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John Hood opines daily on the important issues facing North Carolinians.
Updated: 2 hours 57 min ago

Don’t backtrack on school choice

Mon, 2018-11-19 01:09

When it comes to giving parents more control over where their children attend elementary and secondary school, North Carolina has become a national leader. Now that Republicans no longer enjoy veto-proof majorities in the legislature, however, will the state’s progress on school choice be arrested or reversed?

That’s one of many questions politicos are asking in the aftermath of the 2018 midterm elections, which produced a 16-seat gain for Democrats in the General Assembly. No one can answer it for certain, yet, but I tend to think school choice will survive and thrive despite recent shifts in the political winds.

It is certainly true that Democratic Gov. Roy Cooper has been a skeptic, at best, when it comes the core elements of North Carolina’s school-choice strategy: 1) charter schools and 2) assistance to low-income and special-needs students who attend private schools. He and his appointees would prefer to limit charter-school expansion and to reduce if not eliminate funding for the other programs.

If he vetoes a state budget next year over these issues, Republicans do not have enough votes on their own to override. But it is important to remember that Democrats are hardly unified in their opposition to school choice. Some members of the House and Senate are strong supporters of the popular charter schools in their districts, for example. Others believe that opportunity scholarships and educational savings accounts aimed at at-risk and special-needs students are a worthy expenditure of state funds.

To put the issue in a national context, North Carolina’s policy commitments to parental choice and competition in education rank us sixth in the nation in educational freedom, according to the Cato Institute, and seventh in the nation on the Parent Power Index, published by the Center for Education Reform.

Moving North Carolina into the top five will require continuing expansion of both charter-school enrollments and annual funding for opportunity scholarships, among other things. The top states in school choice, such as Indiana and Florida, have had their school-choice reforms in place for a longer time. They serve more of the students in those states.

But North Carolina is headed in the right direction — toward giving parents more authority to direct the education of their children, and toward giving educators and community leaders more opportunities to be innovative in addressing the many needs of our students across the state.

School choice has sometimes proved to be a partisan issue. That’s unfortunate. As I have argued many times, both fiscal conservatives and progressives can endorse choice and competition in North Carolina without betraying their fundamental principles.

After all, we have for decades allowed beneficiaries of government programs to make choices among competing providers of critical services. That’s how Medicare and Medicaid work. Patients aren’t assigned hospitals and doctors based on their home addresses or socioeconomic status. They make that choice for themselves. The underlying assumptions are that individual choice leads to a better “fit” between patient and provider and that the resulting competition lowers the cost while increasing the quality of services rendered.

Our public policies follow the same course when it comes to nutrition assistance, Section 8 housing vouchers, preschool and day care subsidies, and assistance to students attending private as well as public colleges and universities. To wall off K-12 education as the one place where choice and competition will be largely absent, where the vast majority of students attend schools assigned to them by central authorities, would be odd and counterproductive.

I recognize, however, that some interest groups and individuals disagree vociferously with my argument here. They will push the larger Democratic minorities in the General Assembly, plus as many Republican legislators as will listen, to keep new families from accessing choice programs while imposing much-heavier regulation on charter, private, and even home schools.

The resulting debate may get testy. The legislative battle may get messy. In the end, though, I don’t think North Carolina will take a backward step toward monopoly. I think we’ll keep moving forward.

John Hood (@JohnHoodNC) is chairman of the John Locke Foundation and appears on “NC SPIN,” broadcast statewide Fridays at 7:30 p.m. and Sundays at 12:30 p.m. on UNC-TV.

Categories: Public Policy

Increasing allowable sales at distilleries would give businesses fighting chance as N.C. ABC trims product list

Fri, 2018-11-16 04:00

The N.C. Alcoholic Beverage Commission is trimming the number of products it lists because, to be blunt, some of those items — i.e. bottles — just aren’t selling.

In an email to suppliers Wednesday, sent on behalf of ABC administrator Agnes Stevens, the goal is providing “the optimum selection of products and sizes to meet customer expectation (both individual and mixed beverage customers).”

So, de-list products that aren’t selling for products that do. We get that.

The state would do well to offer more hard-to-find and specialty items. Products from Willett Distillery in Bardstown, Kentucky, for instance. Or Buffalo Trace bourbon, which is plentiful in other states but nearly impossible to find in North Carolina.

The same goes for products by North Carolina distillers, which are sometimes tough to buy, depending on where people live and shop.

The timing of the email raises questions.

ABC’s strategy, according to the email, would, in December, “de-list products that do not meet 2017/18 profit thresholds for N.C. ABC boards — $15,000 for vodkas, $10,000 for other, $5,000 for N.C. products, $1,000 for boutique … and use additional filters including trends and numbers of similar products to trim list to a maximum of 2,300 listed products.”

The ABC Commission website showed 2,695 items, as of Nov. 1, the ABC says.

“Before Jan. 2, 2019, the Commission will advise brokers of items that have been de-listed and need to be cleared from warehouse Jan. 21- Feb. 8, 2019. …”

Why so quickly? To be fair, ABC spokeswoman Kat Haney says the November email sent “to all brokers and suppliers is well in advance of the 2019 listing meetings that are scheduled for January and February. In the past, the conversations about delisting were held at the same time as the requests for potential new products being listed. Regarding public comments, product listings and delistings are an operational matter, and have not ever been a public hearing topic that I am aware of.”

Still, constitutional concerns, arise, which Jon Guze, director of legal studies at the John Locke Foundation, explains here. The new ABC rules are akin to a state statute prohibiting brewers from producing more than 25,000 barrels a year unless they use a distributor as a means of selling it to retailers.

What Guze writes about brewers also applies to the state’s distillers: “North Carolina should be encouraging such people, rather than actively holding them back. If the General Assembly won’t protect their economic rights, don’t be surprised if they turn to the courts!”

Some of the state’s largest brewers have done just that.

Granted, the threshold for sales for N.C. distillers is lower, but it could prove problematic for many.

At $25 a bottle, ABC stores would need to sell about 450 bottles from a distiller to earn $1,000 in profits, according to estimates from Joe Coletti, a senior fellow at JLF who specializes in fiscal and tax policy analysis.

Fact is, many small distillers will fall by the wayside. Startups will stall.

Says Haney, “The state supports the health of the North Carolina distilleries and works closely with them. Each distiller meets with the Commission in advance of a product being listed. The Commission long has had graduated sales thresholds as a qualification to hold warehouse space for North Carolina distillers as well as out-of-state suppliers.

“The North Carolina distilleries that do not meet the sales threshold guidelines have the option to change their listing category from a regular listing to a special order listing,” Haney says. “This allows them to sell up to five bottles at their distilleries after tours and also to make their products available for sale by the case (prepaid at ABC stores) to individuals or mixed beverage permit holders.”

But will that be enough?

The state could avoid possibly putting these North Carolina producers out of business by allowing distilleries to sell an unlimited number of bottles from their distilleries, without requiring them to ship products to Raleigh to store in a warehouse. Much like the Virginia model, in which distillers, in effect, become individual ABC stores, under the respective local boards.

Also allow distillers to sell mixed drinks, loosening archaic rules on putting them on par with breweries and wineries. For many N.C distillers, that would be the next logical place to go toward revamping a monopolistic system with its roots in Prohibition.

Categories: Public Policy

Impactful N.C. congressmen: From the Civil War to World War II  

Thu, 2018-11-15 04:00

I have shared a list about North Carolina politics with you before. It was fun, at least for me. Here’s another one. In no particular order, these are my top five most interesting and impactful members of the state’s congressional delegation from the critical Civil-War-until-World-War-II period.   

George Henry White only served two-terms in Congress, but his impact on North Carolina politics was hardly commensurate with such a short stay in Washington. White was a prominent African-American Republican from Tarboro and central figure in the state’s fusion of populist and GOP politicians that wrestled power away from the Democratic establishment in the last decade of the 19th century. White worked tirelessly for civil rights and introduced an important bill designating lynching a federal crime. After the Democrats grabbed power back in the wake of the Wilmington race riot of 1898, they set about reversing Jim Crow and disenfranchising blacks. White decided not to run for a third term in 1900 and retreated to Pennsylvania, where he built a successful banking career. After his departure, no African-American served in Congress for 28 years, and he was the last black elected to Congress from the South until 1972.   

Funnily enough, the next political figure succeeded White as the member from the second congressional district, Claude Kitchin. Protected by the Democrats’ political monopoly and racist sentiment in the eastern part of the state, Kitchin served 22 years in the House until he died in office in 1923. Few North Carolinians have ever been as powerful in national politics. He was House Democratic leader for three Congresses when he controlled the party’s committee assignments. He also chaired the Ways and Means Committee, the panel charged with writing bills on taxes and trade. Kitchin was a skilled orator and widely respected legislator. He opposed the tariff and called for a direct income tax to make up revenue. Kitchin warned that America was militarily unprepared in 1917, and although he disliked the Germans could not support President Wilson’s request to go to war.     

Furnifold Simmons was another figure behind the racial violence that forced White from office. After losing his U.S. House seat in 1890 to an African-American Republican, Henry Cheatham, Simmons helped orchestrate a Democratic revival in eastern North Carolina and then built a stunningly successful political organization of white supremacy, patronage, and the distribution of government largesse. The machine dominated state politics and secured his election to the Senate five times over a 30-year career in Washington. Simmons chaired the Finance Committee and midwifed the largest reduction in tariffs since the Civil War. He was eventually undone by a stubborn refusal to back the Democratic presidential candidate and anti-Prohibition Catholic Al Smith in 1928. In an act of retaliation — and opportunism given the increasing creakiness of the Simmons machine — Gov. O. Max Gardner secured the nomination of Josiah Bailey to the seat in 1930.   

