INSIDE THIS ISSUE: ALSO: Diversity bus- Vehicle project seeks C A R O L I N A $18 million in tax funds/4 ing not mak- Does air quality official ing the grade have a conflict of interest?/5 in Wake Surprise! Cost of County/12 A MONTHLY JOURNAL OF NEWS, ANALYSIS AND OPINION government goes up/16 JOURNALFROM THE JOHN LOCKE FOUNDATION March 2009 Vol. 18. No. 3 STATEWIDE EDITION Check us out online at carolinajournal.com and johnlocke.org Liberal Advocacy Groups Compete For Millions in Bailout Funds By David N. Bass Associate Editor RALEIGH ocal governments and nonprofits in North Carolina are vying for millions in federal dollars meant to bail out counties suffering Lfrom the housing crisis, but critics fear the funds could benefit private lenders and liberal advo- cacy groups more than strug- gling homeowners. Congress allocated $4 billion in July for the Neigh- borhood Stabilization Pro- gram, administered by the U.S. Department of Housing Experts say one big storm could collapse program and Urban Development. The funds, part of the $700 By Karen Welsh in a few years. Experts agree the plan could collapse billion bailout of the mort- Contributor under a surge of claims if a major hurricane hits the gage industry, enable local RALEIGH state’s seaboard. governments to purchase nsurance policyholders across the entire state and resell foreclosed homes, ostensibly avoiding should brace for troubled waters ahead. The rea- ‘A ticking time bomb’ blight. North Carolina qualified for $52 million in son? The North Carolina Beach Plan, the state levy N.C. Department of Insurance Commissioner NSP funds, and Charlotte received an additional Ithat insures coastal homes across the state, is under- Wayne Goodwin, who inherited the problem when he $5 million. funded by more than $65 billion. took office earlier this year, said the program is an ex- Supporters say the funds will help hom- Also known as the “Coastal Insurance Wind plosion waiting to happen. “The North Carolina Beach eowners weather a turbulent economy, but state- Pool,” the program was created in 1969 as a supple- Plan remains a ticking time bomb until sufficient tar- level homeowner groups and free-market advo- mental insurance of last resort. However, in 2003 the geted reform is made,” he said. “It is the number one cates are approaching the program cautiously in General Assembly approved the plan to write econom- issue of my administration.” light of numerous scandals involving misuse of ically priced homeowners’ policies, quickly making it The aftereffects of Hurricanes Katrina and Ike mortgage bailout funds. the first choice of coverage for most coastal residents. forced insurance companies to crunch the numbers “We’re concerned that they really stay on As a result, the properties covered through the program skyrocketed from $18 billion to $70 billion Continued as “Experts,“ Page 2 Continued as “Liberal,“ Page 3

Should the General Assembly cut 80programs or raise taxes to balance DEPARTMENTS The John Locke Foundation NONPROFIT ORG. the state budget? 200 W. Morgan St., #200 U.S. POSTAGE Raleigh, NC 27601 PAID North Carolina 2 RALEIGH, NC Interview 8 PERMIT NO. 1766 Education 9 Higher Education 13 Cut programs 68 % Raise taxes 16 % Local Government 16 Not sure 15 % Books & the Arts 20 Opinion 24 %Civitas Respondents Institute in Online June CivitasPoll, January Institute 2009 Poll Parting Shot 28 PAGE 2 MARCH 2009 | CAROLINA JOURNAL

C a r o l i n a Experts Worried About Beach Insurance Fund Continued from Page 1 state, so it’s better to work on this now before it’s too late. Journal and do the math. The bleak forecast was that the wind pool “We’ve all seen what happened in Mississippi, Texas, has only a small fraction of the funds in reserves. This has and Louisiana. Texas still hasn’t had claims paid from Hur- ricane Ike. There’s been a lot of pain as a result of that. Mil- Richard Wagner led some companies to pull their entire coverage from the state. lions of dollars haven’t been paid. We want to come up with Editor a solution to protect both coastal homeowners and inland Don Carrington That has Goodwin concerned. “If recent and certain Executive Editor future reforms of the Beach Plan are not allowed to return residents. We’ve been working with the legislative select the Beach Plan to being committee to provide information. We want them to have David N. Bass, Mitch Kokai the long-intended (by these tools and policy Michael Lowrey statute) market of last re- proposals.” Associate Editors sort, then private carriers Marshall said it is might continue to leave imperative for the De- Chad Adams, Jana Benscoter North Carolina, and then partment of Insurance to Kristen Blair, Roy Cordato that would harm all con- create a stable wind pool Becki Gray, Paige Holland Hamp sumers,” he said. to deal with potentially David Hartgen, Sam A. Hieb “That’s unaccept- devastating storms in the Lindalyn Kakadelis, George Leef future. He said coastal Karen McMahan, Karen Palasek able. My dual goals are residents should expect Susan Robinson, Marc Rotterman to protect consumers and Mike Rouse, Jim Stegall protect the solvency of higher deductibles and George Stephens, Jeff Taylor insurance institutions. steady rate increases. Michael Walden, Karen Welsh The two goals are inter- “It’s not hard for Hal Young, John Calvin Young related and interdepen- insurance companies to Contributors dent. We must meet the prove their need for the dual goals of consumer rate increase,” he said. Clint Atkins, Abby Alger protection and ensuring “The surcharge and in- Laura Barringer, Katie Bethune a solvent insurance mar- crease in deductibles are Nick Chandler, David Koon ket.” greater on the coast than Shelley Gonzales, Jessica Thompson their western counterpart.” Editorial Interns Tom Marshall, lecturer of risk management and insur- ance at the University of North Carolina at Charlotte, said Opposition on the coast it’s both a difficult and painful situation to deal with, espe- Published by cially in a major recession. He agrees, however, that Good- Coastal communities across eastern North Carolina The John Locke Foundation win and the legislative study commission need to deal with disagree. They have filed lawsuits and pushed for legisla- 200 W. Morgan St., # 200 it or suffer the consequences. tion to stem the tide of rising costs to policyholders. Raleigh, N.C. 27601 “With only a $500 million to $700 million surplus, one Dare County Attorney Robert Outten said the rate in- (919) 828-3876 • Fax: 821-5117 hurricane has the potential of wiping out the wind pool. creases, which took effect Feb. 1, are a blatant attempt to www.JohnLocke.org Right now, the North Carolina Beach Plan can only pay out push policyholders away from the beach plan. $2 billion max with reinsurance and cash on hand. If we “[Former North Carolina Insurance Commissioner Jon Ham have a $4 billion storm, everything would run out, and the Jim Long] added a 10 percent surcharge to everyone’s ho- Vice President & Publisher companies would have to turn to assessments. The insur- meowner policy, trying to run people out of the Beach Plan John Hood ance companies can run the numbers and know what their into traditional homeowner’s policies,” he said. “The prob- Chairman & President assessments will be. A few companies have simply thrown lem is, there are no insurance companies writing those po- up their hands and have already exited the state.” lices. They are pushing people into paying 10 percent more Bruce Babcock, Herb Berkowitz for no good reason at all.” Charlie Carter, Jim Fulghum Companies plan ahead Outten said Long also raised their deductible from 1 Chuck Fuller, Bill Graham Remaining insurance companies have taken proactive percent to 2 percent on the value of the home and raised the Robert Luddy, Assad Meymandi measures to stem the tide of potential doom. Property Ca- coastal rates for fire and theft insurance, even though there Baker A. Mitchell Jr., is no greater risk of those dangers. Carl Mumpower, J. Arthur Pope sualty Insurers of America (PCI) hired San Francisco-based Milliman Principal and Consulting actuary Nancy Watkins “None of it makes any sense,” he said. “It’s a huge Thomas A. Roberg, David Stover problem in all the eastern North Carolina counties. There Robert Stowe III, Andy Wells as a “neutral unbiased explainer” to assess the issue. Board of Directors Similar to Goodwin, she found that the state’s coastal were no public meetings and no transparency in the deci- homeowner policies have “exploded” by a rate of $1 billion sion-making process. They need to redress the issue. The a month and that the state is unprepared to handle a major claims history does not support the rise in rates and deduct- Carolina Journal is a monthly journal hurricane if one slams into the coastline. ibles. There is no rhyme or reason where this is concerned. of news, analysis, and commentary on state “It has really ballooned,” she said. “PCI had a concern “There’s a perception that the rest of the people are and local government and public policy issues that the beach plan was potentially devastating to the state subsidizing rich coastal-owning people, but most are rural, in North Carolina. and the insurers in the state. What I found was that under low-income. These rate increases apply to some of the poor- ©2009 by The John Locke Foundation various scenarios the beach plan’s funds would be exhaust- est people with the lowest incomes in the state that live in Inc. All opinions expressed in bylined articles ed.” Tier 1 counties. This needs to be fair and equitable for every- are those of the authors and do not necessarily body. We want to understand it. And, when we do, we’ll be reflect the views of the editors of CJ or the PCI public affairs manager Jessica Hanson said Wat- fine with it.” staff and board of the John Locke Foundation. kins’ findings conclusively show the insurance market is in Material published herein may be reprinted as jeopardy. She said the company has worked hard to come Marshall said the “sticker shock” of rising insurance long as appropriate credit is given. Submis- up with meaningful strategies, but she warned that it will rates along the coast can be expected. However, he said resi- sions and letters are welcome and should be take a holistic approach, including raising rates, building dents don’t have much of a choice. directed to the editor. stronger homes, and hardening existing homes, to fix the “A rate increase is justified,” he said. “What the North CJ readers wanting more information problem. Carolina insurance department is thinking is that they need between monthly issues can call 919-828-3876 She said PCI presented its findings before the legisla- to get the rates up a little at a time and not all at once so and ask for Carolina Journal Weekly Re- tive coastal insurance study commission in December. She the insurance companies won’t stop writing policies in the port, delivered each weekend by e-mail, or visit state. The lawsuit is to put a moratorium on the rate in- CarolinaJournal.com for news, links, and ex- said PCI will keep working on the issues until the plan is crease. From my perspective, they don’t have a chance to clusive content updated each weekday. Those solvent. interested in education, higher education, or “We believe we can go into this (2009 legislative) ses- win. It seems unlikely the court would overrule the state local government should also ask to receive sion and make some changes and change the direction it is agency who is the expert in the matter. They have the au- weekly e-letters covering these issues. going,” Hanson said. “North Carolina always has a hurri- thority to set effective rates and dates. It seems to me it is cane lurking. It takes only one storm to disrupt an entire very remote that a group of people could win that.” CJ MARCH 2009 | CAROLINA JOURNAL PAGE 3 Liberal Advocacy Groups Compete For Millions in Bailout Funds Continued from Page 1 More in the pipeline point with housing,” said Chris Estes, The new stimulus bill will in- executive director of the North Caroli- clude billions more for neighborhood na Housing Coalition, an organization stabilization. The $4.19 billion in the that campaigns for low- and moderate- House measure was stripped before income housing. the Senate approved the bill, but a “We want to make sure that cities don’t use this to supplant some of their compromise version included at least other funding and use it to build a park $2 billion. or a parking deck,” he said. California, Florida, and Michigan The U.S. Office of Inspector Gen- got the largest grants from the initial eral identifies NSP funds as “high appropriation in July because of high risk.” That, mixed with weeks of head- foreclosure rates. The NSP isn’t the lines about misappropriation of gov- best fit for North Carolina because the ernment funds, has some members of state hasn’t experienced foreclosure North Carolina’s congressional delega- rates on par with cities like Cleveland tion worried, too. and Detroit, Estes said. “With much of the money being “It could have a neighborhood funneled to liberal political groups like stabilizing effect, but the Catch-22 is ACORN, [which] is under federal in- that you’ve got to have buyers who can vestigation, there must be strict over- buy those homes,” he said. CJ sight to prevent the waste and abuse of tax dollars,” said U.S. Rep. Patrick The N.C. Housing Finance Agency (Web site shown above) is one of two housing List of Nonprofits McHenry, R-10th, an opponent of the agencies already funded by state taxpayers. It received $12 million in state appro- Applying For Funds bailout. priations for fiscal 2008-09. U.S. Rep. Virginia Foxx, R-5th, Affordable Housing Management Inc. - another critic of the bailout, called the The state was expected to award the amount approved by Congress last $4.87 million, http://www.ahmi.org/ NSP constitutionally suspect. “Like the grants by Feb. 13, although a summer. I’ve said before, if you liked the way spokesperson for the Commerce De- ACORN responded to the Boeh- Cape Fear Community Development Corporation - $2.1 million, http://www. the federal government handled Hur- partment said it could take until the ner press release shortly afterward cfrcdc.org/about.asp ricane Katrina relief, you’ll love the end of the month. claiming that it has no intention to pur- way they handle real estate invest- A preliminary list of applicants sue the funds. “We have not received Charlotte Housing Authority - $5.61 mil- ments,” she said. obtained by Carolina Journal shows 46 neighborhood stabilization funds, lion, http://www.cha-nc.org/ entities that have applied for the funds: have no plans to apply for such funds, Cumberland Community Action Pro- N.C. bailout 23 local governments, 20 nonprofits, and didn’t weigh in on the pending gram Inc. - $2.1 million, http://ccap-inc. rule changes,” said Bertha Lewis, chief org/ Economic uncertainty has hit and three housing and community organizer for ACORN. home in North Carolina, which ranked development agencies. Some of the lo- The North Carolina chapters of The Community Reinvestment Asso- eighth among all states in unemploy- cal governments overlap. Both Wake ciation of N.C. - $751,000, http://www. ACORN were not on the list of NSP- ment in November and 35th in foreclo- County and Raleigh, for instance, ap- cra-nc.org/ applying nonprofits provided to CJ sure filings nationwide in December. plied for funds. State taxpayers already fund two by the Commerce Department. But The Durham Housing Authority - $3.39 The state is expected to experience a million, http://www.durhamhousingau- of the housing agencies that are seek- at least one nonprofit on the list, the $2 billion budget shortfall, and many thority.org/mission.asp ing NSP dollars — the N.C. Housing Community Reinvestment Association local governments, facing evaporating Finance Agency, which received $12 of North Carolina, pushes a liberal leg- East Market Street Development tax revenue, are going hat in hand to million in state appropriations for fis- islative agenda. Corporation - $2.21 million, http://www. the federal government asking for re- eastmarketstreet.com/mission.php cal 2008-2009, and the N.C. Commu- The group, which applied for lief. nity Development Initiative, which $751,000 in NSP funds, advocates Habitat for Humanity of Forsyth County HUD has identified 23 counties received $1 million. “social change and economic justice” - $2.1 million, http://www.habitatforsyth. in North Carolina as areas of greatest The third agency, the Durham- and “uses research, education, mo- org/Homepage.asp need for NSP funds. The state’s top based Center for Community Self- bilization, media, litigation, regula- urban centers are on the list. Forsyth, Habitat for Humanity of Greater Greens- Help, is a nonprofit that received tory changes, legislative advocacy, and boro - $2.36 million, http://www.habitat- Guilford, Mecklenburg, and Wake $2.5 million in government contribu- stockholder actions to initiate change.” greensboro.org/index.php counties had the largest number of tions for fiscal 2007, according to the It received financial backing in 2008 foreclosure starts between January Habitat for Humanity of Charlotte - $2.1 group’s IRS Form 990. The organiza- from the Z. Smith Reynolds Founda- million, http://www.habitatcharlotte.org/ 2007 and June 2008. Other counties tion’s mission is to create and protect tion, a supporter of left-wing causes projects_thrivent.cfm experiencing high foreclosure rates “ownership and economic opportu- and promoter of “progressive public Habitat for Humanity of Union County - include Gaston, Cabarrus, Union, Dur- nity for people of color, women, rural policy and social change.” ham, and Johnston. $2.35 million, http://www.unionhabitat. residents, and low-wealth families and Another of the nonprofits, the org/home/union_habitat-home.php Local governments, nonprofits, communities.” Dubois Center in Wake Forest, has and housing agencies had until Feb. faced fraud allegations. Authorities ar- Johnston-Harnett Community Action 3 to apply for NSP funds. Grants are Liberal nonprofits rested the group’s former executive di- Inc. - $2.1 million capped at $5 million for local govern- rector in 2006 on charges of embezzling Government transparency advo- Progressive Action and Restoration ments and housing agencies and at $2 $169,000 from the nonprofit and devot- Community Development Corporation - million for nonprofits, according to cates are particularly concerned about ing the funds to a different group, also $2.72 million program guidelines published by the leftist nonprofits obtaining and misus- devoted to low-income housing. The ing bailout funds. Raleigh Area Development Authority - N.C. Department of Commerce. Dubois Center, now under a new ex- $2.1 million, http://www.rada-nc.com/ “Grantees must use at least 30 U.S. House Minority Leader John ecutive director, applied for $2 million percent of funds to assist households Boehner, R-Ohio, issued a press release in NSP funds. St. Augustine’s College - $2.35 million, whose incomes do not exceed 50 per- Jan. 23 warning that the Association of At least one of the nonprofits, St. http://www.st-aug.edu/ cent of the applicable area median Community Organizations for Reform Augustine College in Raleigh, does The DuBois Center - $2 million income,” the guidelines say. “The re- Now, or ACORN, could get “billions” not appear to have a direct link to the maining 70 percent of grant funds may from the Obama administration’s eco- NSP’s purpose of acquiring and rede- Wilmington Housing Authority - $2.1 mil- lion, http://www.wha.net/ be used to service households up to nomic stimulus bill. That bill contained veloping foreclosed properties. The 120 percent of the applicable area me- an additional $4.19 billion in funding school has asked for $2.35 million in Source: N.C. Department of Commerce dian income.” for the NSP, which would augment NSP funds. PAGE 4 MARCH 2009 | CAROLINA JOURNAL Vehicle Project Wants $18 Million Jump Start From Taxpayers

