December 2000
For Members Only
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Area meetings end 22 cities 
and hundreds of new friends later

After crisscrossing the state with stops in 22 cities, NCCBI wrapped up its annual fall membership meetings at a reception in Wilmington on Nov. 6. Chairman Mac Everett, as energetic and enthusiastic at the last meeting as he was at the first, declared the annual tour a success. 

“What a thrill it’s been to bump into folks I haven’t seen in a long time and to make a whole lot of new friends,” he said. “Now more than ever before I’m impressed by the reach of NCCBI across North Carolina and the wide variety of members we have.”

The online edition of this month’s newsletter contains pictures from Area Meetings in Boone, Charlotte, Concord, Elizabeth City, Gastonia, Greenville, Kinston, New Bern, Rocky Mount, Salisbury, Southern Pines and Statesville. We'll have the rest of the Area Meeting pictures next month.

A total of 1,725 members and guests attended the 22 events, up from 1,665 at last year’s 21 meetings. Attendance was down at a few, most likely because of changes in scheduling. For example, the Boone meeting, which has been a relatively well-attended breakfast, was switched to a reception this year. It wasn’t anticipated that this change would make it more difficult for some members in that area to attend.

Among the many bright spots on the tour was the heavily attended meeting for members in the Burlington/Elon College area. Thanks to the diligent work of Avery Thomas, of the Thomas, Stout, Stuart, Core & Stuart accounting firm, the Burlington meeting has grown to become the second-largest one on the tour, trailing only the meeting for Triangle area members.

 

Area Meeting Attendance Chart

City

1998

1999

2000

Triangle

319

316

325

Rocky Mount / Wilson

70

50

58

Kinston / Goldsboro1

35

522

36

Greenville

55

49

62

Fayetteville

52

63

68

Wilmington

107

92

75

Charlotte

112

104

68

Salisbury

44

64

45

Gastonia

43

36

40

Asheville

78

74

51

Hickory

107

115

85

Burlington

165

144

204

Winston-Salem

96

108

111

High Point

33

51

51

Greensboro

65

512

85

Asheboro

23

38

44

New Bern

36

47

75

Elizabeth City

47

38

41

Boone

51

54

24

S. Pines / Pinehurst

45

67

51

Concord

70

52

55

Statesville

n/a

n/a

71

Total

1,653

1,665

1,725

1 = meetings rotate between these cities
2 =
attendance hurt by Hurricane Fran
n/a =
meeting not held there that year

Committees rush to complete research on legislative issues

NCCBI’s policy committees are completing a three-month process of reviewing, revising and developing legislative position statements for the 2001-2002 legislative session. The committees finalized their recommended position statements during the last two weeks of November and will present them to the NCCBI Executive Committee at its next meeting on Dec. 11 in Charlotte. 

After the Executive Committee's review, NCCBI's positions on public policy issues will be presented to top state political leaders during the association's annual Legislative Conference. That important event will be held Feb. 22 in Raleigh and will be preceded the night before by our reception honoring new and returning members of the General Assembly.

During several meetings that began in September, the committees began by reviewing their position statements from the 1999-2000 session to determine what positions need to be changed or maintained. Then, other position statements were created to address new issues that are expected to impact the business community during the General Assembly’s upcoming long session, which convenes on Jan. 24.

“The position statements provide a framework for our lobbying efforts when we are monitoring legislation that could affect businesses in North Carolina,” said NCCBI President Phil Kirk. “Our committees are representative of the cross-section of NCCBI’s membership and provide the various perspectives we need to develop comprehensive positions on business issues.”

NCCBI committees focus on education, transportation, economic development, health care, environmental concerns and tax and fiscal policy. The newly-created Legal Issues and Workplace Policies Committee is a blend of what was the Governance, Civil Justice and Employer/Employee Relations committees. The three committees were merged last year when there appeared to be significant overlap of relevant issues among the three groups.

With a new governor and some new faces in the Council of State, state House and Senate, committees have attempted to take proactive positions on issues they believe will be high priorities for the governor and other state leaders.

“Until the newly elected leaders take office and the legislative committee chairs are named, it is difficult to determine the specific topics that will be on the front burner,” Kirk said. “But NCCBI is fortunate to have committee members who know the political insiders and do a great job anticipating what will receive attention during the legislative session.”

After the Executive Committee reviews and officially adopts the committees’ position statements, NCCBI will officially unveil its legislative agenda at its annual Legislative Conference on Feb. 22 at the McKimmon Center in Raleigh. NCCBI’s annual Legislative Reception will be held the night before, at the Capital City Club in downtown Raleigh.

NCCBI members should watch their mail in coming weeks for a brochure that will contain complete information about the Legislative Conference.

Mark Your Calendar

Dec. 5: Small Business Advisory Board meets at the Global TransPark in Kinston, 9:30 a.m. to 2:30 p.m.

Dec. 8: NCCBI's Environmental Concerns Committee meets at the Capital City Club in downtown Raleigh, 10 a.m.-1 p.m.

Dec. 11: Executive Committee holds its quarterly meeting at UNC-Charlotte's Barnhardt Student Activity Center, beginning at 12:30 p.m. 

Feb. 21: NCCBI Legislative Reception honoring new and returning legislators and other political leaders, 5:30-7:30 p.m., Capital City Club, downtown Raleigh. 

Feb. 22: NCCBI Legislative Conference, 8:30-2 p.m., McKimmon Center, Raleigh.

First Citizens wraps up NCCBI's 
best-ever membership campaign


Although final numbers have yet to be tallied, it's apparent that the First Citizens Bank folks produced the best-ever membership campaign in NCCBI's 58-year history. At last count, the bank had brought in 383 new members.

Added to other, ongoing membership recruitment efforts, including those by members of the NCCBI Board of Directors, 470 new members have joined since April 1. That raises total membership in NCCBI to more than 2,200.

