a Department of Cultural Resources program that brings performing arts groups to schoolchildren across the state.

Karen Wells, the group's executive director, says the arts are a good investment because they contribute to the state's economic growth and to its reputation as a desirable place to live.

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