By Don Carrington in October 2009. Additional funding, Executive Editor whether through the NCGA or other RALEIGH sources, including user fees, will be upporters of a struggling state- utilized to provide for operations and funded vehicle research center in additional capital improvements in Northampton County are seeking subsequent phases.” San additional $18.2 million from state taxpayers. Since the center’s inception Conflicts of interest? in 2005, the General Assembly and oth- The project has had its share of er public sources have committed $17 apparent conflicts of interest. Wray ac- million to the project. knowledged he owns land adjacent to Rep. Michael Wray, D-Northamp- the project. His 105-acre tract is listed ton, introduced a bill Feb. 12 that on the N.C. Department of Commerce would send another $18.2 million to directory of available industrial prop- the project over the next two fiscal erty. years. The bill designates $1.9 million When asked whether he might for operating costs and the remainder have a conflict of interest, Wray toldCJ, for continued construction costs. State “No, because the project was started Sen. Ed Jones, D–Halifax, introduced before I got to the General Assembly.” an identical bill in the Senate. When asked whether he thought oth- The project, N.C. Center for Au- ers might think he has an appearance tomotive Research (NCCAR), was of a conflict of interest, Wray said, “I known until April 2007 as the N.C. can’t speak for others.” Advanced Vehicle Research Center. The Northeast Commission, un- NCCAR is organized as a nonprofit, der the direction of then-CEO Rick and Northampton County Economic A sign advertises the sale of land owned by Rep. Michael Wray, D-Northampton, that adjoins the NCCAR site. (CJ photo by Don Carrington) Watson, was involved in the plan- Development Director Gary Brown ning stages of the NCCAR project. serves as president. have not yet occurred. CAR has focused on extensive mar- The commission is a state-funded re- “NCCAR plans to be an indepen- ket research conducted in 2006. This Is it feasible? gional economic development organi- dent, non-profit center devised to meet involved three industry organizations zation headquartered in Edenton. In the ever-evolving product research, “State sponsorship and affiliation and included one-on-one interviews 2004 Watson helped locate the facility testing and development demands of with North Carolina’s university and with 128 industry leaders, globally. on Northampton County land owned the automotive industry,” according to community college system offers ex- All the NCCAR features and equip- by O.S. “Buck” Suiter and his rela- its Web site. The 625-acre site, just off ceptional opportunities for matching ment design have been based directly tives. A retired Ahoskie banker, Suiter Interstate 95 outside Roanoke Rapids, the innovative talents of the world’s on these studies, which have proven to also serves as a board member on the is to include a 4.6-mile test track, ad- automotive industry with the research be very consistent as validated by on- Northeast Commission, as an appoin- vanced laboratory, and client garages. capacity and business development re- going industry contacts, dialogue, and tee of former Gov. Mike Easley. Financial reports filed by NC- sources of the State of North Carolina,” continual refinement.” After Northampton County CAR show that it paid Chicago-based reads a claim on the center’s Web site. CJ also asked Brown whether he optioned the site for the project in Lotus Engineering $315,000 in 2006 CJ asked Wray whether he had any potential users that could be 2004, the commission paid a Raleigh and $158,000 in 2007 for “systems de- thought the project was still feasible, interviewed. “No,” he said. engineering firm to conduct a pre- sign.” Simon Cobb, a former Lotus given the current troubles with the U.S. What happens to the project if liminary environmental assessment. employee, became NCCCAR chief op- auto industry. “I think it is feasible be- the General Assembly doesn’t provide Last year Suiter told CJ that erating officer last April and remains cause of the alternative energies being the additional $18.2 million requested he was unaware his commission the only employee. A groundbreaking pushed by Washington. There is still by Wray? Brown said, “NCCAR will had spent money evaluating the ceremony took place in April 2006, but a need for a testing facility,” he said. be operational with Phase 1A facilities site. CJ there was no visible construction activ- When asked whether NCCAR had an ity until last fall. In September NCCAR updated feasibility study, he said he awarded an $8.4 million site develop- was not aware of one. Books authored By JLF staFFers ment contract to PLT Construction in CJ also asked Brown whether the Wilson. project was still feasible. “Absolutely. Efficiency and Externalities In January NCCAR awarded a This is the best possible time to bring $2.8 million contract to Heaton Con- NCCAR into the marketplace to sup- in an Open-Ended Universe struction of Roanoke Rapids to build a port the new methods of engineering 23,620-square-foot engineering, client and producing vehicles. The automo- garage, and operations building and tive industry is faced with drastic glob- the entry security building. al challenges, which include cutbacks Dick Dell of Raleigh developed of effectively everything and conse- the concept for the research center. He quential disposal of capital assets and helped sell the project to the General key skilled workforce,” he said. Assembly, which in turn appropriated “NCCAR offers solutions to those $15 million. Dell also helped secure a companies and organizations as they By Roy Cordato Vice President for Research $1 million grant from Golden LEAF, emerge from their current difficulties. John Locke Foundation a foundation set up to handle North This is not just our view. It comes di- Carolina’s tobacco settlement funds. rectly from the industry contacts we “Cordato’s book is a solid Dell is no longer associated with the talk with at very frequent intervals,” performance, demonstrating project but continues to do automotive said Brown. impressive mastery of both research under the name of Advanced CJ asked Brown when the most the Austrian and neoclassical Vehicle Research Center. recent feasibility study was released. literature.” Golden LEAF President Dan Ger- “Feasibility studies are typically based Israel Kirzner lach told CJ the $1 million grant from on projections with limited validated Cato Journal his organization is on hold because it data and are often prone to inaccu- is tied to job creation requirements that racy,” he said. “Development of NC- www.mises.org MARCH 2009 | CAROLINA JOURNAL PAGE 5 Air Quality Official Recruited for Nonprofit on Taxpayers’ Dime

By David N. Bass He also moderated phone calls the board meeting took place. engage with other states in develop- Associate Editor between registry staff and board mem- Nicholson participated in reg- ing a regional or national [greenhouse RALEIGH bers, drew from DAQ funds to make istry events in his official capacity as gas] registry that will comprehensively former official in the N.C. Di- two payments of $50,000 to the reg- DAQ deputy director and continued to meet the state’s needs as soon as pos- vision of Air Quality charged istry, and traveled on DAQ time to at draw on his state salary while recruit- sible.” about $2,000 to his state reim- least three registry-sponsored events. ing for the nonprofit. As of his retire- The recommendations are non- Abursement account while traveling for The first ment in Decem- binding. The Climate Registry, an out-of-state was an executive ber, Nicholson’s The Legislative Commission on nonprofit that seeks to fight global committee meet- annual salary was Global Climate Change never has ad- warming. ing Feb. 5-6, 2007, Brock Nicholson $107,979, accord- dressed the question of North Caro- Brock Nicholson, who was depu- in Scottsdale, ing to the N.C. lina’s involvement in a multistate reg- ty director of DAQ until he retired in Ariz. Nicholson worked on state Office of State Per- istry, nor has the General Assembly December, also worked on state time listed expenses time to convince sonnel. passed legislation dealing with the is- to convince entities to join the registry of $676.79 for the Asked by CJ sue. and pay membership fees. Nicholson trip, according to others to join if his participation Chris Horner, a lawyer and senior served on the group’s board of direc- reimbursement re- in the registry was fellow with the Competitive Enterprise tors and executive committee while cords. climate group appropriate, Nich- Institute, said Nicholson should have holding his position at DAQ. The second olson said that he billed his time and expenses back to As reported by Carolina Journal was a registry was “carrying out the registry for reimbursement to N.C. previously, North Carolina joined the board meeting and implement- taxpayers. registry, which is based in California, May 22-24, 2007, in Chicago. Nichol- ing recommendations” from the North “In the event this is not some- in 2007. The nonprofit’s goal is to per- son stayed at the Hyatt Regency Chi- Carolina Climate Change Advisory thing that politicized offices are willing suade companies, organizations, and cago and listed expenses of $273.42 for Group and the N.C. Legislative Com- to do, then a request should be made state and local governments to report the trip, not counting airfare, which mission on Global Climate Change. that [Nicholson’s] time be recalculated their greenhouse gas emissions in was not included on the reimburse- CAPAG is a DAQ-created group as personal time,” he said. hopes of curbing climate change. ment accounts provided to CJ. that advises the state on ways to re- Horner also criticized Nicholson’s Nicholson was the point man for The third and final trip, also to duce carbon-dioxide emissions. The justification for supporting the registry. North Carolina’s involvement with the Chicago for a registry board meeting, Legislative Commission on Global Cli- “It seems clear that this state of- group. He sent letters, made phone took place June 3-5, 2008. Nicholson mate Change was established in 2005 ficial, on taxpayer expense, worked on calls, and coordinated a meeting at was reimbursed for $976.30, includ- to study global warming and its im- behalf of an outside entity, no matter DAQ’s offices in Raleigh aimed at get- ing $551.62 for a two-night stay at the pact on the state how much he points back to what is in ting entities in North Carolina to join four-star Millennium Knickerbocker One of CAPAG’s recommenda- essence his own office as the author- the registry and report their emissions. Hotel in downtown Chicago, where tions is that “North Carolina actively ity for having done so,” he said. CJ