The enthusiasm of the First Citizens team is a major reason for the success of the campaign. Another reason is the extra effort that's been put into promoting NCCBI to business people throughout the state during informal receptions. Since April 1, First Citizens Bank leaders, NCCBI board members and NCCBI staff have staged many of these membership recruitment events. They have been held in Cullowhee, Hendersonville, Greensboro, Reidsville, Sanford, Asheboro, Skyland, High Point and Fayetteville. That's in addition to the 22 Area Meetings.

Two major membership recruitment events are coming up soon. One is planned for Jan. 25 in Winston-Salem at the N.C. School of the Arts. The evening reception will be sponsored by NCCBI board members in Winston-Salem. The second will be Feb. 15 at White Oaks in Charlotte. NCCBI Chairman Mac Everett of Charlotte, the First Union Bank executive, will be the main host for that event.

NCCBI's recent success in membership recruitment has even attracted some national attention. The Association of Membership and Marketing Executives recently honored NCCBI and the California state chamber by presenting its top award for "Highest Market Share Growth." The award was presented to NCCBI Development Director Rosemary Wyche at the organization's annual meeting, which was held in conjunction with the meeting of the Council of State Chambers in Santa Fe, New Mexico.

Welcome these new members

New members that have joined NCCBI since Oct. 1 include: ACTS Retirement Life Communities, Columbus; Alan Vester Management Corp., Roanoke Rapids; Automax, Greenville; Blue Ridge Paper Products Inc., Canton; Chatham County Board of Education, Pittsboro; JPC Associates, Durham; Clay County Board of Education, Hayesville; Comprehensive Rehab of Wilson, Wilson; Compucom Systems, Raleigh; Condrey Heating and Air Conditioning Inc., Shelby; DP Cars & Trucks, Reidsville; Electro-Mechanical Specialties, Sanford; Enterprise Mountaineer, Waynesville; Environmental Chemists Inc., Wilmington; Ned T. Grady Inc., Kinston; Hickory Construction Co., Hickory; Hobbs Auto Sales, Clinton; Holiday Chrysler, Jacksonville; Holly Springs Chamber of Commerce, Holly Springs; Honda Suzuki of Sanford, Sanford; Injection Technology Corp., Arden; Jack's Used Cars, Rocky Mount; JITCO Inc., Fletcher; Johnston County Visitors Bureau, Smithfield; Leasing Unlimited, Southern Pines; McDowell Panel & Component, Old Fort; Morrow Insurance Agency Inc., Hendersonville; N.C. Shore & Beach Preservation Association, Oak Island; Packaging Source Inc., Kernersville; Jake A. Parrott Insurance Agency Inc., Kinston; Polaris Realty Group LLC, Clemmons; Premier Financial Services, Eden; Rigsbee Consulting, Cary; Roberts & Wellons, Smithfield; Rothchild Assets, Fayetteville; C. F. Russell Co. of N.C., Tryon; Salemtowne, Winston-Salem; Sampson County Economic Development Commission, Clinton; Scenic Chevrolet Dodge Jeep, West Jefferson; Security Storage Co. Inc., Goldsboro; Thomas R. Shephard & Son Inc., Hendersonville; Tom Smith, Salisbury; Snipes Insurance Services, Dunn; Southern Group Inc., Greensboro; St. Luke's Hospital, Columbus; Steel & Pipe Corp., Sanford; Sterling South Bank & Trust Co., Greensboro; Tri-City Inc., Rockingham; E. B. Wall & Associates, Lenoir; Wayne Family Medical Center, Goldsboro; Wells, Jenkins, Lucas & Jenkins, Winston-Salem; Weston & Associates, Winston-Salem; Wilkes County Board of Education, Wilkesboro.

 

SPECIAL REPORT: ERGONOMICS

Jan. 16 looms as dark day in struggle over new workplace rules
 
Business groups are fuming that President Clinton gave in to demands by OSHA officials and organized labor by imposing ergonomics rules that will take effect just days before he leaves office. The president's decision nearly led to a shutdown of the federal government last month and has spurred a raft of lawsuits seeking to halt or at least delay implementation of the new rules (see related story below).

One day after the president signed an executive order authorizing OSHA to implement the ergonomics rules, North Carolina Labor Commissioner Harry Payne adopted the standards for North Carolina's job-safety program. Payne has tried to enact state ergonomics rules, but his proposals have been stalled by NCCBI, which twice persuaded the General Assembly to direct Payne not to spend any taxpayer dollars on ergonomics.

Payne's decision to adopt the federal ergonomics standard by reference as the state's standard is required under the agreement with the federal government allowing North Carolina to run its own job-safety program. But Payne didn't have to act so fast. The state had six months to adopt the federal rule or one of its own. 


Although legal actions are in the works, as it stands now almost every business in North Carolina, and more than 6 million nationwide, will be subjected to the new regulations effective Jan. 16. Businesses will have until October to get geared up and become ready to comply.

Because the president acted before a National Academy of Sciences study has been complete, a debate continues raging over whether the rules, as written, will be effective at curbing repetitive motion injuries. ``We don't think there is any scientific basis to say how many repetitions are too many, how much weight is too much,'' said Stephen Bokat, senior vice president and general counsel for the U.S. Chamber of Commerce. NCCBI is the state affiliate of the U.S. Chamber.

Bokat and others said OSHA should have issued nonbinding ergonomics guidelines instead.
The National Association of Manufacturers (NAM) and other business organizations contends OSHA grossly underestimated the cost of the regulations. OSHA puts compliance costs at $4.5 billion, but one industry study concludes the new rules would cost U.S. businesses more than $90 billion a year. A study by the NAM, with which NCCBI also is affiliated, said it would cost the typical company $780 per employee to comply with the ergonomics rules in the first year.

