State Government
Similar
Trouble South of the Border
By Steve Tuttle
If misery loves company, North
Carolina should be overjoyed to have South Carolina
sharing the same bumpy ride toward a balanced budget. As
Yogi Berra said, it's deja vu all over again on both
sides of the state line.
In Raleigh, lawmakers were working to plug a budget
deficit mainly caused by having to refund $1.2 billion in
taxes on stocks and bonds and on retirees' benefits that
the courts have ruled were collected illegally and more
than $800 million appropriated for flood relief. In
Columbia, the legislature was still coming to grips with
a decision by the S.C. Supreme Court that the state has
miscalculated benefits for Palmetto State retirees since
1989. The court said South Carolina owes somewhere
between $125 million and $2 billion, depending upon
whether the retirees or the state is correct.
South Carolina Gov. Jim Hodges says the state will not
shirk its responsibility in paying legitimate debts but
he doubts the state can afford to pay out $2 billion
without ruining its $6 billion operating budget.
The lawsuits in the neighboring states sound eerily
familiar. South Carolina was sued by retirees for refunds
on state taxes collected on federal and state pensions.
That law was designed in 1989 to answer an older tax suit
because the state did not tax state retirees but did tax
federal employees. The 1989 law exempted both state and
federal retirees from taxes on the first $3,000 of
income, but it also raised the state employees' pensions
to pay for the taxes. North Carolina did almost exactly
the same thing, got sued by the same classes of
taxpayers, and lost on the same legal grounds.
But the outcome is more worrisome in South Carolina,
which, at about half the size of its bigger neighbor to
the north in all categories except the number of retired
people, can less afford to pay the piper. South Carolina
faces up to $3 billion in refunds of various kinds.
Solving that budget dilemma will be difficult. Just ask
the folks in Raleigh.
Leveling the Playing Field
Let's say your business has had a
run-in with state government and you don't believe the
law and regulations were applied fairly to you. It may be
that your application for a wastewater discharge permit
was denied. Or a state inspector visited your factory and
wrote you up for an expensive fine. What can you do to
seek redress of your grievances? When can you have your
day in court?
Under terms of the state's Administrative Procedures Act,
you can appeal decisions of state regulatory agencies to
an Administrative Law Judge. In what has all the
trappings of a courtroom proceeding, you can put on
evidence, offer testimony and cross-examine the state's
witnesses.
After evaluating all the evidence, an ALJ, as these
judges are known, can determine that you were right and
the state was wrong. But the trouble is, such a verdict
would be only a symbolic victory for you because, odd as
it may seem, the judge's decision is only an advisory
opinion that the state agency can blithely ignore.
Under current state law, you can win the case and still
be faced with having to appeal to a higher court in order
to have the ALJ's decision mean anything.
The unfairness of that situation has irritated NCCBI for
a long time, and the association was trying again this
year to rectify the situation. It was pushing the General
Assembly to adopt reforms to the Administrative Procedure
Act that would mean that when the state loses before an
ALJ it must abide by the decision.
The NCCBI-backed bill before the legislature is H. 968
Amend Contested Case Procedures, co-sponsored by Reps.
Martin Nesbitt (D-Buncombe), Connie Wilson
(R-Mecklenburg) and David Redwine (D-Brunswick). The
measure would simplify the administrative review process
by making decisions of the ALJ final. The bill passed the
House last April and was being debated in the Senate last
month.
The bill would give equal footing to private citizens and
the state in contested proceedings. Testifying recently
to a Senate committee on behalf of the bill, NCCBI Vice
President of Governmental Affairs Leslie Bevacqua said
that ìapproval of this bill will make the process
cleaner and we believe it is also a faster and fairer
process. Time is a real factor for all businesses. One of
the most frequent complaints we hear from our member
companies is the amount of time it takes to process
permits and the time it takes to get decisions. By making
the decision of the ALJs final, it could cut as much as
nine months out of the process and that would be a
positive thing for everybody.î
The main opposition to the bill has come from state
agencies which believe this would dilute their power.
Gov. Jim Hunt, who normally sides with the business
community on issues like this, has expressed reservations
about the bill.
Other groups supporting the proposal include the N.C.
Home Builders Association, the N.C. Forestry Association,
the N.C. Academy of Trial Lawyers, the N.C. Association
of Realtors, the N.C. Retail Merchants Association, the
Manufacturers and Chemical Industry Council, the National
Federation of Independent Businesses, the American
Furniture Manufacturers Association and a number of other
associations.
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