Slightly altered wage, smoking bills are back

By: - August 5, 2005 5:10 am

Winston-Salem Journal
Democrats get around House rules by changing the proposals’ substance
By David Rice and David Ingram


One proposal would raise the state’s minimum wage to $6 an hour. The other would require most restaurants to have a no-smoking section.

Earlier versions of both failed on the floor of the N.C. House two months ago, but they both were given new chances yesterday at becoming law as Democratic leaders tried to find budget compromise in their divided caucus.

"If you don’t believe in resurrection, just come to the General Assembly," said T. Jerry Williams, a lobbyist for the N.C. Restaurant Association, which opposes both proposals.

It’s rare for bills to fail, because legislative leaders usually don’t spend time on unpopular bills. Only six bills have failed this year. And it’s rarer for bills to be brought back after they fail, in part because the House rules discourage it.

If a bill fails, according to Rule 42, "the contents of that bill or the principal provisions of its subject matter shall not be considered in any other measure originating in the Senate or originating thereafter in the House."

The minimum-wage and nonsmoking bills failed June 1, but the versions released yesterday were altered slightly. House Speaker Jim Black, D-Mecklenburg, said that the changes allow legislators to bypass the rules because the substance is different.

For example, the new minimum-wage proposal is an increase of 85 cents rather than the $1 increase proposed earlier, which failed 66-52. Legislators married the proposal with a proposal to give small businesses that provide workers with health insurance a tax credit of $400 for each employee.

"Working hard is still not enough," said Rep. Alma Adams, D-Guilford, who has pushed to raise the standard wage. Adams said that the increase would help 101,000 workers, or about 3 percent of North Carolina’s work force.

"This bill would have a tremendously positive effect on North Carolina workers … who work every day but simply can’t make ends meet," Adams said.

Both Adams and Rep. Hugh Holliman, D-Davidson, who sponsored the tax credit for small employers who provide health insurance, pointed to major incentive packages for large corporations.

"In the past, we’ve done many, many incentives for large businesses in the state," Holliman said. "I think most people know that most people are employed by small businesses."

But business groups and Republicans questioned the gains.

Gregg Thompson, the state director of the National Federation of Independent Business, said that an increase in the minimum wage would mean fewer jobs.

"The employer’s going to be faced with either reducing the hours of the employee or reducing the employees," Thompson said. "When you couple it with the $400 tax credit, there really is no savings to the small-business owner."

Fran Preston, the president of the N.C. Retail Merchants Association, said that raising the minimum wage would force employers to raise wages for others in the wage scale as well.

"Our major opposition is real-ly the ratcheting effect that comes with this bill," Preston said.

The tax break for health insurance is projected to save businesses as much as $40 million a year. But Connie Wilson of the Employers Coalition of North Carolina said that based on estimates by the Congressional Budget Office, the increase in the minimum wage would cost businesses $81 million a year.

Rep. Bill Daughtridge, R-Nash, said that businesses would have to give up a tax deduction that they can already claim for health insurance to claim the new tax credit.

"It sounds a whole lot better than it is," Daughtridge said. Based on an average cost of $5,000 to insure a worker, he said, "It sounds like you’re getting $400, but you’re really only getting $55."

Senate leaders questioned the tax-credit proposal, though.

"We need to do something on health care," said Sen. John Kerr, a co-chairman of the Senate Finance Committee. "But I just have about drawn the line on credits. Everybody but you and me in North Carolina has a tax credit – it’s eroding our tax base."

And as far as the minimum-wage legislation, Wilson said, "This bill’s like Frankenstein – it just keeps coming back to life."

Holliman, also the sponsor of the no-smoking bill, attached the no-smoking provisions to an unrelated bill about training for drug counselors that was being heard yesterday in a House judiciary committee.

He acknowledged that it is unusual to revive a failed bill, but he said that the changes would swing the votes of at least six legislators who voted against it. The vote two months ago was 63-57.

The biggest change is an exemption for restaurants with a capacity of fewer than 50 people. All other restaurants would need to make their main dining area no-smoking, with any smoking area in a separate room.

"A very small restaurant would have a hard time segregating smokers from nonsmokers," Holliman said.

Despite the change, the proposal is expected to face plenty of opposition from some restaurants, and others that see it as an encroachment on smokers’ rights. Some restaurants would not be able to afford to construct a separate smoking area, said Williams, the lobbyist for the restaurant association.

"That part creates a real problem," Williams said.

Another change would put a 25 percent cap on the portion of seating capacity that could be in a smoking area. The original bill had a 50 percent cap.

The resurrection of the minimum wage and smoking regulations came as legislative leaders continued to negotiate the state budget. It was due July 1, but the Democratic leadership has been working with a divided caucus with several small groups pushing individual interests.

Rep. Joe Kiser, the House Republican leader, said that Democrats are horse-trading to make sure that they have enough party discipline for a budget vote.

"They’re trying to get enough votes to pass the budget," he said.

Kiser also complained that Democrats were breaking the House rules.

• David Rice can be reached in Raleigh at (919) 833-9056 or at [email protected]

• David Ingram can be reached in Raleigh at (919) 833-9916 or at [email protected]

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Chris Fitzsimon

Chris Fitzsimon, Founder and Executive Director of N.C. Policy Watch, writes the Fitzsimon File, delivers a radio commentary broadcast on WRAL-FM and hosts "News and Views," a weekly radio news magazine that airs on multiple stations across North Carolina. [email protected] 919-861-2066