Charles Jeffress, head of the federal OSHA program in the Department of Labor and former head of North Carolina's state OSHA program, said businesses would reap about $9 billion in benefits from the new rules as a result of greater productivity and reduced lost-time accidents.
 

On the surface at least, most employers covered by the rule may have to do little more than provide workers with information about ergonomics-related injuries and their symptoms. But the trouble comes when a worker complains. (See Frequently Asked Questions below.)

If just one employee reports symptoms of a musculoskeletal disorder -- such as carpal tunnel syndrome, back pain or tendinitis -- the employer must determine whether that problem is connected to the job. If so, the worker is entitled to medical care and time off with pay. The employer must then find out if that job exposes workers to risks and take steps to reduce the hazards. That could include altering work stations, redesigning facilities or changing tools based on injuries.

The ergonomics standards, which were 10 years in the making, were so contentious that they helped torpedo budget negotiations between the White House and Republican lawmakers. The impasse helped stall final agreement on the $350 billion spending bill for the departments of Labor, Health and Education. Both the Republican-controlled House and Senate opposed OSHA's plans to issue the rules before the National Academy of Sciences completed its own ergonomics study, and stipulated that in the budget bill for the agencies.

Questions are being raised over whether, and how easily, the next president could undo Clinton's imposition of the rules. "If a Bush administration wanted to overturn them, they would have to go through a lengthy rule-making process," one senior House Republican aide said.

Such a challenge, critics said, would almost certainly draw a counterattack from organized labor, and lead to a costly, drawn-out and uncertain court fight. But Jeffress disputed that assertion. "If the next president determined that there is no basis for the rule, all it takes is to give 30 days notice, have 30 days comment, and then a decision," Jeffress said in a New York Times article.

NCCBI joins suit filed by coalition over new ergonomics rules
 
NCCBI has joined a lawsuit filed by the National Coalition on Ergonomics (NCE) seeking to halt or overturn actions by the Occupational Safety and Health Administration to impose ergonomic regulation. NCCBI President Phil Kirk said the association agreed to be named as a party in the action at the request of the National Association of Manufacturers, a major player in the NCE. NCCBI is the state affiliate of NAM.

NCCBI's action came as several national business organizations sought help from the courts over the new workplace rules.

"You cannot do something this big this fast and still do it right," said NAM Senior Vice President Mike Baroody. "If OSHA were serious about a sensible rulemaking, it simply could not have finalized the ergonomics regulation in less than a year."
"OSHA’s regulatory juggernaut has violated employers’ right to due process, by failing to provide a clear standard regarding which workplace circumstances or conduct would meet the obligation to control significant risk," said U.S. Chamber President Thomas Donohue. "OSHA’s refusal to listen to reason as they rushed ahead with this ill-advised and illegal proposal is an example of irresponsible government at its worst."

NCCBI is the state affiliate of the NAM and the U.S. Chamber of Commerce, which also is initiative legal action against OSHA's ergonomics rules.

The NAM filed a petition for review in the U.S. Court of Appeals for the D.C. Circuit on grounds that it is unsound procedurally, scientifically and legally. The National Coalition on Ergonomics and other major business groups support the NAM in pursuing a legal remedy, with more expected to join as the process moves forward.

"Our other objections to the rule are by now well known: it reaches beyond the workplace to make employers liable for injuries aggravated, but not caused by, work; it overrides existing workers compensation laws and creates a ‘most-favored injury’ status for ergonomics; and, its finalization now ignores the will of a bipartisan majority in both houses of Congress, which voted to block implementation of the rule," Baroody continued.

The NAM and the business community overall contend that OSHA’s rush to regulate on ergonomics has led to a rule that is too broad, overly vague and unsound scientifically. "While OSHA will say this is a standard more than 10 years in the making, the proposed rule was published – complete with errors – less than a year ago. We’re talking about the most far-reaching and costly rule in the agency’s history, and we think 11 months is a fraction of the time needed to develop an effective regulation."

The NAM noted that OSHA has pressed on with publication on the final rule despite a steady decline in ergonomics complaints, according to the Bureau of Labor Statistics.

Ergonomics Briefing Paper

Prepared by the NAM

The overall injury and illness rate is currently at its lowest level since the Bureau of Labor Statistics (BLS) began reporting this information in the 1970s. In spite of BLS data showing that musculoskeletal disorders (MSDs) have declined by 24 percent since 1994, and despite the lack of consensus in the scientific and medical communities on the causes of MSDs, OSHA is moving aggressively forward with an ergonomics regulation and ignoring the intent of Congress.

Employers covered by OSHA’s proposed rule – which was published in the Federal Register on Nov. 23, 1999 – would be responsible for taking measures to reduce all MSDs, including carpal tunnel syndrome and neck and back strains, by initiating and maintaining a basic ergonomics program once A SINGLE injury is reported in their facility. OSHA considers an injury "work related" if working conditions contributed to the injury, even if non-work factors contributed as well. Further, where typical workers’ compensation rules currently provide two-thirds of an employee’s pay while out of work, OSHA’s rule will require workers to be paid at 90 percent of their pay if claiming an ergonomic injury. OSHA has, in effect, created a "most favored injury" status for ergonomics.

If covered, employers must set up an ergonomics program to control "work-related" MSDs which must include the following elements: (1) management leadership and employee participation; (2) hazard identification and information; (3) job hazard analysis and control; (4) training; (5) medical management and (6) program evaluation. In October 1998, Congress approved $890,000 for the National Academy of Sciences (NAS) to conduct an independent, peer-reviewed analysis of the available science on MSDs. The NAM opposes the rule and urges OSHA to wait until all the evidence is in before moving forward.

OSHA’s rule defines "work related" even as an injury aggravated by work. Under the rule, any injury sustained away from work but aggravated by work is the employer’s responsibility.