“Farmer” Bob Doughton from Allegheny County served in the House for 42 years, making him the “dean,” or longest continually serving member of that body, when he retired in 1952 at age 89. Doughton was a quiet but critically important player in the Democratic Congress that enacted the New Deal. He chaired the Ways and Means Committee for the entirety of Franklin Roosevelt’s presidency and helped shepherd the National Industrial Recovery Act and the Revenue Acts of 1935 and 1937 through the House. Doughton was also instrumental in getting the body to pass the Social Security Act, establishing America’s public pension plan and the crown jewel of federal government programs. He was not particularly enthusiastic about the idea, but once fellow Democrat David Lewis of Maryland had introduced a version, Doughton began working closely with the legislation’s chief architect, Sen. Robert Wagner of New York. Keen to get credit for this seminal achievement, the usually modest Doughton substituted his own bill for Lewis’s, ensuring the press would call the measure Wagner-Doughton.         

Another “mountain man,” Bob Reynolds, served two terms in the Senate, again covering the FDR presidency. Reynolds’ personal life was colorful, to say the least. He married five times, became a wealthy widower after the death of his first wife, and spent his pre-Washington career as an itinerant vaudeville performer, voracious womanizer, and quixotic political candidate. In 1932, he found a winning populist message in the Democratic primary against incumbent Cameron Morrison. Reynolds had a refreshingly honest approach and an uncanny ability to expose haughtiness in elites. He initially supported the president, particularly the public works programs that brought federal funds flooding into the rural South. But there was another side. Despite having traveled the globe, Reynolds was an ardent isolationist wary of the administration’s surreptitious support of Britain in the prelude to war. Many thought him a fascist sympathetic to Nazi Germany. N.C. Democrats rejected his effort to win a third term in 1944.    

Andy Taylor is a professor of political science at the School of International and Public Affairs at the N.C. State University. He does not speak for the university. 

Categories: Public Policy

Please mind your own business

Wed, 2018-11-14 01:01

Not that it is really in my interest to say this, but many of our political debates are a waste of time.

They may well be about important issues. But they go nowhere. The two “sides” disagree strenuously without making a real effort to understand what their foes are saying.

So here’s a little time-saver the next time you get into such a debate. Assuming you’re somewhat on my ideological wavelength, just tell your opponent, “Mind your own business.”

No, I don’t mean give him the brush-off. “Mind your own business” is a pretty meaningful phrase, if you think about it, and nicely describes a key element of the freedom philosophy as articulated by English philosopher John Locke in the 17th century, the American Founders of the 18th century, and free-market scholars of the 19th and 20th centuries.

I say that it describes a “key element” of the philosophy because it is not, by itself, the philosophy. There are other aspects, and areas of substantial disagreement among those who otherwise agree on the primacy of liberty in politics. But as a starting point, “Mind your own business” suffices.

As it happens, the phrase did originate with a famous English writer and thinker of the 17th century. No, it wasn’t John Locke. It was one of his intellectual forebears and heroes, Sir Francis Bacon. A lawyer, statesman, and essayist who lived from 1561 to 1626, Bacon served in several posts in the Stuart monarchy of the early 17th century, ran afoul of many powerful politicians, got removed from office amid allegations of bribery, and then retired to write and conduct scientific experiments.

It was only in about the 1500s that speakers of English began to use the term “business” to refer to trade or commercial activities, so earlier usages would have had a different connotation than the one usually ascribed to Bacon’s phrase.

It’s worth considering the original meaning, though. The word “business” seems to have come from the obvious: “busy-ness.” It referred to something that kept one “busy,” that made one anxious or uneasy. Later came the notion that “business” was a particular matter needing one’s attention.

Consider two different ways to understand the phrase “mind your own business” in a political context. First of all, it basically means “butt out.” Don’t fixate on, or try to prohibit or regulate, what someone else is doing — unless, of course, that person’s actions would impinge on your own freedom. Applying this principle in public policy doesn’t invalidate government action. It demands government action, but only to maximize the freedom of individuals to make choices and act on them.

The second meaning is more literal: pay attention to your own needs. This may sound presumptuous to say, perhaps even somewhat in tension with the first meaning. After all, who are you to demand this of me? Shouldn’t I have the freedom not to mind my own business, my own personal or financial affairs, if I don’t want to?

Up to a point, yes. But practical people — and both Bacon and Locke were immensely practical as well as philosophical thinkers — understand that it can be hard to contain the effects of irresponsible personal decisions.

Adults who don’t adequately care for their children or their elders generate a problem that, perhaps contrary to good sense or libertarian principle, inevitably becomes a public one. People who don’t save for a rainy day, who don’t finish school and make sure they have a marketable skill, who indulge personal vices and addictions, who drive recklessly and act foolishly — in short, people who don’t mind their own business very well — somehow end up costing the rest of us a lot of our money and often quite a lot of our freedom when politicians pass laws to “save them” and help others avoid their fate.

I think that we might have a better chance of getting governmental busybodies to mind their own business if we really and truly minded our own business.

John Hood (@JohnHoodNC) is chairman of the John Locke Foundation and appears on “NC SPIN,” broadcast statewide Fridays at 7:30 p.m. and Sundays at 12:30 p.m. on UNC-TV.

Categories: Public Policy

Next session gives lawmakers chance to practice for 2019

Tue, 2018-11-13 04:02

Just seven weeks remain for veto-proof Republican supermajorities in the N.C. General Assembly. That gives GOP lawmakers plenty of time to craft, unveil, and approve new legislation.

They don’t need support from Democratic Gov. Roy Cooper. They need no input from Democratic colleagues in the House or Senate. Acting on their own, Republican legislators face a relatively clear path to enact their favorite policies.

The urge to end the 2017-18 legislative session with a bang will prove tempting. Lawmakers should fight the temptation.

Regardless of the supermajorities, the General Assembly has plenty of work to do when it reconvenes Nov. 27 in Raleigh. The post-Thanksgiving session also offers lawmakers a chance to practice for the new political reality voters have created for 2019.

That reality includes a House and Senate still under control of Republican leadership. But GOP members will no longer enjoy the luxury of sidestepping all objections from the Democratic caucus. Nor will Republican leaders be able to ignore complaints from the Executive Mansion.

With a new legislative lineup taking office next year, a united GOP will need at least one Democratic senator and a half dozen Democratic representatives to help them override a Cooper veto. That’s not impossible. But it will require work.

In other cases, legislative leaders can strive to bring the governor on board to support their plans. Any time he’s willing to leave the veto stamp in his desk drawer, lawmakers can spend less time worrying about counting to 72 and 30 — the number of House and Senate members needed to override Cooper’s objections.

New legislative constraints take effect Jan. 1. There’s no reason why lawmakers have to wait until the new year to test those constraints. They will have multiple opportunities in the weeks ahead to conduct practice runs.

Three of the four constitutional amendments voters approved last week could require new laws. The tax-cap amendment offers the single exception. That amendment simply changed one word in the existing N.C. Constitution.

It’s not entirely clear whether new amendments promoting crime victims’ rights and hunting and fishing rights require immediate action. If so, Republicans need not craft measures that would bring their supermajorities into play.

Forty-six legislative Democrats — 77 percent of that party’s caucus — approved placing the crime victims’ amendment on the ballot. Twenty-seven Democrats backed the hunting and fishing amendment. One suspects well-drafted implementing legislation for both measures could win a fair amount of bipartisan support.

The voter ID amendment presents a different story. No legislative Democrat supported placing the measure on the ballot. Recent debates for and against a photo identification requirement have tended to emphasize partisan division.

But the same electorate that gave Democrats victories in every contested statewide election also approved the voter ID amendment with more than 55 percent of the total vote. More than 2 million people cast ballots favoring the measure. It clearly has a degree of bipartisan support.

Now that the constitution mandates a voter ID, lawmakers must fill in details. As they decide which forms of identification will prove acceptable, and as they consider possible exemptions, Republican leaders might find some support from open-minded Democratic colleagues.

It wouldn’t hurt to start discussions by looking at requirements that have cleared legislatures and survived court challenges in the 34 other states with voter ID. With 70 percent of states now enforcing some ID rules, the issue clearly goes beyond basic red-versus-blue partisan fights.

Three of our four neighboring states employ the strictest form of photo ID requirement, according to the National Conference of State Legislatures. That includes blue-trending Virginia. As North Carolina sheds its status as the only Southeastern state with no voter ID rules, Republicans can invite their colleagues from across the aisle to help the state re-enter the electoral mainstream.

Beyond the constitutional amendments, lawmakers need to take some action soon on the future of state elections oversight and ethics enforcement. Voters rejected a proposed amendment creating a new bipartisan board to deal with those issues. Meanwhile, a state court has struck down the current elections and ethics board. It’s slated to go away in early December.

If GOP legislators seek input from Democratic counterparts on a replacement, they could find some takers. There must be bipartisan interest in creating some certainty in elections and ethics enforcement before the next electoral cycle begins.

