Commentary, NC Budget and Tax Center

First look at NC’s potential revenue losses from pandemic points to an obvious policy course

Image: AdobeStock

The consensus revenue forecast released by the General Assembly today provides further evidence of both the enormous economic harm COVID-19 is inflicting on the state and some important long-term certainties about our economy. More than ever, it’s clear that how people are faring and what policy decisions are made to support their well-being will make a difference for the state’s economic recovery.

Economists with the Fiscal Research Division and Office of State Budget and Management are cautiously projecting revenue losses as deep as the Great Recession, but they also lift up many questions that remain about how this downturn and the recovery will play out. They also make clear that the numbers reflected in today’s forecast could change.

One thing we know for certain, however, is that our leaders in Washington and Raleigh can and should put policies in place today to support people and thereby, in turn, our economy.

Only through a bold policy agenda that rejects the status quo can our state hope to bend this latest curve upward so that we can secure an inclusive recovery and ensure all communities can thrive.

The hard truth is that weaknesses of our last economic expansion left our state less resilient in the face of this pandemic. Too many North Carolinians were already living paycheck to paycheck; too many didn’t have access to affordable health insurance; too many couldn’t afford safe housing or afford to put food on the table each night. Too many barriers to good jobs and the capital to start new businesses persisted for Black and brown North Carolinians.

Our leaders must go further to provide people with the supports to make it through this pandemic. A pro-growth agenda can’t ignore the drag of inequities and hardship any longer, but must first invest in every person’s well-being.

Even with the projected revenue losses, North Carolina leaders can make smart choices to quicken the recovery for more people.

Now is the time for our state leaders to call for additional federal aid to state and local governments that is sufficient and flexible to fill this revenue shortfall. Now is the time to look to smart, targeted revenue options at the state level that can undo tax cuts that have hampered our public response.

In this moment and for the future, North Carolina must have the foundation of public services and institutions in place to deliver well-being to all.

Alexandra Sirota is the Director of the N.C. Budget & Tax Center.

Environment

Hitting the water on Memorial Day weekend? Sound Rivers tells you where contamination is.

The Upper Neuse River Basin includes Falls Lake, the Eno River and Lake Michie. (Map: Upper Neuse River Basin Association)

Sound Rivers, a nonprofit environmental group, launches its summer waterway testing in the Upper Neuse River watershed this weekend, and has found five sites with high levels of fecal bacteria.

The bacteria tested for — E.coli  — can be found in freshwater and indicates likely fecal contamination. If you ingest or touch the contaminated water, there is an increased risk of gastrointestinal illness and skin infections.

The sites showing high levels of bacteria above state and federal criteria are Hickory Hill Boat Launch, Anderson Point Park Canoe Launch, Buffaloe Road Canoe Launch, Milburnie Park Canoe Launch, and Poole Road.

Either avoid the area or use caution if you decide to visit. Keep water out of your eyes and nose, and wash your hands after you’ve touched it. This is especially important if  you have open cuts, scratches or wounds.

To find out more about water quality in your area, go to www.soundrivers.org/swimguide or text ‘SWIM’ to 33222 for weekly water quality updates.

COVID-19, NC Budget and Tax Center

Release: Latest labor market figures show devastating blow from COVID-19

The Budget & Tax Center, a project of the NC Justice Center, issued the following summary and assessment of North Carolina labor market data released today. From the media release:

RALEIGH (May 22, 2020) — Labor market data for N.C. released today show April was the worst month of job losses in North Carolina’s history, far surpassing the worst months of the Great Recession. “The scope of the job losses is simply staggering,” said Patrick McHugh, Research Manager with the North Carolina Budget & Tax Center. “Job losses are concentrated in industries and occupations that typically pay the worst wages so a lot of the people who lost jobs in April had little or no financial cushion to fall back on. Many of the jobs that have disappeared likely won’t be coming back anytime soon, which means state and federal leaders have to figure out a way to support people through an economic crisis unlike anything in living memory.”

Economic challenges facing North Carolina include: Read more

COVID-19, Defending Democracy, News, Voting

Bipartisan elections bill filed; would quell some voter access concerns amid COVID-19

The bipartisan election bill North Carolinians have been waiting weeks to see is finally here.

House lawmakers filed House Bill 1169 this morning, and it contains a lot of the measures the State Board of Elections and voting rights advocates have asked for to prepare for conducting an election in the COVID-19 pandemic.

The bill reduces the requirement for absentee mail-in ballots from two witnesses to one; it gives counties greater flexibility in where they assign poll workers; it allows voters to submit an absentee ballot request form via email, online portal, fax, mail or in-person (currently voters can submit an absentee ballot request form only by mail or in person); it allocates matching funds to receive federal dollars made available through the CARES Act and directs money to counties for preparation of election administration during the pandemic.

