John Locke Foundation
Perhaps it’s fitting that North Carolina’s gerrymandering fight returns to the national stage during the same week that major-league baseball teams return to action.
That’s because recent debates about this state’s election maps have been influenced by a “Barry Bonds effect.”
No, you won’t find the controversial slugger’s name within the volumes of documents filed in the Rucho v. Common Cause case. U.S. Supreme Court justices hear oral arguments today in that dispute involving N.C. congressional election districts.
The Bonds effect maintains no ties to formal legal theories or social science research. Yet it might shed light on why gerrymandering has become such a potent issue in N.C. politics within the past decade.
Longtime baseball fans remember the steroid era, when performance-enhancing drugs transformed mediocre players into good ones and helped some better-than-average players soar close to the game’s top heights. Some critics complained, but no one addressed their concerns.
Then there was Barry Bonds. By 2000 he already had compiled Hall of Fame-caliber achievements. During the next decade, banned substances appeared to help boost his on-field performance from great to unbelievable. Bonds ended up shattering baseball’s cherished single-season and career home run records.
It took a top-tier player achieving unprecedented results for baseball’s establishment to take notice. Officials addressed steroid concerns that had amounted to background noise for years. The major leagues cracked down on banned substances and those accused of using them.
What does this have to do with gerrymandering in North Carolina?
The practice of drawing election maps for partisan advantage is older than America’s pastime. Politically inspired election districts existed for years before the controversial 1812 Massachusetts state senate election map that gave gerrymandering its name.
Gerrymandering has played a significant role in N.C. politics for decades. Democrats employed the practice frequently once Republicans challenged Democratic dominance of state elections in the last decades of the 20th century.
The practice produced bizarre election maps. Most infamous was the 12th Congressional District drawn for the 1992 elections. Snaking originally from Durham to Gastonia, and eventually from Greensboro to Charlotte, the 12th allowed Democrats to create a mandated majority-minority district. At the same time, their party had a good chance to win the lion’s share of the other 11 congressional seats.
Decades of mapmaking mischief under Democratic control generated some criticism. Along with obvious objections from Republicans, outside pundits occasionally opined against gerrymandering. But the issue never reached the top tier of N.C. policy debates.
Now gerrymandering has assumed unprecedented prominence in North Carolina’s political discourse. What changed?
First and foremost, Republicans now control the state’s election redistricting process. Winning control of the N.C. General Assembly in 2010, under maps drawn by Democrats, Republicans have crafted the state’s congressional and legislative election maps during this decade. They have used the process to solidify their own advantages.
It should surprise no one that Democrats raise more concerns about gerrymandering now than they did during their time of legislative dominance. It’s no more surprising that some Republicans who once bemoaned gerrymandering now balk at any potential reforms. To the extent that major media outlets and the academic establishment reflect liberal sentiments, gerrymandering might be attracting more attention today than it would if Democrats still drew state maps.
But I submit that there’s an additional factor to consider. Here’s where the Barry Bonds analogy comes into play.
Because Democrats tend to cluster more closely together geographically than Republicans in this state, the GOP enjoys an advantage when it comes to drawing election districts. Make districts as compact and contiguous as you can, and Republicans are still likely to gain an edge.
A clear example of this geographical disparity emerged in the 2016 presidential election. Omitting third-party candidates, Donald Trump beat Hillary Clinton by a 52-48 margin. If Republicans and Democrats had been dispersed fairly equally across the state, one might have expected Trump to win about 52 of the state’s 100 counties. He actually won 76. Had each county represented an “elector,” Trump’s slim victory margin among actual voters would have jumped to a 3-to-1 advantage.
That election was no outlier. Left-of-center advocacy group Common Cause worked with a bipartisan group of retired N.C. judges in 2016. They attempted to design “fair” congressional election districts. Their map produced six districts that were likely to elect a Republican, four likely to elect a Democrat, and three toss-ups.
In normal circumstances, then, with evenly matched candidates, a good election for Democrats would produce no more than a 7-6 advantage under the “fair” maps. On the other hand, a slight shift of political winds could swing the outcome toward a 9-4 Republican advantage.
Take this built-in geographical advantage for Republicans, then give GOP lawmakers control over redistricting, and one might expect the resulting election maps to give Republicans an even greater edge.
For instance, if “fair” maps could result in Republicans winning nine of the state’s 13 congressional seats, it’s within reason that maps intentionally skewed toward the GOP could give them 10 seats. In legislative elections, Republicans’ geographic advantage would be likely to transform a slight edge in the overall statewide vote into a substantial margin of legislative seats. Give the GOP control of the maps as well, and that substantial margin could turn into a veto-proof supermajority.
Combining his superior baseball skills with unnatural enhancements, Barry Bonds broke baseball’s record book. His extraordinary exploits brought attention to performance-enhancing drugs in a way that few other baseball players could have done.
The same might be said for election redistricting as practiced by a political party that already enjoyed a built-in geographic advantage. If Republican gerrymandering in North Carolina appears “excessive” or “extreme,” as some critics contend, call it a case of the Barry Bonds effect.
Mitch Kokai is senior political analyst for the John Locke Foundation.
Health care costs too much. Are we agreed? Great. Perhaps now we can discuss the more interesting question of what policymakers should do about the problem.
There are dozens of different proposals to reform all or significant chunks of the health care system. Many are federal in scope, involving major changes in Medicare, Medicaid, and regulated private plans. Others are state-level reforms of insurance, licensure, and the operation of the market for medical services.
North Carolina lawmakers are currently considering both sets of alternatives. As usual, there is a proposal to accept federal Medicaid dollars under the Affordable Care Act to expand subsidies to hundreds of thousands of North Carolinians. Gov. Roy Cooper included Medicaid expansion in his budget. Some Republican lawmakers agree, although probably not enough to prevail.
I think a more productive area for bipartisan cooperation would be on the cost side of the equation. After all, Medicaid expansion is largely about reducing the price of health care, not the cost.
If Medicaid expansion forces taxpayers to pick up the tab for a medical service that was either previously financed some other way or not consumed in the first place, there is no reduction in the cost of care. What really happens is that the price largely or fully disappears. The cost of care gets hidden in the taxes people directly or indirectly pay to cover the Medicaid bill.
Sometimes expansion advocates argue that Medicaid expansion would truly reduce the cost of medical care by diverting people from emergency rooms or encouraging cost-saving preventive care. The first claim is incorrect. Expansion does not consistently reduce ER utilization, and may even boost it. The second argument is wildly exaggerated. Most preventive care does not save money in the long run, although patients may derive other benefits from it.
I think health care costs too much — that is, the full cost exceeds the real benefit in health outcomes — because of poorly aligned incentives, insufficient information, and insufficient competition. Consumers should be spending (tax-free) cash for routine expenses, rather than filing low-dollar insurance claims, and feel empowered to buy that routine care in the form of monthly fees and other alternative arrangements rather than just in payments per service rendered.
For hospitalizations, surgeries, ongoing therapy for chronic diseases, and other high-dollar expenses that represent a disproportionate share of total health spending — the costliest five percent of patients in America account for about half of total annual expenditures — we need a more transparent and coherent system of upfront prices coupled with more robust competition.
The North Carolina General Assembly could make significant headway on the competition front this year. For example, the bipartisan SAVE Act (House Bill 185 and Senate Bill 143) would expand the scope of services that advanced-practice nurses can perform in our state without direct supervision by physicians, which can be unnecessary and adds tremendously to the cost of delivering care.
Lawmakers could also pare back the regulatory thicket of North Carolina’s certificate-of-need law, which forces providers to get permission from the state to open new facilities or offer new services in competition with existing hospitals or physician practices.
Finally, lawmakers should not attempt to obstruct State Treasurer Dale Folwell’s push for more transparent and affordable pricing of the services that teachers and other public employees purchase from North Carolina hospitals through the state health plan.
About half of all medical bills are already “paid for” by government programs rather than by households or private insurers. Of course, patients and taxpayers are really paying those bills, but not in a way that effectively pairs the perceived value of the service with the cost.
Even as we may disagree about how expansive these government financing systems should be, surely we can agree that finding ways to deliver high-quality services at a lower cost is in everyone’s interest. Shifting the cost from one pocket to another doesn’t make it go away. We need more innovation, more competition, and more information. Smart state policies can help.
By the time you read this, Britain should have left the European Union. Or, perhaps, it’s still a member. Maybe there will be another referendum. This uncertainty reveals how divided Britons are about their future and place in Europe. It also tells us a lot about direct democracy, a form of governance Americans have always found appealing.
Direct democracy occurs when residents of a jurisdiction — a city, state, country — vote on policy rather than have elected representatives make these decisions for them. Thomas Jefferson believed such a “pure” democracy was best for the United States because it nurtured public virtue and would most efficiently project yeoman values into American life. James Madison warned majorities would exploit it to suppress dissenters and, as the driving force behind the Constitution and its ratification, his argument won the day.