Bipartisan outreach undoubtedly would catch some Democrats off guard. During a presentation last week for the Institute of Politics at UNC-Chapel Hill, Cooper strategist Morgan Jackson indicated that the governor expected lawmakers to engage in “payback” when they returned to Raleigh. GOP legislators want to punish Cooper for campaigning against their supermajorities, Jackson argued.

At least one lawmaker is on record expressing similar sentiments. “I wouldn’t be surprised to see quite a few things appearing on the agenda that none of us are aware of today,” Sen. Floyd McKissick, D-Durham, told Raleigh’s News and Observer.

Jackson and McKissick might be correct. Like the teenager approaching his 18th birthday and adulthood, some GOP lawmakers might relish a chance to run wild before the new circumstances of Jan. 1 rein them in.

Those seeking a productive 2019 legislative session ought to pursue an alternative course.

Mitch Kokai is senior political analyst for the John Locke Foundation.

Categories: Public Policy

Suburbs hold key to GOP future

Mon, 2018-11-12 01:01

Democrats achieved significant victories this year in the “inner suburbs” of Charlotte, Raleigh, Greensboro, and North Carolina’s other major cities — tossing out GOP incumbents in the General Assembly, county commissions, and other offices.

Although Republicans did better in the “outer suburbs,” in the counties that ring the state’s urban cores, they would be wise not to draw too much comfort from that fact. If Democrats can retain the allegiance of inner-suburb voters, the GOP will struggle in future elections.

For all the pre-election hoopla about an increasingly Trumpy GOP repelling suburban women into the Democratic column, the actual results suggest a broader narrative.

According to the nationwide exit polls (no North Carolina-specific polling is yet available), women did, indeed, shift about 4 percentage points away from the Republicans in 2018 as compared to 2016. But men shifted in the same direction by the same margin. Moreover, these Democratic gains in voter preference occurred in urban, suburban, and rural areas.

So why focus on the suburbs? One reason is that a disproportionate number of the competitive races for Congress, legislature, and local offices are found there. Losing a few points in urban cores won’t matter to Republicans likely to lose there, anyway, while losing a few points in rural districts won’t keep them from winning there.

Another reason is that the inner and outer suburbs together are the largest single bloc of votes in most states. When Republicans win statewide races in places such as North Carolina, it’s because they combine dominance in rural areas with sizable victories in the suburbs, thus offsetting big losses in urban cores.

Here’s the situation in a nutshell. Even in a midterm election, there are swing voters. You’ll find them all over the place, but they are disproportionately located in inner suburbs. They constitute only a few percentage points of the electorate, but that’s enough to tip close races one way or the other — and with respect to the suburban gains that North Carolina Democrats made in 2018, most of their winning margins were within four percentage points. Some were within two points.

We know North Carolina Republicans can do well among these voters, because that’s what had happened in recent election cycles until 2018. So, how can the GOP bring them back into the fold in 2020?

It’s not a choice between style or substance for these voters. They value both. Whatever effect President Trump’s bombast and balderdash may have elsewhere, his style clearly turns off these swing voters. State-level Republicans can’t do much about that. But they can focus their policies and campaigns more on the substantive issues that drive this disproportionately suburban vote.

Whether the subject is education, health care, traffic congestion, or something else, these voters are seeking a good value. They want better services, yes. Despite what the Left believes, however, these voters aren’t oblivious to cost. They believe they pay enough already — in the form of taxes, insurance premiums, copays, and vehicle registrations. They want basic services to be delivered more effectively, not more expensively.

North Carolina Republicans thought it was enough to remind voters of recent tax cuts. But that was a backward-looking message. What did GOP candidates say about their future plans?

Here’s what they should have said: we’re going to get you a better value for your dollar. For example, we’re going to make it easier for you to shop around for the best deal in health care. That means more “minute clinics” staffed by nurse practitioners, more online consultation, and more choices in health plans.

Stuck in traffic? We’re going to squeeze more waste out of the transportation budget so we can spend more of your tax money fixing and adding lanes to the jam-packed roads in fast-growing communities.

Repeating talking points about immigration or symbolic issues annoys these North Carolinians. Enough of them switched sides in 2018 to give Democrats some key victories. If Republicans want to avoid a replay in 2020, a different approach is needed.

John Hood (@JohnHoodNC) is chairman of the John Locke Foundation and appears on “NC SPIN,” broadcast statewide Fridays at 7:30 p.m. and Sundays at 12:30 p.m. on UNC-TV.

Categories: Public Policy

Wall Street Journal: ‘State AGs for rent.’ What about N.C.?

Fri, 2018-11-09 04:00

The Wall Street Journal warns of a troubling new scheme. It gives privately funded environmental litigator/activists (who are unaccountable to the people) state police power:

In August 2017 the NYU outfit emailed then-New York Attorney General Eric Schneiderman’s office that demonstrated how the new attorneys would be used. These privately funded staffers would work out of an AG’s office for two years and deliver quarterly progress reports to the State Energy and Environmental Impact Center. …

In the New York case, a special interest is funding staffers who could wield state law-enforcement power to punish opponents.

The State Energy and Environmental Impact Center made clear that state AG offices would only qualify for special assistant AGs if they “demonstrate a need and commitment to defending environmental values and advancing progressive clean energy, climate change, and environmental legal positions,” according to the August 2017 email to numerous AGs. Mr. Schneiderman’s office suggested in its application for the fellows that it “needs additional attorney resources to assist” in extracting compensation from fossil-fuel emitters.

That’s exactly what’s happening. …

Blatant ethical problems

WSJ points out that so far “at least” seven other AG offices have signed on to this scheme, the others being Maryland, Massachusetts, Oregon, Washington, Illinois, New Mexico, and the District of Columbia.

They warn:

The ethical problems here should be obvious. Private interests are leveraging the police powers of the state to pursue their political agenda, while a government official is letting private interests appear to influence enforcement decisions. None of this is reassuring about the fair administration of justice.

What about North Carolina?

In order for a state attorney general to “qualify” for outside agitators using his office’s police powers to pursue their private agenda,* the AG must “demonstrate a need and commitment to defending environmental values and advancing progressive clean energy, climate change, and environmental legal positions.”

Just in the past two weeks, N.C. Attorney General Josh Stein has joined with all those AGs identified by the WSJ above, plus a few others, in high-profile, national environmental fights:

Is that “demonstrating” fealty sufficient for this special-interest outfit? Would Gov. Roy Cooper’s “climate change” executive order also play a role in demonstrating fealty?

Anyone interested in constitutional, accountable, transparent government — anyone interested in good government — should hope Stein stays far away from this dangerous scheme and any similar ones.

* Even if you like the particular private agenda, think about the corruption and dangerous precedent-setting of such a practice!

 Jon Sanders is director of regulatory studies at the John Locke Foundation.
Categories: Public Policy

State ABC Commission rewards local boards for their ‘hard work’

Thu, 2018-11-08 04:00

Members who serve on the 168 boards that control local alcohol sales in North Carolina are doing good work.

Know how we know?

Because state Alcoholic Beverage Control Commission officials, including one who’s no longer with the agency, say so.

The ABC is giving these boards a bonus of sorts. For all their “hard work.”

Former ABC administrator Bob Hamilton left the agency in late July, about two weeks before the state auditor released a report saying the N.C. Alcoholic Beverage Control Commission has over past years cost the state about $13.5 million.

Hamilton, ABC meeting minutes say, reported that ABC staff recommended reducing the bailment surcharge — $1.40 per case — to $1.15 per case. (Bailment charges and fees are imposed on each case of liquor shipped from an ABC warehouse).

The formula for pricing a bottle of liquor in North Carolina is, well, complicated. The cost to the consumer is the result of myriad fees and taxes, including the bailment fee and local markup, as well as state and federal excise taxes, state sales taxes, and bottle charges.

Guess who ends up paying more?

A bottle of, say, Jim Beam white label bourbon will cost you $16.95 for a 750-milliliter bottle at any ABC store in this state. In Virginia, also a control state, that bottle will cost $14.99, according to the Virginia ABC website. In South Carolina — not a control state — that same bottle, a quick web search tells me, is fewer than $12 at some stores and fewer than $11 at others.

On to the “bonus.”

The local markup for a bottle of liquor in North Carolina has stood at 39.5 percent. To help make up for the bailment reduction, ABC decided to increase the markup to 39.6 percent.

The increase in the markup for local boards would cover operating expenses, the ABC says.

As Hamilton explained, according to the minutes, “this increase would allow the boards to return more funds to their local communities without the need for suppliers to increase their pricing. … Hamilton added the consumers would not experience an increase to their cost for liquor as a result of the increase in the markup percentage [when paired with the lower surcharge].”

ABC Chairman A.D. “Zander” Guy doubled down, saying “this is a way for the Commission to show its appreciation for the work of the ABC Boards.”

He also mentioned the boards’ “hard work,” the minutes say.

Board members are paid from money generated by local alcohol sales. Each local ABC board, the commission says, may set its own compensation, as long as it doesn’t exceed $150 per board meeting, according to state statute.

Joe Wall of the N.C. Association of ABC Boards was quite pleased with the change.

But what about the consumers, many of whom, in my mind, are getting played by a monopolistic system run by people and special interests intent on locking it down for the foreseeable future? How else can one explain the commission’s sudden generosity with money to localities funneled through a group of people appointed by local politicians, who, then, are paid for their “hard work?” Looking at the ABC system as a whole, these are people who hold unfettered power to control what should be a free and open market. People who control markups, surcharges and fees. Who control prices, which aren’t dropping despite record profits. 

