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Morning Memo: The recasting of Gov. McCrory? Unraveling his shifts

PAT McCRORY LINKS MEDICAID REFORMS TO TEACHER PAY HIKES -- Governor pledges big announcement in coming months: Speaking at the Cary Chamber of Commerce's annual banquet Wednesday evening, Gov. Pat McCrory promised "controversial" proposals to change the state's Medicaid system. Overruns in Medicaid costs are a huge burden on the state and have drained funding for education, he said.

Citing issues with federal regulations, "a lack of waivers from the feds, and frankly, some of the politics within Raleigh here," McCrory said he wanted to change the state's implementation of the federal health program for people with low income.

"I'm going to have to bring up some fairly controversial proposals to change Medicaid, or we're going to continue to have some very, very serious issues here in North Carolina," McCrory told the crowd. "That's coming in the next three, four months. I'll probably introduce them while the legislature's out of town, between now and May," he said, drawing laughs. Changes to Medicaid, he said are " the way we're going to get raises to the teachers."

***McCrory appears to be charting a new course, but the administration is backtracking on a different education announcement. Read it all below in today's Dome Morning Memo***

STUNG BY GOP LAWMAKERS, McCRORY CHARTS HIS OWN COURSE: In a week that brought Gov. Pat McCrory stinging defeats, with lawmakers from his own party overriding his first two vetoes, the Republican governor Wednesday responded by criticizing legislators and throwing up roadblocks to the new laws that he had opposed.

McCrory vowed not to implement a new law requiring drug tests for some welfare recipients until the legislature finds the money to pay for it. And he said his administration would further scrutinize a new immigration law to make sure it complies with the “letter and spirit” of federal law. In a lengthy written statement, the governor also struck out at the General Assembly over a budget provision that eliminates bonus pay for teachers who earn master’s degrees after the current school year, which ends next spring.

The dust-up followed the Senate’s vote first thing Wednesday morning, taking just six minutes to override McCrory’s vetoes of the immigration and drug-testing bills, after the House vote to override the day before. That turned the pair of bills into law, effective immediately.

THE MONEY DISPUTE: McCrory noted that the bill didn’t identify funding for either the state Department of Health and Human Services or for county social services departments for the testing. Rep. Dean Arp, a Republican from Monroe and the main sponsor of the bill, said McCrory’s response didn’t upset him, but he said there is enough money in the budget to start the program.

The legislature did set aside money that can be used to implement the bill: $9 million is in budget reserves for the cost of a variety of new laws this fiscal year, and $11.6 million in the next fiscal year. A legislative staff fiscal analysis indicated that it would cost about $145,000 to set up the computer interface necessary to conduct the background checks.

Since the drug-testing portion of the new law doesn’t go into effect until around a year from now, that cost doesn’t have to be funded in the current budget. Later, the state Social Services Commission will write rules specifying what drug tests and background checks will be used, and that will determine future costs. Read more here.

EDITORIAL WELCOMES A NEW McCRORY: From the Greenville Daily Reflector -- "More likely is that McCrory, who brought to the campaign a moderate record as mayor of Charlotte, is trying to assert himself after a turbulent start. Many voters who supported him expected the governor to act as a counterbalance to the extremes well represented in the Legislature. If this is an indication he is willing to step up, it will be welcome news for the state." Read it here.

UNRAVELING McCRORY'S ANNOUNCEMENT -- The story at the start: Gov. Pat McCrory asked his state Board of Education on Wednesday to guarantee extra pay for all teachers now enrolled in master’s degree programs. The legislature ended master’s pay for teachers who won’t earn their advanced degree by the end of the current 2013-14 school year. But teachers who don’t finish their programs until May or June could also be affected unless the board changes its policy. That policy requires teachers planning to graduate next spring to have submitted all their paperwork by April 1. Teachers who already have theirs master’s would not lose their pay supplement.