So, we do not have direct democracy at the federal level, but states, counties, and cities do. It has always been a fixture of New England politics; residents still meet regularly to discuss their towns’ business and approve matters like budgets. During the Progressive Era that straddled the turn of the 20th century, many other states established procedures to permit the public to vote on changes to law and their constitution, some even allowed residents to place these proposals on the ballot rather than have legislators do it for them. North Carolina has a relatively limited form of direct democracy in that the public can only vote on changes to the constitution proposed by the legislature. We have done it quite a lot recently, however. You might recall the General Assembly presented us with six amendments in the election this past November.
Americans want direct democracy. Polls routinely show we deeply distrust elected officials. We also have greater confidence in state and local government than Washington and believe policymakers should faithfully reflect the will of majorities. Brexit, however, should give us pause.
Brexit is a kind of parable about direct democracy, because in June 2016 the British people voted to leave the EU in a referendum. Britain doesn’t have much direct democracy; there are only two modern precedents for the 2016 vote, a referendum on continued EU membership in 1975 and one on changing the electoral system in 2011.After its 2015 reelection, the governing Conservative Party under Prime Minister David Cameron believed only the public could be charged with making such a momentous decision.
Cue the current mess. The proposal the British people approved was a simple one asking if the country should leave or remain in the EU and made no mention of an exit process. No one really debated the terms of Britain’s departure during the campaign. The result was very close, with 52 percent in favor of quitting.
This is the central problem with direct democracy. The public — by which we really mean majorities — sometimes has strong views on important matters, but these tend to be simplistic and incoherent. There is little understanding of how they might hang together in a program of policies. There is no grasp of what these policies will produce once applied to real-world conditions.
In complete contrast to the wording of the referendum, the Brexit process has generated a dizzying array of complicated decisions the government and parliament must make. The process of trying to leave the EU has had many unforeseen “knock-on” effects, regarding everything from the Irish border to the future of Britain’s trade policy. There is no mandate for any particular option.
Direct democracy can work if the public is asked to approve a negative action or stop something from happening. In May 2012, North Carolinians voted to prohibit same-sex marriage. The government’s responsibilities were then clear. Sometimes, a direction to act positively can also present a simple task to policymakers. The referendum to add a voter identification requirement to our state constitution implied specific instructions because the U.S. Supreme Court had greatly restricted the scope of constitutionally permissible action. The Republican General Assembly had also telegraphed intentions about what it would do if granted the authority. That in both cases courts intervened to reverse the public is a topic I’ll grumble about another day.
More often, though, a referendum only obfuscates. Brexit is as complex as most of the conceivable policy matters Americans could consider under direct democracy at the federal level. Imagine asking them directly about Social Security reform, trade policy with China, an income tax overhaul, or climate change. As the Brexit chaos demonstrates, executives and legislative majorities should formulate and implement complex policies on issues like these. The public’s role should be to give them the power to do so after an election campaign in which candidates thoroughly and straightforwardly debate core principles and the broad outlines of the course of action they intend to pursue.
Andy Taylor is a professor of political science at the School of International and Public Affairs at N.C. State University. He does not speak for the university.
Buffalo Trace and Blanton’s are virtual unicorns for bourbon lovers living in North Carolina. Getting the chance to buy a bottle, particularly Blanton’s, in North Carolina is — using a movie reference — akin to finding a golden ticket in an oversized bar of chocolate.
North Carolina gets products from the Buffalo Trace Distillery in Frankfort, Kentucky — which makes the iconic and mostly unattainable Pappy Van Winkle — only a couple times a year, and those bottles are subsequently allotted to N.C. Alcoholic Control Commission boards around the state.
Buffalo Trace, the distillery’s flagship bourbon, isn’t hard to find in Kentucky and many other states — granted, it may cost more — but good luck finding a bottle in North Carolina.
The Wake County ABC posted on its Facebook page this week that it received shipments “of some allocated rare bourbons. We will be transferring these products to our stores over the next week or so. Please be patient as this is done. These allocated products will be limited to (one) bottle per retail customer of each.”
Most customers, then, are left to guess when during the week respective stores will get the bourbon, and exactly what each store will get. A clerk at one of the largest stores in Wake County told me Tuesday he didn’t know when that store would get the Blanton’s. Wednesday? Nope, not yet. Don’t know.
Just keep showing up, I guess? Call incessantly and bug people to death?
Join any bourbon-centric social media thread with ties to North Carolina and a plethora of similar stories appear. A thriving and illegal secondary market only accentuates the problem, as bourbons such as Pappy can fetch so much more than what it sells for in price-controlled North Carolina.
To be clear, this isn’t the fault of store clerks and managers, who, by my experience, have been consistently knowledgeable, pleasant and helpful. I know ABC store managers, two in particular, who make extraordinary efforts to serve customers and to stock their stores with products both popular and rare. These are good people doing good work.
Thing is, the system in which they operate is broken and in dire need of reform. Almost daily now, state lawmakers are filing myriad bills toward reforming the system. The momentum is building, yet the Buffalo Trace fiasco is just one example of an 80-year-old problem.
I’ve read posts on social media arguing against privatizing the state ABC system because it would hurt small towns and rural counties, primarily because money from sales transferred by the boards to the municipal entities would go away. But there are other ways to make up for that so-called “lost” revenue — excise taxes, property taxes, selling the state-owned buildings, licensing fees. The state revenue, too, could be held harmless until lawmakers and local officials devise an equitable means of replacing the money. Further, stores must be profitable to distribute revenue and, a recent study by General Assembly staff says, about half of the state’s 550 or so municipalities get no money from liquor sales.
Some people, self-professed bourbon aficionados, even say they prefer cheaper, widely available bourbons over Blanton’s. Others simply find fun in the chase, an idea I mentioned to an ABC store worker Wednesday.
“It’s not fun,” he said.
Antiquated and arcane state control never is.
Democrats made substantial gains in the 2018 elections, both in the U.S. House and in state offices. They did so primarily by running against the incumbent president, as is usually true for midterm cycles when the president’s approval ratings are underwater.
As North Carolina holds special congressional elections in 2019 for the 3rd and 9th Districts, however, don’t expect a simple rerun of the 2018 cycle. Democrats will certainly try to make Donald Trump the main issue again. And in the 9th, the district stretching from Charlotte along the South Carolina border to Fayetteville, Democrats will attempt to make it all about the election-fraud charges that prompted the new election in the first place.
I don’t think these efforts will be particularly successful. Political trends shift. Attention spans wander. Trump remains a central feature of the political landscape, to be sure, but that landscape now contains other compelling personalities and events.
The new Democratic majority in the U.S. House has spent the past four months redefining the party’s image, here in North Carolina and across the country. Newcomers such as Alexandria Ocasio-Cortez, Ilhan Omar, Rashida Tlaib, and Ayanna Pressley have attracted massive press coverage and exploded on social media, either explicitly calling themselves socialists or advancing radical expansions of federal power in such areas as health care and transportation.
At the same time, the nomination battle for president has begun with a dramatic “race to the left” as Kamala Harris, Elizabeth Warren, Cory Booker, Kirsten Gillibrand, and other Democrats try to squeeze out socialist Bernie Sanders by embracing soak-the-rich tax schemes, massive entitlements, and direct government intervention in corporate governance, labor markets, and the energy sector.
Democrat Dan McCready may want the 2019 general election in the 9th District to be all about McCrae Dowless, Mark Harris, and last fall’s events. But what will really happen after the party primaries is that McCready and his Democratic counterpart in eastern North Carolina’s 3rd District will be pressed by their Republican opponents and others to answer the following questions:
• Do you favor or oppose a new proposal from Warren, Harris, and other Democrats to spend trillions of dollars on slavery reparations? Who’ll be eligible to receive reparation payments? Who’ll be obliged to make them?
• Do you favor or oppose proposals that are increasingly popular among your fellow Democrats to abolish the Electoral College, “reapportion” the U.S. Senate to make it truly “democratic,” and pack the U.S. Supreme Court with as many Democratic nominees as necessary to overcome the current conservative edge? That latter idea has drawn favorable comment from Warren, Harris, Gillibrand, Beto O’Rourke, and others.
• Do you favor or oppose the Green New Deal, including a rapid transition away from fossil fuels and trillions of dollars in new taxes on consumers as well as subsidies for politically favored businesses?
• Do you favor a Medicare-for-all program that would eliminate private health plans and cost tens of trillions of dollars?
• Do you agree with Warren, Gillibrand, Ocasio-Cortez, and other prominent Democratic leaders that U.S. Immigration and Customs Enforcement (ICE) should be abolished? What enforcement efforts, if any, should the federal government conduct to prevent or deter illegal immigration?
During midterm elections with an underwater president, the out-of-power party typically seeks to nationalize congressional and other races while incumbents try to localize their races — to focus on their own records and communities while distancing themselves from national controversies. The 2018 cycle followed this typical pattern for the most part, with Democrats doing a little better than the historical average in U.S. House contests and worse than average in Senate contests.
In the two 2019 congressional elections in North Carolina, Republicans will flip the script. They’ll nationalize those races — with plenty of assistance from Democratic presidential candidates seeking attention, money, and primary votes in 2020. To the extent voters wanted a check on President Trump, they’ve already gotten it with a Democratic House. The 3rd and 9th District contests will play out in a very different context.