Rep. Chuck McGrady, R-Henderson, has a fundamental problem with the markup change.

“One has to wonder if the ABC board markup functions like a tax, and if so, should it be set by the legislature?” McGrady asks.

In May, the state’s Program Evaluation Division released a follow-up report to “North Carolina’s Alcohol Beverage Control System Is Outdated and Needs Modernization.” That initial report was released in 2008.

“Since performance standards were initiated in 2011,” the latest report says, “local ABC board compliance with the standards has increased the overall profit percentage for the ABC system from 8.5 percent to 11.2 percent,  the percentage of boards with profit margins of 5 percent or more from 44 percent to 72 percent, and the percentage of local ABC boards with operating margins that match or exceed private liquor retailers from 31 percent to 62 percent.”

In fiscal 2006-07, the PED report says, total revenue for liquor sales in North Carolina was almost $692 million. For fiscal 2016-17, total revenue was more than $1.1 billion, about $74.5 million of which went to county and city governments.

Overall, the report says, the profit percentage for the ABC system increased from 8.54 percent for fiscal 2010-11 to 11.19 percent for fiscal 2016-17. The percentage of boards with profit margins of 10 percent or more increased from 10.1 percent to 19.6 percent. Since performance standards were implemented in 2011, 62 percent of local ABC boards have operating margins that match or exceed private liquor stores in South Carolina and Florida, the PED study says.

Beyond the idea of buying loyalty, the ABC, regardless of profit margins, are unwilling to lower prices, save the across-the-board monthly specials. The ABC, of course, has no competition, so why would it? 



Categories: Public Policy

Voters opt for split decision

Wed, 2018-11-07 01:01

If you expected the 2018 midterm elections to settle all scores and clarify all unanswered political questions in the era of Donald Trump, you were just asking for disappointment — and that’s what voters gave you.

In North Carolina and around the country, Democrats enjoyed quite a few victories. They recruited good candidates, raised gobs of money, and deployed solid campaigns. Winning the U.S. House, netting some governorships and legislative chambers, and breaking the GOP supermajorities in the North Carolina legislature were all impressive accomplishments.

But as the election returns came in, most Republicans were actually breathing a sigh of relief. Earlier in the year, they feared the worst: a massive anti-Trump blue wave that would give Democrats historic gains in Washington and the states. It didn’t materialize.

Republicans actually gained seats in the U.S. Senate, including defeats of longtime Democratic incumbents. The Democrats’ House gain was close to the historical average for midterms — so much for Trump upending all the political rules — and key governorships in Florida and Ohio stayed in Republican hands.

In North Carolina, Democrats underperformed in congressional races and overperformed in state ones. None of the three targeted U.S. House seats — the 2nd district in the Triangle, the 13th district in the Triad, and the 9th district stretching from Charlotte to the Sandhills — flipped from red to blue, despite the influx of vast resources to the three Democratic campaigns.

The Democrats’ investment in state races was far more productive. In the 12 midterm elections since 1970, the party not controlling the White House has gained an average of 11 seats in the state legislature — an average of eight seats in the N.C. House and three seats in the Senate. Although some close races were not yet called by my deadline, it looks like state Democrats have beaten both spreads, with particularly noteworthy success in urban counties.

Seven of the 10 seats Republicans lost in the House, and two of the six seats they lost in the Senate, were in Mecklenburg and Wake. Indeed, only two Republican lawmakers, Sens. Dan Bishop and John Alexander, was left standing in North Carolina’s two most-populous counties. As for Guilford County, it delivered another of the Democrats’ Senate pickups while longtime Republican Sheriff B.J. Barnes went down to surprising defeat (as did Wake County’s Republican sheriff, Donnie Harrison).

As for statewide contests, Republican lawmakers struck out with their two attempts to reduce the institutional power of Democratic Gov. Roy Cooper. Voters said no to constitutional amendments that would have created an evenly bipartisan state elections board and limited the governor’s ability to fill judicial vacancies. Most important of all, arguably, were the Democrats’ victories in races for appellate courts. With the election of Anita Earls — an outcome Republicans themselves may have aided by eliminating judicial primaries and allowing two GOP candidates to split the right-leaning vote — the North Carolina Supreme Court has a solid 5-2 Democratic majority.

State Democrats are happy with these outcomes, understandably so. But Republicans did maintain control over the most powerful branch of state government, the General Assembly, with still-healthy majorities in the House and Senate. They also celebrated voter approval of constitutional amendments that instituted a photo ID to vote and protected the rights of taxpayers, hunters, and victims of crime.

North Carolina is a closely divided state. We are going to have highly competitive elections for years to come. The 2018 results actually present both parties with tough challenges.

Republicans are clearly struggling to hold the loyalty of suburban voters in counties such as Mecklenburg, Wake, and Guilford. While disaffection with Trump may be a factor, GOP candidates also failed to align their messages with the priorities of these voters.

At the same time, Democrats fell short in a number of potentially winnable races elsewhere in the state. They can break supermajorities by winning urban districts. But that won’t be enough to put them in charge of the state legislature.

Back to work. Up next: the 2020 cycle.

John Hood (@JohnHoodNC) is chairman of the John Locke Foundation and appears on “NC SPIN,” broadcast statewide Fridays at 7:30 p.m. and Sundays at 12:30 p.m. on UNC-TV.

Categories: Public Policy

Civilizing forces needed in fight against partisan hatred

Tue, 2018-11-06 04:02

I’m only half joking when I argue that a true sports fan loathes his archrival more than he loves his own team.

Sure, it’s an exaggeration. But one suspects that at least some Boston Red Sox supporters enjoy feasting on New York Yankee futility more than they celebrate their own team’s fourth World Series title in 15 years. (Don’t believe me? You’ve never heard a New England crowd break into a “Yankees suck” chant … at a Pearl Jam concert.)

Within reason, a heated rivalry enhances our love of sporting events. But one nationally recognized pundit is drawing attention to the negative impact in the world of politics from a similar us-versus-them mentality.

“You have an enormous rise in what they call ‘negative partisanship.’” That’s the observation from Jonah Goldberg, a scholar at the American Enterprise Institute and senior editor at the conservative publication National Review. Goldberg chatted with Carolina Journal in Chapel Hill, just before an Oct. 29 speech sponsored by the Carolina Liberty Foundation and UNC College Republicans.

“There are millions of people who … the only reason they call themselves Democrats is because they hate Republicans,” Goldberg explained. “And the only reason why millions of people call themselves Republicans is because they hate Democrats. That’s a very tribal way of viewing the world.”

Goldberg assigns the blame to human nature. “Our brains are designed to see people like us — or the people that we form coalitions with — as good, and everybody outside is the dangerous other,” he said. “That’s defining so much of our politics these days. … People say that it’s worth being a jerk so long as the right people are offended.”

Examples emerge on both sides of the partisan divide. “People defend some of the things Donald Trump says or tweets purely on the grounds that liberal tears are delicious,” Goldberg contends. “You see the same phenomenon on the left, with people going after the right — mocking religion, mocking traditionalism — purely because it makes [Vice President] Mike Pence sad. This is a profoundly unhealthy way to think about politics.”

Now is a good time to remind ourselves about the original role of politics. “Go back to Aristotle,” Goldberg said. “It’s supposed to be about persuasion, about convincing someone that their interests are better served by being a member of your coalition than the coalition they’re currently in.”

Goldberg says the conservative movement “got into a cul-de-sac” by ignoring the importance of persuasion and appeals to reason. “Instead we emphasize purity,” he said. “We said that if anybody doesn’t agree with us entirely that they’re a squish or a RINO. Once you start emphasizing purity — on the left or the right — you are necessarily pushing away people who might agree with you on a lot and might be members of your coalition.”

A favorite New Yorker cartoon illustrates Goldberg’s point. “It has two dogs at a bar,” he explains. “They’re drinking martinis. One dog says to the other, ‘You know, it’s not good enough that dogs succeed. Cats must also fail.’ That’s the essence of our tribal politics these days.”

“We care less about winning save as measured by whether it’s making the opposition lose or feel like losers,” Goldberg added. “That has no limiting principle to it, which is why our politics continues to get uglier and uglier. It’s like the junkie who needs to keep upping the purity or the quantity of the dose. We need to constantly mainline more outrage about how terrible the other people are or how unfair they’re being to us.”

Natural tribal tendencies should not prevail. “We understand that a functioning society needs to hold that stuff at bay,” Goldberg said. “The only real way you can hold human nature at bay is by civilizing people, by teaching people right from wrong. And when you don’t do that, human nature comes rushing back in. That’s the real source of corruption in life.”

One key obstacle: Civilizing forces have weakened in the United States and across the West. “When you teach people on a mass scale that they are the ultimate arbiter of right and wrong — that they are their own priests — it becomes much more difficult to get people to have a sense of what is good for the greater good or what is simply right and wrong beyond a utilitarian calculus. … As a culture, that system has broken down. It’s broken down because these institutions are no longer able to do their job, starting with the family.”

Despite his complaints, Goldberg maintains a degree of optimism. “We’re going to learn some lessons from the Obama years and from the Trump years,” he said. “We have a choice to act upon those lessons or to compound the problems that led us that way. One of the great things about liberal democratic capitalism is its capacity for self-correction. I still think we have that.”