The first knot: McCRORY ASKS STATE EDUCATION BOARD FOR ACTION -- BOARD SAYS IT CAN'T HELP: McCrory told the board Wednesday morning he wanted it to adopt a policy to extend the extra pay – roughly a 10 percent raise – to all teachers who are now pursuing master’s degrees, regardless of when they plan to graduate. “Master’s pay for teachers is one education policy I think we can change right now,” he told the board. “. . . I’ve worked with my budget office, the Office of Management and Budget. I’ve talked to our budget director, (asking) ‘Is there any way we can find sufficient revenue, to find money and get them the dollars they deserve?’ My budget director said absolutely.”

Board Chairman Bill Cobey said Wednesday the board could not adopt a policy to extend pay beyond the spring graduates. “I don’t want to contradict anybody,” Cobey said. “That’s under the legislature. The legislature would like to correct it.” After McCrory’s appearance, his spokeswoman Kim Genardo and his senior education adviser Eric Guckian said the state school board could adopt a policy extending master’s pay to all teachers currently in master’s programs, even though the budget passed by the state legislature – and signed by McCrory – prohibits it.

The second knot: THE $10 MILLION IS HYPOTHETICAL MONEY FOR NOW: Extending the pay supplement would cost $10 million, McCrory's spokeswoman said. She did not elaborate on where the money had been found. Late Wednesday afternoon, Genardo said McCrory was only seeking to extend the eligibility deadline from April 1 to May 1, not every teacher in a master’s program. The money for those teachers is already in the budget, she said. She said the $10 million the governor referenced was for teachers in their first year of a master’s program, and will be in McCrory’s next budget. Read full story here.

QUOTE OF THE DAY: Courtesy of WRAL.com’s Mark Binker -- “When asked what he would tell McCrory about paying for the testing requirement, (Senate Rules Chairman Tom Apodaca) said, "Well, I guess you could cut a few salaries and find the money to put into this program," referring to recent stories about big pay raises granted to relatively young administration hires.”

CUTTING THROUGH THE SPIN -- Three questions for McCrory:

1. Will going nuclear work? McCrory's assertion that he won't uphold state law is tantamount to the nuclear option -- and puts him at a tough spot in legislative negotiations. Despite his feeling (and the growing reality) that he's on the sideline, the governor still needs the legislature on major initiatives, such as a Medicaid overhaul he announced earlier this year. Also, what's to stop lawmakers from investigating his generous pay hikes at the Department of Health and Human Services and crippling his administration?

2. If he felt so strongly about these bills -- or the education provisions in the state budget -- why didn't he say so sooner? McCrory expressed caution about a handful of legislative proposals during the session. But he didn't voice his dire concerns loudly. It prompts a follow up: What's changed? His policy position or his political compass?

3. Why won't he answer questions? McCrory made his objections in a lengthy statement but his minders kept him from the press at two public appearances Wednesday. McCrory will attend two more functions Thursday but his office stamped both with "CLOSED" to the press.

#BEVPART2: The N.C. GOP liked to label Democratic Lt. Gov. Walter Dalton by that Twitter hashtag last year during the governor's race, likening him to embattled Gov. Bev Perdue. But given McCrory's poll numbers (see yesterday's memo), his frequent misspeaks and his refusal to uphold state law (akin to suspending congressional elections?) does it apply to McCrory too? A couple GOP operatives privately say so.

FACT CHECK: N&R debunks part of McCrory's case for the vetoes. Reporter Travis Fain took a look at how the drug-testing and immigration bills were approved and finds no late-night votes, as the governor suggested. Read more here.

McCRORY GOES AFTER HIGH POINT: More from Fain: “Gov. Pat McCrory on Wednesday accused unnamed High Point manufacturers of pushing for a loophole in state law so they can hire illegal immigrants instead of American citizens. …
“Response from High Point was, in a word, “Wow.” “I am actually shocked that he would say that, and maybe it was just a misspeak,” said Melanie McNamara, who owns Absolute Style Furniture and hosted McCrory campaign events last year at her High Point manufacturing plant. Read more here.

