Fitzsimon File

(The Fitzsimon File will not be published July 2- July 4. Please visit www.ncpolicywatch.com  and The Progressive Pulse for the latest news and commentary about the General Assembly. The Fitzsimon File will return Thursday, July 5)

A funny thing happened on the way to an agreement between House and Senate leaders on taxes and ending the county share of Medicaid. Senate Democrats appear to have bowed to major campaign contributors and their well-connected lobbyists and rejected the latest offer from the House because it allowed counties to raise the real estate transfer fee if the public approves it in a referendum.

Lobbyists for realtors and homebuilders have been working feverishly against any transfer tax. Apparently Senate leaders now agree with them that people should not have the right to vote on how their county builds schools or addresses other infrastructure needs.

There’s another part of the story. . Reportedly, the Realtors Association has threatened to oppose any Senator in a swing district who supports a transfer tax of any kind. That could be with money from the wealthy realtors PAC going to the Senator’s opponent. It might mean issue ads along the lines of the commercials the realtors are now running to protect their billions in profits.

It also means that one interest group with deep pockets is controlling the Senate of North Carolina and has now delayed a final agreement on the state budget.  That’s what billions can do for you in the current political climate.

The question is what happens now. House leaders have negotiated in good faith and thought they had an agreement and the realtors and the Senators they intimidate rejected it.

There might be a silver lining. One House member said it means the whole agreement collapses and takes negotiators back to zero. If that’s true, House leaders ought to rethink their decision to make a tax cut for the wealthy part of the compromise.

It has been clear all along that ending the 2001 increase in the income tax on the richest taxpayers has been the Senate’s top priority this year. Senate leaders have described that tax cut as non-negotiable. That ought to change now, after the House leaders’ too generous of an offer was accepted by Senate leaders and then crushed by the lobbyists.

The rich don’t need a tax cut, especially one paid for everybody else in the state, who may actually see their taxes go up if Senate Majority Tony Rand has his way with Medicaid.

Powerful lobbyists were also at the center of a Senate committee’s decision to limit the number of mental illnesses that insurance companies will be required to cover under a proposed mental health parity law.  

The point of a parity law is to end discrimination against people with mental illness, not to arbitrarily decide that some people are worth covering and others aren’t. 

A lot has been written about that disturbing development and that the list of illnesses that will be covered was written by lobbyists for Blue Cross Blue Shield.  But where is the outrage about it? Why are lobbyists for an insurance company allowed to decide which people with mental illness will have coverage? 

A psychiatrist from the UNC Med School told the committee that there is no medical reason to limit the mental illnesses that are covered. That leaves only a financial reason, that Blue Cross is protecting its billion dollar surplus, a rather odd motivation for a nonprofit company.

It doesn’t hurt that among the Blue Cross lobbyists and executives are two members of the UNC Board of Governors, one of whom was the Chief of Staff for former Governor Jim Hunt.  The former legislative liaison for the UNC system is also paid by Blue Cross to influence lawmakers. To call them well-connected would be an understatement.

There are plenty of unanswered questions about this legislative session, the final decisions about the budget and an infrastructure bond among them. But events this week in the Senate ended any doubts about who really runs the General Assembly, at least on the big issues. A handful of powerful lobbyists do.

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This entry was posted on Friday, June 29th, 2007 at 4:51 pm and is filed under Fitzsimon File. You can follow any responses to this entry through the RSS 2.0 feed.