One hopes that Goldberg’s optimism bears fruit.

It hurts no one when a Michigan fan lustily cheers a loss for my beloved Ohio State Buckeyes. We all lose when we treat political divisions with the same degree of red-hot hatred.

Mitch Kokai is senior political analyst for the John Locke Foundation.

Categories: Public Policy

What to do if you lose

Mon, 2018-11-05 01:01

As I write, the results of the 2018 midterm elections are not yet known. By the time some readers see this, it’s possible that the long-predicted blue wave will have washed away GOP majorities in Washington and at least the supermajorities Republicans enjoy in the North Carolina General Assembly.

Alternatively, perhaps it will have turned out that Republican and GOP-leaning voters rallied to the red standard in the final weeks of the campaign — joined by swing voters breaking rightward late — and Democrats have underperformed expectations to such an extent that they are dejected and Republicans are relieved.

My observations, then, are truly meant to apply to either scenario, or to some other electoral outcome that lies somewhere in-between — or even further out on the blue or red spectrum than the scenarios I described. If you find yourself on the losing end of the 2018 midterms, please consider the following suggestions as offering potential benefits for yourself and for our republic as a whole.

First, while mourning a disappointing cycle is inevitable, don’t wallow in grief or yield to persistent bitterness. It’s probably not the first time a political result has disappointed you, and it certainly won’t be the last. While every election is important, the repeated claim that “this election is our last chance to avoid disaster” is more hysterical than historical.

After the 1992 elections, triumphant Democrats proclaimed that with Baby Boomers finally assuming the reins of political power in America, the Reagan-era GOP coalition was no more. Two years later, that coalition roared back to capture both houses of Congress for the first time in nearly half a century, as well as dozens of governorships, legislative chambers, and other state and local offices. Two years after that, in 1996, the resurgent Republicans failed to defeat Bill Clinton for reelection, then lost ground in the 1998 midterms.

Partisan fortunes continued to ebb and flow. After the 2004 elections, triumphant Republicans proclaimed a new majority. Two years later, they took it on the chin in the midterms, then saw Barack Obama elected in 2008. Now, indeed, was the GOP truly finished? Nope. A massive red wave built over the next two years. Rinse, repeat.

By now, it should be obvious that a single election cycle, be it presidential or midterm, rarely settles anything. It matters. It can lead to major shifts in public policy and make or break individual politicians. But another cycle comes around soon enough.

My second suggestion is to focus on that next election. It will present you with many new opportunities. And one of the (perhaps few) saving graces of a “down” cycle is that it often produces useful lessons. You find out which candidates looked better on paper than they ended up looking to voters. You find out which messages resonate and which ones flop. Choose to learn, not to burn with righteous indignation.

Third, you should resist the temptation to delegitimize the results of an electoral loss unless you have compelling evidence of massive criminal wrongdoing. If the other side raised and spent more than your side did, or got more favorable media coverage, or benefitted from favorable district lines, or had better luck, these might be valid explanations for your loss. They are not, however, excuses to launch cynical attacks.

Although you may strongly disagree with the views and priorities of victorious politicians against whose election you worked, keep in mind that they believe their public service — for which they will likely sacrifice personal time, income, privacy, or all of the above — will advance the public good as they see it.

You can disagree strongly with your political rivals without demonizing or wishing misfortune on them. Just as they should avoid being obnoxious winners in the coming months, you should avoid being a sore loser. Next time around, the results could be reversed. How would you like to be treated in that case? This is always a good rule to follow. One might even call it golden.

John Hood (@JohnHoodNC) is chairman of the John Locke Foundation and appears on “NC SPIN,” broadcast statewide Fridays at 7:30 p.m. and Sundays at 12:30 p.m. on UNC-TV.

Categories: Public Policy

Cooper’s $58 million pipeline agreement under the microscope

Fri, 2018-11-02 04:00

From the time it was announced in January, the agreement between Gov. Roy Cooper and the companies building the Atlantic Coast Pipeline  invited questions about its constitutionality, legality, and practicality. North Carolinians are poised to get answers when work by a subcommittee of the Joint Legislative Commission on Governmental Operations gets under way Nov. 14.

At issue is the $58 million Memorandum of Understanding announced by Cooper hours after the Department of Environmental Quality provided certification for work on the pipeline to continue on its route through eastern North Carolina. The permit was announced by DEQ on Jan. 26 and the MOU had been agreed to by both parties only the day before, raising questions of timing and pay-to-play. Eyebrows were raised further when it was revealed the agreement is between the ACP partners and Cooper himself, not the State of North Carolina.

The controversy was heightened by Rep. Pricey Harrison, D-Guilford, when she said, as reported by WRAL, that it “wasn’t that they were paying $57 million or whatever it was to get the permit. It was just that that was a condition of getting the permit granted was the access to this fund that would try to undo some of the damage that was created by the pipeline, and that seems like a legitimate use.” Harrison later asserted her comment was inaccurate.

The constitutional question over who controls the money was dealt with swiftly. Under our constitution, only the legislature can appropriate funds that come to the state. By directing the $58 million directly to an escrow account controlled by him, Cooper attempted to circumvent the constitution. Shortly after the MOU was announced, the General Assembly passed legislation redirecting the funds to the state treasury.

That leaves open the issue about the timing of the MOU and the permit. We don’t yet have enough information to draw a firm conclusion. In laying out the case for an investigation on Aug. 29, Sen. Paul Newton, a Republican who represents Cabarrus and Union counties, cited monthly requests from DEQ to ACP partners for additional information that potentially delayed final approval. In his presentation, he asked whether those requests were “levers to stall the issuance of the permit until the MOU was fully negotiated.” Such an abuse of the review process would be serious, and one that career staff at DEQ would be loath to implement. The committee could clear the air on this issue by questioning DEQ staff.

Hopefully, the subcommittee will learn whether (a) the timing of the permit and the MOU was a coincidence, (b) the pipeline partners sought to voluntarily pay for the permits in a quid pro quo memorialized in the MOU, or (c) the ACP partners were forced to pay as implied by Newton.

We’ve waited the good part of a year for answers about whether or not the state’s environmental permitting process is transparent and fair, and whether the state constitution is respected. Let’s hope the answer to both is yes. But if this MOU shows something is amiss, let’s find out why and, together, set about to make things right.

 Joe Coletti is senior fellow at the John Locke Foundation, where he examines fiscal and tax policy. He previously headed the N.C. Government Efficiency and Reform initiative within the Office of State Budget and Management.

Categories: Public Policy

Do relocating businesses care about public school spending? 

Thu, 2018-11-01 04:00

A common justification for more government spending on public schools is that such “investments” are a critical factor in driving businesses to a state. Presumably, the increase in spending leads to an increase in quality, and higher quality schools produce a more capable workforce. While there is some merit to the latter claim, the relationship between spending and quality has always been tenuous, at best, as decades of empirical research has identified a host of non-pecuniary factors that affect school quality. 

Research notwithstanding, elected officials, chambers of commerce, economic development officials, and public school advocates insist public school spending is a key criterion for making relocation or expansion decisions. In August, the Charlotte Business Journal declared North Carolina is “not making the grade” in attracting new businesses to the state. Their proof? The state had dropped from No. 5 to No. 9 on CNBC’s America’s Top States for Business 2018 ranking. CNBC staff wrote, “A great workforce has businesses sticking with the Tar Heel State, but underfunded schools are infringing on success.”   

Despite their grave assessment, seven of the top 10 states in this year’s CNBC ranking spent less per student than the national average. The third-best state for business, Utah, has one of the lowest per-student expenditures in the nation. New York, which is second only to the District of Columbia in per-student spending, ranked 27th. As New Yorkers know, big-time spending on schools requires levels of state and local taxation that keeps new enterprises away and U-Haul dealers busy. 

Starting in the 1980s, researchers began producing empirical studies that tried to examine the relationship between state-specific characteristics and business relocation and expansion decisions.  Most researchers have found corporations prefer favorable tax, regulatory, and infrastructure conditions, rather than “quality of life” factors that economic development officials and others claim are instrumental in luring businesses to their respective states. 

For example, a 1999 Journal of Business Research study assessed a survey of businesses that had relocated, expanded, or been launched in Colorado. The respondents said the cost of office or plant, the availability of labor, and business operating costs were the most important considerations in their decision. The quality of primary/secondary education was, at best, a second-tier consideration, with only 10 percent of respondents saying that it was an “extremely important” factor. 

An article a year later in Policy Sciences asked similar questions to executives from 118 internationally owned firms in North Carolina. Of the 11 location factors that respondents were asked to consider, the perceived quality of schools and universities ranked fifth. Labor force factors, such as the availability of labor and wage rates, topped the list. State marketing efforts were dead last.  

Unsurprisingly, surveys of top business executives and managers agree with the research. According to a 2017 Site Selection Magazine survey of corporate real estate executives, workforce skills were identified as the most important location criteria, followed by transportation infrastructure, utilities, state and local taxes, and the availability and price of real estate. 

Although useful, research and rankings of business development and relocation criteria are based on perceptions, generalities, and various what-ifs. Insight into the actual decision-making processes that business executives undertake, as well as state responses to their deliberations, are more difficult to find. Fortunately, when Toyota and Mazda earlier this year announced that they planned to locate a new joint automobile plant in Alabama rather than North Carolina, WRAL published nearly 400 pages of N.C. Department of Commerce emails, text messages, and planning documents related to the negotiations.  