If state lawmakers agree to jettison a controversial legislative tactic, combatants in one of North Carolina’s most closely contested 2018 campaigns might both be able to claim some credit.
The tactic is called “gut and amend” or “gut and replace.” Top legislators employ it when they strip the contents of a House or Senate bill, then replace those contents with completely different language covering a separate topic.
Their motivation need not be nefarious. Once the General Assembly’s self-imposed bill-filing deadlines have passed, lawmakers face limited options for addressing new ideas. A bill that’s going nowhere can prove to be a tempting “vehicle” for carrying new legislation. Gutting a dead bill can make room for legislation that’s likely to pass.
The gut-and-amend tactic also can save time. If majority caucuses in both the House and Senate agree informally to approve a measure, leaders might gut a bill that already has passed through one chamber. That move can cut days from the legislative process.
Regardless of increased efficiency, the tactic defies the goal of legislative transparency.
In a recent column, this observer highlighted one retiring lawmaker’s concerns about gutting and amending bills. Republican Rep. Jonathan Jordan had told the Ashe Post and Times late last year that one of his least favorite memories of his legislative service involved the 2013 “motorcycle abortion bill.”
A powerful legislator had used Jordan’s committee to transform a motorcycle safety bill into a measure focusing on abortion rules. “That was a mistake,” Jordan told the Ashe County newspaper. “We didn’t know enough at that time, but we should have said to the speaker, ‘No sir, we’re not doing that.’”
As the N.C. House debated rules for the 2019-20 legislative session, this columnist proposed that lawmakers ponder Jordan’s comments. If they had decided to reject the gut-and-amend procedure, the change could have been dubbed the “Jordan rule.”
The House took no action at that time. But now the issue has a champion. He’s the man who sent Jordan into legislative retirement.
First-year Rep. Ray Russell, D-Watauga, topped Jordan in last November’s House District 93 race. Russell won 52 percent of the vote. His victory margin amounted to 1,591 votes out of almost 36,000 total ballots cast.
Russell and three Democratic colleagues address the substance of the “Jordan rule” in House Bill 341, the North Carolina Sunshine Act, filed March 12. The measure would expand live broadcasts of legislative sessions and committee hearings. It would require 24 hours of notice before any bill could clear either the House or Senate. It would limit lawmakers’ public meetings to the hours of 7 a.m. to 9 p.m.
Under the heading of “germaneness,” the Sunshine Act would require that the full title of a bill “shall adequately and fairly reflect” its subject matter. Other than the state budget bill, two-thirds of the House or Senate would have to vote to approve any bill dealing with more than one subject.
The bill also would require a two-thirds vote to consider any amendment or substitute bill that employs the gut-and-amend tactic. In other words, Russell and his colleagues would place the Jordan rule into law.
The change would “stop what I would call interrupting the regularly scheduled programming,” Russell said during a news conference unveiling the Sunshine Act.
It’s unclear whether Russell read Jordan’s original lament about gut-and-amend tactics. Nor did he cite this columnist’s musings about changing legislative rules. But the freshman representative did credit another newspaper column about limited legislative transparency. Russell said his reading prompted him to draft the Sunshine Act.
In a state House run by Republicans, prospects appear dim for legislation sponsored by four Democrats and no GOP colleagues. That’s true despite Democrats’ increased presence in the House, thanks to elections like the one in which Russell unseated Jordan in District 93. House leaders signaled their disinterest in giving Russell an easy legislative path. The Sunshine Act must clear a dozen different committees before it could face a House vote.
Still, some ideas incorporated in the Sunshine Act could secure bipartisan support. Russell’s colleagues already have voted 115-1 to approve House Bill 218. That Republican-led bill would lead to video webcasts and some television broadcasts of House meetings. The measure calls for a study of televising Senate sessions.
Working across the aisle, Russell and his co-sponsors might pick up GOP support for other Sunshine Act provisions. To secure a new ban on gut-and-amend tactics, Russell could remind colleagues about the “motorcycle abortion bill.” That’s the anecdote that disturbed his predecessor and former opponent.
It might even help his sales pitch if he’s willing to call the measure the Jordan rule.
Mitch Kokai is senior political analyst for the John Locke Foundation.
While election scandals, national issues, and candidate announcements for 2019 and 2020 races have dominated the political headlines, North Carolina is continuing to head in the direction of greater freedom. Thank goodness.
I believe North Carolina state and local governments have important responsibilities. They finance or deliver critical public services. Their regulatory authority can be used to protect public health, combat fraud, and resolve disputes.
But government power is inherently coercive. That’s quite literally what a government is, a social institution that enjoys a monopoly on the legitimate use of physical force in a given geographic area. It’s necessary. It’s also dangerous, which is why we constrain the day-to-day exercise of governmental power with written federal and state constitutions, explicit grants of state authority to localities, and the common law.
To the extent government is limited to its essential powers, expenditures, and exactions, we enjoy the freedom to make our own decisions, to form our own private agreements and associations according to our own personal values. I believe such freedom — the freedom to live as we choose as long as our actions do not endanger the equal freedom of others to do the same — is both a natural right and a practical solution to many social problems.
Among the 50 states, North Carolina is relatively free. There are various ways to measure this. One reasonable and consumer-friendly tool is the Cato Institute’s “Freedom in the 50 States” project. On its website, you can compare state performance on the overall index as well as on specific criteria.
North Carolina currently ranks 18th in Cato’s overall freedom measure. We earn better-than-average scores in economic freedom, a bundle that includes taxes, spending, and regulations. We do even better, ranking 17th, in a bundle of personal freedom measures that includes educational freedom (6th), regulations on tobacco (8th), property rights for those accused (but not convicted) of crimes (11th), and overall incarceration rates (17th).
In the category of regulations on alcohol production, marketing, and consumption, North Carolina ranks below average at 35th. But it looks like that ranking is going to be improving soon. The state’s beer wholesalers and emerging craft-beer industry, at loggerheads for years, have just announced a compromise that, if enacted by the General Assembly, will loosen the state’s tight restrictions on direct distribution by breweries. Other proposed legislation would reform North Carolina’s archaic and counterproductive system of ABC stores.
Another problematic ranking for North Carolina is in the area of health-insurance regulation. We impose too many mandates on what health plans must cover, and how they can be structured and sold. Again, however, there is room for optimism. A bill to strengthen the market for association health plans, which allow businesses and individuals in the same industry to band together to get better deals on health insurance, has just passed the North Carolina Senate with a bipartisan vote and now awaits action in the House.
When it comes to property-rights protections, our national ranking isn’t horrible at 20th. But protections are stronger in our neighboring states of South Carolina (2th), Tennessee (4th), Georgia (11th), and Virginia (12th). The General Assembly could improve the situation this session by placing a constitutional amendment on the ballot that would limit the abuse of eminent domain and by putting a final nail in the coffin of the state’s unconstitutional Map Act, which had deprived property owners of the just compensation to which they were due as part of the process of planning and constructing state roads.
I don’t favor expanding freedom in North Carolina because I think North Carolinians always make the right decisions for themselves. We are flawed creatures, subject to temptations and prone to mistakes. But politicians are no less flawed than the rest of us, to put it charitably.
I prefer to trust the wisdom of crowds, as reflected by the outcomes of free choices by millions of people over time. We try, we err, we learn from each other. That’s freedom in practice. It works.
The state treasurer and the N.C. Hospital Association can’t reach consensus over how to pay for health insurance for state employees. The governor and some legislative leaders are advocating Medicaid expansion to cover an additional 600,000 people, which would cost the state roughly $600 million the first two years.
The debate, proposals, and arguments have focused on the high cost of health care, who will pay, and ways to shift costs. I think they’re focusing on the wrong things.
Everyone involved in the discussion seems to accept the high cost of health care, which affects and drives up the cost of insurance. The debate is how or who will pay, but not about the root of the problem, which is how to lower the high costs.
Obamacare was supposed to make health care more affordable. It hasn’t. To my dismay, many North Carolinians seem to accept high costs as the new normal. We shouldn’t. Costly medical care drives up the cost of insurance. That doesn’t help anyone. It helps neither those who have insurance nor those who don’t.
Instead of looking for ways to lower costs for everyone through free-market reforms, Gov. Roy Cooper and some legislative leaders are not only doubling down on the high-cost status quo, but they also want to expand it.
Medicaid expansion would add more than 600,000 able-bodied childless adults caught in an insurance gap. That might sound good, but focusing on adding more people to a fragile government program undergoing massive change is the wrong approach. Medicaid is more an issue of government trying to solve a problem government created. We should work to lower the costs. When we do that, those in the insurance gap will have access to affordable insurance coverage.
Here’s what we know about Medicaid expansion’s failed promise: Expansion states are seeing enrollment numbers way over what was predicted, cost overruns that threaten the stability of state budgets, and less access to care.
We don’t have to join the government spiral. When we reduce the cost of health care, and as health care costs go down, the cost of health insurance will go down, too, enabling more North Carolinians to afford the health insurance they want and access the health care they need. All without depending on a government one-size-fits-all program. Here’s how we change the trajectory with a package of reforms focused on individualized, innovative ideas driven by free markets and personal choice:
- Repeal Certificate-of-Need laws.