Since 1991, Carolina Journal has provided thousands of readers each month with in-depth reporting, informed analysis, and incisive commentary about the most pressing state and local issues in North Carolina. Now Carolina Journal has taken Join one of the John Locke Foundation’s its trademark blend of news, analysis, and commentary to the airwaves with new regional clubs. There’s one near you. Carolina Journal Radio. A weekly, one-hour newsmagazine, Carolina Journal Radio is hosted by Mitch Kokai and Donna Martinez and features a diverse mix of guests and topics. The Triangle Freedom Club Piedmont Freedom Club program is currently broadcast on 18 commercial stations – from the mountains Raleigh, Durham, Chapel Hill, and near- Charlotte, Gastonia, Concord, and near- to the coast. The Carolina Journal Radio Network includes these fine affiliates: by cities and towns by cities and towns Albemarle/Concord WSPC AM 1010 Saturdays 11:00 AM Triad Freedom Club Down East Freedom Club Asheville WWNC AM 570 Sundays 7:00 PM Winston-Salem, Greensboro, Burlington, Greenville, Rocky Mount, Elizabeth City, Burlington WBAG AM 1150 Saturdays 6:00 AM and nearby cities and towns and nearby cities and towns Chapel Hill WCHL AM 1360 Sundays 6:00 PM Elizabeth City WGAI AM 560 Saturdays 6:00 AM Sandhills Freedom Club Western N.C. Freedom Club Fayetteville WFNC AM 640 Saturdays 1:00 PM Fayetteville, Southern Pines, Pinehurst, Asheville, Hickory, Burnsville, and nearby Gastonia/Charlotte WZRH AM 960 Saturdays 2:00 PM and nearby cities and towns cities and towns Goldsboro WGBR AM 1150 Saturdays 6:00 PM Greensboro/Burlington WSML AM 1200 Saturdays 12:00 PM Southeastern Freedom Club Hendersonville WHKP AM 1450 Sundays 6:00 PM Wilmington, Jacksonville, Whiteville, and nearby, Jacksonville WJNC AM 1240 Sundays 7:00 AM cities and towns Newport/New Bern WTKF FM 107.3 Sundays 7:00 AM Salisbury WSTP AM 1490 Saturdays 11:00 AM Siler City WNCA AM 1570 Sundays 6:00 AM Smithfield/Selma WTSB AM 1090 Saturdays 6:00 AM 3 Ways to Join Southern Pines WEEB AM 990 Sundays 7:00 PM 1. Visit www.JohnLocke.org/freedomclubs Valdese WSVM AM 1490 Tuesdays 6:00 PM 2. Phone 1-866-JLF-INFO Wilmington WAAV AM 980 Saturdays 4:00 PM 3. Be our guest for one meeting. If you like what you see and Winston-Salem/Triad WSJS AM 600 Sundays 8:00 AM hear, you can join on site. Go to this link to check meeting dates For more information, visit www.CarolinaJournal.com/CJRadio and locations: http://www.johnlocke.org/events/ PAGE 6 MARCH 2009 | CAROLINA JOURNAL JLF: Annexation Reform Should Include Services, Oversight By CJ Staff oversight, the study commission had its hands tied RALEIGH by the process of accepting or rejecting proposed re- awmakers seeking real reform of the state’s A proper definition of forms,” he said. “Commission members were not al- flawed annexation law should tackle two criti- lowed to amend most of the proposals made at the cal issues that were not addressed properly in a ‘meaningful services’ group’s final meeting. Instead they were given the Lstudy group’s final report, a John Locke Foundation choice between a poor recommendation and no rec- analyst says. would require ommendation at all.” “Regardless of where one stands on other an- municipalities to provide In the case of annexation oversight, this meant nexation reform questions, these simple reforms a choice between no oversight and oversight without should be enacted without delay,” said Daren Bakst, water and sewer service any clear guidelines by the state’s Local Government JLF legal and regulatory policy analyst. “First, mu- Commission, Bakst said. “The LGC is a poor choice nicipalities should not be able to annex areas unless to provide oversight over forced annexations,” he they provide truly necessary services. Second, mu- ruling should be codified into law by requiring mu- said. “That group is not neutral in the annexation nicipalities need legitimate oversight when they ini- nicipalities to provide meaningful services. Unfortu- debate. Four of the five appointed members have a tiate forced annexations.” nately, legislative staff working with the study com- conflict of interest due to their ties to municipalities.” Bakst addresses both issues in detail in a new mission provided a weak definition of ‘meaningful That’s not the only problem with leaving an- Spotlight report. He also offers draft legislative lan- services.’” nexation oversight in the LGC’s hands, Bakst said. guage that would help lawmakers address key an- That definition was so weak that municipali- “Beyond its oversight of local government’s debt nexation issues. ties would have been allowed to annex areas forc- management, the LGC’s history has been terrible,” Legislators can improve upon the recommen- ibly without providing water and sewer service, he said. “For example, the group has oversight over dations the Joint Legislative Study Commission on Bakst said. “Water and sewer are the most important tax increment financing. In that role, it approved the Municipal Annexation approved in January, Bakst services municipalities provide to annexed areas,” Randy Parton Theatre debacle that has saddled Roa- said. “One of that group’s recommendations would he said. “To ignore these services within the defini- noke Rapids with millions of dollars of obligations allow property owners in proposed annexed areas tion of ‘meaningful services’ is disingenuous at best. for a failed project.” to vote,” he said. “This important recommendation, Fortunately, the study commission voted down this It’s clear elected county commissions would overwhelmingly supported by a 14-6 vote, should be weak option.” provide more appropriate oversight, Bakst said. very encouraging for those who believe that North A proper definition of “meaningful services” “County commissions represent the interests of both Carolina’s outdated system of forced annexation would require municipalities to provide water and the municipality and the annexation victims,” he needs to be changed. However, two other critical re- sewer to areas that need those services, Bakst said. said. “Municipal residents and annexation victims forms were not addressed properly.” “The definition also would prohibit municipalities also can hold the county commissioners accountable The first involved provision of “meaningful from simply duplicating services an area already for their actions. The commissioners also would be services,” Bakst said. “A 2006 N.C. Supreme Court has,” he said. “The draft legislative language at- far more familiar with the needs of their communi- ruling explained that the primary purpose of forced tached to my report is designed to address these im- ties than the LGC.” annexation was to promote sound urban develop- portant issues.” Bakst’s report is designed to explain how these ment by having municipalities provide meaning- The second critical issue involves proper over- “common-sense reforms” should be implemented, he ful services to areas that need services,” Bakst said. sight of the annexation process, Bakst said. “In the said. “The details can make all the difference between “There appears to be wide agreement that this court case of both ‘meaningful services’ and annexation real reform and reform that is simply a façade.” CJ Report: N.C. Teachers Have Fared Better Than Other State Employees

By CJ Staff the other hand, state employees had gram should look like.” “Once the data are adjusted cor- RALEIGH pay increases totaling nearly 56 per- Merit pay would mark a major rectly, it’s clear North Carolina teacher n average N.C. public school cent.” change, Stoops said. “For years, law- compensation does not fall below the teacher draws more than The report recommends that N.C. makers have ignored the facts and re- national average,” he said. “Plus there $59,000 in annual compensa- leaders shift their focus away from sponded instead to misleading infor- is no evidence that reaching an ‘aver- tionA — $4,000 more than an average across-the-board teacher pay raises. mation put forward by the National age’ salary level would produce a sig- peer across the country, according to “Despite multimillion-dollar increases Education Association, the nation’s nificant increase in teacher recruitment the John Locke Foundation’s annual in teacher pay, it has become clear that largest teachers union,” he said. “That and retention or student performance.” report on teacher pay. across-the-board group has pub- Stoops’ report highlights the gap “Adjusted for pension contribu- raises unrelated to lished teacher pay between the NEA’s numbers and the tions, teacher experience, and cost of performance serve data that contain true picture. “The latest NEA report living, North Carolina’s adjusted an- to reward both A comprehensive no adjustments ranks North Carolina 30th in average nual teacher compensation is $59,252, good teachers and for cost of living, teacher pay, with salaries $5,300 lower high enough for North Carolina to mediocre ones, teacher-pay plan pension contribu- than the unadjusted U.S. average,” rank No. 14 in the United States,” said thus doing little tions, or teacher he said. “But even the union admits report author Terry Stoops, JLF edu- to help students must attract experience. The its rankings will not produce apples- cation policy analyst. “That’s $4,086 learn,” Stoops said. NEA’s numbers to-apples comparisons of teacher pay higher than the U.S. adjusted average “A recent study and reward have helped per- across states.” and $674 higher than the average of from the Univer- excellence petuate myths It’s easy to spot the problem states ranked by the Southern Region- sity of Arkansas about underpaid with NEA data comparing unadjusted al Education Board. These numbers points to merit pay teachers.” teacher salaries in North Carolina to refute the cliché that North Carolina for teachers as one Annual NEA those of states with high costs of liv- has underpaid schoolteachers who are education reform that shows promise reports that understated N.C. teacher ing, such as Connecticut, New Jersey, victims of miserly, unappreciative, and for raising student achievement.” compensation led to a misguided goal and California, Stoops said. “Any- ignorant taxpayers.” Now is the time to begin imple- of “raising” the state’s average teacher one who’s ever lived in a state with a Teachers have fared far better menting a comprehensive teacher pay pay to the national average, Stoops higher cost of living knows better than than other government employees in program that attracts and rewards said. “While the teacher unions and to compare unadjusted salary figures recent decades, Stoops said. “North excellence, Stoops said. “Education their affiliates praise these efforts, rais- across state lines.” Carolina’s average teacher pay nearly leaders can look at Guilford County’s ing salaries to an arbitrary goal like a Useful comparisons also depend doubled between 1988 and 2008 — Mission Possible as an excellent model national average produces positive on data that factor in teachers’ years of climbing by 93 percent,” he said. “On for what a high-quality merit pay pro- media coverage, not better teachers.” experience, Stoops said. CJ MARCH 2009 | CAROLINA JOURNAL PAGE 7 Mileage Taxes: New Highway Funding or Smart Growth Proxy?