#NCSEN 2014 -- A LOOK AT THE 'IMPECCABLY COIFFED' THOM TILLIS: More from the Washington Post's GovBeat and Reid Wilson -- "As the last of his state representatives filed out the door on Wednesday, after adjourning a brief special session to overturn two vetoes, an impeccably coiffed man in a pinstriped suit and French cuffs named Thom Tillis sat on a leather couch in his corner office in the building where the legislature meets and reflected on the record that he and his Republican majority have compiled. A few blocks away, at a Colonial Revival mansion that houses the North Carolina Democratic Party, strategists plotting against Tillis were doing the same thing." Read more here.

AFP TARGETS N.C. WOMEN IN LATEST TV AD: Americans for Prosperity, a national organization that pushes conservative causes, is poised to spend more than $60,000 in North Carolina in an effort to target women ages 35-64, reports Roll Call. The D.C. publication reported that AFP -- an issue advocacy nonprofit backed by David and Charles Koch -- spent $20,050 at WBTV and $41,375 at WSOC-TV for ad time to reach the target demographic. The group is also buying ad time in Ohio, Florida and Washington, D.C. The North Carolina ads will run through mid September.

SENATE REPUBLICAN SETS THE STAKES FOR THE 2014 ELECTIONS: In a widely read online story from The Washington Post (linked on the Drudge Report at one point), Sen. Bob Rucho, a Charlotte Republican, renewed his pledge to repeal the state's income taxes. Rucho's evangelical push in this area didn't get him very far in the 2013 session but he said he will push again in 2015. Read Reid Wilson's piece here.

GOP DOMINATES ONLINE: Jennifer Woodward, a former communications pro in the Hunt and Perdue administrations, posted an analysis of partisan online use at her firm's blog: "Republican legislators are clearly dominating the online conversations. On Facebook, Republican House members maintain a strong following of 50,773 followers compared to the Democrats with 11, 751 followers. That’s a 332% increase over Democrats!

"On Twitter, Republicans have a 107% advantage with 42,226 followers compared to the Democrats’ 20,354 followers. Granted there is a larger number of elected Republican legislators than Democrats. However, a breakdown, of average followers per legislator, still illustrates GOP dominance, especially on Facebook." Read the full analysis here.

EAT YOUR VEGETABLES -- MUST-READ POLICY STORY: (Bike mechanic) Jared Harber – along with legions of bartenders, baristas, retail clerks, the self-employed and other uninsured workers – is about to find out whether the nation’s new health care law, the Patient Protection and Affordable Care Act, will deliver on its promise of affordability.

On Thursday, Blue Cross and Blue Shield, the state’s largest insurer, plans to release details for more than two dozen subsidized plans the company will soon offer in North Carolina under the new law. The law’s success hinges on the willingness of Harber and other young people – dubbed “young invincibles” in insurance industry parlance – to enroll in the subsidized plans. Read more here.

STATE ED BOARD TO DECIDE ON ABSTINENCE GRANTS: North Carolina's school board is expected to distribute about $800,000 to 19 rural public school districts to help teach children to abstain from sex. The State Board of Education is scheduled to decide Thursday on a plan to distribute the federal money that will focus on students in grades 4 through 6 who are at increased risk for bearing children out of wedlock and academic failure.

A little-known feature of the federal health overhaul law commonly called "Obamacare" extends through next year the program that distributes money to states to teach abstinence education. Read more here.

MORE EDUCATION NEWS: Superintendents and local school board members are bracing themselves for the release of standardized test scores next month that will show a sharp drop in the number of students who passed.

The State Board of Education is scheduled Thursday to set passing scores for students who took standardized tests last spring that were based on new, tougher education standards, including Common Core standards for English/language arts and math. If they adopt the scores the state Department of Public Instruction recommends, thousands of students who thought they were doing pretty well in school just a year ago – and their parents – will learn they failed the latest round of tests. Read more here.

--Staff writer Andrew Kenney contributed to this report.


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