- Encourage the use of telemedicine.
- Expand the scope of practice for providers, allowing them to offer services they’ve been trained to to provide.
- Amend supervisory requirements to allow experienced practitioners to provide care where appropriate.
- Introduce dental therapy as a way to extend dental care cost effectively.
- Encourage direct primary care practices to continue to grow and flourish.
- Allow and expand small business health plans to offer more flexibility and customization of health insurance plans.
- Adopt a rule, as is being considered by the Trump administration, to require doctors and hospitals to disclose the rates they negotiate with insurance companies.
- Establish a foundation to offer grants or low-interest loans for expansion of medical services, assistance with medical training costs, and housing and personal needs for mid-level providers in rural areas. Use a percentage of hospital nonprofit property, income and sales tax relief to fund the foundation. Allow other businesses or philanthropies to contribute to the fund.
- Lead the nation and region by establishing a Southeast compact to offer health insurance plans across state lines.
- Encourage competition, discourage monopolies and market consolidation in the hospital, insurance and pharmaceutical industries.
Our reform plan must not leave existing Medicaid recipients stranded. We must ensure Medicaid works better and ensure it provides a safety net to those it was always intended to help. About 12,000 current Medicaid recipients are on waiting lists — some five to 10 years long — to receive support services, the ninth-highest in the country. These services are for people struggling with mental illnesses, opioid addiction, or severely disabled children.
Rather than adding 600,000 mostly childless, able-bodied, working-age adults onto a fragile system, let’s allocate the money to reduce the waiting lists and get these people the help they need.
Becki Gray is senior vice president at the John Locke Foundation.
The first step to saving money is to stop wasting it. A full-scale recodification of our criminal laws would empower North Carolina to accomplish exactly that.
In December, the N.C. Supreme Court issued its opinion in State v. Rankin, a felony littering case that illustrates how North Carolina’s haphazard collection of criminal laws is a losing proposition for the state’s taxpayers.
In April 2014, Angela Rankin and her boyfriend drove around Greensboro looking for scrap metal. They came upon an oil tank by the road outside a private residence. Believing the tank abandoned, they tried to load it into the back of their truck. But the tank, which still held heating oil, was too heavy. Undeterred, Rankin and her boyfriend dumped the fuel on the ground, loaded the tank in their truck, and drove off. As she later told investigators, she figured the oil would simply “dry up.”
It didn’t dry up. The dumped heating fuel contaminated the soil, ran into the gutter, and polluted the stormwater system. The Department of Health spent more than $10,000 cleaning up the mess. After admitting to dumping the fuel, Rankin was indicted for felony littering on July 21, 2014.
Seen from a prosecutor’s perspective, this would seem to have been an easy case. Rankin admitted to intentionally spilling litter onto property she did not own in violation of General Statute 14-399(a). She had spilled it onto the ground (i.e., not in a “receptacle” as allowed by the statute), and she was not authorized to spill it on that property. And because the litter was hazardous waste as defined by the statute, the resulting offense was a felony. It would seem reasonable that Rankin would accept a plea agreement rather than risk a harsher penalty at trial, right?
Not so. Instead, Rankin and her attorney proceeded to trial in July 2016 — two years later. At trial, Rankin moved to dismiss the case, arguing the state failed to present enough evidence on her state of mind. Under the littering statute, Rankin would be guilty only if she “intentionally or recklessly” spilled the oil on the ground. This element is known as “mens rea,” a Latin phrase meaning “guilty mind.” But Rankin admitted to knowing the tank contained oil. And she admitted to intentionally spilling it. She was certainly guilty of simple littering. So on what mens rea element did the state fail to provide evidence?
Most likely, Rankin’s theory was that the state failed to prove that she knew she was spilling hazardous waste — the element that made her actions a felony. The littering statute does not say what state of mind satisfies this particular element. Subsection 14-399(e) simply reads, “Any person . . . who discards litter that is a hazardous waste as defined [by statute] is guilty of a Class I felony.” Rankin probably hoped the court would interpret the statute to require some level of mens rea on this element that the state could not prove: e.g., that Rankin’s purpose was to spill hazardous waste, or that she knew the waste was hazardous. But the court declined to do so. It overruled Rankin’s objection, and the jury found her guilty of felony littering.
Rankin appealed her conviction to the N.C. Court of Appeals. Rather than raise the mens rea issue on appeal, Rankin swapped horses and challenged the sufficiency of her indictment. The court agreed and voted 2-1 to vacate Rankin’s conviction. In December 2018, the state Supreme Court voted 5-2 to affirm the Court of Appeals. Four and a half years, tens of thousands of dollars, and countless hours of labor from investigators, attorneys, judges, and support staff failed to end in a conviction in a routine case that should have been resolved pre-trial. And the legal question that kicked off this entire saga — whether the hazardous waste element requires a culpable frame of mind — remains unanswered.
So, what does Rankin’s prosecution have to do with recodification of the criminal code? In short, a clearer criminal code would result in fewer trials like her’s.
Jury trials are expensive and burdensome, and the outcomes are generally uncertain. Each litigant faces substantial pressure to settle the case long before the trial begins. As a result, the cases that most often go to trial are the close cases in which a key fact or legal question remains unresolved.
What made Angela Rankin’s case close enough to merit a trial? An ambiguous statute. The littering statute failed to define a mens rea for the hazardous waste element. Must a defendant know that the litter is hazardous waste? Is it enough that a defendant is reckless about whether the litter is hazardous waste? Should a defendant be held strictly liable if the litter is hazardous waste, regardless of whether she knew? The statute does not make this clear. Nor is there a catch-all mens rea provision in the criminal code that instructs the court to “read in” a level of culpability where none is defined. The resulting ambiguity created a close case that should not have been close at all.
This issue is not confined to the littering statute — ambiguity is one of many systemic issues plaguing North Carolina’s criminal code. Recodification is the solution. Careful, considered revisions to the code would limit the ambiguity in criminal statutes. A well-defined, self-contained code would limit the amount of taxpayer money burnt on avoidable trials.
Mike Schietzelt is a criminal justice fellow at the John Locke Foundation.
American states and localities are, on the whole, administered more responsibly than the federal government is. Their superiority has nothing to do with the qualities of individuals involved. Indeed, many federal politicians were once state or local politicians.
The difference is institutional. It’s about rules. Most states and localities are required to balance their operating budgets. The federal government isn’t. Balanced-budget rules discipline behavior and choices of political actors.
Compare the current conditions of the federal government and North Carolina’s state government. Washington is full of politicians who profess to care about fiscal responsibility but do nothing of consequence about it. According to the latest estimates, we will see well over $10 trillion in federal deficits over the next decade. If President Trump’s recent budget proposal somehow became law, we’d still run $8 trillion in deficits during the period. And these scenarios assume no significant recessions.
I think the recent federal tax bill was a good one. It reduced the double-taxation of savings and investment, boosting both short-term and long-term economic growth. It also expanded the freedom of Americans by letting them keep and spend more of what they earn.
But its fiscal impact should have been offset by large reductions in federal spending, both short-term and long-term. Although growth will be faster, broader, and deeper because of tax reform, the resulting increase in federal revenue will fall far short of closing the deficit. Tough decisions are inevitable.
In North Carolina, by contrast, state government has run small to moderate surpluses every year since the end of the Great Recession. Its operating budget cannot, legally, run a deficit. Moreover, state lawmakers and governors have wisely chosen not to spend all the surpluses, but instead to build up the largest cash reserves in modern North Carolina history.
These reserves came in handy when the hurricanes hit. They’ll come in handy when the next economic recession hits. They will protect taxpayers (by reducing the political pressure to raise taxes during future crises) as well as the state’s long-term spending priorities (fiscal panic is often inconsistent with sound budgeting).
Balanced-budget rules bind today’s politicians in the interest of tomorrow’s residents. These constraints can be uncomfortable. Leaders are compelled to make tough decisions. That produces better decisions — and, actually, better leaders.
The exceptions prove the rule. Consider two hot-button issues in North Carolina politics right now: Medicaid expansion and public debt. Gov. Roy Cooper and legislative Democrats recognize that the state doesn’t have nearly enough revenue coming in to finance the operating expenditures they believe are needed. But most also (correctly) believe that North Carolinians don’t consider themselves undertaxed. Despite the forlorn hopes of progressive activists, Cooper wasn’t never going to propose large-scale tax increases on personal or corporate income.
Instead, the governor’s budget proposes to expand Medicaid and to issue $3.9 billion in bonds to fund capital projects for schools, colleges, universities, and local utilities. Both use borrowed money to skirt North Carolina’s balanced-budget rule — federal debt in the first case and state debt in the second.
The Medicaid gambit is more egregious, since Medicaid is inherently an operating expense. But even when it comes to capital spending, North Carolina has traditionally employed debt conservatively, not expansively. While borrowing does make financial sense in some cases, pay-as-you-go has its own benefits and ought to remain a significant part of the mix.