It’s possible the issue of public schools came up during a meeting or appeared in correspondence that was excluded from the documents obtained by WRAL. Nevertheless, the contents of the North Carolina proposal don’t mention per-student spending in North Carolina, which is slightly higher than Alabama, or even the quality of the public schools in Randolph and adjacent counties that bordered the megasite identified for the proposed plant. In the end, the existing supply chain for automotive parts in Alabama was the deciding factor. 

Business leaders know it’s not necessary to rely on state systems of public schools to meet their skilled workforce needs. Both interstate and international labor mobility can address deficiencies in local and regional markets. Why else would the North Carolina proposal to Toyota and Mazda include funds for the Japanese Saturday school? 

Dr. Terry Stoops is vice president of Research and director of Education Studies for the John Locke Foundation.



Categories: Public Policy

State offers strong value proposition

Wed, 2018-10-31 01:01

Where is the best place to find good employment opportunities in the technology industry? According to a new study by the Computer Technology Industry Association (CompTIA), it’s not Silicon Valley. It’s North Carolina.

The CompTIA analysis compared metropolitan areas across the country on the basis of how many tech jobs are currently available, the expected growth rate in those jobs over the coming months and years, and the cost of living.

Where these factors intersect is the basic question the study explores, by identifying communities where prospective workers can find “excellent career opportunities and a rewarding lifestyle,” as the report puts it, “where your tech job dollar will take you far.”

Companies based in San Jose and San Francisco still play an outsized role in the technology industry, of course, but these are very expensive places to live. Comparatively speaking, North Carolina isn’t. At the same time, our state is home to many start-ups and high-growth companies that either work in computing or information technology directly or specialize in applying technology solutions to business opportunities in finance, agriculture, medicine, manufacturing, and other fields.

This attractive combination explains why Charlotte and Raleigh ranked first and second, respectively, on CompTIA’s Tech Town Index for 2018. Austin, Texas came in third. San Jose, San Francisco, Dallas-Ft. Worth, Seattle, Denver, Atlanta, and Huntsville, Alabama rounded out the top 10. Durham-Chapel Hill, by the way, was a strong contender, as well, ranked 15th on the national list.

North Carolina is used to getting kudos for its business climate from national trade associations, research organizations, and media outlets. What drew my interest to this study is the emphasis on value rather than just on growth rates or average pay.

As we have seen play out in our state and elsewhere, conservatives and progressives propose different public policies because they start with different assumptions about the priorities of economic decisionmakers.

Conservative argue that cost matters a great deal. They assume that when a jurisdiction raises tax rates or imposes higher regulatory burdens, that dissuades employers, entrepreneurs, investors, and households from coming to or staying there. Progressives argue that service quality matters more. They assume that most employers, entrepreneurs, investors, and households would rather be in a place with high-quality public goods — financed by taxes or protected by regulations — even if that means the cost of living and doing business there is higher than in competing jurisdictions.

Based on the available empirical evidence, conservatives have the stronger argument. Most peer-reviewed studies of state and local economies shows that higher taxes and heavier regulations are associated with lower rates of economic growth. Most peer-reviewed studies do not find that spending more tax money on public services, including education and transportation, is associated with stronger growth.

That certainly doesn’t mean that these services aren’t valuable, or that government has no constructive role to play in economic development. In fact, this isn’t really a binary choice between service and cost. Think of it more like a spectrum. What economic decisionmakers are really seeking is their own “sweet spot” between the two poles. They are seeking value — good-quality services at the lowest possible cost.

Arguably, North Carolina is one of the nation’s leaders in delivering value, and is getting better at that with each passing year. Responsible state leaders have reduced the cost of government, no question about it. They’ve reduced and reformed the tax code while also eliminating counterproductive rules and streamlining the regulatory process.

But they have also improve the cost-effectiveness of North Carolina public services, including education, transportation, and even the criminal-justice system (by reducing the number of nonviolent offenders locked up at high cost in state prisons, so that our resources are focused on incarcerating the most-dangerous offenders).

In other words, North Carolina offers potential employers and employees an attractive value proposition: do your work here, rather than in California or the Northeast, and you will enjoy lower business costs and more-affordable housing options without sacrificing quality of life.

John Hood (@JohnHoodNC) is chairman of the John Locke Foundation and appears on “NC SPIN,” broadcast statewide Fridays at 7:30 p.m. and Sundays at 12:30 p.m. on UNC-TV.

Categories: Public Policy

Partisan election battle masks N.C. Supreme Court’s collegial character

Tue, 2018-10-30 04:02

In the heat of partisan battle, much discussion about North Carolina’s Supreme Court election focuses on the current split between the court’s Republicans and Democrats.

Democrats hold four of the high court’s seven seats today. They have a chance to extend their advantage to 5-2.

That’s significant. But a closer look at the state Supreme Court’s recent record suggests that campaign rhetoric tends to overstate the impact of partisan affiliation.

Republican incumbent Justice Barbara Jackson holds the only seat up for election this year. Democrat Anita Earls is trying to unseat Jackson. (A second Republican in the race, Chris Anglin, complicates matters. But Anglin has spent little campaign time promoting his own candidacy. Instead he has focused on complaining about partisan judicial elections and the GOP-led General Assembly.)

A Jackson win would maintain the court’s status quo. So it’s useful to look beyond campaign ads and news reports. Let’s investigate the justices’ actual track record with Jackson on board.

The N.C. Supreme Court has issued 137 opinions in the nearly two years since Democrats gained their 4-3 majority. As a Republican justice on a court dominated by Democrats, Jackson must have spent most of her time in the minority, right?

Not exactly. Jackson has voted with the court’s majority 133 times, a whopping 97 percent. Only Justice Sam Ervin IV, a Democrat, rivals Jackson’s record over the past two years. Sitting out a single case, Ervin has voted with the majority in 131 of 136 cases, or 96 percent.

To be fair, all seven justices vote with the majority most of the time. Even the most frequent dissenter, Democratic Justice Cheri Beasley, has voted with the majority in 123 cases (90 percent).

While the differences remain small, Jackson still stands out slightly from the court’s other two Republicans. Justice Paul Newby has voted with the majority in 130 cases (95 percent), and Chief Justice Mark Martin has cast his vote with the prevailing side 129 times in 136 cases (also 95 percent).

Given the numbers cited above, it might not surprise you to learn that Jackson also has been the justice least likely to take up her pen in opposition to her colleagues. While she has cast four dissenting votes over the past two years, she has authored only a single dissenting opinion. That was in 2017. Jackson is the only one of the seven current justices who hasn’t written a single dissent this year.

In contrast, Beasley has written seven dissents this year alone and eight over the two-year period. Martin has written five dissenting opinions, the most among the Republican justices.

The lack of dissenting opinions from Jackson does not indicate an unwillingness to write. With seven majority opinions this year, she trails only Ervin’s 10. Over the two-year period, Jackson ties Beasley and Martin in total majority opinions (11), trailing Ervin (20), Newby (13), and Justice Robin Hudson (12). The court’s most recent addition — Democratic Justice Michael Morgan — has written the fewest majority opinions (seven).

The numbers also show that the court’s Democratic justices tend to agree more often with Jackson than with either of the other two Republicans. In both 2017 and 2018, Jackson was the Republican justice most likely to agree with Beasley, Hudson, and Morgan.

Though Ervin agreed more often with Martin than with Jackson in 2017 (the difference was a single case out of 57), Ervin has agreed more often with Jackson this year than either Martin or Newby. In fact, the Democrat Ervin has agreed more often with Jackson this year (76 of 79 cases) than he has with any of his fellow Democrats.

The bottom line: Nothing in the record from the past two years suggests that Justice Barbara Jackson pushes a partisan agenda from the bench. To the extent that the court has an ideological center, the numbers suggest she occupies it.

It’s important to note that just one case during the last two years has focused on a political battle with partisan implications. In January’s 4-3 Cooper v. Berger ruling, the court’s Democrats joined together against their Republican colleagues, including Jackson. Democratic justices ruled in favor of Democratic Gov. Roy Cooper in a dispute involving the state board overseeing elections and ethics enforcement.

Partisan Democrats hope — and their Republican counterparts fear — that Earls would provide a reliable fifth vote in future political disputes. If so, Cooper could enjoy a greater advantage in his ongoing court fights against Republican legislators.

That’s entirely possible. And the prospect of that partisan shift has helped drive much of the energy in this fall’s Supreme Court election campaign.

But as far as typical business is concerned, the numbers point to a different conclusion: A state Supreme Court without Barbara Jackson will have lost its most striking example of bipartisan collegiality.

Mitch Kokai is senior political analyst for the John Locke Foundation.

Categories: Public Policy

Few voters split their tickets

Mon, 2018-10-29 01:01

Has politics become polarized? Even if you and I agree on little else, I’ll bet we agree that the answer is clearly yes. But as the wild and wacky elections of 2018 near their close, it’s worth considering what political polarization is — and what it is not.

Not that long ago, a significant share of voters split their tickets between the two major parties. They voted for Republican candidates for president and other federal offices, for example, even as they were perfectly willing to elect Democrats to state and local offices. That was a familiar pattern in Southern states.

Elsewhere, in electorates such as the Northeast corridor and some Western states, ticket-splitters often went the other way: Democratic for federal office, Republican down the ballot.