The NAM supports bipartisan legislation, H.R. 987, "The Workplace Preservation Act," introduced on 3/4/99 by Rep. Roy Blunt (MO-07) and approved by the full House of Representatives on 8/3/99 by a vote of 217-209, which would prevent OSHA from moving ahead with an ergonomics regulation until a comprehensive review of all medical studies related to MSDs is completed by the NAS. With a current lack of consensus in the scientific and medical communities on the causes of MSDs, the NAM believes this objective assessment by the NAS of all available data will narrow, if not eliminate, the significant differences of opinion that currently exist regarding ergonomics in the workplace.

On May 24, 2000, during the House Appropriations Committee consideration of the FY 2001 Labor, HHS and Education appropriations bill, Rep. Anne Northup (KY-03) proposed an amendment that would prohibit OSHA funds from being used "to promulgate, issue, implement, administer or enforce any proposed, temporary or final standard on ergonomic protection." It was approved by a vote of 32-22. Most recently, on June 8, the full House rejected 220-203 a labor-backed amendment, offered by Rep. James Traficant (D-OH), that would have stripped the Northup language from the spending bill. The NAM fully supports Rep. Northup’s efforts to keep OSHA from imposing the most expensive and overreaching rule in the history of the agency on manufacturers who, by and large, are already doing the right thing and spending mightily on the safety and health of their employees.


Statistics on Workplace Injuries 
According to the Bureau of Labor Statistics

A total of 1.7 million injuries and illnesses that required recuperation away from work beyond the day of the incident were reported in private industry workplaces during 1998, according to a survey released earlier this year by the Bureau of Labor Statistics (BLS), U. S. Department of Labor. The total number of these cases has declined in each year since 1992. 

A total of 5.9 million injuries and illnesses, including those that did not require recuperation away from work beyond the day of the incident, were reported in private industry workplaces during 1998, resulting in a rate of 6.7 cases per 100 equivalent full-time workers, according to the BLS survey. Employers reported a 4 percent drop in the number of cases and a 3 percent increase in the hours worked compared with 1997, reducing the case rate from 7.1 in 1997 to 6.7 in 1998. The rate for 1998 was the lowest since the Bureau began reporting this information in the early 1970s.

In 1973, the BLS incident rate of lost-time workplace accidents per 100 full-time employees was 11.0. That rate has declined steadily over the years since then and stood at 6.7 at the end of 1998, a drop of nearly 61 percent in such workplace accidents over that time period. 

In 1992, the Bureau record 2.33 million workplace injuries that required recuperation away from work beyond the day of the incident. The number declined to 1.73 million at the end of 1998, the study said. Of that number, musculo-skeletal injuries -- the type most specifically addressed by ergonomics rules -- accounted for 592,500 of all workplace injuries, or about one of every three that required recuperation away from work beyond the day of the incident. 

Frequently Asked Questions
Answered by the NAM

u "Is my company covered even if we've never had what OSHA calls a "musculoskeletal disorder" (MSD)?"
Yes. All manufacturing facilities would be covered by OSHA's standard. Even if there never has been even a single MSD in a facility, manufacturers would be required to satisfy OSHA that they establish "management leadership", "employee participation" and "hazard information and reporting" relating to MSD issues. Once a covered MSD is reported, the full-blown OSHA program would be applicable.

u "What kinds of conditions is OSHA talking about?"
Injuries of muscles, nerves, tendons, ligaments and joints, including many strains and conditions of ordinary life. Covered are complaints of "low back pain", "sciatica", "trigger finger", "rotator cuff syndrome", "tendinitis", and carpal tunnel syndrome, among others.


u "I've heard that our safety incentive programs and even our workplace drug testing policies have to be reconsidered under the OSHA proposal. What do they have to do with ergonomics?"
OSHA would require all manufacturers to "reconsider" policies and practices that may make employees reluctant to report MSD signs and symptoms. In OSHA's view, safety incentive programs can have that effect, as might requirements that all employees reporting accidents must submit to a drug test.


u "How are MSDs reported?"
First, you must give employees information about "common MSD hazards" as well as the signs and symptoms of MSDs. Second, you must set up a way for employees to report such signs and symptoms to the company, and get responses. Third, you must provide "MSD (medical) management", including an assessment of whether work restrictions are necessary (with accompanying wage protection requirements), access to a health care professional at no cost to the employee, and a written opinion regarding the employee's condition.


u "What's the significance of an MSD report?"
Once a single MSD is reported, you can attempt to eliminate the related "hazard" via OSHA's "Quick Fix" method. If that is unsuccessful or if another MSD occurs, you must set up the complete ergonomics program. This includes "job hazard analysis and control", "training", "MSD management (including wage replacement in many instances) and program evaluation.


u "What are 'problem jobs'?"
A "problem job" is any and every job in which an MSD is reported. The resulting obligations also apply to any other job in that workplace that involves the same physical work activities and conditions as the one in which the MSD is reported.


u "Are any requirements triggered once a position is labeled a 'problem job'?"
After you survey employees on the physical difficulties of the job, you must observe the job and evaluate the "hazards" posed by ergonomic "risk factors", such as "force", "repetition", "awkward postures", "contact stress", "cold temperatures" "static postures", "vibration" and others. You must then implement "feasible" controls -- remembering that OSHA's preference is for engineering changes, rather than administrative controls or personal protective equipment. Thus, a "fix" dictated by the rule can include things from new tools to increased staffing (to minimize repetition and repeated exposures) to automating various processes. You also have an ongoing obligation to "periodically look to see whether additional controls are now feasible and, if so, implement them promptly".