More importantly, North Carolina has already been evading its balanced-budget rule for decades by promising pension and retiree-health benefits to public employees without setting aside enough money to cover the cost. We should have tightened the rule to stop that, by requiring accrual rather than cash accounting. But we didn’t — and now we have tens of billions of dollars in unfunded liabilities. That’s a real debt that effectively reduces the state’s capacity to issue bonds.
Washington’s unfunded liabilities are enormously larger, of course. States are better run, no question. But they aren’t perfectly run. Time to clean up the mess — and to avoid making bigger ones.
It’s no easy task to find the silver lining behind a recent court ruling striking down two N.C. state constitutional amendments.
But this observer has found at least one: The ruling offers a good excuse to remind readers about basic facts involving taxes.
Facts contradict a key “finding of fact” that helped motivate Wake County Superior Court Judge Bryan Collins’ decision to kill the amendments. Specifically, the facts paint a far different picture than the one suggested by the 33rd “fact” spelled out in Collins’ 14-page order.
In November, 2 million N.C. voters (57 percent of those casting ballots) decided to lower the state’s constitutionally mandated cap on income tax rates. The cap established in Article V, Section 2(6) of the constitution had been set at 10 percent. Voters agreed to drop that cap to 7 percent.
That vote had no direct impact on existing tax rates. At the time of the vote, the state’s flat personal income tax rate stood at 5.499 percent. The corporate income tax rate was 3 percent. Both rates fell in 2019, to 5.25 percent and 2.5 percent respectively. But those decreases were tied to other legislation, not the constitutional amendment.
Both before and after the vote, neither tax rate came anywhere close to 7 percent, let alone the 10 percent rate in the original cap. The General Assembly could raise the current personal income tax rate by 33 percent before butting up against the 7 percent cap tied to the amendment. Lawmakers could nearly triple the corporate rate before hitting the new cap.
Yet Collins states, as fact, that the amendment harms the plaintiffs in the case before him: the N.C. NAACP and its members. How? “Because the amendment places a flat, artificial limit on income taxes, it prohibits the state from establishing graduated tax rates on higher-income taxpayers and, over time, will act as a tax cut only for the wealthy.”
The judge goes on to state, as fact, that the “artificial limit” tends to favor whites and “disadvantage people of color.” Hence the perceived harm to the NAACP.
My John Locke Foundation colleague John Hood has labeled the judge’s assertion “both offensive and factually inaccurate.” Hood backs up those words by disputing Collins’ implication that recent state reforms benefit only white, wealthy taxpayers.
One can offer at least three more basic critiques of Collins’ 33rd “fact.” First, the amendment does not place a “flat, artificial” limit on income taxes. Instead It adjusts an existing constitutional cap on the top tax rate the state can charge.
If one treats a cap as “flat,” and if the flat nature of that cap violates some constitutional protection, then no cap would be permitted at all. Not only would the new 7 percent cap fail Collins’ test, but the pre-existing 10 percent cap would have to disappear as well.
Perhaps Collins meant to distinguish between 7 percent and 10 percent by using the word “artificial.” But there is no factual basis for that distinction. If a 7 percent cap is artificial, nothing about the old 10 percent cap would allow it to escape the same label.
Second, the amendment sets no prohibition on the state establishing graduated tax rates. This is indisputable. It would be a bad idea for lawmakers to jettison their growth-enhancing flat tax. Yet a future — presumably Democratic — General Assembly would be free to do so.
For example, lawmakers could maintain the existing 5.25 percent tax rate for income up to a certain threshold, then raise rates as high as 7 percent for income beyond that threshold. Such a decision would have negative impacts for the tax code’s simplicity. It could slow economic growth. But the amendment leaves lawmakers free to make that unwise choice.
Third, it’s not possible to argue with a straight face that an amendment that does nothing to affect current tax rates amounts to a tax cut. The amendment itself generates no tax cut for the wealthy or for anyone else, either now or “over time.” Only future action from the General Assembly will raise or lower tax rates.
Collins’ “facts” clearly fall short of meeting a factual standard. Yet the story need not end at that point.
The judge’s findings suggest he takes issue with a state income tax structure that would enable the wealthy to avoid paying a larger tax burden “over time.” Perhaps he’ll be happy to learn that North Carolina’s existing tax structure — including its single flat rate — already requires higher-income earners to pay substantially more than those with lower incomes. That situation is likely to continue “over time.”
Thanks largely to regular increases in the standard deduction since 2013, lower-income earners have seen substantial portions of their tax burdens sliced away.
Under current law, a childless married couple with $25,000 of income faces a state income tax bill of $262 (roughly 1 percent of household income). A couple with income of $120,000 pays $5,250 (4.4 percent). A couple earning $1 million pays $51,450 (5.1 percent). That million-dollar household faces a tax bill roughly 200 times as large as the couple making $25,000. Add children to the equation, and the numbers look even better for the couple with the lower income level.
The tax cap amendment did nothing to change those relative tax burdens. Nor would the amendment prevent a future General Assembly from raising the standard deduction again in the future.
It’s too bad those facts didn’t find their way into Collins’ “findings of fact.” Perhaps higher courts will prove more receptive to evidence that challenges his recent ruling.
Mitch Kokai is senior political analyst for the John Locke Foundation.
In the twilight of his political career, Ronald Reagan made the media rounds to discuss his administration, legacy, and unfinished business. During several of these interviews, Reagan went out of his way to criticize the longtime practice of gerrymandering electoral districts for partisan advantage.
“I think this is a great conflict of interest,” Reagan told ABC news host (and North Carolina native) David Brinkley in 1988, “to ask men holding office, elected from districts, to change the lines of that district to fit the new population.” Speaking to Firing Line host William F. Buckley a couple of years later, Reagan argued strongly that the redistricting process should be reformed. Describing the convoluted congressional districts in the Los Angeles area as resembling a “nest of snakes,” Reagan complained that legislative majorities in California and most other states had “funneled” as many voters of the opposing party into “a few districts as possible” to subvert the will of the voters.
Bill Buckley, by the way, was also critical of partisan gerrymandering during his long career as a conservative columnist and commentator — ridiculing it a “Mickey Mouse” approach to governance, among other things.
As a conservative who came of age politically during the Reagan era, I can’t help chuckling to myself whenever a Republican critic responds to my longtime advocacy of redistricting reform by questioning my conservative credentials.
Reagan considered gerrymandering to be one of the major impediments to enacting his agenda in Washington. In his day, most legislatures were controlled by Democrats. Most victims of egregious gerrymandering were Republicans. That was certainly the case in North Carolina, where gerrymandering has a long, disreputable, and mostly Democratic history.
It’s an overstatement to say that past districts drawn by Democrats weren’t as slanted as today’s maps because Democrats lacked modern technology. The most contorted legislative maps I’ve ever seen — districts that would have locked Republicans out of power in Raleigh regardless of the preference of the voters — were drawn by Democratic lawmakers after the 2000 elections and census. Only successful litigation by the GOP kept this attempted Democratic gerrymander from sticking.
Most active North Carolina Republicans supported this litigation, by the way, and continued to advocate redistricting reform throughout the first decade of the 21st century. The only major exception I can recall was the late Richard Morgan, who helped keep his political partner (and future felon) Jim Black in charge of the North Carolina House even after Republicans won a majority of seats in the 2002 elections. Morgan insisted that legislatures should retain maximum autonomy to draw districts however they wished, even if Republicans were on the receiving end of the resulting gerrymander.
Needless to say, I don’t think Republican leaders in North Carolina today should take governance advice from Richard Morgan. They should take it from Ronald Reagan.
Set aside for the moment the prudential case for Republicans to support redistricting reform — that given the uncertainty about who will win the 2020 elections, and how current redistricting litigation will end, reform would keep Republicans from suffering the kind of gerrymanders they faced before 2010. North Carolina conservatives and Republicans should change the system simply because it’s the right thing to do, because letting politicians choose their voters rather than letting voters choose their political representatives is incompatible with basic principles of conservative governance.
I am part of a cross-ideological coalition, North Carolinians for Redistricting Reform (NCRedistrict.org), that is backing a fresh approach to the issue this year. House Bill 140, otherwise known as the FAIR Act (for Fairness Accountability and Integrity in Redistricting), would use both a constitutional amendment and a statute to place neutral, nonpartisan constraints on redistricting.
There will never be a perfect way to draw political maps. Perfection is impossible in any human endeavor — which happens to be another core conservative principle. But conservatives should not accept the current process as “the best we can do.” It’s not. Indeed, conservatives should take the lead in reforming redistricting. That’s what Ronald Reagan would do.
There’s no extra money.
The 2019-20 General Assembly session is well under way. Bills are being filed and committees are meeting, but the attention will soon fall on the biennial budget, which the governor introduced this week and included new and expanded spending, including a 9.1 percent raise for teachers. Early revenue returns have been optimistic, even showing a surplus in the $150 million range. But folks eager to spend that might want to proceed cautiously. The money is already spent.