Here in North Carolina, as many as a quarter of voters used to be fairly reliable ticket-splitters. Indeed, as recently as 2004, Republican President George W. Bush won 56 percent of the North Carolina vote for reelection at the same time that Democratic Gov. Mike Easley won 56 percent of the vote for his reelection bid.

The electorate is much more polarized now. Does anyone truly believe that, say, in 2020 Roy Cooper could win reelection with 56 percent of the vote while Donald Trump won 56 percent of North Carolinians’ votes for president? Both won in 2016, of course, but their margins were either close (four points for Trump) or razor-thin (two-tenths of one percent for Cooper).

The share of voters truly up for grabs is probably in the single digits now in our state, and not much higher in most other states (although a healthy ticket-splitting contingent still exists in states such as Massachusetts and Maryland that are generally blue but seem poised to reelect their popular Republican governors by large margins).

The primary explanation, according to most analysts, is that the parties have become more ideologically standardized. Historical patterns of conservative Democrats in places like North Carolina and liberal Republicans in places like Connecticut have run their course. The two major parties have sorted themselves ideologically. Voters have followed suit.

The rise of the unaffiliated voter is not a challenge to this explanation, by the way. Joining a party and voting consistently for a party are not the same thing. Nearly a third of North Carolina voters have no partisan registration. There are more unaffiliated voters than there are registered Republicans. Still, the vast majority of these unaffiliated North Carolinians vote reliably red or reliably blue. They may not be joiners. But they have strong partisan preferences.

I have made this observation many times, and I stand by it. However, there is an ambiguity that sometimes causes confusion. To say that most voters have sorted themselves by party is not to say that there is only one kind of Republican or one kind of Democrat. The two major political parties remain broad coalitions, not the political equivalent of religious denominations.

Different analysts use different taxonomies to describe them. One longtime system, based on surveys by Gallup and other pollsters, identifies two different Republican-leaning groups, Conservatives and Libertarians, along with Progressives and Populists as Democratic groups plus a shrinking but still significant Centrist group in the middle.

Other taxonomies are more complicated. A new study called Hidden Tribes, published by the organization More in Common, has been making headlines recently. It identifies seven groups on a left-to-right scale: Progressive Activists, Traditional Liberals, Passive Liberals, Politically Disengaged, Moderates, Traditional Conservatives, and Devoted Conservatives.

Setting aside the pros and cons of each approach, the valuable part of such exercises is that they distinguish between partisan polarization and viewpoint polarization. Reliably Republican voters disagree among themselves on a variety of issues. So do voters in the Democratic coalition.

These disagreements can be passionate. But switching one’s partisan allegiance in response to such disagreements has become surprisingly rare. That’s polarization for you. It explains a lot about today’s politics. Whether the phenomenon will persist into the future is anyone’s guess.

John Hood (@JohnHoodNC) is chairman of the John Locke Foundation and appears on “NC SPIN,” broadcast statewide Fridays at 7:30 p.m. and Sundays at 12:30 p.m. on UNC-TV.

Categories: Public Policy

Weathering the storm through bold leadership 

Fri, 2018-10-26 04:00

If we learned one thing during the devastation and recovery from Hurricanes Florence and Michael, it’s that setting aside more than $2 billion in savings for a rainy day was a very good idea. But that $2 billion didn’t just magically appear. It came from hard decisions, focused priorities, bold leadership, and fiscal discipline. Thank goodness we had it. 

Beginning in 2011, the General Assembly recognized opportunity for real economic growth was possible if the right decisions were put into place as the state and nation began to recover from the Great Recession. It started with re-thinking our state budget and role of government and an understanding that lower taxes and fewer regulations would encourage business growth, lead to more jobs, and allow people to realize the fruits of their labor and, in turn, provide for themselves and their families. It worked. 

State government spending per person, adjusted for inflation since 2011, has been flat, with no increase in the cost of government. Every budget since 2011 has been kept at or below he growth of inflation plus inflation. Medicaid spending — which was the fastest growing segment of state government and 16 percent of the total budget — has been brought under control and is now responsibly managed. A $2.75 billion debt to the federal government for unemployment insurance was paid off.   

We’ve gone from a $600 million budget shortfall in 2011 to budget surpluses the past four years.  What have we done with that extra money? We’ve built the state’s savings reserves to the highest level in state history — more than $2 billion. Beginning in 2015, public school teachers have gotten five consecutive pay increases. State employees have had four consecutive pay increases. Just this year, most state employees got a 2 percent pay raise, with a mandated $15 an hour minimum wage. The State Highway Patrol got an 8 percent pay raise, correctional officers received a 4 percent raise, and lawmakers dedicated $15 million for prison security.   

There are two sides to the state’s finances — the spending and the revenue. Budget reforms controlled spending. Tax reforms allowed people to keep more of their money to spend how they chose. Since 2011, North Carolinians have gotten more than $15.8 billion in tax relief. The personal income tax has been reduced from a high of 7.75 percent to 5.25 percent, effective in 2019. Legislators allowed a one-cent temporary tax to expire in 2011, cutting the rate from 5.75 percent to 4.75 percent, a $1 billion annual tax break. The corporate tax has been slashed from 6.9 percent to 2.5 percent, the lowest rate of any state that charges a corporate tax. Many credits and carveouts have been eliminated, broadening the base and lowering the rate. The number of North Carolinians who pay no tax was increased when the standard deduction was increased. For a family of four filing jointly, the deduction went from $6,000 to $20,000.  

Reining in the growth of government and reforming an oppressive tax system, along with regulatory reform to get government off residents’ backs, education investments focused on kids — not unions — and a strategic transportation investment program to get politics out of infrastructure has worked. It has created an economy with unemployment at a 17-year low, record personal income and GDP growth, and more than 600,000 net new jobs.  

Economists agree. North Carolina’s economy is on track to continue strong growth through 2018 and into 2019. Job growth is expected to be the strongest since 2006. The latest revenue reports indicate yet another revenue surplus. A strong economy allows core functions of government to be funded, enables people to work and keep more of their money, and provides for extra revenue to be set aside in savings. 

The General Assembly held two special sessions to appropriate money from the rainy-day fund to help hurricane victims. As recovery continues, more of that money will be needed and spent.  All or most of it will be gone, and North Carolina will have another rainy day.  Will we be ready? Imagine if, instead of a reserve account to count on, lawmakers increased taxes as folks struggle to recovery from the devasting storm damage. The time to plan for the next storm is now. What kind of leadership is in place? Will they replenish that savings reserve, as the General Assembly has done, or will they spend the surplus, as the governor advocated? That $2 billion did not magically appear, and magic won’t get us through the next storm. Or the next. Disciplined fiscal management and bold leadership will. It starts in January 2019.  


Categories: Public Policy

Caring about sound science: Carbon is not carbon dioxide 

Thu, 2018-10-25 04:00

From Merriam-Webster

Carbon dioxide. A heavy colorless gas CO2 that does not support combustion, dissolves in water to form carbonic acid, is formed especially in animal respiration and in the decay or combustion of animal and vegetable matter, is absorbed from the air by plants in photosynthesis, and is used in the carbonation of beverages. 

Carbon. A nonmetallic chiefly tetravalent element found native (as in diamond and graphite) or as a constituent of coal, petroleum, and asphalt, of limestone and other carbonates, and of organic compounds or obtained artificially in varying degrees of purity especially as carbon black, lampblack, activated carbon, charcoal, and coke. 

It should be pretty clear carbon dioxide (CO2) and carbon aren’t the same things. CO2 is a colorless and odorless gas emitted when all animals exhale, and it’s given off when formerly living things — plants and animals — decay. Not mentioned by Merriam-Webster is that it’s also generated when these formerly living things, even after millions of years — as with the case of coal and oil — are burned. Also not mentioned by the online dictionary is the fact carbon dioxide, in addition to its role in photosynthesis, is what is called a “greenhouse gas.” That is, in conjunction with other gases, water vapor being the most dominant, acts as a blanket that keeps heat from escaping the atmosphere and prevents the planet from freezing over. Carbon dioxide is essential for sustaining life. 

Carbon, on the other hand, is a solid. It’s present in all living things and things that were once living. As noted, when these once-living things that contain carbon are burned, the carbon combines with oxygen to form carbon dioxide and is emitted into the atmosphere along with the CO2 that we exhale or that comes from decaying plant life. So, while it is one of the elements that goes into forming carbon dioxide, it’s no more the same as carbon dioxide than hydrogen or oxygen is the same as water. Water being two parts hydrogen (H2) and one part oxygen (O). 

So, why, in nearly all discussions of global warming, is the word “carbon” freely substituted for “carbon dioxide?” 

“Carbon emissions,” “carbon taxes,” “carbon footprint,” and “cost of carbon” all use the word carbon, when actually what’s being referred to is carbon dioxide. Carbon can’t logically be a substitute expression for carbon dioxide any more than hydrogen or oxygen can be a substitute expression for water. In the latter case, everyone would realize such a substitution would be silly and just bad science. And yet, when it comes to talking about carbon dioxide and carbon, the switch in terminology is made seamlessly and really without notice. In fact, it’s so common to refer to CO2 as carbon that it is done regularly by people on all sides of the global warming debate and even by government agencies, as with the expression “cost of carbon” used to describe the EPA’s estimate of how much emissions of carbon dioxide in the atmosphere are estimated to cost society. 