By Karen McMahan been determined by GPS devices in the said his group supports a fuel tax in- Contributor cars that tracked drivers’ speed and lo- crease if the money goes to highway RALEIGH cation. The device wirelessly phoned The projects instead of being used as a car- growing number of federal and the company every time a client drove bon tax. state lawmakers are consider- faster than 79 mph for than two min- But a Congressional Policy Brief ing new types of taxes, called utes. While the court determined the Federal from the Pew Center on Global Cli- Avalue pricing or direct user charges, company could not charge a fee, it did mate Change in fall 2008, along with to finance highway construction and not prevent the company from con- File several reports on the U.S. Department maintenance projects to make up for a tinuing the GPS tracking policy. of Transportation Web site, reveals a projected shortfall in fuel tax revenues Annalee Newitz, a policy analyst strong emphasis on public policies as vehicles become more fuel-efficient. with the Electronic Frontier Founda- and tax strategies aimed at cutting Among the nonhighway toll con- tion in San Francisco, reported that a greenhouse gas emissions by reducing cepts being funded through millions Washington state court had held that the number of vehicle miles traveled. of dollars in grants from the U.S. De- law-enforcement officers must obtain These policies favor public transit and partment of Transportation are mile- warrants to install GPS devices on ve- carpooling over the building of new age-based taxes, congestion pricing, hicles to track suspects. The judge in highway infrastructure. surcharges for parking during peak that case ruled that these devices could In conjunction with a vehicle hours, parking cash-out policies, and “only be installed under the most ex- mileage tax and increased tolls, the pay-as-you-drive pricing, including treme circumstances,” Newitz said, Pew Center recommends pay-as-you- pay-per-mile car insurance premiums because the “devices are considered so drive insurance that links premiums to and innovative car ownership, leasing, privacy-invasive.” miles traveled, which rewards drivers and usage arrangements that reduce who rarely use personal vehicles, or al- considering the mileage tax would not fixed costs in favor of higher variable Debating fairness ternatively having drivers pay for their scrap the gas tax but would have both. usage costs. insurance each time they purchase fuel Proponents of the satellite-based Some in Congress support not only the Transportation officials, long- for their vehicles (pay-at-the-pump) technology system say it is fairer than new user-based taxes but an increase in range planners, and lawmakers refer through an additional fuel surcharge. the current fuel tax system because the gas tax. Among the supporters are to these “pricing mechanisms” as user- The report promotes the notion those using the roads in a jurisdiction Rep. James Oberstar, D-Minn., chair- based fees, not taxes. that smart growth policies, such as would be paying for them, with a fuel man of the House Transportation and N o r t h high-density, compact, mixed-use de- tax drivers Infrastructure Committee; and Rep. Carolina is velopment, encourage more Ameri- can pur- Peter DeFazio, D-Ore., chairman of the one of six cans to use mass transit and alternative chase gaso- House Highway and Transit Subcom- states partic- modes of transportation, including line in one mittee, according to a report from the ipating in a carpooling, vanpooling, bicycling, and jurisdiction Oregon Department of Transportation. two-year na- walking, instead of driving. but pri- Congress created the 15-mem- tional field In a 2008 hearing, the House marily use ber National Commission on Surface study of the Committee on Ways and Means roads else- Transportation Infrastructure Financ- new vehi- looked at ways to draft comprehen- where. ing, which has called for an increase in c l e - b a s e d sive global warming legislation that the current federal 18.4 cents-per-gal- mileage tax. E v e n would promote a reduction in vehicle lon tax on gasoline and the federal 24.4 The Univer- some liber- miles traveled, saying it would reduce cents-a-gallon tax on diesel and has sity of Iowa tarian and congestion and carbon emissions, and recommend fuel tax rates be indexed Public Pol- c o n s e r v a - conserve fuel. to inflation. icy Center, tive ana- Critics say behavioral tools, such In addition to pushing for an in- funded by a lysts think as compact developments and mass crease in the federal tax, the commis- $16 million tolls and transit, are intrusive, ineffective, and sion also is urging states to do the same federal grant, installs a GPS-monitor- user-based fees are fairer and would more expensive. Long-range trans- and to increase their use of toll roads ing device in participants’ vehicles to be a more efficient and cost-effective portation and land-use planning actu- and user-based taxes, particularly con- record the number of miles driven. way to fund highway construction and ally worsen congestion and per-capita Supporters say the system, should it be maintenance. gestion-based pricing that makes users driving. Randal O’Toole, a senior fel- implemented, would charge only for Critics, however, say that a mile- pay more for traveling during peak low with the Cato Institute, said in a the actual miles driven. age-based tax would penalize drivers times. 2008 report that urban planners admit This technology, however, raises of fuel-efficient and electric vehicles “Absent much higher tax levels “congestion is our friend” because it privacy concerns. The Public Policy and could discourage Americans from and/or major infusions from supple- “is a powerful disincentive for sprawl Center acknowledges on its Web site buying these vehicles, even as gov- mental sources, the current funding [and] creates political pressure to cre- (www.roaduserstudy.org) that the ac- ernment mandates automakers build approach is simply inadequate over ate a quality transit, bicycle, and walk- ceptance of such a system will depend more fuel-efficient and alternative fuel the long-term,” the commission said in ing system.” largely on how the public perceives vehicles. its interim report in February 2008. Cit- Rail transportation is not only privacy and security issues. Can driv- FreedomWorks, a Washington ing Oregon’s 2006-07 pilot program of the most heavily subsidized form of ers’ records be subpoenaed for crimi- D.C.-based organization that advo- GPS-based vehicle miles traveled, the transportation, said O’Toole in another nal or civil cases, for example, or what cates for lower taxes and less govern- commission said “such programs may policy brief, but “many light-rail op- happens if the data are breached by ment, believes a mileage-based tax also not be ripe for widespread implemen- erations use more energy per passen- computer hackers? would unfairly burden those who have tation in the U.S. yet, but are maturing ger mile than the average sport utility Participants in a mileage-based to commute long distances to work. rapidly.” vehicle, and almost none uses less than user fee public opinion study con- A recent report from the Oregon ‘Smart growth’ agenda a fuel-efficient car such as a Toyota ducted for the Minnesota Department Department of Transportation shows Prius.” of Transportation in August 2007 said that, under the vehicle mileage tax sys- Some analysts and industry ex- Urban transit costs 61 cents per they were skeptical of claims that any tem, those driving vehicles that get 20 perts say that the push for user-based passenger mile, but highway subsi- information collected would not be or more miles per gallon would be the fees has more to do with promoting dies average less than a penny per tracked and watched by “Big Brother.” losers, with the biggest losers being “smart growth” policies that favor passenger mile. “A mile of rail transit These concerns might be justi- those with vehicles that get 70 mpg. public transit and align to an environ- line typically costs more to build than fied. An article on About.com reported Under the gas tax system, drivers of mentalist agenda. a four-to-eight-lane freeway and typi- that American Car Rental was sued for vehicles getting less than 20 mpg pay In a recent Associated Press ar- cally carries fewer than half as many attempting to charge its clients $150 for the most. ticle, Charles Whittington, chairman people as a single freeway lane mile,” each instance of speeding, which had Also at issue is that many states of the American Trucking Association, said O’Toole. CJ PAGE 8 MARCH 2009 | CAROLINA JOURNAL Bauerlein: Kids Need to Log Off, Shut Down, and Do Some Reading

By CJ Staff kids reading. And it shows the kids this RALEIGH “A parent can no longer say, is what adults do. This is what you do ark Bauerlein, professor of if you’re a responsible person in a de- English at Emory University, ‘Go to your room! You’re mocracy. You read. You stay informed. made headlines in 2008 by grounded!’ No, the room is a You’re not always out there connecting Mdeclaring today’s young people the with your buddies. After the one hour “dumbest generation.” At least that command center.” is over, go ahead, go on back to your was the title he used for a book describ- blog, to your cell phone. Check your ing the impact of the digital culture on Mark Bauerlein messages, whatever you need. But par- young Americans. He discussed that Professor of English ents have to carve out a space vigilant- impact with Mitch Kokai for Carolina Emory University ly in the day in which you’re going to Journal Radio. (Go to http://www. do something else. You’re going to pay carolinajournal.com/cjradio/ to find a attention to some adult matters. You’re station near you or to learn about the going to read a long book without in- weekly CJ Radio podcast.) terruption. The cell phone’s not going to buzz. The computer is not going to Kokai: Some members of our au- Japan, and the Soviet Union. Fifty-two have to understand the depth of social ding an e-mail through. And in that dience should know whether to feel in- percent of high school seniors chose meaning that these tools have. If you one hour a day, it will accumulate into sulted. Who are you describing when Germany or Italy or Japan. This is as- want to see that, just go to a 17-year- something significant over the years. you talk about the “dumbest genera- tonishing, because World War II is old and say, “You have to give up your That’s what I say within the home. tion”? a popular culture subject, not just a cell phone for two days,” and you see On college campuses, it’s a different classroom subject, and in order not to what that means for that 17-year-old. A matter — in the education system. For Bauerlein: I’m talking about know that the Soviet Union was our parent can no longer say, “Go to your one thing, there is a tidal wave to digi- people who have really grown up with ally in that conflict, you have to see room! You’re grounded!” No, the room talize classrooms everywhere you can. digital technology from kindergarten this as more than just passive igno- is a command center. The room opens And we all know that technology is onward, so all these digital tools have rance — not reading your textbooks them up to all of their friends because the wave of education, but I think it’s been in classrooms, in their homes, carefully. It really means you are ac- they have the blog, the personal pro- very important for educators to real- from formative ages, and this has re- tively shielded from this type of his- file page, the laptop, the cell phone, the ize that there are certain habits of mind ally entered into their lives from really torical knowledge, that there’s anoth- text messaging, and so on where they and communication that screens are the first learning ages. The influence of er force in young people’s lives that keep in touch with one another. If you not conducive to. I would summarize digital technology and digital tools on is closing them off from this kind of really want to punish a 17-year-old, these in just calling them slow reading their learning development, their intel- understanding and knowledge, and all you have to do is say, “Go outside and slow writing, and you can see the lectual development, I think while on that’s where we get into the power of and play, and leave your cell phone contrast simply by standing behind an the one hand has provided enormous digital culture in young people’s lives. and Blackberry at home.” That is ex- 18-year-old in a library or at a comput- access and wondrous knowledge and That’s where we see digital cul- ile. That is banishment for them. That er. Watch that person go through Web information at their fingertips, it has ture not serving the purposes of open- underscores the power of these tools. pages online. It is fast. Watch them on the other hand produced some ing young people up into the great big So the recipe I offer to parents read. See how long it takes for them to deterioration of certain aptitudes. world of history and fine arts and civics is, look, one hour a day you have the read a page. They don’t read linearly. and foreign affairs and so on. Actually, family disconnect, log off, shut down, They don’t read all the words. They Kokai: Calling this group The it is shielding them from those things. and go into a room and read. And read look for visual clues, bullet points, Dumbest Generation sounds pretty whatever you want. Read the news- catch phrases, keywords, and they harsh. Kokai: So if digital technology paper, read Harry Potter, read Conan pass on. It’s a fast information retrieval is causing these problems, what do we novels, read The Daring Book for Girls. system, and this does not cultivate the Bauerlein: It is a harsh judgment, do about it? It doesn’t have to be Moby Dick every forms of attention and analysis and and it’s a provocative one, and I really time, but the parents have to do it, too. deliberation that are very important understand the title here as a provoca- Bauerlein: This is the tough The parents have to model for their in a lot of workplace environments. CJ tion more than an empirical description question, and this is the question that of the young. Young people today are always hits at the end of these discus- actually showing very many positive sions. What do we do about it? It’s behavioral measures. We have lower a really, really sticky thing because rates of violent crime, lower rates of you’re dealing with two extraordi- illegitimacy, better attitudes toward narily powerful forces. One, all of the Visit our Western regional page marketing, the consumerism, the in- parents, better educational pursuit — http://western.johnlocke.org more AP course taking for instance dustry behind all these digital tools — and more enrollment in college. — you go to the mall and walk inside However, when we look at mea- the Apple store, and you will see an The John Locke Foundation sures of knowledge, measures of ac- abundance of consumer goods and has five regional Web sites span- tual understanding in areas of history, commodities that are fun and excit- ning the state from the mountains of civics, of fine arts, culture, current ing. All the kids are in there running to the sea. events, foreign affairs — those sorts of around, and they want to have them: the iPhone, the iPod, and so on. So traditional liberal arts subjects — we The Western regional page in- see astonishingly abysmal numbers. you’ve got a whole industry support- The level of ignorance, for instance, in ing this, and it has consumer cachet cludes news, policy reports and U.S. history is quite distressing. Every among the young. That’s one thing. research of interest to people in time the U.S. Department of Educa- The other thing is this extraor- the N.C. mountains. tion gives the U.S. National History dinarily powerful force in our society, Exam, more than half of seniors in high which is the collective will of teenag- It also features the blog The school score “below basic,” according ers, the capacity to imitate one another, Wild West, featuring com- to reflect one another, to be like one to the scoring, which is essentially an F. mentary on issues confronting For instance, in 2001, when they another, to exclude one another, all the gave the U.S. history exam, one ques- forms of tribalism that go into high Western N.C. residents. tion was, “Which of the following school, come into play with these tools. countries was our ally in World War And so we have to understand before II?” The choices were Germany, Italy, we can see what to do about it, we The John Locke Foundation | 200 W. Morgan St., Raleigh, NC 27601 | 919-828-3876 MARCH 2009 | CAROLINA JOURNAL PAGE 9