Smart budget decisions and a strong economy over the past few years enabled lawmakers to put $2 billion into the savings reserve fund, about 10 percent of the general fund and the highest level of savings in state history. Thank goodness it was available when Hurricanes Michael and Florence devastated eastern communities. The General Assembly took about $850 million out of the rainy-day fund for hurricane recovery with a promise to replenish it within five years. They would be wise to rebuild that savings account as quickly as possible to ensure North Carolina is prepared for the next storm, whether a natural disaster or an economic downturn. In addition, a 2016 law requires 15 percent of new savings go directly into the savings reserves.
What it takes to run the Medicaid program will be recalculated, as it is every year under the ACA, to adjust spending based on increasing medical costs and additions to enrollment and usage. Twenty percent of North Carolinians are on Medicaid, and almost 50 percent of babies born here are covered by Medicaid. A proposed expansion would add 500,000 mostly able-bodied childless, working-age adults to the program. As a federal entitlement program, Medicaid funding has precedent, and this year’s adjustment to the current program could cost upwards of $200 million.
Commitments have been made for repairs and renovations to state-owned facilities, new construction is under way on projects across the state, and general obligations bonds and other debt equals $7.3 billion. A recent change in the law requires 4 percent of the general fund go toward paying these debts and obligations. The State Capital and Infrastructure Fund is $956 million; the $150 million is new money not spent last year.
North Carolina is now the ninth most-populous state, with more than 112,000 people moving here in the past year. As school enrollment grows, education costs rise. Recent reductions in class size require more school funding for the additional teachers as classes get smaller.
Thanks to a commitment to make teacher pay competitive with other states, and with four consecutive years of pay raises, average teacher pay is $53,000. Promises were made to raise the average salary to $55,000 next year.
Our state health and pension plans for state employees, teachers and retirees has $50 billion in unfunded liabilities. Promises were made to continue paying the health-care costs of the 700,000 workers covered under the state health plan. As medical costs increase, so do costs to the state health plan. About 950,000 retirees in the system are entitled to receive pension benefits promised when hired. A recent law establishes an Employee Benefit Trust Fund; building a reserve for this unfunded liability is a good idea. Meanwhile, the promise made to state employees has to be kept, and it’s an expensive one — about $150 million this year.
Promises were made to continue expanding Opportunity scholarships. Costs will be incurred as we implement the Raise the Age program for juveniles in the prison system.
Built-in obligations mean added spending as additional tax cuts become effective in 2019. The personal income tax will go down from 5.499 percent to 5.25 percent, and the 3 percent corporate tax rate will tick down to 2.25 percent.
Promises made, promises kept.
Reining in the growth of state government, cutting taxes, reducing burdensome regulations, and making the right investments in education and infrastructure have paid off. Unemployment is the lowest in 17 years. North Carolina’s economy is strong and continues to grow. To ensure continued growth, strong fiscal discipline is needed. We should stay the course, live within our means, save when we can and spend cautiously and carefully. That means making reasonable promises you can keep, and not spending money you don’t have.
A week or so ago, a group of people who don’t like the idea of people drinking liquor got together to denounce efforts to privatize the state monopoly on alcohol sales, storage, and distribution.
The group included representatives from the General Assembly, law enforcement, and — never to be left out of any discussion that centers on railing against alcohol — the Rev. Mark Creech of the Christian Action League.
They played all the usual notes of concern — easier access to alcohol for minors and problem drinkers, loss of local revenue, increased crime, etc.
The N.C. Alcoholic Beverage Control Commission, which oversees some 170 boards throughout the state, is irrevocably broken. It’s archaic, draconian, and should have been fixed long ago.
It’s useless for media outlets to continue reporting on “news” conferences such as the one led by Creech, who, simply put, would be thrilled to reenact Prohibition. Nothing more, in regard to his thoughts — and the thoughts of those with similar mindsets — needs saying.
But there’s a twist here.
Not long after the news conference, the Wake County ABC board posted on Facebook a “thank you” — photos, included — to Creech and the gang. I asked on the post whether it was appropriate for an ABC board — a government entity — to appear as if it’s supporting efforts to thwart legislation to change the monopolistic system.
A short time later I tried to return to the post. It was gone.
On Tuesday morning I emailed Wake County ABC General Manager Ike Wheeler and Bryan Hicks about the post. As of Wednesday afternoon, they still had failed to respond.
Employees of the N.C. ABC, members of the boards, and workers in the more than 430 government-run stores around the state want to keep the status quo. Well, of course they do.
But it’s important they remember that, as government employees, their job is to implement and adhere to rules and laws enacted by the General Assembly and, in some cases, county and city entities. Their duties are many, and these are often complicated. Yet supporting or opposing pending legislation, in an official capacity — as an arm of government — shouldn’t be among them.
Expect a slew of bills this session that aim to reform liquor laws in North Carolina. Moves, for example, allowing distilleries to sell mixed drinks, giving local governments the option of operating ABC stores on Sunday, and allowing spirituous liquor tastings at ABC stores. Lawmakers will introduce measures aimed at helping North Carolina distilleries, which are treated far differently by the state than are breweries and wineries.
Some of the discussions around fixing the system — replacing local money, for instance — are valid. And, yes, it’s critical that we keep liquor away from minors, and that we, as a community, reach out and help problem drinkers.
But some arguments are just plain hyperbolic.
Rep. Pat McElraft, R-Carteret, as reported by the Insider, said during the news conference that, if the system goes private, as many as 9,000 stores in North Carolina could be selling liquor.
That reasoning, based on retailers now selling beer and win, is dubious at best.
As my colleague Jon Sanders has pointed out, the idea that government control of liquor distribution and bottle sales somehow makes us safer is an old and tired belief. Yes, beer and wine are widely available throughout the state — in bars, restaurants, grocery stores, gas stations. …
Alcohol is alcohol, whether it’s a dram of whiskey, a glass of wine, or pint of beer. North Carolina maintains a mysterious bias against spirituous liquor, which, so far, no opponent of reforming the N.C. ABC has begun to explain, in terms either scientific or empirical.
This debate — repeating myself yet again — isn’t about alcohol, yet defenders of the status quo will use the same frayed and threadbare arguments. Wouldn’t it be wonderful, they probably think, if all liquor simply evaporated into the ether.
But wait, they think again. The state has a stranglehold on one of the world’s most innovative, vibrant, and thriving markets. A market that last year amounted to $1 billion in revenue — an all-time high — for North Carolina.
Stratistics MRC says the Global Alcoholic beverages market accounted for $1,324.1 billion in 2017 and is expected to reach $1,864.2 billion by 2026, growing at a compound annual growth rate of 3.9 percent during the forecast period.
Change things in North Carolina? Why, never.
In any human enterprise as complex, varied, and challenging as education, we shouldn’t expect a great deal of consensus, much less unanimity. Politicians, educators, parents, and citizens debate education policy constantly not only because it is of crucial importance to our shared futures but also because the field simply contains many highly debatable questions.
Whether paying teachers extra if they obtain graduate degrees will make them more effective is not among those debatable questions, however, at least not any more. In the vast majority of cases, the answer is no. Pay bumps for teachers with graduate degrees is cost-ineffective. If you seek to improve student learning, such as policy isn’t worth pursuing.
Over the past three decades, scholars have published more than 100 studies in peer-reviewed academic journals testing the proposition that possessing a graduate degree makes one a better teacher, all other things being held equal. In more than 80 percent of the empirical studies, researchers found no relationship between graduate degrees and measurable teacher effectiveness.
Of course, that does leave room for a few studies finding a positive association (as well as a few finding a negative one). Even for the positive studies, though, the finding is often narrow. There is a handful of studies showing that when teachers possess graduate degrees in the subject they teach, rather than in education, their students may benefit. But this evidence has mostly to do with graduate-level mastery of math or science, not with degrees in any and all subjects.
In a rare and praiseworthy occurrence of evidence-based policymaking, the North Carolina General Assembly decided several years ago to end the state’s pay supplements for graduate degrees. Lawmakers decided instead to reform the teacher-salary schedule so that pay rose with gains in teaching effectiveness, which occur disproportionately in the early years of a teaching career, while also offering bonuses for exceptional performance.
In addition, an increasing number of North Carolina school districts are pursuing the flexibility to adopt new compensation systems that pay teachers more for assuming advanced teaching roles. We may also see greater differentiation as teachers get paid more based on hard-to-staff subjects and hard-to-staff schools, although political resistance to such common-sense practices — which are common in other professions — remains significant.
As North Carolina and other states continue to iterate and innovate, some promising teacher-pay reforms will pay off. Others may prove ineffective or even counterproductive. Policymakers should always be willing to subject their ideas to evaluation in real-world settings, which are inherently more complex than the models they use to craft legislation.
Does that principle sound reasonable? If you think so, keep in mind that you are obligated to apply the principle consistently. If you pounce on every adverse finding to savage an education policy you dislike, yet insist that North Carolina restore pay supplements for graduate degrees because “it just makes common sense,” you are being grossly inconsistent.
But what about that narrow finding about students benefitting from teachers with advanced math or science degrees? Couldn’t North Carolina reinstate pay bumps for those special cases?
In theory, yes. In practice, it’s neither necessary nor workable. It’s unnecessary because if obtaining such a degree will improve teacher performance, we can capture the effect of that by rewarding the performance itself — measured however you like, by value-added test scores or principal evaluation or student surveys or some combination — rather than the acquisition of the degree.
