New state challenges confront legislators

They may act on mental health care, probation and workers' safety.

The economy is souring, money is tight, and state lawmakers have to run for re-election in the fall.

It's the kind of scenario that might prompt state lawmakers to do little more this legislative session than put out a state budget and then go home.

But as lawmakers return to Raleigh on Tuesday, they will face pressure to act on widely publicized issues that have emerged since they adjourned nine months ago. Those issues include widespread problems in the state's probation and mental health systems and calls for the state to better protect poultry workers from injuries.

These and other concerns, such as the growing chorus for more roads and a push to raise teachers' pay to the U.S. average, will force lawmakers in the Democratic-controlled legislature to make hard choices before they go back home to run for re-election.

"We do have a lot of competing needs and a lot of competing expectations," said House Speaker Joe Hackney.

Leaders' priorities

Hackney, Senate leader Marc Basnight and Gov. Mike Easley, all Democrats, have their own preferences about what to tackle. Hackney is championing grant programs to help reduce the state's high school dropout rate of more than 30 percent. Basnight would like to give voters the opportunity to vote on a bond referendum to provide hundreds of millions of dollars for new roads and buildings at UNC-system campuses. Easley wants to expand his signature Learn and Earn program, which gives students the chance to pick up a high school diploma and an associate's degree in five years, tuition free.

Democratic and Republican leaders agree they must address the state's struggling mental health system. A News & Observer series in February reported more than $400 million wasted on ill-conceived community support programs, a lack of inpatient services and poor care of patients in state mental hospitals. Proposals include increasing mental hospital staff, adding capacity for mental health patients at community hospitals and tightening requirements for community support programs.

Legislative leaders also want to improve the monitoring of felons on probation or parole, though there's disagreement about whether that will require more money or just better management.

Small surplus to spend

Last week, the legislature's economist, Barry Boardman, reported that lawmakers will have surplus revenue of roughly $150 million with which to craft a budget for the fiscal year that starts July 1. That's not much in a budget expected to approach $22 billion.

But North Carolina is in better fiscal shape than many states. A recent report by the National Conference of State Legislatures found that nearly half the states face budget deficits; on Wednesday, the governor of Tennessee announced plans to cut 2,011 state jobs to help close a $468 million shortfall.

Dan Gerlach, a senior adviser to Easley, said the governor will introduce a budget proposal Monday that increases spending by a little more than 4 percent and includes money to improve the mental health system, expand his Learn and Earn program and increase teachers' pay to the national average. But the budget will be built upon revenue estimates that have been revised downward for fiscal year 2008-09. The state's projected economic growth rate has fallen from 4.7 percent to 3.5 percent.

Pressure to cut taxes

Gerlach would not specify how Easley would pay for a 4 percent increase in proposed spending, but noted that revenue growth in the next fiscal year -- the $150 million surplus plus budget savings this year -- could allow for increased spending in next year's budget.

Hackney and Basnight said they do not expect to raise taxes this session and don't see much room to cut taxes. Gerlach said Easley's budget will propose a sales-tax holiday on energy-efficient appliances.

Republican leaders will again stress cutting taxes and reducing spending. State Republican Party Chairman Linda Daves said last week that the surplus should be returned to taxpayers.

Legislative leaders and Easley say that money will be needed to help pay for raises for teachers and state employees, enrollment growth at the state university and community college systems and crime prevention programs that received favorable evaluations during the interim. Hackney said rising fuel costs alone will add $40 million to the budget.

Lawmakers say the challenges in front of them this session aren't enough to keep them here into the fall. Budget writers say they've gotten a head start by meeting at least a month in advance.

House Minority Leader Paul Stam, an Apex Republican, has a theory why lawmakers will want to get out of town: The more votes they cast, the more likely some will come back to haunt them on the campaign trail.