Charter Schools at Disadvantage COMMENTARY When Dealing With Budget Cuts Capping Charter By Jim Stegall with her school’s ability to manage School Successes Contributor despite having to revert about $42,000. RALEIGH “We budget very closely and esearch on charter schools ing short of remarkable” by Boston harter schools are being hit cut corners where needed. We are generally shows these in- Foundation President Paul Grogan. harder by cutbacks in state always looking for the most cost- novative public schools Moreover, charters produced higher school funding than their tra- effective means of providing a solid Rboost achievement. Critics aren’t test scores in both lottery-based Cditional public school counterparts, education for our students,” Kent convinced. Charter students might and observational comparisons. according to some charter school ad- said. “We do not jump on every ed- excel, they counter, but such success Pilot school results were mixed and ministrators. With state revenues ucational bandwagon that goes by.” is preprogrammed before school inconclusive. projected to plummet next year, char- Joe Maimone, headmaster of even starts. The Boston research augments ter school operators are preparing for Thomas Jefferson Classical Academy Here’s a look at their logic: earlier lottery-based studies from even leaner times to come. in Mooresboro, said he feels fortu- Parents who seek out charter economist Caroline Hoxby showing Both former Gov. Mike Easley nate that his budget has been cut only schools are highly invested and in- New York City and Chicago charter and the new governor, Beverly Perdue, 2 percent, since state revenues have volved, and these familial qualities schools bolstered student perfor- ordered cuts to all state agencies in been running about 7 percent below — not educational factors intrinsic mance. Taken together, these data recent months. But each has shielded forecast. His school has managed to to the schools — produce student will undoubtedly catalyze charter public education from the full effects absorb the $100,000 hit to the budget achievement. This argument has expansion efforts: Massachusetts, of the cuts, relative to other agencies. by postponing some capital upgrades obvious ramifications for the char- New York, and Illinois all restrict ter movement’s growth: If these the number of charter schools oper- Easley’s cuts, or “reversions,” as they to its historic facility and leaving an schools have a negligible ating statewide. are known in gov- a d m i n i s t r a t i v e impact on academic out- Such findings have ernment circles, position vacant. comes, who needs more implications for North required all school But each of them? Carolina’s charter move- districts and char- Charter schools charter school The city of Boston ment as well. Why? ter schools to trim is different, and just might. In a new Statewide, charter school their budgets lack the ability some have had it report sure to confound demand greatly exceeds by 0.75 percent. to absorb cuts tougher than oth- critics, Boston charter supply. Here as elsewhere, Most school ers. Carter Com- school students outper- high-demand charters districts were by cutting in the munity School formed their traditional with more applicants than able to cope with in Durham was school peers, even when spots must conduct an- the reversions by central office forced tempo- the students had parents KRISTEN nual lotteries each spring holding down rarily to lay off who were similarly en- BLAIR to determine enrollment. spending at the three “very criti- gaged. The study’s Har- A recent Carolina central office lev- cal tutors who vard and MIT research- Journal survey found at el, leaving individual schools largely provided support to children in criti- ers, commissioned by the least 57 of the state’s 97 unaffected. Charter schools do not cal need of one-on-one support,” ac- Boston Foundation, did conduct charter schools had 2008-09 wait report to district central offices and cording to Executive Director Gail standard observational compari- lists. At five schools, wait lists had to absorb the cuts on their own. Scott Taylor. Taylor said that since the sons of all of Boston’s traditional, topped 1,000 students. Soon after taking office in Janu- school didn’t have the funds to hire charter, and pilot schools (public Some schools, though, have ary, Perdue announced a new, deeper full-time staff to help at-risk students alternatives created by the teachers’ struggled academically. Others round of cuts. The Department of Pub- close the achievement gap, the school union and school district). But they have mismanaged their finances. lic Instruction, which manages distri- had hired tutors on an hourly basis. also addressed concerns over family But the charter system provides bution of funds to public schools, was She worries that the cuts will put bias, following the performance of for these contingencies. Unlike ordered to revert 2 percent of its bud- her school, which already has a high two groups of equally matched kids traditional public schools, chroni- get to the state treasury. However, DPI at-risk population, even further be- who all sought entrance to high- cally underperforming or troubled officials decided to make all the cuts in hind. But she said, “In times like these, demand charter and pilot schools charter schools are shut down. State their own budget rather than pass them the true spirit of a charter school’s staff via an admissions lottery. tallies indicate 38 charter schools down to schools and school districts. shines through as members assume Lottery winners who enrolled have closed since 1997. Several With DPI absorbing the latest re- extra duties and responsibilities to en- in charter or pilot schools com- more may follow. versions, public schools should have sure that all students are provided the prised one group. Students who Overall, though, North been able to complete the year without enrichment they need to flourish aca- lost the lottery and remained in tra- Carolina’s charter movement is having to make dramatic changes to demically, socially, and emotionally.” ditional public schools made up a flourishing. Yet we cannot repli- their budgets, but there was another Some charter schools, such comparison group. In terms of fam- cate charters’ achievements. Our factor at work. County governments as Bethel Hill Charter in Roxboro, ily background, though, this was 100-school charter cap arbitrarily also are experiencing revenue short- have strong PTAs that have raised one homogeneous bunch. “At the limits growth. Supportive state falls, and most have responded to the enough money to allow the school time of admission, the only differ- lawmakers have sought repeatedly ence between applicants who were — and unsuccessfully — to repeal shortages by cutting the funding they to avoid personnel cuts. Union offered admission and those who the cap. They are trying again this provide to their local schools. These Academy in Monroe has had great were not was a coin flip,” affirmed 2009 session. county reversions are supposed to be success generating financial sup- lead researcher Thomas Kane in a Let’s hope they prevail this spread among traditional and char- port from the community through press release. time. Currently, thousands of ter schools alike in proportion to the its annual black-tie silent auction. But what a coin flip it was: students across the state await the number of students attending each. The stakes for charter schools are Charter students’ achievement rose outcome of crowded charter lotter- To cope with the cutbacks, char- far higher than for traditional public in every category compared to their ies. Charters are reforming public ter school administrators have been schools. Individual administrators at traditional school counterparts. education and helping kids achieve. forced to think hard and act fast. Most traditional public schools might get in Middle school math performance Why would anyone want to cap have frozen hiring, stopped buying trouble for poor financial management was particularly impressive: Just that kind of success? CJ supplies, and deferred all nonessential or faulty budget execution, but the one year in a charter school in- maintenance. Denise Kent, adminis- schools themselves are never closed creased student achievement by trator for grades K-8 at The Franklin for these failures. Charter schools the equivalent of 19 percentage Kristen Blair is a North Carolina Academy in Wake Forest, credits “fore- that fail to meet their financial obliga- points — a finding deemed “noth- Education Alliance fellow. thought and good spending practices” tions stand to lose their charters. CJ PAGE 10 MARCH 2009 | CAROLINA JOURNAL

NC School Briefs $20 million proposal

Dropouts linked to gangs Law enforcement and school State Lunch Program Funding Jump Questioned officials have noticed a troubling correlation between high school By Mitch Kokai that [in] your low-wealth areas, there’s some folks that are dropouts and gang activity, the Associate Editor just … in order to meet the current guidelines of providing a Asheville Citizens-Times reports. RALEIGH meal or balancing the budget, you know, they have to go to Of the 66 students who ome state legislators want taxpayers to pay an extra pizzas and French fries.” dropped out of an Asheville City $20 million in the next budget year to help local school Yongue reminded colleagues that they’ve been push- school last year, more than 40 per- systems offer healthier meals to elementary school stu- ing for the $20 million in new spending for “three or four cent were African-American males, Sdents. years.” “We finally ended up with getting $4 million at the and most of them were affiliated But the idea already has raised some concerns from a ‘big-chair’ level,” he said, referring to negotiations among with a gang, school officials said. chief N.C. House education budget writer. “There’s no ques- the full chairs of the legislature’s budget-writing appropria- Police have identified about tion in my mind that there [are] issues and that it’s needed, tions committees. “Before that was over, we had a member 25 operating gangs, 225 gang mem- but given where we are, I’ve got real concerns about starting of the committee up there make a motion to take part of that bers, and 75 associates in Asheville a new $20 million stream on a program that’s never been a out, and we had about $2 million left.” neighborhoods. state responsibility before,” said Rep. Rick Glazier, D-Cum- Further negotiations stripped the final $2 million of Gang members tend to be mi- berland, during the meeting of the Joint Legislative Educa- “seed money” out of the last budget, Yongue said. “We norities in their teens or early 20s tion Oversight Committee on Jan. 14. know it works,” he said. “It’s just a matter of monitoring to from low-income, single-parent Glazier and his colleagues expect to face a hole in the make sure we spend it wisely.” households. That is similar to the next state budget that some observers have projected to be Concerns about inadequate oversight are not limited profile prevalent among high school as large as $3 billion. More-conservative estimates still peg to child nutrition programs, Yongue said. “I think your com- dropouts. the figure at more than $1 billion. ment and concern could be spread across the board to about More than 3,400 murders and The Education Oversight Committee endorsed the everything we’re doing,” he told Glazier. “I mean, you 172,000 violent assaults nationwide $20 million in new child know, we need to monitor a could be prevented if high school nutrition funding as part lot of things with the money graduation rates were raised by of a package of recommen- sliding away.” just 10 percent, according to a 2008 dations heading to the full Another retired school report released by Fight Crime: In- General Assembly. A draft administrator echoed vest in Kids, an organization of law bill says the money would Yongue’s comments sup- enforcement leaders and crime vic- “ensure that child nutri- porting increased funding. tims. tion programs operating “When you change to try That same report said 68 per- in the public schools have to serve more nutritious cent of state prison inmates across adequate funds to imple- meals, you just don’t get the country are high school drop- ment nutrition standards as many sales per day, and outs. In North Carolina, more than adopted by the State Board that’s really hurting all of 77 percent of inmates do not have a of Education for elementary them,” said Rep. Larry Bell, high school diploma, according to schools.” D-Sampson. “If we’re going the N.C. Department of Correction. “Child Nutrition Pro- to make that provision for grams can be part of the them to serve [that] nutri- solution to the epidemic tious food, we’re going to Benefits of education of overweight children in have to help them in some In order for the United States North Carolina,” according to the committee’s draft report. way.” to maintain its top position in the “However, it is more expensive to provide healthful foods At least one lawmaker sided with Glazier in the de- world, every child must receive a such as fresh fruits and vegetables, whole grain products bate over spending new money. “My feeling is that money sound basic education, the chair- and skim milk, and there are increased labor and equipment is going to be exceptionally tight,” said Rep. Curtis Black- man of the State Board of Education costs associated with providing healthy food choices.” wood, R-Union. “We have a major problem with a third of says. Those arguments did not persuade Glazier, who has our population being obese, and a third of the population Speaking before about 80 peo- chaired the House subcommittee in charge of drafting a being overweight, so it’s a very valid concern. But I think ple at Fayetteville State University’s state education budget. He reminded colleagues that he had we’re going to have to make some very difficult choices. Ex- Seabrook Auditorium on Feb. 17, objected to the $20 million when it was proposed in the last panding new funding is something that maybe ought to be Howard N. Lee touted education’s legislative session. “I continue to have concerns over the looked at three times.” power to lift humanity, the Fayette- fact that it’s a straight $20 million bill, as opposed to set- One legislator urged his colleagues to put off the fund- ville Observer reported. ting out — or requiring that folks set out — some baseline ing debate to a later date. “This bill has got a long way to “Education, beyond all other responsibility that districts have and parents have.” go, like all of these other bills,” said Rep. Joe Tolson, D- devices of human origin, is the great School districts across the state would collect the new Edgecombe. “This is just making a statement that I think equalizer,” said Lee, who is the first funds based on the “number of reimbursable meals served this body says there’s a need to look at nutritious meals. It black to chair the state’s education to students in elementary schools,” according to the draft may be that we cannot fund it, but at least we’re making a board. “Give me an education and report. statement, I think, from this committee that it’s an issue that I will free myself from the chains of “A district that’s charging $0.40 a lunch and perhaps we need to address.” society.” not doing its full responsibility through its parents is going Lawmakers made no statements about the problem Lee, 74, spoke as part of FSU’s to get the same benefit as a district that’s really taxing its that Carolina Journal has documented with free and reduced- annual Chancellor’s Distinguished folks at the lunch stage — $2 a meal — and they’re really try- price lunch programs in North Carolina’s public schools. Speakers Series. A former university ing to do it as they’re supposed to,” Glazier said. “I’ve just “A majority of sampled applicants enrolled in the free administrator, city of Chapel Hill got real concerns about us going on record and supporting a and reduced-price lunch program in North Carolina can’t mayor, and state legislator, Lee was $20 million new stream this year with no tag, no responsibil- prove eligibility to participate, according to verification appointed to the State Board of Ed- ity, no minimum requirements by districts to comply.” summaries from the state’s 115 school districts,” CJ reported ucation on May 15, 2003, by former Glazier’s comments drew a response from Rep. Doug online in November. Gov. Mike Easley. Yongue, D-Scotland, a retired school administrator and co- Supporters expect no decision on the $20 million in new During his speech, Lee cited chairman of the Education Oversight Committee. “I under- funding until the state budget is finalized. Gov. Beverly Per- the state’s 7 percent dropout rate stand where you’re coming from,” Yongue assured Glazier. due will submit a budget plan to legislators by the middle of and 69 percent high school gradua- “There’s going to have to be some cleaning house and ev- March. Lawmakers will then draft their own proposals. The tion rate as evidence of the need to erybody singing off the same sheet of music and some direct governor and lawmakers will try to finalize a spending plan CJ do more. monitoring. But, you know … the main factor we have is by the start of the new budget year July 1. CJ MARCH 2009 | CAROLINA JOURNAL PAGE 11 Questions Surround Guilford Strategic Plan’s Implementation By Sam A. Hieb Mecklenburg Schools, where Green plan. any semblance of order with the school Contributor was assistant superintendent before “I’m afraid what we’re going to locations,” so that regionalization GREENSBORO taking over in Guilford County. end up doing is working at cross-pur- shouldn’t make much of a difference any questions still surround While it can’t be said that the poses or being redundant,” Daniels in board members’ accountability. Wil- Guilford County Schools Su- school board has been overly enthusi- said. son pointed out an elementary school, perintendent Mo Green’s am- astic about Green’s plan, it hasn’t ex- Green reminded Daniels that the a middle school, and a high school that Mbitious new strategic plan. One major actly challenged it, either. The board board gave him the go-ahead to initi- are on one contiguous site but are not question is exactly what the Board of seems tentative about asserting its ate a strategic plan when he arrived at represented by the same board mem- Education’s role will be in implement- role in implement- GCS. ber. ing the plan. ing the plan, al- “When I first With that in mind, Wilson said a Green unveiled the plan Jan. 27 in though at a Febru- started, one of the board member would more than likely a showy ceremony at Guilford Techni- ary meeting board Board seems first things I did have more than one regional superin- cal Community College. It definitely Chairman Alan hesitant to was ask the board tendent in his or her district under the sets ambitious four-year academic Duncan said that to what extent strategic plan. goals. if the board felt assert its role will I be able to Board member Garth Hebert Among them are 81 percent of strongly against put in a plan that quizzed instructional-improvement of- students performing at grade level on any aspect of the in implementing I think will move ficer Lewis Ferebee on the advantages end-of-grade reading tests; 25 percent plan, especially re- the district for- of installing a regionalized system. of students in grades three through gionalization, then the strategic plan ward. What I got Ferebee replied that the main eight scoring above proficient on read- it had an obliga- as a response was benefit of regionalization would be ing tests; a 16 percent increase in the tion to speak out. ‘Certainly, Mo, we combining school support offices and number of students scoring at grade “We’d be doing a disservice if want to have the opportunity to pro- academic improvement offices, with level on math tests; and 6 percent in- we didn’t communicate that,” Dun- vide input and advice, but this is your the regional superintendent oversee- creases in students taking and passing can said. “I think it is important that plan,’” Green said. “That’s the way ing both offices, thus avoiding -over advanced placement courses. we give some reaction if there’s some- we’ve proceeded, and at no time am I lapping of services. The tool for accomplishing these thing in the plan that’s not in complete thinking the board will be approving “Often, when you’re dealing with goals is equally, if not more, ambi- accord just so it can be taken into ac- the plan in toto.” school support issues, they blend with tious. Green wants to “regionalize” the count,” although, he said, he hadn’t Green added, however, there academic issues,” Ferebee said. “The school system, dividing into smaller heard any discord from the board. probably would be certain financial regional superintendent would still be districts to be overseen by “regional Board member Paul Daniels did and policy matters related to region- responsible for facilitating academic superintendents.” The plan is a model take the initiative to ask Green about alization of the district whereupon the improvement for the schools they’re of the system put in place by Charlotte- the board’s role in implementing the board “would have the opportunity to supervising, along with addressing react to, approve, or not approve.” parental concerns and school support Daniels also was concerned about issues. Currently, the instruction im- how regionalization would affect the provement officers are separate from board, mostly if realigning the districts school support issues, but what I’ve would be required. found is they’re often related.” “It seems to me, at first glance, Hebert replied that, while he un- we shouldn’t be splitting districts,” derstood the regionalization concept, Daniels said. “A board member’s dis- he was still trying to “get a feel” for ex- trict should not be split among two, actly how the plan was going to work. or three, or four regional superinten- “I see pictures in my mind, and dents. By doing that, we’re moving the none of them gel,” Hebert said. whole issue of accountability.” Hebert also warned that, at some Board attorney Jill Wilson ex- point, the superintendent’s goals and plained that “districts don’t align with the board’s goals might conflict. CJ PAGE 12 MARCH 2009 | CAROLINA JOURNAL