Moreover, the distinction will never stick. When a few state lawmakers filed a bill this year to restore the pay bump, they extended it to all academic subjects. The North Carolina Association of Educators then welcomed the bill only as a first step to restoring the supplement for all graduate degrees, including those in education (which represent a large majority of the degrees at issue).
Restoring pay bumps for graduate degrees would be a triumph of special-interest pressure over sound policy, of image over substance, of hope over experience. North Carolina shouldn’t backslide. It should move forward.
If the words “Norway” and “Sweden” prompt you to think about government control of people’s economic decisions, you might want to think again.
That was one of the most interesting takeaways from a recent lecture at Duke University.
“The northern European social democratic countries, in fact, have a lot of economic freedom,” said Robert Lawson, economics professor at Southern Methodist University. “They are all in the top 25 percent or maybe just outside of that. … Most of Europe is very market-[oriented}.”
“Think about what it’s like to live in Stockholm,” Lawson said. “It’s private cars and private businesses. Prices of products are unregulated. They export freely. Volvos are all around the world. This is a market economy. This is not a socialist economy.”
As self-proclaimed socialists like Alexandria Ocasio-Cortez play a more vocal role in today’s Democratic Party, it’s important to define what they mean when they refer to socialism. If they invoke Norway and Sweden as models for the United States of the future, Lawson suggests they’re not interested in real socialism.
“They’re market economies,” he said. “If you want to see the socialist economies, you go to Argentina or Brazil, where the government is infecting every aspect of business. You go to large parts of the continent of Africa, and you’ll see that’s actual operating socialism. You have governments operating enterprises.”
“Of course, Venezuela is the current standard-bearer there,” Lawson added. “Some people think socialism is Sweden. I’m going to say, ‘No, socialism is Venezuela.’”
Lawson should know the difference. He’s spent much of his career comparing economies around the globe. The result of that work is an annual Fraser Institute index titled “Economic Freedom of the World.”
The index measures freedom in five areas: government size, property rights, sound money, free trade, and regulatory burden. Once Lawson and his colleagues examine 42 variables under those broad categories, they rank 162 countries from top to bottom. The country with the most economic freedom ranks No. 1.
Hong Kong has occupied the top spot since rankings began. “The top tax rate in Hong Kong is 15 percent,” Lawson explained. “There are no property-rights problems. In fact, they have one of the greatest court systems in the world.”
“There are no inflation problems,” he continued. “There are no tariffs or quotas into or out of Hong Kong. It’s complete, absolute free trade.”
As for government red tape? “It takes 30 days to start a business in the United States — it takes one day, according to the World Bank, to start that same business in Hong Kong.”
Both Hong Kong and world No. 2 Singapore remind us that economic freedom doesn’t correlate exactly to political freedom. But most of the rest of the top performers could be characterized as “our liberal democracies,” in Lawson’s words. “We’re looking at Switzerland, New Zealand, Ireland, the United States, … the United Kingdom, Australia,” he said. “These are countries that are both market economies, … and they’re also good, sound, liberal democracies with freedom of speech and religion.”
On the other end of the scale sits Venezuela, which chose a socialist path in electing the late Hugo Chavez as president 20 years ago. Current leader Nicolas Maduro continues to follow Chavez’s policies.
Out of a possible 10 points for economic freedom, Venezuela scores 2.88. “I believe 2.88 is the lowest score on the economic freedom index ever recorded by any country ever,” Lawson said. “Even Zimbabwe I don’t think ever got down that low 10 or 15 years ago when it was at its bottom.”
There are good reasons for people to prefer a higher score and higher ranking on the economic freedom list. Countries with more freedom are “richer,” Lawson said. Within countries ranking in the Fraser index’s top 25 percent, average income totals $40,376. Among the bottom 25 percent, that number slumps to $5,649.
Socialists might respond that all of that extra income in economically free countries flows to the rich. In the critics’ preferred economic arrangements, they believe the most disadvantaged people secure a larger piece of the pie.
In countries with the most economic freedom, the poorest 10 percent of the population secures 2.74 percent of the income. That share drops to 2.47 percent within the countries with the least freedom. “There is no relationship between the level of economic freedom, as we measure it, and the degree of economic inequality around the world,” Lawson explained.
The freest countries also enjoy higher life expectancy and lower poverty and infant mortality rates. People in economically free countries are happier, too, according to Lawson’s assessment.
“The index allows us to unlearn some of the things we thought we knew,” Lawson said. If so, let’s get copies in the hands of AOC and the rest of today’s American socialists. Perhaps they will “unlearn” their support for an economic system that would make us all poorer, less healthy, and less happy.
Mitch Kokai is senior political analyst for the John Locke Foundation.
If you own it, you control it. That’s what it means to enjoy a property right, in a nutshell. It is a right safeguarded by North Carolina’s constitution as well as the 14th amendment to the federal constitution, among other provisions.
And it is a right denied every day by localities across North Carolina.
As you may know, there are political fights across our state right now about housing. Some communities, worried about worsening affordability and responding to the preferences of young consumers, are considering plans to open up their housing markets by allowing higher-density development, “granny flats,” and other ways to add capacity at a reasonable cost.
At every step, these reformers find their way blocked by residents who seek to preserve or even tighten existing rules against such practices. All too often, these battles get headlined as “developers vs. neighborhoods.”
To frame the issue this way, however, is to ignore a large group of people: would-be homeowners and renters. They want reasonably priced options for housing. Developers want to sell them. Lot-size requirements and other government restrictions stand in the way of both willing buyers and willing sellers.
Naturally, the “neighborhood” advocates have an argument. Who doesn’t? They contend that more residences per square mile mean more vehicular traffic, more people, more bustle, more noise. Having already bought or rented their current residences, they argue that their quality of life will be harmed.
These debates usually devolve into competing factual claims, the wording of zoning ordinances, and speculations about the feasibility of transit or walkability as an alternative to automotive transportation. Not enough attention is paid, I think, to the fundamental question: What do you think you own?
If I own a piece of property, I have a right to enjoy and dispose of that property as I see fit. I may also have some specified rights to the use or sharing of other resources held in common among the neighbors, depending on the particular deal struck and certain practical realities of the local geography.
But I don’t own the property of my neighbors. I don’t own a deed to a specific traffic count on the street, or a minimum distance from a place of business, or an expected “property value,” or to choose what kinds of people I may encounter. To be sure, generations of residents, politicians, and “experts” have claimed otherwise. That doesn’t make their position reasonable.
In places where governments impose more and heavier regulations on the production and sale of housing, it costs more. The empirical evidence for this relationship is overwhelming. Yes, places with plentiful high-paying jobs and other amenities are popular places to live, which bids up housing prices. But those prices, in turn, make it attractive for developers to supply more housing. That tends to keep the median cost roughly in line with the median income of prospective buyers — unless government gets in the way.
North Carolinians have the right to purchase, use, enjoy, and dispose of their property as they see fit. This sphere of private ownership and control very much includes housing. In a free society, the proper response to questions about high-density housing and granny flats and the like is going to be that those who own the property to be developed or used — not those who happen to live nearby — get to answer those questions.
What reasonable exceptions there may be, such as direct impairment of neighboring property or immediate health and safety concerns, reinforce this principle rather than undercutting it. If you blast your music so loud that it make it impossible for me to function normally, or host a party that leads to your drunken friends parking or puking on my lawn, I am entitled to take action.
But if you rent your basement apartment to a group of earnest if hapless students from the local college, I am entitled to do nothing more than chuckle to myself. And as a good neighbor, I’d feel obligated to wave.
As the specifics — and many of the absurd objectives — of Rep. Alexandria Ocasio-Cortez’s Green New Deal have come to light, the common refrain from Democrats who support it is that the plan is “aspirational.” In other words, they believe that the world Ocasio-Cortez envisions is somehow ideal. It is the world we all aspire to live in. But is it?
Let’s be clear. The world that so many Democrats are proclaiming as “aspirational” can only be achieved and maintained by the use or threat of force, i.e. violence. The goals outlined — the elimination of air travel, the building of a nationwide high-speed rail system, the rebuilding or “retrofitting” of all structures, the elimination of cows and presumably beef and cheese from our diets, to name just a few of its goals — could not possibly be realized without explicit and implicit threats of force. In reality, the plan is to coercively transform society by creating a Green New Deal state.
This has been the starting point of every totalitarian regime of the past 100 years. And, in fact, there are no examples of governments that have started with this premise and tried to carry out their plans that have not ended in totalitarianism. It makes no difference whether they arose from violent takeover, as was the case in Russia or Cuba, or from some form of democratic process, as has been the case with Nicaragua and Venezuela.
The fact is that when a complete transformation of people and their lifestyles, from their morals and religious beliefs to their eating habits and travel plans, are the goal, no one can be allowed to say no to the state. No homeowner would be allowed to say, “No, I don’t want the government to rebuild my house. I like it the way it is.” No farmer would be allowed to say, “No thanks, I want to continue to raise my dairy cows or beef cattle.” No landowner would be allowed to say, “No, I don’t want my property taken to make room for a new high-speed rail line.” No airline company would be allowed to say, “I think we want to stay in business and continue serving those travelers who prefer flight to rail.”
