NC JUSTICE NEWS - April 28, 2009: State Health Plan + Halifax Co. Hearing + Senate's Bold but Not Big Plan


STATE HEALTH PLAN : Solution Creates New Problems
Governor Perdue has signed into law a plan to temporarily keep the State Health Plan afloat. It includes unprecedented punishments for smokers and those who are overweight.
The plan will reduce benefits and increase co-payments and deductibles for plan enrollees – namely, state employees, teachers and retirees. All enrollees will be put in the more expensive Basic Plan, and then those who attest they do not smoke, who are not overweight, or who have a doctor’s note saying they are in smoking cessation or weight-loss programs, will be moved to the less expensive Standard Plan.
There are a host of problems with this plan. First, raising co-pays and deductibles for state employees will have many unintended consequences, including pushing off the plan healthy spouses and dependents, who can buy less expensive coverage elsewhere. In addition, this plan presents considerable administrative challenges. How much will it cost to monitor smokers and overweight people to make sure they’re on the right plan? Will retirees get the information about the plan changes and will they understand what actions they need to take? Will someone who smokes one cigar at a party be put on the more expensive plan – a move that could cost him thousands of dollars if he faces a medical emergency or chronic illness?
MORTGAGE PROTECTIONS : Federal Bill Would Nullify NC Law
A bill now moving through the US House threatens to nullify North Carolina’s strong consumer protection laws.
The bill is actually modeled on NC’s laws and is supported by North Carolina’s own Brad Miller and Mel Watt. The bill would prohibit bonuses to mortgage brokers for putting people in higher-cost loans, would require brokers to confirm the borrower’s income, and would prohibit brokers from making new loans and refinanced loans that do not benefit the borrower.
But the bill would also protect the Wall Street wizards who financed and bought up the risky mortgages that spurred the housing market bubble and subsequent collapse. It does this by insulating these loan "holders" from responsibility or liability for the illegal loans they made possible. So, if you're a consumer who got ripped off, it's tough luck. You'll have no right to recover from the big-money people behind the whole scheme.
The second huge problem with the bill is that it would preempt stronger state laws, such as those in North Carolina, which allow consumers to sue the Wall Street types who hold their loans and includes other stronger protections. These laws would no longer be enforceable.
At this point, both Miller and Watt say they want to strengthen the bill by addressing the offensive provisions. Whether they can pull it off is another matter. The forces arrayed against them are powerful and time is short. The Financial Services Committee is expected to take action on the proposal this week.
SENATE TAX PLAN: Bold but Not Big
Last week the Senate Finance Committee released a draft revenue plan designed to modernize the state’s tax system and raise revenues to help plug the budget gap. The Senate’s plan would raise $544 million for the state’s general fund in FY 2009-2010. This would fill less than 20% of the state’s budget gap and is less than the governor’s plan to increase tobacco and alcohol taxes would raise.
The Senate’s plan would: 1) broaden the base of the personal income tax and lower all income tax rates, 2) broaden the sales tax base to include more services and digital downloads and lower the state sales tax rate by .75%, and 3) require a broader range of businesses to pay franchise taxes and lower the corporate income tax rate and local privilege taxes on businesses.
Kudos to Senate leaders for recognizing that a period of crisis is no time to bury their heads in the sand. Rather, it’s the perfect time to do long-term planning. The Senate’s draft plan is bold and comprehensive and, if enacted, would make state revenues more reliable and reduce future deficits.
There are four key differences between the Senate’s plan and the progressive revenue plan developed by the Justice Center’s Budget & Tax Center. The BTC's plan would 1) increase the EITC, 2) add two top income-earner brackets to the personal income tax rate schedule, 3) close corporate tax loopholes by enacting mandatory combined reporting, and 4) plug 30% of the budget gap with new revenues (while the Senate plan fills less than 20% of the shortfall). The committee has not yet scheduled a vote on the draft plan, and the committee chairman indicated that the committee would like to hear from interested parties about the plan’s recommendations.
THE LEANDRO MANDATE: Turning Around Halifax Co. Schools
This Wednesday, the students of Halifax County will get their day in court. Superior Court Judge Howard Manning, who has been overseeing the implementation of the Leandro court ruling, has called the state’s education leaders into court to explain how they plan to turn around Halifax County Public Schools (HCPS). Only 39.7% of Halifax kids in grades 3 through 8 passed the end-of-grade math test last school year, and an astonishingly low 25.5% passed the reading test.
The state’s plan will include professional development for school staff, administrators and teachers, as well as “transformation coaches” and “master educators” to help teachers improve classroom instruction. However, it is vital that the state include parents and community leaders in this process, and that the greater needs of the community are taken into consideration.
Halifax County will need much more in order to improve its schools. State legislators need to look at ways to invest in low-income, rural counties like Halifax so they can attract and retain licensed educators and other professionals who make up a quality school system. As state legislators move through the budget process, they must remember that they have a constitutional responsibility to ensure that districts like HCPS are successful in educating their students, and that providing schools with the resources they need includes providing communities with the resources they need to thrive.
IMMIGRANTS' RIGHTS: Call-In Program to Help Crime Victims
Immigration attorneys from the Justice Center will participate in a three-hour call-in session this Thursday to help Hispanic victims of crime get important information.
Cooperation between some local law enforcement agencies and immigration enforcement, unfortunately, has made many immigrant crime victims reluctant to go to these same agencies for help, protection, or important information. The Spanish-language television station Univision is broadcasting announcements to let its viewers know they can register with the Statewide Automated Victims Assistance and Notification Program so they can receive notifications of an offender’s custody status, such release and scheduled court dates.
This Thursday, victims of crime will be able to have their questions answered by representatives from the Attorney General’s Office, Department of Correction, N.C. Coalition Against Domestic Violence, N.C. Coalition Against Sexual Assault, N.C. Justice Center, El Pueblo, the Governor’s Crime Commission and the N.C. Victims Assistance Network. They will take calls from 6 p.m. to 9 p.m. Tune in to Univision on Thursday for the telephone number.
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