Back To Budget

By Cece Nunn, posted May 19, 2017
Lawmakers at the N.C. State Legislative Building (above) are now tackling the state budget, including several issues impacting the Wilmington area. (Photos By Marc Kawanishi)
Finding money to accomplish local goals remains at the top of the list for state legislators who represent the Cape Fear region.

More than three months after the long session began in January, the latest and largest effort currently is tackling the state budget.

HB2, the controversial “bathroom bill” that some say cost North Carolina jobs, events and millions of dollars, including nearly being struck from consideration as a venue for national sports championships, was repealed in March. The law’s requirement that transgendered individuals use public bathrooms that reflect their birth gender was reversed in the new legislation.

But legislators, now mid-session, have moved on from the issue. The local delegation has been working on a number of issues that relate specifically to the Wilmington area, including an increase in the film industry grant program, boosting economic development for a portion of the state where no major new job announcements have been made in recent years, addressing health and drug addiction concerns and working to establish a way to keep local beaches nourished.

Economic Development

The Senate’s proposed budget, which passed May 12, includes $45 million a year for two years for the N.C. Ports, which includes the Port of Wilmington.

Last year was the first time the state’s ports had received significant state dollars for capital improvements, in the amount of $35 million in recurring funding, said Sen. Michael Lee, R-New Hanover.

“Now we’re increasing it further because we’re working with the N.C. Ports and their CEO to help move forward on some opportunities that we see on the horizon,” Lee said. Nearly $6 million a year for two years is also included for Wilmington International Airport.

He said the measures are part of a broader economic development strategy.

“We have a port, an international airport, a university, a community college … what we’re trying to do in our delegation, specifically Sen. [Bill] Rabon [R-Brunswick] and I, is to capitalize on those assets that we can offer for employers to come and locate in our area,” Lee said.

The next step in the budget process is for the N.C. House to consider the Senate’s budget – a nearly $22.9 billion spending plan – and come up with its own proposal.

“The House has to take that budget, come back with our proposal, which the Senate will not agree to. It never happens,” said Rep. Ted Davis (below, right), R-New Hanover, adding that, typically, neither entity puts together a budget that’s totally acceptable to the other and they aim to work out differences during the conference phase.

The budget has to be approved before the next fiscal year starts July 1.

Money For Film In Flux

As budget details are worked out, members of the local delegation are hoping more money can be added to what’s proposed in the Senate budget for the state’s film fund.

Davis (right) said he was “very disappointed” in the Senate budget’s amount. The grant funding makes $30 million available for the state’s film grant program, which in 2015 replaced tax credits. That’s the same amount that’s available now, but $15 million is earmarked as permanent annual funding to give potential TV series more certainty.

The amount doesn’t send a strong signal to those selecting filming sites, Davis said.
He said in his discussions with Wilmington-based Screen Gems Studios, a better number has been $45 million.

“So when it comes down to the film aspect, now my burden will be to go and find the appropriate committee in the House that will be addressing that and see if I can get them to give more money,” Davis said.

Additional funding is a possibility, legislators said.

Lee and Rabon said in a statement on the Senate budget, “We look forward to working with Representatives Davis and [Holly] Grange [R-New Hanover] to increase funding for the film grant program and make the program’s entire appropriation permanent in the final budget.”

Since the state’s film grant program was implemented in 2015, the news release said, the program has been funded year-to-year with onetime money.

“The Senate budget matches previous budgets by designating $30 million for the film grant program in 2017-18,” the release said.

For several months, both Grange and Lee had been working on pieces of legislation that would allocate more funding and include recurring funds.

Lee said that he, too, was disappointed that the number for recurring funds came in at $15 million in the Senate budget instead of the $30 million he had pushed for.

Moving forward, Lee said, “it’s about getting the number moved up from here so that when we have a final budget in a month and a half, that number is more in the range of $30 to $40 million recurring, and that’s important to have recurring.”

These days, the industry in Wilmington consists of one major TV project, the second season of TNT’s Good Behavior. Meanwhile, parts of Georgia are currently the site of filming for at least three dozen feature film and TV productions, according to a Georgia Department of Economic Development website.

But the newest member of the local delegation, Rep. Deb Butler, D-New Hanover, who filled former Rep. Susi Hamilton’s seat in February, said she is hopeful about increased funding for the grant program, though she feels the previous tax credits worked better.

“I’m a big advocate of the program as it existed for all those successful years,” Butler said. “When that happened [grants replacing tax credits], we watched our film industry flock to Georgia, and that’s just a tragedy.”

Recurring funding is “a step in the right direction, but honestly, if we could just go back to what we had, it would work better,” she added.

Because of the parameters of the current grant program, the potential for new productions is limited to a window of projects with budgets between about $7 million to $24 million, said Johnny Griffin, director of the Wilmington Regional Film Commission.

“If somebody’s doing a $35 million feature film, they’re not going to look at North Carolina because they can’t get enough incentive to make it count,” Griffin said.

For those seeking to film multiyear TV projects, Griffin said, “it is a little bit hard for them to focus on Wilmington right now or North Carolina, knowing that there’s not a future right now that is laid out that they can see. We’re very anxious to get through the budget process and know what the future is so we can pitch to those multi-year projects.”

Local Sales Tax Debate

A Senate bill that includes new adjustment factors for distributing a portion of local sales tax revenue to allocate additional revenue to poor, rural counties is again meeting with resistance from some local legislators.

“I will not support any legislation that redistributes sales tax to the detriment of New Hanover County. I was against the sales tax proposal that Sen. [Harry] Brown [R-Jones, Onslow,] made last session. I voiced my opposition to it; I will do the same with this new bill that’s being done. I’m not going to vote for anything that hurts the people I represent,” Davis said.

Rep. Frank Iler, R-Oak Island, said although some rural counties would be helped, the Cape Fear region could suffer because tourism and visitor spending are high here.

“That’s going to hurt Brunswick, and that’s not a good thing,” he said. Legislators said they hoped the House could change the bill so that local counties wouldn’t be negatively impacted.

Securing Beach Funding

Money for beach nourishment is on the list of tasks facing local officials.

“That’s an ongoing battle,” Davis said. “The more education that can be given to legislators that don’t live in coastal counties, the better their understanding will be as to the need of why we have to have the money for beach renourishment.”

The minimum needed, according to estimates, is $25 million annually for beach renourishment, Butler said.

“It needs to be a recurring appropriation because it’s a statewide need,” she said.
Lee said some strides have been made.

“We’ve taking a step to get the fund established, and now we’re working on the heavy lifting on getting it funded,” he said.
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