The Virginian-Pilot
                             THE VIRGINIAN-PILOT 
              Copyright (c) 1995, Landmark Communications, Inc.

DATE: Tuesday, January 24, 1995              TAG: 9501240240
SECTION: LOCAL                    PAGE: B1   EDITION: NORTH CAROLINA 
SOURCE: BY BETTY MITCHELL GRAY, STAFF WRITER 
DATELINE: RALEIGH                            LENGTH: Long  :  123 lines

TAX CUT, LOTTERY HIGH ON LIST FOR '95 LEGISLATURE LEADERS SAY THEY ALSO WILL TACKLE EDUCATION REFORM.

When the General Assembly convenes Wednesday, Republicans will hold a majority of seats for the first time since Reconstruction.

They'll control most seats in the state House of Representatives and will hold enough seats in the Senate to influence much of the debate in that chamber.

Based on interviews with House and Senate leaders, the two chambers will be seeking much the same things during the 1995 session, despite being headed by different political parties.

Last Wednesday, House leaders Harold J. Brubaker, a Randolph County Republican, and N. Leo Daughtry of Smithfield, the incoming majority leader, met with reporters to discuss their priorities for the session.

Brubaker and Daughtry said they would concentrate first on the fiscal portions of the eight-point Republican Reform Agenda, signed by most GOP legislative candidates in October, and later on the social programs identified in that contract.

``What's in our contract,'' said Brubaker. ``That's where we're starting from.''

Sen. Marc Basnight, the Manteo Democrat who's slated to be re-elected Wednesday as president pro tempore of the Senate, in a press briefing of his own, said he had not yet read the nine-paragraph Republican contract but he expected little disagreement between Senate Democrats and their Republican counterparts in the House.

``The House and I get along well,'' Basnight said.

Here's a look at the similarities and differences between the Republican House and Democratic Senate agendas for the coming session:

Tax cuts: House Republicans and Senate Democrats agree that some type of tax cut will be among the legislature's top priorities this year.

The differences between the two chambers appear to be whose taxes to cut and by how much.

Gov. James B. Hunt Jr. has proposed a $483 million package of tax cuts over the next two years, which Basnight said would get ``a proper review.''

``We're not in lockstep with the governor,'' said Basnight. ``We'll study what he's proposing, but we're going to have to see those cuts.''

The Republican House leaders say they'll stick with their contract, which promises at least $200 million in income tax cuts ``for the working people of North Carolina and the rejection of any new taxes.''

``It's not going to be a bidding war,'' said Brubaker. ``We're concerned with being responsible.''

Said Daughtry: ``We're not going to bankrupt the state to one-up the governor.''

But Brubaker assured taxpayers that they would receive at least the $200 million in tax cuts promised by the Republicans. ``We will deliver on that,'' he said. ``Absolutely, absolutely, absolutely, absolutely.''

The Senate, meanwhile, will concentrate on lifting the state intangibles tax, on increasing tax deductions for children and families, and some type of homestead exemption for elderly residents, Basnight said.

``You'll see a great deal about the Homestead Exemption Act,'' he said.

Gubernatorial veto: The only difference that Senate Democrats and House Republicans seem to have over granting North Carolina's governor the right to veto legislation passed by the General Assembly appears to be when to hold the referendum.

``We think that the veto is a good reform instrument for the state,'' said Daughtry.

Said Brubaker: ``The people of North Caolina have said they want a chance to vote on it, and they should have that chance.''

The state Senate has twice approved in recent years legislation calling for a voter referendum on granting North Carolina's governor the veto. The Republican Reform Agenda, or contract, calls for a popular referendum on granting veto power to the governor in 1995, a date Brubaker admitted the Republicans may miss.

Brubaker and Daughtry said veto legislation will likely be the first bill introduced in the House, and at the news conference they talked about holding a referendum on gubernatorial veto power in 1996 during the primary or general election, when the most voters will go to the polls.

After being shown a copy of the contract that calls for the 1995 vote, Brubaker smiled and said the 1995 date ``could have been a typo.''

Basnight, however, said during his meeting with reporters that he would like the state to take the gubernatorial veto to the voters at a time when it and other constitutional changes will not be caught up in electoral politics.

``Our thinking was we'd put it on the ballot at the time that would be less expensive to the state,'' said Daughtry.

Education reform: Senate Democrats and House Republicans say North Carolina's public school students would be better served if the state superintendent of public instruction were appointed rather than elected, and more power was transferred to the state Board of Education.

Basnight told reporters that while the state waits for voter approval of a constitutional change on the state superintendent, the General Assembly should place more power in the state school board and give the Senate president pro tem and House speaker some appointments to that board.

Brubaker and Daughtry said they would consider the idea.

The Republican contract calls for granting local boards of education more control of public schools, and it reduces the state Department of Public Instruction bureaucracy. It also specifies that savings from these cuts be used to pay for textbooks, supplies and other classroom materials.

House Republicans and Senate Democrats agreed that Smart Start, the governor's program designed to prepare young children to enter the public school system, will be under close scrutiny this year.

``If it's succeeding, it will be expanded,'' Basnight said.

Said Brubaker: ``It will be safe to say it will not be expanded.''

But Brubaker also said Republicans don't intend to dismantle the program, which is operating in about a third of the counties in the state.

Hunt has repeatedly said that expanding Smart Start is a priority this year.

The lottery: Proponents who looked to the ouster of House Speaker Daniel T. Blue of Wake County, an opponent of legalized gambling, as a boon for a state-run lottery will likely be disappointed this year.

While Republicans have promised that any lottery legislation proposed by House members will get a full debate, that chamber's new leaders predict the issue will fail in the House just as it has in recent years under Democratic control.

``Personally, I'm opposed to a lottery,'' Brubaker said. ``It's just a poor way to do business.''

The Democratic-controlled Senate has approved lottery legislation in recent years but Basnight predicts that this year prospects for a lottery will be diminished.

``Republicans in general don't like lotteries and they won't vote for people who want lotteries,'' Basnight said.

KEYWORDS: GENERAL ASSEMBLY 1995 NORTH CAROLINA by CNB