u "When can I be sure that I'm done and have met my compliance obligations?"
Good luck guessing! Until you implement "controls" acceptable to OSHA that completely eliminate "problem jobs" and "MSDs", you will be under obligations to take further steps, monitor the impact of those steps, and go on to make further workplace changes. Will each interim measure you take satisfy OSHA? Will the agency's field compliance officers – likely to be less than knowledgeable about your industry and inexperienced in your manufacturing processes – agree with your conclusions as to what is "feasible" in terms of engineering or other changes? These and other questions are likely to remain unresolved…until that lucky day when your work-site is examined by OSHA inspectors applying compliance guidelines issued by the agency regarding this vague rule.


u "What does OSHA mandate for employees who can't work because of an alleged MSD?"
In a startling departure from most OSHA standards, the agency would implement mandated compensation protection for employees who can't perform their regular jobs because of MSDs. Employers would be required to guarantee 100% of normal after-tax earnings of employees on restricted work, and 90% of normal after-tax earnings for employees who are removed from the workplace because of these conditions.


u "Some employees who report MSD symptoms engage in activities outside work that are more likely to produce those symptoms more than their jobs. Doesn't that scenario eliminate our responsibilities under the rule?"
No. In fact, OSHA's proposal would limit a company's ability to even identify such outside activities that contribute to reported symptoms, in contrast to virtually every state workers' compensation law. Where signs and symptoms are reported for jobs that include a degree of lifting, repetition and other requirements, there is no practical way for an employer to avoid the OSHA rule's responsibilities, even where the individual's signs and symptoms are more closely linked to outside activities.


u "Doesn't this treat MSDs differently than other workplace injuries?"

Yes, it establishes these as the "most favored" condition, guaranteeing compensation at levels above those now provided for more traumatic and severe injuries and illnesses by almost all workers' compensation programs and disability insurance policies.
 

u "We've covered ergonomics issues for years under our workplace safety & health program. We've achieved some improvements. Am I right to assume that this proposal is not a big deal for us?"

Do you guarantee 100% of after-tax for up to 6 months for employees on restricted work for an MSD? Do you guarantee 90% of after-tax earnings of employees out of work for MSDs? Are you limited in learning about non-work activities that might contribute to such "compensable" conditions? To these and other important questions, even those employers with comprehensive safety & health programs that cover ergonomics issues would answer "no".

 

SPECIAL REPORT: The elections

Predicted Republican surge
fails to materialize in state races

Republican George Bush carried North Carolina with a 56-43 percent margin over Al Gore, but Bush didn't have any coattails. That's different than how it looked In the final days of the campaign when NC FREE and others were predicting a Republican surge strong enough to sweep several Republicans into office. And in the early hours of vote counting it appeared that some notable Democratic candidates were in trouble.

However, the early lead held by Republican gubernatorial candidate Richard Vinroot, lieutenant governor hopeful Sen. Betsy Cochrane and other Council of State candidates waned. Two-term Attorney General Mike Easley swept past Vinroot with 52 percent of the vote. That was the same margin that Democrat Beverly Perdue, a seven-term state senator from New Bern, defeated Republican Betsy Cochrane, the 10-term state senator from Advance.

Democrats captured all but one of the Council of State races.
Rep. Cherie Berry, the four-term Republican legislator from Catawba County, eked out a 7,000 vote margin over Democrat Doug Berger.

Republicans fared much better in the judicial elections. Republican Justice I. Beverly Lake Jr. edged out incumbent Chief Justice Henry Frye by a margin of 51-49 percent. Republicans also won the other race for Supreme Court associate justice, with Robert Edmunds posting a surprisingly easy victory over incumbent Justice Franklin Freeman. That leaves the N.C. Supreme Court 5-1 Republican, with one vacancy.

In the Court of Appeals contests, Republican Douglas McCullough beat incumbent Democrat Clarence Horton, and Republican John Tyson defeated Democrat Jim Fuller. However, Democrats prevailed in the other Appeals Court races; Robin Hudson defeated Paul Stam, John Martin beat Wendy Enochs, and James Wynn edged  Wendell Schollander.

Candidate

Votes

Pcnt.

President 

George W. Bush, GOP

1,564,429

56

Al Gore, Dem

1,203,216

43

Harry Browne, Lib

12,118

0

Pat Buchanan, RP

8,582

0

Governor

Mike Easley, Dem

1,468,445

52

Richard Vinroot, GOP

1,300,212

46

Barbara J. Howe, Lib

40,409

1

Lieutenant Governor 

Beverly Perdue, Dem

1,437,481

52

Betsy Cochrane, GOP

1,255,899

46

Catherine Carter, RP

48,900

2

Attorney General  

Roy Cooper, Dem

1,390,387

51

Dan Boyce, GOP

1,255,402

46

Auditor 

Ralph Campbell, Dem (i)

1,338,404

51

Leslie Merritt, GOP

1,305,641

49

Agriculture Commissioner 

Meg Scott Phipps, Dem

1,359,588

51

Steve Troxler, GOP

1,330,967

49

Insurance Commissioner 

Jim Long, Dem (i)

1,528,915

57

Mike Causey, GOP

1,168,527

43

Labor Commissioner 

Cherie K. Berry, GOP

1,320,435

50

Doug Berger, Dem

1,316,395

50

Secretary of State 

Elaine Marshall, Dem (i)

1,451,153

55

Harris D. Blake, GOP

1,211,291

45

Superintendent of Public Instruction

Mike Ward, Dem (i)

1,417,016

53

Michael Barrick, GOP

1,234,197

47

Treasurer 

Richard H. Moore, Dem

1,482,969

56

Henry McKoy, GOP

1,187,146

44

 

Higher education bonds 
achieve a landslide victory
The NCCBI-led campaign for passage of the $3.1 billion bond issue for community colleges and the UNC System campuses celebrated an historic victory, winning in all 100 counties. The 1.8 million votes for the bonds led the ticket. The largest bond issue in state history -- and also the largest bond issue for higher education passed by any state in the history of the nation -- will give $2.5 billion to the 16 universities and UNC public TV and $600 million to the 59 community colleges. 

