N.C. Senator Ellie Kinnaird's Newsletter

August 17, 2009 Newsletter

Dear Friends,

Ellie Kinnaird

Greetings from Raleigh.

This has been a very difficult session. Revenues coming into the state were 4.5 billion short. As a result, the governor had to made drastic cuts just to keep the state operating on last year’s budget. She had to take the Rainy Day fund, the Clean Water Management Fund, all capital funds except the Imaging Center for the University Cancer Center and all unused funds from every source. She also filled some holes with stimulus funds, particularly Medicaid (which goes up when people lose their jobs) and unemployment.

We were faced with trying to fill that $4.5 billion hole for the 2009-10 budget. We made draconian cuts to every program from education, to health and human services. To show you the depth of the cuts, in my Justice and Safety Appropriations Committee, we have had to cut numerous positions from the Department of Correction and the courts. I have heard from many of you as a program you work in or use has been severely or entirely cut, especially in mental health. Group homes for disturbed children are being closed. I hear from desperate families every week who have no place to serve their disturbed children.

This fall we will work on a revenue package to completely rework our entire tax system. We need to broaden the base since we are no longer a manufacturing state and change from dependence on the sales tax for goods only, to services. I have heard from various groups saying please don’t tax us (there is a bigger billy goat coming across behind me, Mr. Troll). But to make it fair, all groups will be considered. The overall result will be to lower everyone’s tax across the board. We will study it during the interim and enact a bill perhaps in a special session. In the meantime, we are punting with the worst possible solution: a 1 cent sales tax and a graduated surcharge on income.

Our situation is similar to most other states, California being the worst. Some states are paying in IOU’s, many had to raise taxes and cut school funding and reduced employee pay or hours.

Even in tough times, we are able to work on other issues. We passed a bill to provide help against identity theft by allowing you to more easily place a freeze on your credit report to keep it from being releases without your permission. This can be done starting 1 October via a secure website at www.annualcreditreport.com or for a small fee by phone at 1-877-322-8228.

In another bill, people in foreclosure will have a chance to have their mortgages reworked if more time could help them.

The Racial Justice Act passed as did comprehensive sex health education and a bullying bill. We passed two bills that will greatly improve the prison over-crowding situation and will study sentencing reform so that low-level offenders will receive treatment and community service rather than taking up prison space. A bill to provide a hearing for the severely mentally impaired before a capital trial did not pass, but we will work it again next session.

I have heard from many of you about the Beach Plan. The difficulty is that the Beach Plan only has a small proportion of the money needed to cover property in the event of a very large hurricane. Since it can’t cover the damages, private insurers may pull out of our state because they can’t cover the difference. That would affect everyone in the state. The solution was to charge homeowners in 11 coastal counties 10% more than every place else in the state, cap the amount they can recover and increase the deductible. It would increase the insured in other parts of the state a smaller amount as well as fishermen and blue collar workers in the coastal counties. We do have to remember that the coast isn’t the only part of the state that gets hurricane damage. Hurricane Fran wrecked the Triangle and Ivan the mountains, Hugo, Charlotte and Floyd the east. We all chipped in for those natural disasters. We hope for a turn-around in the economy and in the meantime, our heart goes out to those who have lost their jobs or had crucial programs for their families reduced or cut.

Paid for by Ellie Kinnaird for Senate • PO Box 668, Carrboro, NC 27510 • 919-929-1607 •