“This bill is a positive step toward ensuring every eligible North Carolina voter is able to safely and securely cast a ballot in this year’s elections,” said Bob Phillips, executive director of Common Cause NC. “We applaud members on both sides of the aisle for this bipartisan effort. As the bill makes its way through each legislative chamber, we urge lawmakers to be responsive to suggestions from election experts and the public. Ultimately, it is crucial that we work together to fully prepare our state to conduct an election that is free and fair for all.”

Lawmakers are set to discuss the bill at a House Elections and Ethics Law Committee at 9 a.m. Wednesday. Primary sponsors of House Bill 1169 include Rep. Holly Grange (R-New Hanover) and Rep. Destin Hall (R-Caldwell), who are both co-chairs of the Committee that will meet next week. Committee members Rep. Allison Dahle (D-Wake) and Rep. Pricey Harrison (D-Guilford) are also sponsors of the measure.

There are at least two lawsuits pending to try and force the state to make elections more accessible in North Carolina. HB 1169, if passed, would satisfy most of the requests that plaintiffs have made in those suits.

The bill would prohibit the State Board of Elections from moving to an all mail election or sending ballots to North Carolinians who didn’t request them. It should be noted, though, that neither the Board or voting rights advocates ever asked for an all mail election.

House Speaker Tim Moore commended lawmakers in a Friday news release for their work on the measure.

“Voters deserve consensus bipartisan efforts to improve our elections systems, and this General Assembly will provide the necessary funding and reforms to effectively administer elections in the 2020 cycle,” he said.

Environment

NCDOT, Dominion excluded top Durham officials from discussions on proposed pipeline along American Tobacco Trail

The large green dot on the left panel shows the beginning of the proposed natural gas pipeline, along the American Tobacco Trail near Herndon Park on Scott King Road in Durham — roughly Mile Marker 10.25. The pipeline route, marked in red dots, would then continue another six miles to Morrisville Parkway in Cary, shown in green on the right panel — Mile Marker 16.

The NC Department of Transportation failed to inform top Durham officials of a controversial natural gas pipeline that would parallel part of the American Tobacco Trail, one of the city’s — and the region’s — most popular recreational areas.

Emails obtained by Policy Watch under the Public Records Act show that city officials were caught off guard by the news. They learned of the proposal nearly two weeks after the Board of Transportation conveyed a section of its right-of-way along the ATT to Dominion Energy.

The News & Observer first reported the board’s decision this week.

Dave Connelly, chairman of Durham’s Open Space and Trails Commission, alerted more than a half dozen county and city officials via email on May 19.

“This is the first I have heard about this. You?” wrote Durham Deputy City Manager Bo Ferguson that evening to City Manager Tom Bonfield.

“Complete news to me,” Bonfield replied a few minutes later.

DOT did not answer questions from Policy Watch about why it didn’t inform the local governments about the plan and who decided to pursue an agreement with Dominion.

Instead, a DOT spokesperson sent a statement:

“Dominion Energy’s request to execute an easement agreement to utilize the NC Rail corridor along the American Tobacco Trail for a natural gas pipeline is being re-evaluated by executive leadership at this time.”

“A review of the history of this proposal, as well as an assessment of all community engagement, will be conducted before NCDOT takes any action to move forward with the proposal as offered, require adjustments or changes, or to deny the request.”

After years of negotiations and permitting processes, the first three miles of the American Tobacco Trail opened in June 2000. It starts in downtown Durham and follows an old railroad corridor owned by NCDOT.

The ATT has been extended several times and now runs 22 miles south through Chatham and Wake counties. It attracts tens of thousands of bicyclists, runners and hikers each year. The ATT is also part of the 3,000-mile East Coast Greenway system.

On May 7, the Board of Transportation agreed during a public meeting to a $3 million deal between Dominion and NCDOT  for the utility to build a 12-inch diameter pipeline beneath an easement along a portion of the right-of-way.

Though the item was included in the board agenda, it wasn’t obvious. The one-paragraph mention occurred on page 17 of “Item R, Right of Way Resolutions and Ordinances.”

Although the entire 13-mile route hasn’t been finalized, the proposed six-mile portion along the ATT would from start at Scott King Road, near Herndon Park in Durham, and run south through Chatham and Wake counties to Morrisville Parkway in Cary.

The item is now expected to be discussed at the June 10 meeting of the Durham-Chapel Hill-Carrboro Metropolitan Planning Organization.

Dominion Energy spokeswoman Persida Montanez said in an email that the utility has been planning the project since late 2017. Details were included in a presentation prepared for PSNC, before the company was bought by Dominion nearly 18 months ago, in January 2019. Maps and illustrations in the presentation show one side of the trail would keep its existing 10-foot buffer, and beyond that a 30-foot wide clearing for the pipeline.