"What I've seen today has said to me that the citizens of North Carolina really connect with higher education," UNC system President Molly Broad told the Charlotte Observer. "They really see the opportunity for their children and grandchildren. North Carolina is seen as a bellwether in public higher education, and the result of today's vote will send a powerful signal across the nation."

The NCCBI-leg campaign organization, North Carolinians for Educational Opportunity, spent more than $3.5 million in a four-month campaign. "It's the most significant effort to pass a bond that I can remember," said Leslie Bevacqua, director of North Carolinians for Educational Opportunity.

In a letter to the editor they submitted to the North Carolina magazine, Broad and Community College System President Martin Lancaster said they were deeply grateful: "We would like to express our heartfelt thanks to the voters of North Carolina for their overwhelming support of the higher-education improvement bonds, and for their demonstration of confidence in our public university campuses and community colleges. With their votes on Nov. 7, our citizens affirmed that higher education in this state must continue to open the doors of opportunity for their children and grandchildren, as it has done for generations past. We pledge to honor this enduring faith, and to ensure that the funds generated by this bond issue are spent wisely to preserve and expand access to the highest quality education and training."

Results of Congressional Elections

District 1

Candidate

Votes

Percent

Eva Clayton, Dem (i)

121,935

66

Duane Kratzer, GOP

60,791

33

Christopher Delaney, Lib

3,430

2

District 2

Bob Etheridge, Dem (i)

140,284

58

Doug Haynes, GOP

99,168

41

Mark Jackson, Lib

1,993

1

District 3

Leigh McNairy, Dem

73,467

37

Walter Jones Jr., GOP (i)

120,697

61

David Russell, Lib

2,433

1

District 4

David E. Price, Dem (i)

196,705

62

Jess Ward, GOP

116,631

37

Brian Towey, Lib

5,424

2

District 5

Richard M. Burr, GOP (i)

169,899

93

Steven LeBoeuf, Lib

13,140

7

District 6

Howard Coble, GOP (i)

189,109

91

Jeffrey Bentley, Lib

18,324

9

District 7

Mike McIntyre, Dem (i)

158,003

70

James Adams, GOP

66,045

29

Bob Burns, Lib

2,975

1

District 8

Mike Taylor, Dem

86,254

44

Robin Hayes, GOP (i)

109,767

55

Jack Schwartz, Lib

1,967

1

District 9

Ed McGuire, Dem

66,326

30

Sue Myrick, GOP (i)

148,074

68

James Cahaney, RP

1,083

0

Christopher Cole, Lib

2,084

1

District 10

Delmas Parker, Dem

69,965

29

Cass Ballenger, GOP (i)

162,372

68

Deborah Eddins, Lib

6,087

3

District 11

Sam Neill, Dem

110,671

42

Charles Taylor, GOP (i)

143,626

55

Charles Williams, Lib

7,276

3

District 12

Mel Watt, Dem (i)