Income-based integration Busing For Diversity in Wake Not Making the Grade By Karen McMahan like Ron Margiotta, Kent Misegades, Contributor Robert Luddy, Nelson Dollar and Paul RALEIGH Stam.” n early 2000, the Wake County “After attending multiple work Board of Education adopted a sessions and school board meetings, school assignment policy based on I’m convinced their [Wake school Ifamily income, which the board says is board] goal is to promote mediocrity. necessary to improve the educational The board of education is using busing outcomes of economically disadvan- to mask the low performance of indi- taged students and balance schools vidual schools,” said Cope in a recent across the district. interview. But North Carolina end-of-grade By sending children far away test data show student achievement from their local schools, the school for economically disadvantaged stu- board is discouraging parents from dents in Wake County has declined being involved in schools, said both since income-based assignments were Cope and Brennan, and it boosts a instituted. school’s overall achievement data but Several Wake County parent Tests have shown that low-income student achievement has declined since income- not for subgroups like economically groups have begun coordinating their based assignments were instituted. disadvantaged or Limited English Pro- efforts to end Wake County’s income- ficiency students. based assignment policy that they say fied with the educational quality their nomically disadvantaged students — Referring to the current school is traumatic for both children and their child is receiving. 50 percent — than does Wake County board, “the white folks in charge of the families. An income-based integration Supporting this and other chang- — 30 percent — yet the data show that school system who have no children plan determines school assignment by es is Ron Margiotta, a member of the Charlotte-Mecklenburg students are are speaking for educationally disad- whether a student is enrolled in the Wake County Board of Education, who faring better than those in Wake Coun- vantaged students without any mean- federal free and reduced lunch pro- along with Keith Weatherly, mayor of ty. ingful input from their parents,” said gram (F&R). Apex, Kent Misegades, chairman of the A better measure of academic Cope. The groups include WakeCARES, board of trustees of Thales Academy, achievement would be to analyze co- “The school board assumes that which sued the Wake County Public and two other Wake County residents, horts or representative groups, but these parents won’t get involved, but School System in 2007 over its forced wrote and presented an open letter to the school board and the Department the board doesn’t give them the op- year-round school conversion policy, the school board at the Feb. 6 meeting. of Public Instruction have declined to portunity. They’ve never even talked and two newly formed groups, the release these performance data to the to the F&R parents to see what they Wake Schools Community Alliance Policies and results parent groups. think of these policies,” Brennan said. (www.wakesca.org) and Children’s After comparing data from the Right to choose “The federal government has grants to PAC, founded by Dana Cope, execu- state’s school report cards for the help F&R kids, and Guilford County tive director of the State Employees school year 2007-08 to data from the Parents who oppose Wake’s schools got one, but Wake didn’t even Association of North Carolina. school year 2001-02, the letter’s au- school assignment policies are not try- apply.” At a school board hearing Feb. 6 thors concluded that economically ing to undermine diversity, as some “Board members have heard lit- in Holly Springs, parents voiced their disadvantaged and Limited English have charged, but rather are trying tle from minority parents, especially opposition to the most-recent three- Proficiency students in Charlotte- to make sure that parents, regardless those from Southeast Raleigh,” wrote year school reassignment proposal Mecklenburg Schools have progressed of income level, have a voice in the T. Keung Hui, a reporter for the News presented by the Wake County BOE, rapidly relative to their Wake County educational system and can choose and Observer of Raleigh. “Most of the which would reassign 24,654 students public school counterparts. CMS abol- the best educational opportunities for feedback has come from white, subur- over the next three years. ished income-based assignments in their children. ban parents who are upset about their But Kathleen Brennan, cofounder 2002 after a 2001 court ruling that end- Cope and Brennan said that sev- children changing schools.” of WakeCARES, and other parents dis- ed busing. eral minority advocacy groups, includ- Cope’s comments that the school pute that number. In a written state- Parents showed the school board ing Raleigh Wake Citizens Association, board was using “his children for a so- ment, Brennan said both the Wake that EOG scores for economically dis- support their efforts to change Wake’s cial experiment that has gone wrong County school board and Wake Edu- advantaged students in Wake County diversity policies. Several attempts to and needs to be replaced” reflects the cation Partnership are trying to make Public Schools fell from 2.1 percent reach Daniel Coleman, president of the sentiment of many parents. Businesses the 24,654 appear substantially less by above the state average in 2001-02 to Raleigh Wake group, were unsuccess- and people relocate to Wake County referring to the number of people who 2 percent below the state average in ful. because of the quality of neighborhood could be grandfathered in but must 2007-08. In a recent blog post on BlueNC, schools, but students are subject to provide their own transportation. Scores for economically disad- Greg Flynn wrote that the real purpose reassignment after just one year, said For the five-year span from 2004 vantaged students in CMS improved of these opposition groups is to ensure Cope, and that’s “a disservice to stu- and ending in 2009, “WCPSS will have from 7.9 percent below the state aver- higher property values in the neigh- dents, parents, and businesses.” reassigned 38,940 children,” Brennan age in 2001-02 to 2.2 percent below for borhoods where they live and to “oblit- A recent $215,000 audit of the said, which is 28.3 percent of 2008 en- 2007-08. In other words, the 10 percent erate public education and replace it Wake County Public School System by rollment, and that figure does not in- difference that existed in favor of Wake with a free market system funded by Phi Delta Kappa criticized the board clude about 15,000 students scheduled County relative to CMS has been re- taxpayers with universal vouchers.” for failing to conduct a cost-benefit for reassignment over the next two duced to 0.2 percent for 2007-08. While praising the NAACP’s re- analysis of its reassignment plan or di- years or those forced into a year-round Also, EOG scores for Limited cent march in Raleigh that pushed for, versity policy, Brennan said. calendar, opt outs, and so forth. English Proficiency students in CMS among other things, better schools, the Among their recommendations, Instead of shuffling children from now exceed the state average by 1.7 “Employee Free Choice Act,” and col- these parent opposition groups are neighborhood schools and busing them percent, instead of 2 percent below as lective bargaining rights for public em- calling for Wake County to abolish its to schools as far away as 25 miles, par- in 2001-02, whereas EOG scores for ployees, Flynn criticized the Children’s income-based reassignment policy and ents asked the board at the Feb. 6 meet- Wake County’s Limited English Profi- PAC and other parent groups wishing use the savings to focus on the poor- ing to adopt assignment policies that ciency students declined from 6.8 per- to elect new school board candidates, est-performing schools and children favor neighborhood schools, meaning cent in 2001-02 to 2.9 percent in 2007- saying they want to end diversity and with special needs and to pay teach- children attend schools closest to their 08. “weaken the Wake County Public ers based on their individual perfor- homes, and that give parents an open As of February 2009, CMS has a School system to [the] point where it mance, not their seniority, credentials, enrollment choice if they are dissatis- significantly higher percentage of eco- can be easily killed off by conservatives or school where they work. CJ MARCH 2009 | CAROLINA JOURNAL PAGE 13