<a href=”https://assets.documentcloud.org/documents/6921971/ATT-PSNC-GasPipeline.pdf”>ATT PSNC GasPipeline (PDF)</a>

<a href=”https://assets.documentcloud.org/documents/6921971/ATT-PSNC-GasPipeline.txt”>ATT PSNC GasPipeline (Text)</a>

In its presentation, PSNC said it would replant native trees and shrubs that had been cleared, as well as repair trail damage caused by construction.

The utility stated that it investigated more than 20 other routes but they were unavailable. The original route was within the NCDOT right-of-way along Highway 751, but that route required several crossings of Jordan Lake and other US Army Corps of Engineers’ land. The majority of that property, PSNC said, “is not ‘pre-disturbed.'” Montanez said the utility is “studying different route options.”

These options include locations that would not involve an easement adjacent to the American Tobacco Trail, Montanez said. Dominion will collect data during the survey process “to help identify the optimal route,” she added. “The data includes but is not limited to, assessing construction feasibility, minimizing environmental and landowner impacts and using existing corridors where possible.”

“Our  goal is to select a route that minimizes impacts to the community,” Montanez said.

Policy Watch requested additional information on the 20 alternative routes, but Montanez did not provide it.

There is a financial incentive for DOT to accept the $3 million. The department estimated its budget will be short by $300 million for the fiscal year ending in June, because of effects from the COVID-19 pandemic. DOT’s budget hinges on gas taxes, car sales and registration fees; fewer people are driving during stay-at-home orders, which has cut into revenue.

The new pipeline is needed to provide natural gas service to existing and future customers due to the rapid development in the Triangle, according to the utility’s presentation. It would also allow the utility to “downgrade or reduce pressure” of the 73 miles of existing high pressure transmission pipelines in Orange, Chatham, Lee and Wake counties. “Reducing the pressure in these pipelines will reduce the internal stress levels of the pipes and significantly improve the overall safety,” according to the presentation.

Montanez did not directly answer a question from Policy Watch regarding any current safety issues with the existing pipeline. She reiterated points from the presentation that a new segment would “prolong their lifespan, enhancing reliability and safety in accordance with state and federal regulations.”

Otherwise, the utility would have to implement “significant pipeline integrity measures” that would be required to meet federal safety regulations, according to the presentation. To do this on existing pipelines would require replacing thousands of existing pipelines and fittings, “many of which are located along or under existing roadways such as US 15-501” and in towns throughout the Triangle.

The utility would also have to install above-ground facilities to regularly inspect the lines, “thereby impacting private property owned and the general public every seven years at a minimum,” according to the presentation.

Rumors about the project started in mid-May, after the board approved the agreement with Dominion. Dale McKeel, Durham’s bicycle and pedestrian coordinator, heard that it had been on board’s agenda. McKeel contacted Chris Snow, director of Wake County’s Parks, Recreation & Open Space, on May 14, asking if he had information. “We’ve been inquiring about this off and on, and I was not aware this was up for consideration with NCDOT,” Snow wrote to McKeel.

McKeel is also on the staff of the Durham-Chapel Hill-Carrboro Metropolitan Planning Organization, which oversees transportation strategies in those cities. Oddly, the MPO held its regularly scheduled meeting on May 13, at which five NCDOT officials provided progress reports on its projects, according to the agenda. None of those progress reports mentions the pipeline project.

Valerie Jordan represents DOT Division 5, which includes Durham and Raleigh, on the DOT board. She could not be reached for comment.

Most of the Durham portion of the ATT lies within the county’s jurisdiction. Durham City-County Planning Director Patrick Young said no one in that joint office was notified by DOT. The route would cross Panther Creek, which feeds Cary Park Lake, and Northeast Creek, which flows into Jordan Lake. Since Northeast Creek is a “navigable water,” as defined by federal law, the project could require several permits. That creek is already designated as impaired by state and federal officials because of high levels of fecal coliform bacteria; sampling also has showed elevated concentrations of copper, cadmium and nickel.

Although the public thus far has been excluded from discussions about the project, the permitting process should provide those opportunities. The US Army Corps of Engineers would need to issue a permit, according to an email from Paul Kuhn, Cary’s facilities design and construction manager to Durham and Wake officials, “and that will require some sort of public input.”

The NC Department of Environmental Quality would have to issue permits as well, such as those for erosion and sedimentation control, stormwater and water quality, if the pipeline crosses creeks.

Emails among Cary, Durham and Wake County officials state that the easement agreement between Dominion and NCDOT has not yet been signed. To execute the agreement, Dominion will have to submit a set of plans, which also require the permits. “NCDOT doesn’t want to speak for Dominion, but are helping to facilitate the processes,” Kuhn wrote.

Montanez said the utility will decide on a final route within the next two months.