120,551

65

Chad Mitchell, GOP

62,129

33

Anna Lyon, Lib

3,621

2

County

For

  Against

Alamance

25,050

10,765

Alexander

7,645

4,210

Alleghany

2,445

1,527

Anson

4,641

1,839

Ashe

5,224

3,447

Avery

3,782

1,408

Beaufort

10,973

4,503

Bertie

3,949

642

Bladen

6,495

2,428

Brunswick

16,568

8,461

Buncombe

49,296

16,604

Burke

19,770

7,846

Cabarrus

26,726

11,274

Caldwell

15,180

7,675

Camden

1,573

601

Carteret

16,350

8,300

Caswell

5,071

2,015

Catawba

31,935

11,766

Chatham

13,622

4,292

Cherokee

4,838

2,110

Chowan

2,289

394

Clay

2,610

791

Cleveland

20,007

8,497

Columbus

10,738

3,849

Craven

20,595

8,070

Cumberland

48,613

19,667

Currituck

3,997

1,444

Dare

9,113

3,149

Davidson

32,903

12,984

Davie

8,720

4,052

Duplin

8,049

2,593

Durham

64,780

11,964

Edgecombe

13,186

2,402

Forsyth

80,604

26,018

Franklin

9,606

4,202

Gaston

36,489

14,473

Gates

2,340

475

Graham

4,543

868

Granville

10,708

2,578

Greene

4,022

1,165

Guilford

119,436

43,224

Halifax

13,101

2,980

Harnett

14,409

5,544

Haywood

12,693

5,364

Henderson

22,182

9,740

Hertford

5,964

936

Hoke

5,054

864

Hyde

1,493

659

Iredell

31,275

10,842

Jackson

7,545

3,353

Johnston

26,102

11,145

Jones

2,527

906

Lee

10,023

4,760

Lenoir

12,968

3,376

Lincoln

15,280

6,545

McDowell

6,099

2,229

Macon

7,525

3,237

Madison

4,297

2,046

Martin

7,442

1,227

Mecklenburg

133,313

44,536

Mitchell

2,695

1,449

Montgomery

5,884

1,929

Moore

15,577

4,887

Nash

18,487

6,153

N.Hanover

40,494

18,278

Northampton

6,418

1,205

Onslow

19,271

6,695

Orange

39,896

8,153

Pamlico

3,447

1,282

Pasquotank

7,449

1,800

Pender

8,725

3,369

Perquimans

2,487

699

Person

6,823

2,835

Pitt

27,580

6,845

Polk

5,097

2,355

Randolph

23,756

12,610

Richmond

10,678

2,333

Robeson

20,339

4,845

Rockingham

19,771

7,836

Rowan

27,795

11,050

Rutherford

13,963

5,685

Sampson

11,710

4,369

Scotland

2,872

453

Stanly

12,347

8,103

Stokes

9,512

5,114

Surry

14,882

5,632

Swain

2,117

648

Transylvania

8,538

4,988

Tyrrell

1,172

314

Union

28,115

14,213

Vance

7,834

1,999

Wake

186,769

58,363

Warren

4,703

1,397

Washington

3,413

906

Watauga

11,300

4,643

Wayne

21,393

6,228

Wilkes

13,352

8,270

Wilson

12,095

2,858

Yadkin

8,429

3,849

Yancey

5,289

2,566

Totals

1,812,003

656,311

STATE GOVERNMENT NEWS

Concerns Mount Over
Looming Budget Deficit

F
our months into its fiscal year, the state General Fund is barely taking in enough tax revenue to meet budget projections, and legislators are hearing some bad news about more tax repayments and shortages in other areas. Although budget conditions can change (the holidays usually pump extra millions into the state coffers), officials are beginning to worry over what could amount to a revenue shortfall of $320 million for the year that ends July 1.

With October's numbers counted, the state has collected $3.86 billion in tax revenue. The good news is that's about 3 percent more than last year at this time. The bad news is it's about 4 percent less than the state had hoped to collect in the first four months of the year. The biggest concern is over individual income tax collections, which
came in nearly $22 million under budget in October. The state expected to collect $607.8 million in individual income taxes in October but actually took in $585.9 million. After four months, individual income taxes are $143 million under budget.

Bottom line, total tax revenue over the first four months of the year is $181 million under budget, or 95.5 percent of what the budget is built on. The numbers get a little worse, at $189 million under budget, after adding in non-tax revenue, such as interest income on state investments. 

The budget numbers came in after officials learned the state has lost another $60 million in lawsuits. The Joint Legislative Commission on Governmental Operations was told last month the state had been ordered to make refunds to Chrysler Financial Corp. and Ford Motor Credit Co. over state taxes charged on wholesale financing for Chrysler and Ford cars sold in the state from 1994 to 1999. The automakers had contested paying the taxes and sued. A judge in Mecklenburg County ruled in Chrysler's favor in February 1999, and a judge in Wake County ruled for Ford Motor Credit in August 1999. The state Court of Appeals upheld Chrysler, saying the transactions took place in Michigan, not North Carolina. When the state Supreme Court declined an appeal, the state Revenue Department threw in the towel and paid Chrysler $20.5 million and Ford $38.2 million in refunds and interest.

The state already has made the refund to Chrysler out of corporate income tax receipts -- a big reason why that line item is in the red in the chart above.  Also, the chart shows corporate income tax numbers net of transfers to other accounts, mainly the school building fund. Gross corporate income tax collections stand at $135.8 million after four months of the current year. But that compares to $332.6 million at this point last fiscal year.

And more lawsuits over improper taxes may be out there. At the Joint Legislative Commission on Governmental Operations meeting, Senate Finance Committee Co-chair David Hoyle asked if there were any other judgments pending. Legislative fiscal analyst David Crotts said some state agencies could lose $65 million to $70 million in a lawsuit filed by public-school systems over certain state fines and forfeitures. The state Constitution says fines and forfeitures must go to the public schools, but school systems argue that some of that money is going to universities, the Revenue Department and even the DMV. "We will probably lose that case," Crotts told legislators.

And that's not all. Dick Perruzzi, director of the state Medicaid program, recently told legislative leaders that rising prescription drug costs and higher use of medical services have pushed state Medicaid costs 30 percent higher than expected. If those trends continue the rest of the fiscal year, he said, the state Medicaid program will spend $110 million more than budgeted. 

State Budget Officer Marvin Dorman, who is retiring next month, said he has some doubt about the Medicaid shortfall because the 30 percent increase in costs is far higher than the 12 percent average nationwide. Dorman, who plans to retire in January, said he hopes to cover most of what now looks like a $320 million budget shortfall by doing what he did after Hurricane Floyd -- asking state agencies to return a portion of their operating budgets. But most departments already are running on razor thin margins.


Elsewhere in state government . . . 
ESC Notifies Employers
of New Unemployment Tax Rates
T
he Employment Security Commission said it has mailed 2001 unemployment insurance tax rates to North Carolina’s 170,419 employers. The 2001 unemployment insurance tax rate schedule changed to reflect the 6.3 percent increase in wages paid to North Carolina workers in 2000. The tax rate is based on a ratio equal to the Unemployment Insurance Trust Fund balance divided by taxable wages as of June 30. ESC Chairman Raymond W. Goodman Jr. said that 22 percent (38,573) of N.C. employers will have a lower tax rate in 2001, 42 percent (71,489) of employers will keep the same tax rate, and 35 percent (60,357) of employers will have a higher tax rate. "Because of North Carolina’s strong economy and growth in wages, we were able to maintain a stable tax rate structure for our state’s employers," Goodman said. Some employers can lower their tax rate even more by making a voluntary contribution within 30 days of receiving their tax notice. Locally-based ESC tax auditors can assist employers in determining whether a company may benefit by making this contribution. All unemployment insurance taxes are due quarterly and fund the state’s unemployment insurance system. The first payment at the new tax rates will be due April 30.