My speculation is the transformation of the legitimate and accurate “carbon dioxide” into the false and inaccurate “carbon” has been part of an effort, in this case, a quite successful one, to obfuscate what is really talked about. It is a tool of propaganda. Note that this has also been done with the substitution of “climate change” for “global warming,” despite the fact what’s referenced is the warming of the planet, not any general change in climate that occurs all the time. 

The word carbon congers up images, captured in Merriam-Webster’s definition, completely unrelated to carbon dioxide. In most people’s minds, carbon is associated with everything that is black and dirty — coal, charcoal, asphalt, carbon black, etc. Of course, none of these describe CO2, which is a colorless and odorless gas. If one wants the vision of black soot being emitted from power plant smokestacks and automobile tailpipes, then CO2 emissions will just not work. But, of course, that’s exactly what carbon emissions would look like. And it would hardly make sense to talk about colorless, odorless, and harmless CO2 emissions as contributing to “dirty air,” which is done regularly. But carbon? Now that’s something quite different. It’s black, it’s “sooty,” and if it were being emitted into the air as a result of heating our homes or driving our cars, it would make the air “dirty” by any standard. 

In discussions of global warming, we need to take back the language for sound science. Intentionally or not, it’s deceptive and misleading to refer to carbon dioxide as carbon. As noted, this is not just because they are, in fact, not the same thing but because they bring to mind two very different notions. The use of the word carbon allows special interest groups to transform the simple science into a tool of propaganda. Honest protagonists on either side of the global warming debate, particularly those who actually care about scientific accuracy, should make a concerted effort to reject substituting the word carbon for carbon dioxide. They should not only stop making the switch themselves but begin calling out others who continue the charade. 

 Roy Cordato is senior economist and resident scholar at the John Locke Foundation.

Categories: Public Policy

Amendment will protect state taxpayers

Wed, 2018-10-24 01:01

GASTONIA — If your taxable income is greater than $60,000, then you are at least a bit better off than the average North Carolinian. But does that make you wealthy?

There’s an amendment on the ballot this year to lower the state constitution’s cap on income-tax rates to 7 percent, down from the current 10 percent cap that has been in North Carolina’s constitution since the Great Depression.

According to left-wing critics of the 2018 tax-cap amendment, passing that 7 percent tax cap would help rich people at the expense of everyone else. But if you make more than $60,000, such a cap would have saved you a good amount of money during the 1990s and 2000s, when North Carolina’s had a tax rate of 7.75 percent that applied to taxable incomes over $60,000 for singles and $100,000 for married couples filing jointly.

Of course, millionaires did pay that 7.75 percent rate on most of their incomes (actually, for a time their effective state income-tax rate soared above 8 percent because of a surtax). But lots of other North Carolinians got hit by that 7.75 percent rate, too. Call them wealthy if you want. They are unlikely to agree, or to appreciate the implication that they don’t deserve to keep their own hard-earned money and spend it as they wish.

At a recent debate held at the Gastonia Conference Center by the North Carolina Institute of Political Leadership and the statewide cable channel Spectrum News, two state lawmakers and two policy analysts engaged in a spirited but respectful debate about the tax-cap amendment’s pros and cons.

State Rep. Kelly Alexander, D-Mecklenburg, argued that the higher 10 percent cap should remain in place. “I’m from the ‘if it ain’t broke, you don’t have to fix it’ school,” he said. “Ten percent has worked for us. It gives us enough room should we need to go higher.”

State Sen. Dan Bishop, R-Mecklenburg, disagreed, pointing out that the existing income-tax cap has done nothing to limit the tax burden since the General Assembly has never even considered raising the top rate that high. This year, voters have the opportunity to speak directly on the issue.

“Low-tax policies and careful spending policies, at the end of the day, benefit every single North Carolinian,” Bishop said. “And that, I think, is what the notion of a tax cap recognizes. Taxes are not the answer.”

Frankly, I would have preferred to amend the constitution to cap the annual rate of growth in state spending to a combination of inflation and population growth. The Republicans currently leading the state legislature have kept budget increases within such a cap, but it currently has no legal force. Excessive spending is the ultimate cause of excessive taxes, whatever the form those taxes may take.

But that’s not what voters will decide this year. The ballot question is whether to enact a lower cap on income taxes. Keep in mind that the currently scheduled flat rate is 5.25 percent. Even if the tax-cap amendment passes, future legislatures could raise income taxes quite a bit if they deem it necessary — although I think such a decision would be unwise and counterproductive.

During the IOPL debate, Rep. Alexander said he doubted that lowering taxes is responsible for “all of these magical, mystical things” claimed by its advocates. While some conservatives do overstate their case about tax policy and growth — claiming that all tax cuts pay for themselves, for instance — most studies confirm that taxes do influence decisions to work, live, invest, or create jobs in one place rather than another. As long as policymakers accompany tax reduction with firm spending priorities, they can balance budgets and promote economic growth at the same time. North Carolina has been doing just that.

Sen. Bishop picked up on Alexander’s choice of words. “With that I completely agree,” Bishop said. “There is no magic. There is discipline, and discipline practiced over a period of time begins to look like magic.”

John Hood (@JohnHoodNC) is chairman of the John Locke Foundation and appears on “NC SPIN,” broadcast statewide Fridays at 7:30 p.m. and Sundays at 12:30 p.m. on UNC-TV.

Categories: Public Policy

Amendment critics need to move beyond partisan spin

Tue, 2018-10-23 04:02

Critics have devised reasonable arguments against each of the six constitutional amendments on North Carolina’s election ballot. But outlandish claims about the amendments threaten to drown out serious messages that might sway undecided voters.

Consider, for instance, the following quote in the Raleigh News and Observer from Morrisville Mayor T.J. Cawley: “Passing any of these six amendments furthers the partisan divide and makes it even more difficult for our state to make the progress it needs to serve all the people of North Carolina so we can meet our potential.”


Increasing protection of hunting and fishing rights would widen the partisan divide? Enshrining more crime victims’ rights into the N.C. Constitution would impede the state’s progress? Shaking up appointments to the state elections board would hurt state government’s ability to serve people?

If Cawley explained the alleged link between the amendments and the sad fate he predicted, the newspaper reporter didn’t notice. Instead the article painted a picture of partisan politics pulling people toward opposite poles.

The N.C. Republican Party has endorsed all six amendments. The Democratic Party opposes all six. Cawley delivered his remarks during a news conference organized in connection with two left-of-center groups: Local Progress and Common Cause. One can guess which side those groups have chosen in the amendment debate.

The mayor’s comments come across more as partisan posturing than a reasoned assessment of the amendments’ impact. And he’s not alone. Legislators themselves have turned up the rhetoric.

“It is really a blatant partisan use of the constitution to draw out a particular voting populace.” That’s the reaction Rep. Susan Fisher, D-Buncombe, offered the Asheville Citizen-Times to an amendment that would enshrine hunting and fishing rights in the state constitution.

It’s unfortunate for Fisher that the newspaper decided to interview other people. One of them is another member of Buncombe County’s legislative delegation.

“I’m a Democrat. I hunt, I fish, and I have lifetime hunting and fishing licenses,” said Rep. Brian Turner, who voted to place the hunting and fishing amendment on the ballot. “This would get me to come out and vote.”

Fisher’s line about the amendment’s “blatant” partisanship might have surprised Turner and the other 18 House Democrats who supported the measure. The eight Senate Democrats, too.

The partisan argument also plays poorly in the debate about an amendment dealing with crime victims’ rights. Thirty-four House Democrats and a dozen of their Senate counterparts agreed to put that measure on the ballot. Forty-six of the 60 Democrats in the General Assembly voted “yes.” If you’re counting, that’s 77 percent support. This measure would “further the partisan divide”?

Votes for the other four amendments did fall largely along partisan lines, though three Senate Democrats supported a measure to reduce the cap on state income tax rates. Only an amendment to require photo identification at polling places attracted zero votes from Democrats.

No veteran political observer should be shocked to hear overheated arguments from partisans engaged in an electoral fight. It’s more disappointing when media outlets play along.

A popular Triangle public radio program dedicated an episode to the amendment debate. The title: “Constitutional Crisis?”

Crisis? Each amendment appears on the ballot after three-fifths of the members of each legislative chamber approved it. That’s standard procedure. No amendment will take effect without majority support from voters. That’s standard procedure. If voters approve any — or all — of the amendments, state government will continue to operate. As directed by the constitution. That’s standard procedure.

Doom-and-gloom predictions seem to have had little impact on voters. A recent Spectrum News poll found 75 percent support for the amendment targeting crime victims’ rights and 64 percent support for the hunting and fishing proposal.

Even measures with a clearly defined partisan split in the General Assembly tended to do well with surveyed voters. Voter ID (64 percent) and the income tax cap (58 percent) secured clear majorities. The measure changing the state elections board secured 50 percent support, with just 23 percent of surveyed voters registering opposition.

Only the measure affecting judicial appointments appeared headed for trouble, with 35 percent support, 36 percent opposition, and a sizable chunk of undecided voters. (One suspects the 132-word polling question didn’t help. The other amendments required descriptions of no more than 60 words.)

Amendment critics still have opportunities to make persuasive arguments. The numbers suggest they will need more than partisan-fueled complaints.

Mitch Kokai is senior political analyst for the John Locke Foundation.

Categories: Public Policy