UNC System Finding It Hard to Put on Brakes Campus Briefs • This year, 200 years after the birth of Charles Darwin, Ap- After Starting New Programs in Flush Times palachian State University is spon- soring a lecture series exploring Darwin’s ideas and their effects on By Jay Schalin major higher education budgetary is- Education Access Rewards North Car- religion, culture, and science. All Contributor sues facing the Assembly. His presen- olina Scholarships (EARN) are $4,000 talks are free and open to the public. RALEIGH tation to the Joint Committee on Edu- grants for the first two years of college The first lecture was “Why Darwin he problem with letting “the cation indicated that the legislature’s for first-time college students whose Matters” by Eugenie Scott, execu- good times” roll is that it is hard largesse to the university has created family income is less than 200 percent tive director of the National Center to stop the rolling when the large financial demands. The new pro- of the poverty line, or $41,300 for a fam- for Science Education. Other topics economyT goes downhill. grams created during the last full leg- ily of four in 2007. Last year, the legisla- include “Evolution and Faith: What During the last few years, while islative session in 2007 will put finan- ture expanded the program to include is at Stake?” “Darwin at 200 Years: North Carolina’s powerful economy cial pressure elsewhere on the system. students at the state’s private schools. Does He Still Speak to Us?” and “Is filled the state coffers, the University of They are scheduled to grow over time, Bostic said that program pro- Evolution ‘Only a Theory’? Charles North Carolina started many new, ex- and they will not yield their intend- vided an estimated 12,000 students Darwin and the Design of Life.” pensive programs. After the 2007 legis- ed returns for several years, if at all. with $45.5 million in its first year, lative season, UNC officials praised the Three of these programs are the 2008-09. Next year, it will cost at least General Assembly for its generosity. EARN Scholarships, research con- double that amount, since there will • Elinor Benami is the first This year, with tax revenues fall- ducted at the new North Carolina be another year of recipients added. recipient of the Eve Marie Carson ing, those new Biotechnology In 2008, the legislature also Memorial Junior-Year Merit Schol- programs still Center at Kan- shifted the primary source of fund- arship at UNC-Chapel Hill. The require fund- napolis, and ing — all but approximately $7 mil- scholarship, named for the former ing, even as the the University lion — for the EARN scholarships student body president, was de- university sys- Cancer Re- from the General Fund to the Escheat signed to honor a junior committed tem explores search Fund. Fund. The Escheat Fund is created to academics, leadership, and com- making cuts to B o s - from unclaimed property that reverts munity service. The award drew key academic tic also cited to the state, such as when a property p r o g r a m s . e n r o l l m e n t owner dies with no heirs and no will. 138 applicants. Benami, who comes Richard Bostic growth as an- Also in 2008, other need-based from Knoxville, Tenn., has spent of the legis- other consid- scholarship programs pulled $100.7 most of her college years working to lature’s Fis- erable factor million from the Escheat Fund — and protect the environment. This year, cal Research forcing cuts the Board of Governors is requesting she is cochairwoman of the envi- Division esti- — enrollment an additional $23.4 million for fiscal ronmental action committee of stu- mates that the often spikes 2009-10. According to Fiscal Research dent government. Benami said that system will during reces- Division estimates, the Escheat Fund, she has not settled on what summer need $38 mil- sions. He ex- which had nearly $700 million in 2007, project she will pitch, but that it lion in perma- pects an addi- will be empty by 2012, depleted by will be related to the environment. nent cuts and tional 12,399 scholarships programs. At that time, $143.5 million in “one-time bud- UNC students in the next two scholarship funding will likely revert get reversions.” The Fiscal Research years, costing the state an extra to the General Fund — becoming a • The N. C. State chapter Division provides information $44.8 million in 2009-10 and $54.4 hefty nine-figure burden on taxpayers. of Students for Concealed Carry about the budget to the legislature. million on top of that in 2010-11. Last year, the legislature gave on Campus organized an empty- “These cuts will be painful,” UNC But the programs that began in public schools $6 million for opera- holster event Feb. 9 -13. Similar system President Erskine Bowles said at the 2007 legislative session best illus- tions at the North Carolina Biotech- events took place on other campus- the Board of Governors meeting Feb. 13. trate what can happen when good in- nology Center in Kannapolis. After es in North Carolina, South Caro- On Feb. 11, Bostic laid out some tentions become fiscal mandates. The his presentation, Bostic suggested that lina, and Virginia. During the week, the amount might be closer to $10 mil- members of the group carried emp- lion this year — for a highly specula- ty holsters in plain view to draw tive venture with no immediate gains. attention to Second Amendment The University Cancer Research Rights. Students for Concealed Car- Fund is also getting a big jump in ry on Campus is a national organi- Visit our Wilmington regional page funding this year. The state’s annual zation that describes itself as having http://wilmington.johnlocke.org contribution to this fund will increase more than 36,000 college members, to $50 million for the next fiscal year, including students, professors, a $10 million rise. This year, it has college employees, parents of col- The John Locke Foundation a $40 million budget, with $8 mil- lege students, and others. They has five regional Web sites span- lion coming from the Tobacco Trust believe that those who hold state- ning the state from the mountains Fund, $16.5 million from taxes on issued concealed handgun licenses to the sea. tobacco products, and $15.5 million should be allowed to carry their coming from the General Fund. The weapons on campus as elsewhere. The Wilmington regional page future might hold other increases if On its Web site, the group states includes news, policy reports revenue from the tobacco taxes falls. that recent events “clearly demon- and research of interest to Perhaps, if the legislature hadn’t strate that ‘gun free zones’ serve been so generous in good years, the people in the coastal area. to disarm only those law-abiding university system’s cuts wouldn’t citizens who might otherwise be have to be so “painful” now that times able to protect themselves.” CJ It also features the blog Squall are lean. Bostic said that the state Lines, featuring commentary is committed to these projects, but on issues confronting coastal “commitments can be broken. They N.C. residents. aren’t constitutional amendments. Compiled by Jenna Ashley Rob- It’s nice if you can afford it, but… .” inson, campus outreach coordina- Yet with so much money al- tor for the John W. Pope Center for The John Locke Foundation | 200 W. Morgan St., Raleigh, NC 27601 | 919-828-3876 ready devoted to these projects, it Higher Education Policy in Raleigh. will be hard to reverse directions. CJ PAGE 14 MARCH 2009 | CAROLINA JOURNAL

COMMENTARY Canadian Professor Pushes A Letter to Limits of Academic Freedom

By George Leef Rancourt was open about his desire to Prospective Students Contributor use his classroom to motivate students arents, please pass this article on what you want to study, take your RALEIGH to leftist activism. to your high-school-age children. first semester’s worth (or year’s A Canadian professor recently The interesting question regard- Additional information can be worth) of general education courses announced that he would devote his ing l’affaire Rancourt is whether the pro- Pfound at: www.popecenter.org/students/ at a community college. Almost all physics class not to teaching the stu- fessor’s conduct can be defended. prospective. universities require the basics: in- dents physics, but to trying to turn Writing in The New York Times, So, you’ve decided to go to troductory courses in mathematics, them into zealous opponents of “the Professor Stanley Fish made at least system.” The university had the nerve a halfhearted attempt at defending college. Can you afford it? natural sciences, English, and social to say “No, you don’t.” Rancourt, saying that it all depends on First, you need a plan. In my sciences. You can discover which Denis Rancourt teaches — rather, whether one takes a broad or a narrow case, not taking an active role (or fields you enjoy before you decide used to teach — at the University of view of academic freedom. even understanding the details) on a four-year college. Ottawa. He is vehemently opposed Under a “narrow” view, Rancourt meant that I borrowed more money • Live in the dorms for at least to allowing universities to serve as a is not doing his job. Academic freedom than I needed and spent money two years. The price includes water, “boot camp in the service of capital.” means that a professor can’t be penal- foolishly. power, and often Internet access That line reflects his political philoso- ized for his research, writing, and ut- Add up all your expected ex- (which will cost extra in most apart- phy: Capitalism is the universal en- terances, but it does not confer license penses: tuition, student fees, room ments). If possible, choose a dormi- emy, and uni- to ignore the and board, books, and incidentals. tory that organizes rooms in suites versities should terms of his con- Colleges list tuition and rather than halls. With a be churning out tract. It doesn’t fees on their Web sites, smaller number of stu- students eager mean that pro- and often university hous- dents sharing bathrooms to take it on. fessors are so ing and dining services and other facilities, you Since the important that also have Web pages. get more privacy at the University of ordinary rules of If you plan to spend a same low cost. Ottawa did not, law, such as the semester abroad (or even • Save even more by however, see need to abide a summer), consult the living at home. that as its role, by contracts, are school’s study-abroad of- • Buy used books. Rancourt decid- waived. fice for an estimated price. Students spend about ed that he would Is there a Then, examine your JENNA $700 on required course “squat” one of “broad” view? sources of money. Look ASHLEY materials a year. Private his courses; that Rancourt thinks to scholarships, savings, ROBINSON bookstores located off is, use it to teach so, claiming that family contributions, campus usually offer bet- what he wanted academic free- work-study, and current ter prices than the campus to rather than dom is “the ide- income before you mort- bookstore. Sell back any what the course al under which was supposed Prof. Denis Rancourt of the University of professors and gage your future with college loans. books that you won’t use in the Ottowa. Lastly, spend your money future. Or buy online at sources like to cover. Why students are wisely. There are many ways to trim Amazon or Half.com. waste valuable time with “Physics and autonomous and design their own the Environment” when profit-driven development and interactions.” Fish costs — from a few hundred dollars • Don’t join a fraternity or global finance is wrecking the world? may think so, too. Instead of saying to a few thousand: sorority. There are some benefits University officials were not that students and professors are free to to Greek life, but the price is high. amused. do what they want but not to violate • Look beyond the U.S. News If you must join, pay with money This was not university rules rankings. You can get a great educa- earned working part-time, not the first time Ran- and contracts, he tion without going to an expensive loans. court had clashed vaguely suggests school. Apply to colleges with good • Minimize the party scene, with the univer- that Rancourt’s programs in your chosen field of and don’t splurge on concerts or sity. A few years Rancourt’s case is view has some va- interest. fashion. Tuition and fees cover a ago, he had cre- an embarrassment lidity and can be • Take Advanced Placement lot of bells and whistles: access to ated a course on defeated only by courses in high school. Taking five gymnasiums, Olympic-sized pools, “activism” that the to those who say “an essentially po- AP courses — and scoring well on intramural sports, computer labs, university subse- litical decision.” the exams — can help you graduate free newspapers, and athletic tick- quently canceled. liberal bias in There is a semester earlier. Not only will you ets. Take advantage of those. The final straw academia is a myth some “gray area” save tuition money, you’ll also enter • Take a full load of classes. came when he around the edges the job market with fewer competi- Figure out how many hours are adopted a policy of academic free- tors graduating at the same time. required to graduate. Divide that of assigning all dom. For example, • Don’t apply to too many number by eight semesters. Take students grades of A-plus against uni- how unscholarly does a book have to colleges. I applied to seven universi- at least that number of hours every versity policy that professors evaluate be before it becomes illegitimate for a ties. Looking back, I think that was semester, in order to graduate on students. professor to use it in a class? probably too many. The average col- time. This time, university officials sus- Fish’s most recent book, Save the lege application fee is around $25. pended his employment and banned World on Your Own Time, proposes the (Some colleges charge up to $60, Yes, you can get a great educa- him from the campus. They might fundamental argument that professors while others don’t have an applica- tion without breaking the bank. CJ even fire him, although the procedural are not supposed to teach anything tion fee at all.) Trimming your list hurdles to firing a tenured professor but the subject matter of their courses could save several hundred dollars. are daunting. while in class. CJ Better yet, you may be able to have Jenna Ashley Robinson is cam- However the case turns out, it’s some fees waived. pus outreach coordinator for the John a severe embarrassment to those who • Consider starting at a com- W. Pope Center for Higher Education say that the problem of politicized George Leef is director of research at college teaching is simply a myth in- the John W. Pope Center for Higher Educa- munity college. If you don’t know Policy. vented by conservative reactionaries. tion Policy. MARCH 2009 | CAROLINA JOURNAL PAGE 15

Opinion Let’s Hear Both Sides of the Story From NCSU’s Speakers ormer President Bill Clinton pre- Charlie Rose. It almost appears influence people who are uncertain. sented his vision of the future at Easley sup- as if the invita- Young people sitting in the audience a speech at N.C. State University porters might say tions to Gergen might not question him, unless they Fin January as part of the Millennium that the series is and Graham were already know the arguments counter- Seminar Series. As expected, his vi- politically balanced premeditated to ing his claims. For example, many sion resembled various planks on the because of the deflect accusations countries with the nationalized health- Democratic Party platform. two other political of bias without care systems favored by Clinton Sadly, the entire Millennium Se- speakers, former actually bringing deliver inferior medical services to ries has started to look like the Demo- Reagan adviser a true free-market their citizens compared with the care cratic Party platform. The univer- David Gergen and political voice onto provided by the United States’ more sity system is not supposed to show Republican Sen. campus. decentralized system. Some scientific favoritism for one Lindsey Graham. Yet they hardly rep- While Clinton often is described research indicates that the Earth is political party resent conservative thinking; rather, as a “centrist” in the media, he openly cooling, not warming, and that pow- and its beliefs. many conservative Republicans hold tilted to the left when he spoke at N.C. erful natural forces in the universe But then, the wife them in contempt. Gergen might have State. Among the ideas strongly iden- overwhelm mankind’s impact on the of a Democratic worked for Republican presidents, but tified with liberals that he presented climate. ex-governor has he was also a close Clinton adviser, were the need for policies to counter- This is not to suggest that Clin- invited the speak- and his recent work as a political act climate change and the need for ton should not speak at N.C. State. ers. analyst on CNN shows a man of no universal national health care. He is the former president, and by all Many ethical strong political convictions. With the Clinton’s vision of the world and means we should hear his vision of questions were wind now blowing to the left, so does the country is a liberal Democrat’s the future. However, we should hear raised about the JAY he. view — he took the other side as well, for the sake of hiring and promo- Graham is a slap at Bush by fairness, for balance, and for intellec- tion of Mary Easley SCHALIN reviled by much suggesting that tual discourse. at N.C. State in the of the political University the rest of the Instead of such one-sided argu- summer of 2008. The school defended right. Time and world respects ments, a thriving campus should her pay raise partially on the ground again he has speakers program the United States feature open debate and a clash of that someone of her stature is needed served as a foil again with the ideas, with the best ideas winning. to attract high-profile speakers. Yet it to conservative shouldn’t resemble transition of That is how a democracy is supposed appears that the speakers she invites causes. The Ameri- power to Presi- to function. share a blatant ideological bias. can Spectator, a Democratic dent Obama. He It would appear that UNC sys- In its first three years, the series leading conserva- Party platform also expressed tem President Erskine Bowles, himself has scheduled 13 speakers. Six have tive publication, a belief that the a former Clinton Cabinet member, been nonpolitical, either businessmen titled a May 15, United States agrees with this sentiment. or scientists (and NCAA president 2008, article about should no longer To achieve a greater balance in Miles Brand). Of the remaining seven, him “The Worst Republican Senator,” act “unilaterally” in its own interests, the ideas presented by Millenium four have been high-ranking mem- then listed the many times he under- but should act for the good of an “in- Series speakers, he contacted the Pope bers of the national Democratic Party cut President George W. Bush and his terdependent” world. This suggests Center for some suggestions for more establishment. These include Clinton, fellow congressional Republicans. a willing submission to international conservative speakers. For this act of two former members of his Cabinet To provide balance to liberals organizations such as the United Na- fairness, he should be commended. CJ — Education Secretary Donna Shalala like Bradley and Clinton, the Mil- tions or World Court favored only by and Labor Secretary Robert Reich lennium Series should also schedule those on the left. Jay Schalin is senior writer for the — and former U.S. Sen. Bill Bradley. conservative stalwarts like former Clinton is an entertaining and John W. Pope Center for Higher Educa- A fifth ardent liberal was PBS host Speaker of the House Newt Gingrich. persuasive speaker. He easily can tion Policy. PAGE 16 MARCH 2009 | CAROLINA JOURNAL Annual JLF Report Shows Increase in Government Cost