 

Supreme Court Chief Justice
Beverly Lake Jr., GOP 1,393,251 51
Henry E. Frye, Dem (i) 1,319,032 49
Supreme Court Associate Justice
Robert Edmunds Jr., GOP 1,377,444 52
Franklin Freeman, Dem (i) 1,274,424 48
Court of Appeals, Horton Seat
Douglas McCullough, GOP 1,308,721 50
Clarence E. Horton, Dem (i) 1,291,009 50
Court of Appeals, John Seat  
John Tyson, GOP 1,299,633 50
Jim Fuller, Dem 1,295,768 50
Court of Appeals, Lewis Seat
Robin Hudson, Dem 1,329,859 51
Paul Stam , GOP 1,253,017 49
Court of Appeals, Martin Seat  
John C. Martin, Dem (i) 1,310,176 51
Wendy Enochs, GOP 1,279,808 49
Court of Appeals, Wynn Seat  
James A. Wynn Jr., Dem (i) 1,324,395 51
Wendell Schollander, GOP 1,247,347 49

Other News
u North Carolina lost more textile jobs between 1997 and 1998 than any other state, according to the U.S. Census Bureau. The survey put the state's textile-job losses at 9,541, about 5 percent of the workforce in those industries. The study listed 208,741 people working in N.C. textile mills and apparel plants in 1997. One year later, that number dropped to 199,200.
u North Carolina and 12 other states will seek diesel-engine emission standards for trucks, buses and heavy equipment that are tougher than federal rules. The plan would affect an estimated 400,000 heavy-duty truck and bus engines build in 2005 and 2006. In North Carolina, the Environmental Management Commission discussed the concept last month, and a draft rule will be presented early next year, said Tom Mather, spokesman for the Division of Air Quality.

u The last oil company that sought to drill for oil and natural gas off the N.C. coast has given up its federal leases. Conoco controlled eight drilling leases off the Outer Banks that the federal government sold in the early 1980s. By giving up exploration rights, Conoco joined Mobil, Marathon and Chevron on the list of companies that dropped plans to drill off the N.C. coast amid heavy political opposition.

u Average faculty salaries at our community colleges are almost 20 percent below the national average, according to a consultant's report being circulated by the State Board of Community Colleges. The study recommends bringing pay for faculty and professional staff to the national average over the next biennium at an estimated cost of $79.2 million. The report also recommended raising N.C. community college salaries to the top 20 percent nationally in the 2003-05 biennium, a goal that would cost another $174.5 million. The study found the average faculty salary in N.C. is $36,205, compared to a national average of $43,637.

u North Carolina's seasonally adjusted unemployment rate increased from 3.6 percent in September to 3.7 percent in October, the Employment Security Commission said. The change put the state rate within two-tenths of a point of the national rate, which was unchanged at 3.9 percent. The N.C. rate is a half-point higher than the 3.2 percent state rate for October 1999.

u The Coastal Resources Commission is easing up a rule that requires all new beach homes and businesses to be built at least 30 feet back from rivers and sounds. It approved a temporary rule setting criteria for building homes on undeveloped lots of 5,000 square feet or less that are between houses on adjacent waterfront lots. Under the change, those homes can be built as far into the buffer area as the neighboring homes.

u The casino on the Cherokee reservation will double in size under an agreement signed by Gov. Jim Hunt and Leon Jones, chief of the Eastern Band of Cherokee Indians. The agreement also creates a foundation to promote smart growth, environmental protection and preservation of Cherokee culture. The document amends and extends for 30 years a 1994 agreement allowing the Cherokee to open a video poker casino. The agreement must be approved by the U.S. Interior Department.

Names in the News

u Johnston County school Superintendent Jim Causby, a member of the NCCBI Board of Directors, was named superintendent of the year by the N.C. School Boards Association.

u The state community college system presented its highest honors, the I.E. Ready Awards, to Phil Kirk, William F. Simpson and the late George B. Autry. The ceremonies were Nov. 17 in Raleigh. Autry was the founder of the non-profit research group, MDC Inc., and led the Commission on the Future of the Community College System. The commission’s report, published in 1998-1989, has served as the basis for system planning and legislative action ever since. Kirk, president of NCCBI and chairman of the State Board of Education,  chaired the working committees for the successful statewide campaign for $2.75 billion in bonds for schools and roads in 1996 and the highly successful $3.1 billion higher education bonds referendum this year. Kirk also served for five years on the State Board of Community Colleges. Simpson served on the State Board of Community Colleges from 1985 to 1995 and was chair from 1989 to 1993. During his 44-year business career, Simpson owned and operated six successful businesses in retail and restaurants. 

u Lynn D. Minges was appointed executive director of the Division of Tourism, Film and Sports Development in the N.C. Department of Commerce effective Dec. 1. Minges succeeds the retiring Gordon Clapp. Minges has served as deputy director of travel and tourism and director of human resources. A native of Bladen County, Minges is a 1980 graduate of Peace.


u Dennis Patterson, the Associated Press chief government correspondent in Raleigh who has covered the General Assembly for 16 years, resigns to join the staff of the state Auditor Ralph Campbell. Patterson's title will be audit publications coordinator; he will edit audit reports and work with the audit staff to produce consistent and well-written reports. He will also prepare the agency’s annual report, maintain and improve the Internet web site, and act as the first point of contact for media inquiries among other duties. Patterson is a native of Grove City, Pa, and a 1971 graduate of Wake Forest University.

u Wayne McDevitt, Gov. Jim Hunt's chief of staff, is joining the UNC System as vice chancellor for administration and financial affairs at UNC-Asheville. He will start in January. McDevitt is a graduate of UNC-A and his son is a senior there. He has been chief of staff since 1999.

u Jack Claiborne, UNC Charlotte's director of public relations since 1994 who formerly was a reporter and editor at the Charlotte Observer for many years,, will retire as of Dec. 31, but plans to return in January as a part-time writer of speeches and ceremonial scripts. Jeff Lowrance, assistant director of public relations since February 1997, will become interim director, beginning January 1, according to Tom Martz, vice chancellor for development and university relations.

uCong. Howard Coble (R-6th) received the Adam Smith Award from the Springfield, Va.-based National Right to Work Committee. The award, made on behalf of N.C. residents and right-to-work advocates Lewis and Annabelle Fetterman of Clinton, is presented annually to individuals whose efforts advance the right-to-work principle. Previous recipients include Sen. Jesse Helms and former Sen. Lauch Faircloth.

 

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