State GOP Chairman Tom Fetzer said today that conditions are ripe for Republicans to win control of the North Carolina legislature next year for the first time since 1898.

Fetzer said the $1 billion in tax increases passed by the legislature combined with a spate of Democratic scandals in Raleigh, a backlash against Democratic health care proposals and historic mid-term election trends bode well for the GOP, reports Rob Christensen.

"We feel very confident that we going to have a Republican majority in the House and the Senate in 2010," Fetzer said at a news conference at state Republican headquarters.

Republicans need to pick up 10 seats in the 120-seat House, and six seats in the 50-seat Senate to win control.

But House Speaker Joe Hackney, an Orange County Democrat, said Democrats were well positioned to expand their majority in the House.

"We are very optimistic we are going to pick up some seats," Hackney said in an interview. "We think we will pick up seven and get to 75."

After moving around the state, Hackney said he believed there was a broad appreciation that the legislature had just gone through one of the most difficult budget sessions in modern times. Hackney said the Republicans had shown no leadership.

"They have not done anything to deserve consideration next time," Hackney said. "They wouldn't tax to balance the budget. And they wouldn't cut to balance the budget. They refused to participate. They wouldn't make any hard decisions."

Three North Carolina localities are ready to build, set up or relocate a liquor store and get their alcohol revenue flowing.

But they have had to put their plans on hold because there is no one in Raleigh to give them approval to proceed.

The state Alcoholic Beverage Control Commission consists of a single commissioner at the moment. Two of the three seats, including that of the chairman, are vacant and have been since May. The commission needs two members to hold monthly meetings where it hears liquor law cases and approves new stores.

Gov. Beverly Perdue has not appointed anyone to fill the empty seats, but administration officials said Friday that an announcement could come as early as this week.

In North Carolina, liquor stores are run by local boards, not the state. The state commission runs the warehouse from which all stores buy their liquor, gives final approval for opening a store and hears cases of ABC law violations.

State commission member Mike Joyner of Charlotte stepped down last year. Then-Chairman Doug Fox of Wilmington resigned in May, at the request of Perdue, after Fox forwarded an e-mail message to friends and associates containing a racist illustration. That leaves only commission member John Lyon of Wake Forest. (N&O)

* At least 44 retired North Carolina judges are offering their time to keep courtrooms operating when judges call in sick or juggle a family emergency.

The problem is simple. Like most state agencies, the N.C. Administrative Office of the Courts had to make tough choices about what the state could afford this year with a skimpier budget.

The legislature cut 6 percent of the agency's budget, shaving $30 million from funds used for expenses such as salaries and training for judges, prosecutors and clerks.

On the chopping block: money to pay substitute judges. One by one, retired judges raised their hands to come back onto the bench as volunteers. (N&O)

GOP leaders went to Rocky Mount on Monday to whip up support for a challenge to Democratic Rep. Randy Stewart.

Party chairman Tom Fetzer and House Republican leader Paul Stam asked Republicans to put up money, give time or even run against Stewart, the Rocky Mount Telegram reports.

Fetzer told the small crowd at Gardner’s Barbecue Restaurant he believes the Democratic Party is on its heels after passing an unpopular tax package in the General Assembly and said the timing of the national health care debate could lead to an influx of conservative voters for the congressional mid-term election.

"This health care bill is very, very bad for senior citizens," Fetzer said. "If this bill passes, it will end health care as we know it, and it will be the end of the Democratic Party."

Republicans are targeting seats they believe will be vulnerable in 2010 as part of an effort to try to win a majority in the legislature, which has been dominated by Democrats for all but a few of the last 100 years.

Gov. Beverly Perdue signed another batch of bills Friday afternoon leaving five remaining unsigned bills on her desk.

The six remaining are:

HB 104: Clarifies which documents produced by lawmakers are exempt from the public records law. Would make requests by lawmakers sent to state agencies exempt from the public records law.

HB 945: The Studies Act of 2009 catalogues a host of items and issues to be studied while the legislature is out of session.

HB 1166: Insurance Law Changes. Makes several changes including a new requirement that to get a license, insurance agents must submit fingerprints for a criminal background check.

SB 947: Provides more opportunity for a homeowner to halt foreclosure if he or she can demonstrate they can pay what is owed.

HB 836: Makes technical corrections to the state budget.

HB 1329: Consolidates various state stautes regulating criminal record expunctions. 

Among the 40-plus Perdue signed Friday are:

SB 167: Prohibits tobacco products and cell phones in prisons. Makes it a crime to provide tobacco or cell phones to inmates.

HB 667: Allows wineries to sell wine during business hours.

SB 138: Bans the recreational use of salvia divinorum, an hallucinogenic herb. Still allows the mint-like plant to be used in landscaping.

SB 786: Authorizes capital projects on University of North Carolina system campuses. The projects have a funding stream to repay debt for the projects. List includes $21.8 million for a parking deck at N.C. State University, a $10 million renovation of the Carolina Inn at UNC-Chapel Hill, $35 million for a Partnership, Outreach and Research for Accelerated Learning Building at UNC-Charlotte.

SB 464: Requires statistics on race to be kept to help identify and prevent racial profiling by law enforcement. Also requires that a law enforcement officer ensure a child is in safe hands if the child's parent gets arrested. The last provision would have prevented a case last year in which three children were stranded on Interstate 85 in the middle of the night for eight hours when a sheriff's deputy arrested the children's mother, an illegal immigrant.

Correction: Perdue had six bills to sign, not five as we previously reported. Dome regrets the oversight. 

* A black or Native American child visiting the state Capitol on a school field trip can wander among the statues, monuments and plaques without seeing an image of someone of the same skin color.