Such resisters would all have to be thwarted, and it won’t be through logical persuasion or simple cajoling. It will be by the use of fines, prison, or worse. If anyone doubts this, just ask yourself how Ocasia-Cortez would answer if asked if she would be willing to forgo the use of jails, fines, or guns in achieving the goals of the Green New Deal. I think the answer is self-evident. To achieve and maintain the “aspirational” goals of the GND would require an overwhelming threat and, if necessary, use of force on the part of the GND state.
So how would this lead to 1 million percent inflation or worse? The answer lies in AOC would pay for her societal makeover. The price tag for the GND is estimated to be, at the low end, $56 trillion over 10 years, or $5.6 trillion per year. To get an idea how much this really is, the entire annual federal budget is now about $4.4 trillion, and almost $1 trillion of that is added debt.
Widely publicized has been AOC’s call for a 70 percent or 80 percent tax on the wealthiest Americans. But this wouldn’t a drop in the ocean in terms of raising the kind of money the GND would require. What has gotten less coverage is her call for increased federal debt, to be underwritten by the Federal Reserve. The bottom line is the plan would be funded by massively inflating the money supply. The money to pay for the GND will be “created out of thin air” or, actually, ledger entries at the U.S. Treasury. Ocasio-Cortez would flood the economy with newly minted greenbacks. It might be a cliché to say that inflation is too much money chasing too few goods and services, but it is true nonetheless.
OAC’s funding scheme hits the price-level from both sides of this equation. She calls for massive new debt financing paid for by equally massive increases in the money supply. At the same time, she plans to punish those who produce valuable goods and services by imposing exorbitant new taxes and onerous regulations, dramatically slowing real economic growth.
The combination will be a disaster of Venezuelan proportions. As the output of basic consumer goods and services shrink and the money supply grows, inflation will necessarily skyrocket and, given price controls, which will be inevitable, shortages will develop. This means the tax base will shrink, adding pressure to expand the growth of the money supply even further to pay for the GND programs. This will produce additional increases in the price-level and more shortages. The resulting spiral downward should be obvious. It is exactly how Venezuela ended up where it is today, in extreme poverty, a currency that is all but worthless, protesters in the streets and the use of even more force. But surely the reduction in temperatures by an amount that OCA and her supporters never specify will make it all worthwhile.
Death and taxes aren’t the only two certainties North Carolinians face. New congressional and legislative districts are coming, too — for 2020 (by court order) and 2022 (after the end-of-decade census).
Chances also are strong the Tar Heel State will get a 14th congressional district, so reapportionment should be on the agenda for the 2022 election cycle.
If lawmakers don’t want to spend most of the next three years in court fighting over new districts — spending taxpayer money which could go to better use — then they can limit the pain, the cost, and the public frustration by taking a few straightforward steps: Stop micromanaging the districts. And require the people who draw the maps to follow rules set in the constitution and by state courts.
A couple of proposals introduced in February would get us closer to that goal.
Reps. Chuck McGrady, R-Henderson, and Robert Reives, D-Chatham, have co-sponsored House Bill 69 and House Bill 140, which offer two different and positive alternatives to the problem of extreme partisanship in mapmaking. They do it by giving individual lawmakers a minimal role in designing the maps.
The N.C. Constitution says the General Assembly has the sole authority to revise state House and U.S. congressional districts. Yet it doesn’t say the legislature has to draw the maps.
For more than two decades, the John Locke Foundation (publisher of Carolina Journal) has backed the establishment of an independent process to set district lines. So have host of “good government” groups, many of them left-leaning. The idea is to curb the power of elected officials to entrench themselves in districts they draw.
H.B. 69 would use an appointed commission to handle the details. Similar commissions in about a dozen other states haven’t always lived up to reformers’ expectations. For one thing, the commissions often have a partisan slant, with the majority party in the legislature getting most of the seats.
H.B. 140 takes a different tack. It would have legislative staff draw the maps, based on the state constitution, federal laws — including the Voting Rights Act — and a set of concise rules designed to prevent the party in power at the time of redistricting from getting an unfair advantage.
Under both bills, the legislature would vote up or down on the final plan, giving lawmakers no opportunity to tweak it.
Maps still would have to comply with the U.S. Constitution and the federal Voting Rights Act. They’d have to satisfy the state constitution — each district with roughly equal numbers of residents, contiguous, and leaving counties whole whenever possible.
But those requirements don’t go far enough. The proposals also would uphold principles set out in the 2002 Stephenson v. Bartlett decisions by the N.C. Supreme Court.
One important principle rarely applied in North Carolina maps but included in both bills: Districts should be compact.
When congressional maps were redrawn for the 2014 election, residents of New Hanover County were outraged the 7th Congressional District no longer was limited to counties in that corner of the state but instead stretched northwest to the Research Triangle Park exurbs.
The 9th Congressional District, which will elect a representative sometime this year (maybe), reaches from the southeastern suburbs of Charlotte east into Fayetteville and then Robeson County. It comprises many communities with often wildly divergent interests.
Common-sense districts would look more like circles than boots — or snakes. Abiding by the Stephenson principles gets us closer to that goal.
H.B. 140 also includes a proposed constitutional amendment. If put on the 2020 ballot and approved by voters, having those rules in place would reduce the potential for judicial overreach when map disputes go to court. A rules-based process would give state judges clear guidelines for setting legal district boundaries. A constitutional amendment also would make it tougher for a future General Assembly to undermine future redistricting plans with a simple majority vote by lawmakers.
A redistricting amendment would offer an insurance policy protecting those out of power and keeping those with power in their place.
Remember when Democrats and progressive activists warned that ending the Affordable Care Act’s individual mandate would “deprive” 14 million Americans of their health coverage? Based on a Congressional Budget Office estimate, this claim helped Democrats defeat a Republican repeal-and-replace bill as recently as 2017.
It was a patently ridiculous claim from the outset. For the vast majority of those included in the estimate, the mandate was said to be forcing them to buy expensive health plans they didn’t want. Ending the mandate would have allowed them to stop buying such plans. They’d have been liberated, not “deprived.”
Aside from the faulty description, this widespread claim had a more basic flaw: the number was wildly exaggerated. By mid-2018, the estimate had fallen from 14 million affected people to 8 million. Now, CBO has admitted the exaggeration was far worse than that.
Their new estimate: 2.5 million Americans will decide to go without federally approved health insurance in the absence of the mandate, which was ultimately repealed as part of federal tax reform.
The notion that the federal government can and should attempt to compel Americans to buy federally approved health plans was both an unnecessary detour on the road to reform and a grotesque assault on our system of limited, constitutional government. It famously led to a lawsuit in which conservatives actually proved their case before the U.S. Supreme Court — the constitution gives Congress no power to compel the purchase of a private good — only to see Chief Justice John Roberts retroactively and disingenuously rewrite the Affordable Care Act to convert an unconstitutional penalty into a constitutional tax.
Want to understand the underlying rationale of the mandate, and why that rationale was faulty? You need only go back to debates between Hillary Clinton and Barack Obama during the 2008 Democratic primaries.
Clinton argued that unless federal health reform included an individual mandate, 15 million Americans would go uncovered. Obama disagreed, arguing that using federal subsidies to help those excluded from coverage by low incomes or preexisting conditions would be sufficient. Clinton’s plan “forces everyone to buy insurance, even if you can’t afford it, and you pay a penalty if you don’t,” Obama warned.
He flip-flopped later, as we know. But Obama was right the first time. For most ACA enrollees, the federal subsidies are so generous that they need no mandate to buy plans. As for higher-income individuals who consume little medical care, the mandate was never going to be enough to corral them into overly expensive exchange policies.
If you look close enough, you’ll see that most lawmakers and policy analysts across the spectrum already agree about subsidizing poor and sick patients. They differ about the specific means to do so, but most think it inefficient and unfair to foist a disproportionate share of the cost of those subsidies onto the relatively small number of consumers who make up the individual and small-group markets for health insurance. Sliding-scale tax credits and high-risk pools, subsidized by general revenue, have been common elements of Republican health proposals for decades.
Now that the individual mandate is essentially gone, we should be embracing reforms that work with our traditions of individual freedom and federalism rather than against them. One promising idea is to let individuals and small employers band together as private associations to purchase the plans they want at an affordable price.
Now that Trump administration has removed Washington’s regulatory roadblocks, states can proceed with explicit authorization to broaden and deepen private markets for such association health plans. Here in North Carolina, Sen. Dan Bishop, R-Mecklenburg, Sen. Joyce Krawiec, R-Forsyth, and Sen. Chuck Edwards, R-Henderson, are the primary sponsors of the Small Business Healthcare Act (Senate Bill 86), which would do just that.
Even as leading Democrats now go beyond ObamaCare to talk of eliminating private plans together, conservatives should seize the opportunity to move the health care debate in a more productive direction. They were right to oppose the individual mandate. Now, the right should propose alternatives.