HEADLINES:

- Budget-writers interested in eliminating support services for mental health patients
- House votes to give treasurer more investment options as pension funds returns underperform
- Top consumer advocate on utilities no longer fighting deregulation of landline phone prices
- Senate considers link of Apple data center tax break to location where economy most sour
- Detailed rules for school district bullying policies approved by House committee
- Allred tells newspaper he’ll retire from NC House after current year session ends
- Delay of high school graduation project requirement heads to Perdue’s desk

THE BRIEF:

COMMUNITY SUPPORT: House budget-writers are interested in
eliminating a heavily scrutinized program that pays for non-medical
care for mental health patients living at home. The elimination of
the “community support” services program is one of about 150
health care program or initiatives that would face cuts in the
draft budget proposal by the health appropriations subcommittee. A
2007 government review of the program said it may have wasted
hundreds of millions of dollars in overpriced or unnecessary care.
Lawmakers would direct state regulators to rebuild the program. The
reductions include cutting Medicaid reimbursements to doctors and
hospitals as well as for personal care services for the elderly and
infirmed.

FLEXIBLE INVESTING: Lawmakers are on the verge of heeding
Treasurer Janet Cowell’s requests for more flexibility in on how
her office invests the state pension fund. The House voted 64-50 to
allow Treasurer Janet Cowell’s office to branch into timberland,
securities rated below investment grade, commodities, and Federal
Reserve-sponsored securities backed by auto loans or commercial
real-estate with up to an additional 10 percent of pension-fund
money. The treasurer now is allowed by law to put up to 5 percent
of pension fund assets into hedge funds and other private equities
and up to 10 percent into real estate. The measure next week heads
back to the Senate, which must agree to changes made in the House.
Cowell said without the changes, pension fund investments are
expected to return less than 7 percent a year instead of the
expected annual 7.25 percent return.

PHONE FREEDOM: North Carolina’s top consumer advocate on utility
issues said he no longer opposes an effort to end state regulation
of the prices consumers pay for landline telephone service. Robert
Gruber, executive director of the state Utilities Commission’s
Public Staff, said he’s satisfied by the consumer safeguards in
legislation that allows AT&T and 15 smaller providers operating in
North Carolina to cut loose from regulations setting the rates,
terms, and quality of their landline services. Landline telephone
providers want the option to drop out of Utilities Commission
price-setting oversight of household service because cable,
Internet and wireless rivals aren’t similarly regulated. The
legislation would allow phone companies to set their own prices,
except for stand-alone basic residential service. Rate increases
for the basic service would be limited to inflation adjustments.
Rural customers must be charged a price comparable to urban
customers for basic service.

COMPANY A: The Senate moved one step closer to changing the
state’s tax law amid fresh talk that the $1 billion investment
involved may become reality within days. The Senate voted 42-6 to
go along with conditions including that the company invest $1
billion in a rural area, meet wage standards and provide health
insurance. The Associated Press reported last week that Apple Inc.
is the company deciding where to put its East Coast data warehouse.
Bill sponsor Sen. David Hoyle, D-Gaston, said if the tax change is
given final approval Monday, an announcement by the unnamed company
could follow shortly.

BEAT BACK BULLYING: A Senate bill requiring school districts to
approve more detailed anti-bullying policies is moving forward
after the House Education Committee recommended the measure.
Districts would have to create policies that at a minimum list
perceived characteristics of a person likely to be bullied. The
list is laid out in the bill, which next goes to a House judiciary
panel. Alison Davis of Durham says the bill would protect her three
sons, each of whom are autistic. The Rev. Mark Creech of the
Christian Action League of North Carolina said he was bullied as a
child. But Creech and other opponents argue the required list would
open the door to special protection for specific groups,
particularly gays and lesbians. The bill’s language states no
protected classes of people are being created.

ALLRED OUT?: A House member accused by colleagues of embracing a
teenage female page inappropriately says he will leave the
Legislature after the current year’s session ends. Rep. Cary
Allred, R-Alamance did not return telephone calls to The Associated
Press, but told The Times-News of Burlington he’ll retire from the
House by Sept. 1. A legislative ethics committee last week received
a report from the House sergeant-at-arms collecting accounts about
Allred’s actions in the House chamber April 27. The report made no
recommendations on Allred’s fate. Allred has said he did nothing
wrong and the page was a longtime friend of his family. He also
acknowledged that he had one drink before driving to Raleigh and
getting stopped for speeding before that evening’s House floor
meeting. Allred said he was never impaired.

HIGH SCHOOL PROJECT: High school seniors statewide won’t have to
create a graduation project in order to get their diploma in 2010
unless a local district wants them to in legislation now heading to
Gov. Beverly Perdue’s desk. The Senate voted 48-0 for a House bill
that puts off the graduation requirement until at least 2011. The
measure affirms a State Board of Education decision to put off the
projects. Local school districts still have the option to require
one.

THURSDAY’S SCORECARD:

In the Senate:
- S584, tightens the law regulating private protective services,
which include private detectives, security guards, and armored car
operators. Passed 47-0. Next: To the House.

In the committees:
- S167, to extend a smoking ban inside North Carolina prisons to
include outside prison grounds and to make it a misdemeanor for
someone to knowingly provide tobacco products or cell phones to a
prisoner or to someone who delivers the items to an inmate.
Recommended for approval, House Ways and Means Committee. Next:
Re-referred to House Judiciary III Committee.
- H135, would allow Internet broadband companies offering
service outside their franchise territory to also include
voice-grade communications services outside their territory. Passed
the Senate Commerce Committee. Next: To the full Senate.

AROUND THE STATEHOUSE:

North Carolina’s Roman Catholic bishops say changes by the state
Senate to a bill designed to prevent racial bias in the death
penalty are “beyond comprehension.” A priest read a letter
Thursday from Bishop Peter Jugis of the Charlotte diocese and
Bishop Michael Burbidge of Raleigh at a news conference outside the
Legislative Building. Other religious leaders attending the event
agreed they’re unhappy with how the Senate approved the Racial
Justice Act with new language also designed to allow executions to
resume in North Carolina. The speakers said the new language should
be stripped from the bill and the original measure approved alone.
Capital punishment has been put on hold for more than two years due
to a legal tangle in the courts.

ON THE AGENDA:

The Senate has scheduled a final legislative vote on changing
corporate income tax laws to attract a $1 billion investment from
an unnamed technology company looking at North Carolina for its
East Coast data center. The Associated Press reported last week
that Apple Inc. is the company deciding where to put the costly
computer warehouse able to handle massive flows of data.

QUOTABLE:

“There’s not a single state employee in my district that
doesn’t come up to me and say, `Yeah, I know I’m going to get hit
with my salary. I’m getting ready to lose something in my salary.
But at least I have a decent retirement.’ ” Rep. Pryor Gibson,
D-Anson. He argued before a House vote that easing restrictions on
how the state treasurer invests pension funds was needed to protect
the promise of good retirement income for state employees.