By Michael Lowrey quantity or quality of services provided in exchange registers. Because owners or renters only rarely live Associate Editor for those dollars. Nor does the report consider the in these dwellings year-round, however, such lo- RALEIGH additional out-of-pocket costs to individuals for ser- calities typically have small permanent populations. he cost of local government increased slightly vices that their local government might not provide. High tax values divided by a small permanent popu- in fiscal 2007. That’s one of the key conclusions In unincorporated areas, for example, home- lation will produce a high per-capita tax burden. in the latest edition of By The Numbers, the John owners might have to contract privately for garbage Residents in the counties of Alexander ($785), LockeT Foundation’s yearly study of tax and fee col- pickup, while those living in a town or city might Gates ($792), Caswell ($831), Greene ($840), and lections by local government in North Carolina. receive this service, paid for through their munici- Hoke ($856) paid the lowest average amounts in tax- The report shows that during fiscal 2007, the pal property and other taxes. Municipalities might es and fees to local governments. typical resident of the median county in North Caro- also use some of their tax dollars to provide a higher As per-capita personal income varies widely lina paid $1,275 in local taxes and fees, up 1.3 per- quality of fire protection, which might translate into across the state — from a high of $44,267 per person cent from an inflation-adjusted $1,259 a year earlier. lower homeowners’ insurance rates. in Mecklenburg County to a low of $ $21,073 in War- That amounts to 4.71 percent of personal income in “Importantly, this means that whether a juris- ren County — looking at tax burdens as a percentage the median county, down slightly from the previous diction is ranked high or low in cost of government of personal income produces somewhat different re- year. is not the end of the debate over fiscal policy — it is sults. Dare County, again, leads the way with county merely the beginning. Citizens of North Carolina’s and municipal revenue accounting for 11.87 percent Calculating burdens cities and counties must decide whether the services of per-capita personal income. Second through fifth State law requires each county and municipal- they receive are worth the price they and their fellow were the counties of Hyde (8.32 percent of per-capita ity to file audited reports, which are available on the taxpayers (residential and business) are paying in lo- personal income), Brunswick (8.31 percent), Bladen Web, with the N.C. Treasurer’s Office each year. cal taxes and fees,” according to the report. (7.86 percent), and Currituck (7.84 percent). By The Numbers builds on that data and exam- Work on this year’s report was complicated by By comparison, taxes and fees collected by local ines property taxes, sales taxes, and total local gov- a number of localities not filing audit reports with governments accounted for 2.92 percent of per-capita ernment collections of all taxes and fees for counties the state in a timely manner. Two counties — Gra- personal income in Alexander County. Next lowest and municipalities for fiscal 2007 (July 1, 2006, to June ham and Scotland — and 16 municipalities are not were Jones County and Onslow County at 3.13 per- 30, 2007), the latest year for which data is available. covered by the report. The localities still had not sub- cent and 3.21 percent of per-capita personal income For each of the three categories, a revenue per- mitted data to the state over a year after it was due. respectively. In 24 counties, total collections were un- capita figure was computed. Countywide figures The cost of local government der 4 percent of per-capita personal income. also were calculated as a percentage of per-capita Among the 31 municipalities with a popula- personal income. Dare County residents paid the highest amount tion of 25,000 or greater (see table below), Charlotte Counties are also ranked against each other for in taxes and fees to local government ($4,056 per residents again paid the greatest amount in taxes and both their per-capita collections and collections as a capita). The counties of Mecklenburg ($2,737), Curri- fees to support local government, with combined percentage of personal income. Municipalities are tuck ($2,417), Brunswick ($2,344), and New Hanover city and county revenue totaling $2,636 per person. sorted by population and ranked within four pop- ($2,153) also rank in the top five in revenue collected The next highest tax and fee burdens were in Ashe- ulation ranges — less than 1,000 population; 1,000- per capita by county and municipal governments. ville ($2,221), Chapel Hill ($2,194), Cary ($2,158), and 4,999; 5,000-24,999; and 25,000 or more. The results for several of these counties reflect Wilmington ($2,121). While By The Numbers shows the cost of lo- their popularity as vacation destinations. Second The entire By the Numbers report is available on- cal government, it does not attempt to measure the homes and resorts certainly do appear on local tax line at johnlocke.org/policy_reports/. CJ

Combined City and County Tax Burdens for North Carolina Municipalities with Populations of 25,000+ Total Revenues Property Taxes Sales Taxes City Per Capita 2007 Rank 2006 Rank Per Capita 2007 Rank 2006 Rank Per Capita 2007 Rank 2006 Rank Charlotte $2,636.67 1 1 $1,388.03 2 2 $524.55 1 1 Asheville $2,220.85 2 5 $1,231.44 5 5 $491.58 2 2 Chapel Hill $2,194.07 3 3 $1,452.75 1 1 $360.87 22 22 Cary $2,157.83 4 6 $1,095.58 12 12 $378.34 15 15 Wilmington $2,121.09 5 2 $1,179.68 8 8 $467.18 4 4 Mooresville $2,023.29 6 7 $1,258.30 3 3 $454.64 5 5 Durham $2,000.86 7 4 $1,222.87 7 7 $404.81 8 8 High Point $1,960.50 8 10 $1,178.14 9 9 $362.60 21 21 Huntersville $1,947.55 9 8 $1,253.62 4 4 $384.03 10 10 Monroe $1,944.33 10 18 $1,015.10 16 16 $360.43 23 23 Raleigh $1,941.57 11 11 $1,059.12 13 13 $379.91 12 12 Greensboro $1,933.78 12 13 $1,162.09 10 10 $364.73 19 19 Hickory $1,891.47 13 12 $999.52 18 18 $439.04 6 6 Matthews $1,867.54 14 9 $1,226.29 6 6 $379.85 13 13 Concord $1,866.50 15 16 $1,140.69 11 11 $410.23 7 7 Winston-Salem $1,807.03 16 14 $1,035.06 15 15 $363.36 20 20 Apex $1,759.86 17 17 $1,051.90 14 14 $376.78 17 17 New Bern $1,729.55 18 15 $814.36 26 26 $398.85 9 9 Salisbury $1,668.70 19 21 $993.70 19 19 $334.44 29 29 Statesville $1,646.39 20 20 $895.33 22 22 $481.07 3 3 Greenville $1,617.62 21 19 $782.74 27 27 $380.09 11 11 Wilson $1,580.42 22 22 $870.61 24 24 $324.78 31 31 Burlington $1,570.66 23 26 $904.76 21 21 $378.06 16 16 Sanford $1,570.53 24 24 $1,014.71 17 17 $379.79 14 14 Gastonia $1,568.35 25 23 $926.42 20 20 $332.31 30 30 Rocky Mount $1,530.24 26 27 $768.36 28 28 $353.91 25 25 Fayetteville $1,527.22 27 25 $816.86 25 25 $349.34 26 26 Kannapolis $1,446.86 28 28 $886.32 23 23 $338.81 28 28 Goldsboro $1,371.85 29 29 $747.41 29 29 $357.97 24 24 Thomasville $1,275.90 30 30 $736.11 30 30 $348.38 27 27 Jacksonville $1,129.34 31 31 $513.04 31 31 $367.98 18 18

Source: John Locke Foundation’s By The Numbers report for FY2007 Note: Total revenues include property tax, sales tax, and other locally collected taxes and fees. MARCH 2009 | CAROLINA JOURNAL PAGE 17

State High Court Rules COMMENTARY A Quagmire for In Raleigh Zoning Dispute Local Governments By Michael Lowrey wrote for the Court of Appeals in over- Associate Editor turning the lower-court ruling against orth Carolina government and how an environmental agenda RALEIGH the permit. McGee further noted that can be amazingly complex. gets adopted with little — if any — n a potentially significant rul- even assuming that the business own- A great example of this public outcry or media attention. ing, the N.C. Supreme Court has ers had sufficiently alleged that they Ncomplexity is the ongoing saga If adopted, all existing devel- overturned a lower-court decision were “aggrieved parties,” the evidence of the new Jordan Lake Nutrient opments in the Jordan Lake water- Iabout the standards necessary to chal- they presented at trial was inadequate Strategy, otherwise known as the shed will have to become compliant lenge the issuance of a zoning permit. to support that classification. Jordan Lake Rules. As it turns out, with current water runoff rules. The case involves several Raleigh At the board hearing, LaMarr one of the “rules” being discussed Imagine owners of developments businesses challenging a special-use Bunn, a licensed landscape architect could have reverberations that af- from 20 or 30 years ago moving dirt, permit issued for the construction of and a licensed real estate broker, testi- fect home development statewide installing new drainage systems, an “adult enter- fied that parking and could cost taxpayers billions and developing new engineering tainment” estab- and stormwater of dollars. Of note, all of this could plans. It also would require that lishment. The high The North Carolina Courts plans for the pro- happen without a single vote from local governments not only enforce court held that the posed club would an elected official. the rule, but also adopt new storm- businesses could be inadequate. He On May 8, the Environmental water programs and implement challenge the issu- also noted that Management Commission (EMC) plans for existing developments. ance of the permit, two similar clubs adopted the aforementioned set That would require an entirely new even though they generate a high of rules. Of the 12 rules department within the had not demon- volume of 911 adopted, only one has enforcement divisions of strated that the calls for police as- caused a great gnashing local government. Tax- opening of the sistance. of teeth. Specifically, it’s payers would eat the cost adult establish- One of the a rule titled “Stormwater of implementation and ment actually would affect their prop- business owners, Barbara Glover Man- Management for Existing enforcement. erty values. gum, expressed her general concerns Development,” or 15A The rationale for PRS Partners LLC and RPS Hold- about the same issues. NCAC 2B. 0266. This rule this particular rule was ings LLC (Respondents) applied in The only specific evidence of de- has drawn the ire of de- supposed to be scientific. November 2005 to operate a “[Gentle- creased property value from the club velopers, homebuilders, But both Durham and men’s]/Topless Adult Upscale Es- related to a 15-acre property directly and cities such as Durham CHAD Greensboro already are tablishment” at a site on Mt. Herman across the street. The owner of that and Greensboro. If adopt- ADAMS dealing with the runoff Road in Raleigh. The Raleigh Board of property was not among those chal- ed, it would force exist- issue, and there appears Adjustment conducted a hearing on lenging issuance of the permit. ing developments in the to be no scientific basis for the application and determined that The Court of Appeals found the Jordan Lake watershed the adoption of the rule the proposed strip club was entitled to lack of a specific harm to the complain- to comply with current stormwater — other than the desire to inhibit a special-use permit. ing business particularly significant. runoff regulations. For perspective, development and create new regu- A group of neighboring business In a decision issued in December, that area spans 26 municipalities latory red tape. owners challenged issuance of the per- the N.C. Supreme Court, however, saw and seven counties. But this is just The long-term implications are mit. In an order issued Sept. 12, 2006, the matter differently, with six of the the beginning. far more ominous, and the environ- Superior Court Judge Narley Cashwell seven justices finding that the allega- The EMC-approved rules were mentalists know this. If adopted, then sent to the Rules Review Com- the rule would become a precedent ruled that the permit had been issued tions rose to the level of “special dam- mission to ensure that they were for the rest of the state. The Divi- improperly. PRS Partners and Hold- ages.” legal and could be enacted. On Oct. sion of Water Quality easily could ings then sought review of Cashwell’s “We cannot agree with respon- 15, Attorney General Roy Cooper’s extend the “existing development” decision before the state’s second high- dent’s arguments and the dissent’s con- office provided cover for the rules rule statewide. Such a rule could est court. tention that allegations of vandalism, to be enacted. In a letter to the N.C. be devastating to local government At issue in the appeal was safety concerns, littering, trespass, and Division of Water Quality, Cooper’s leaders, who would find themselves whether the business owners had le- parking overflow from the proposed office surmised “local governments in a quagmire of epic proportions — gal standing to challenge the issuance business to adjacent or nearby lots fail can impose the new requirements with a mandate to bring all existing of the special-use permit. N.C. law al- to establish that the value of petition- on existing developments through developments into compliance with lows only an “aggrieved party” to seek ers’ properties would be adversely the use of police power.” With that, standards put in place after those court review of a zoning decision. If affected or that petitioners would be the Rules Review Commission ad- developments were built. the person objecting to the decision unable to enjoy the use of their proper- opted the rules and moved on. Truth is, the citizens are bet- does not meet the legal definition of ties,” Justice Edward Brady wrote for Again, this entire process is ter served when policies have true an “aggrieved party,” the state’s courts the high court. mired in the complex environmen- science behind them, include input lack jurisdiction and cannot review the Justice Patricia Timmons-Good- tal agenda and has massive, costly from parties affected, and put in zoning decision. son strongly dissented from the major- implications across the state. Once context the implications of their im- Key to whether one is an ag- ity holding, contending that her col- adopted, the rules were to go into plementation. In other words, don’t grieved party is that they must suffer leagues had misapplied longstanding effect automatically this spring. But fix a problem if one doesn’t exist. some harm distinctive from the com- precedent and that their decision “un- