McGrady, Edwards talk workforce, health care, privatizing liquor

Times News (Hendersonville, NC)

March 08-- Mar. 8--Local state legislators addressed a range of business-related issues Friday over scrambled eggs, pancakes and coffee at Brevard College, answering questions at an event hosted by the Henderson County and Brevard/Transylvania County Chambers of Commerce.

State Rep. Chuck McGrady and State Sen. Chuck Edwards spoke to a crowd of about 120 on everything from workforce development to health care and privatizing liquor sales, answering questions submitted by chamber members ahead of time.

State Rep. Cody Henson, who was served with a criminal summons Thursday for a cyberstalking charge against his wife, Kelsey Henson, was scheduled to attend but did not.

Democrats in the General Assembly have called for Henson's resignation, and a small crowd of protestors greeted attendees as they drove into the event, holding sings condemning domestic violence.

Asked to address the elephant that wasn't in the room, McGrady said Henson couldn't make the meeting due to taking one of his young children to a doctor's appointment, but will do what's best for his family and himself.

"We need to just let the process play out," he said. "We'll see where that goes, and I'm confident he'll make the right decision."

Moderator Graham Fields began the questioning by asking about upcoming budget priorities and opportunities and the likely impact on taxes from those, given the two legislators' positions of influence over the state's finances.

Holding a copy of Gov. Roy Cooper's proposed budget, McGrady said the plan is dead on arrival, as were former Gov. Pat McCrory's budgets. But the arrival of the governor's budget usually signals the beginning of the budgeting process. It's way too early to know the outcomes, he added, though he finds appetites among his colleagues to keep taxes where they are.

The General Assembly and the governor start with a set of numbers they agree on in terms of projecting revenue, he said. He's not surprised the governor has projected to spend essentially all of that revenue, something legislatures that McGrady has served with haven't been willing to do in the past.

McGrady, noting almost $1 billion spent on disaster relief last round without affecting the state's budget, said he's sure the legislature would like to put more money back into the rainy day fund.

Edwards also addressed growth in the governor's budget, saying that the 5.4-percent increase is too much. The Taxpayer Bill of Rights is a good place to start out, he said, and the index laid out therein would call for a 3.08-percent increase for inflation and population growth.

"That essentially means that responsible government should typically not spend any more than that index," he said. "So we're looking to keep under (3.08 percent)."

Edwards also noted $188 million in revenue surplus as of the end of January and another $100 million the state should now get following a Supreme Court decision that will bring in internet sales tax revenues.

Asked about workforce development and whether there are efforts to increase salaries at community colleges, Edwards said yes, noting an investment of $23 million to address some of those salary issues in the previous cycle. There are also multiple programs available through the state to help folks find jobs.

McGrady answered yes to a similar question about principal pay increases for local schools. He said many principals have taken a teacher's salary instead of the principal's salary, and the state is now trying to change that. One of the proposals in Cooper's budget addresses the issue and will be one of the points of budget discussions.

Both McGrady and Edwards showed enthusiasm for continued support of early childhood education.

Asked about health care and Senate Bill 86, or the Small Business Healthcare Act, of which Edwards is a primary sponsor, Edwards said he's gotten unanimous votes out of two recent committees on the bill to help small businesses band together and provide group health insurance to their employees.

The bill takes advantage of Affordable Care Act rules recently rolled back by the Department of Labor. Edwards said he feels confident it will pass the Senate, while McGrady said he will support it and feels it also has a good chance of passing in the House.

"This gives small businesses an opportunity to pull together -- they have to cover at least 500 lives," Edwards said, noting that states that have employed a similar plan have seen rates drop and the bill could help 110,000 North Carolinians get health insurance plans.

On Medicaid expansion, McGrady reiterated his support for Carolina Cares, but said his perception is the bill is less likely to get traction in the Senate and he can't tell where the state might be going.

It's an issue that's become wildly politicized and the state needs to move past rhetoric and step back to ask what the problem is, Edwards said. For him, the problem is that there are people in the state who still need help. The state already covers about 20 percent of its population under Medicaid, he said, and there are more ways to address the problem.

"Many of us believe that the wholesale expansion of Medicaid as offered to us by the federal government is not the solution," he said.

Edwards also said the recent switch to a managed care program versus a fee-for-service program should incentivize those organizations to really help someone get healthy as opposed to churning up activity and invoices. That alone should make a big difference, he added.

Infrastructure and workforce housing were the topics of the next question. Edwards said his role is to help point out weaknesses he sees and things the state can do to help facilitate more affordable housing.

"Many folks are not going to like the answer," he said. "The answer is we've got to quit being our own worst enemy."

Edwards said he hates to see local governments stop housing projects for various regions, citing a recent example in Transylvania County to restrict building on hillsides.

"I encourage local governments to start looking at the restrictions that are in place," he said, because developers ready to spend millions in the community are stopped due to the pressure from neighbors or other things. "We've got to have some real honest dialogue about restrictions that are in place that keep people from building."

Housing costs come down to supply and demand as well as cost to build, he said, and more building in the district should help lower the costs regionwide.

He said he hears often from people seeking state funds to build houses, "and it personally frustrates me, and I don't take much sympathy to those folks when I know that they've been turning developments away."

Addressing transportation, McGrady said a lot of recent projects have been rolled back after contracts have come in more costly than expected. Long-term, "our funding system is broken," he said. The gas tax that primarily funds transportation project no longer provides adequate money to build out projects and make repairs, a problem that's been mounting for a while.

It's something that will have to be dealt with, and one of the really huge issues the legislature will have to deal with in coming years is funding infrastructure, he said.

On broadband, McGrady said it's the biggest issue among legislators in terms of talk, and there's a lot of interest in the mountain region. It should be noted, he said, that all schools in the state have broadband. He mentioned efforts by electric co-ops to partner with the private sector and bring broadband to rural areas of the state.

"I think everybody recognizes that you can't have economic development across the state if the broadband piece is not there. It's just huge," he said.

Asked about the privatization of liquor sales, which McGrady has been advocating, he said craft distilling is the growth industry but many of the state's laws are essentially where they were post-Prohibition.

At the very least, he said, the state needs regulatory reform to make things work normally, including things like allowing electronic transfers instead of requiring certified checks.

"It's hard to imagine how outdated our systems (are)" he said. "Beyond that, my personal view is that the state shouldn't be in the business of selling and distributing alcohol. How do we regulate alcohol when we're also making money on it?"

Thirty to 40 states have a modern licensing system, which is one of three bills McGrady said he's getting ready to introduce all within the next month. The other two will be regulatory reform and a broad craft distilling bill, joining the ABC modernization bill he's already put forward.

He's willing to make incremental moves, he said, explaining that "politics is the art of the possible."

McGrady said he finds it interesting that privatization is already under attack with the concept that the state is going to be totally uninvolved. McGrady said there's a control side the state has to be in; it just doesn't need to be on the sale and distribution side.

Local governments and ABC boards are nervous, however, because of the revenues that come from that system, he said. But there's no way forward unless those revenue streams can be made up, which is what he will try to do.

Assuming he can make that happen, working alongside the state League of Municipalities and Association of County Commissioners, McGrady said, "assuming I can get to that place where pretty much everybody's kept whole, then why would you want state government running an ABC system?"

"I think the answer is they don't need to be in that business," he added.

Restructuring the state Commerce Department's tier system has been a focus for Edwards, who said he has advocated for the system to be gutted and reworked. Henderson County is currently ranked as Tier 3, or least distressed, along with counties like Mecklenburg and Wake.

Edwards said he's come to the realization that with politics in Raleigh, that's just not going to happen because every legislator just looks at their own district and votes as to whether it would come out better or worse.

"So my intent is to put together a different system that will be sitting out there that would be available for us to use as programs expire and as new programs come up," he said.

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