Eddie Davis, a former teacher and former head of the state's largest teachers union, calls it "segregated history in the 21st century." He is proposing that the state Capitol in downtown Raleigh, built with the help of slave labor, reflect and represent all of its people, including those who aren't white, about a quarter to one-third of the population.

He asked members of the state Historical Commission last week to add a "Hall of Inclusion" on the second floor of the Capitol, with plaques recognizing historical contributions by racial and ethnic minorities. (N&O)

* Jam-packed Wake County classrooms with up to 40 or more students have sparked a blame game between leaders of North Carolina's largest school district and state officials and educators.

* As a result of tough-on-crime sentencing laws approved by legislators 15 years ago, North Carolina's inmate population is booming and will soon outpace the number of prison beds.

Despite this, the state budget signed by Perdue this month orders seven small prisons closed, eliminates 972 corrections jobs and cuts programs aimed at keeping juvenile offenders from becoming hardened criminals.

Administrators say the state Department of Correction can safely absorb the cuts in the short-term by increasing the number of inmates at other facilities. But judges, legislators and others with a stake in the criminal justice system worry that the growth, if unchecked, will soon result in prisons so crowded as to be unsafe for inmates and staff. (N&O)

Gov. Beverly Perdue paid back one of the state funds she used to keep the state's checking account flush during the last fiscal year.

The state was facing a $3.2 billion shortfall last year. From month to month, the cash situation was dicey, to put a fine point on it. To ensure the state could pay its bills, Perdue transferred hundreds of millions from four state funds in February as well as ordering agencies to curb spending.

"When the national recession created a shortfall of billions of dollars, I had to turn over every stone to pay North Carolina’s bills — to pay teachers, to keep schools and other core services running," Perdue said in a statement.

Perdue authorized transferring up to $100 million from the Public School Building Capital Fund, the pool of money used to distribute school construction money raised by the state lottery. Perdue took only $37.6 million from that fund because she wanted to spare education, a spokesman said.  

Perdue said Friday that she was using money left over from the last fiscal year to replace what was taken from that fund.

Perdue also took $50 million from the Public School Textbook Fund. That money was repaid by the current state budget.

Transfers from two other funds, the Education Lottery Reserve Fund ($50 million) and the Clean Water Management Trust Fund ($100 million) have not been paid back.

The N.C. Justice Center says that tax increases approved by the legislature this year are likely to prevent job losses in the private and public sectors.

The Center issued a release on a new report that contends that the popular notion that tax increases will lead to job losses is not true.

The report says that without the tax increases, deeper cuts would have been made in state services such as education.

"Those cuts certainly would have caused job losses in both the private and public sectors, while credible research concludes the revenue increases likely will not negatively impact the job market," reads the report.

The report says that North Carolina's tax increases are equal to a small fraction of the state's economy and do not put North Carolina out of line with taxes in other states. As a result, the report says, the tax increases should not put North Carolina at a competitive disadvantage with other states when it comes to jobs.

Finally, the report says that a comparable set of tax increases by North Carolina in 2001 did not have a negative impact on the state's economy.

The report concluded:

Taking a balanced approach to addressing the budget shortfall allowed the state to avoid major setbacks in public programs and avoid laying off tens of thousands of state workers, which would have had negative effects on the state economy.

Update: Well, it didn't take long for the other side to chime in. The folks at the Civitas Institute have posted a response to what they call a "bizarro-world 'analysis."

The Civitas post says the Justice Center report "does nothing to bolster its claim that higher taxes have no effect on job growth. Any basic Econ 101 theory will describe how job and economic growth is based largely upon the accumulation and investment of new capital and the proper incentive structure."

The post says that increasing taxes reduces the amount of capital available for invements and "destroys the incentives for entrepreneurs to engage in productive investment."

Buncombe County Schools will raise class size in higher grades to cope with state-mandated budget cuts to education.

The system lost 42 teaching positions because of a $15 million budget cut, the Asheville Citizen-Times reports.

The school system was able to rehire almost all of the teachers who were laid off at the end of last school year, but it wasn't able to fill all vacant positions. In most cases, students will see two or three extra students in their classrooms. Class sizes vary by grade and course, from 17 to 21 students per class.

The state's school system must each decide how to cut spending.

As part of the final state budget deal, lawmakers and Gov. Beverly Perdue mandated $225 million in cuts to local school systems. Lawmakers scrapped language that would have required increased class sizes in grades 4-12. Instead the budget gave school administrators increased flexibility to move money and to spend federal stimulus dollars while encouraging officials to leave class rooms alone.

The state's teacher lobby, Perdue and certain lawmakers said they believe such cuts can be made without increasing class size, which is necessary when schools have fewer teachers. Administrators in Wake say they believe paying teachers with stimulus money, which runs out in two years, would create more problems than it solves.

Gov. Beverly Perdue says the steep drop in revenue made it hard to keep a campaign promise to help seniors.

Perdue was responding to questions posed by readers of The Charlotte Observer. Two readers asked her about a plan Perdue touted during her campaign to expand the homestead exemption and freeze property tax evaluations for seniors who make less than $50,000 and have lived in their homes for 20 years.

Perdue said the recession and a steep deficit made such a promise difficult to keep.

North Carolina faced a shortfall of $4.7 billion — a 20 percent hole in the state budget — for this fiscal year. Even with new revenue and federal recovery funds, we cut $2.1 billion from the state budget. As a result, many tough decisions had to be made to balance the budget and to protect public school classrooms and other core services in health and public safety.

I'm hopeful that as the economy rebounds we'll be able to make progress on many issues this budget could not address.

Republicans have said Democrats overstated the size of the deficit by measuring available revenue against what they would have hoped to spend in the best of times instead of what was actually spent in the previous year.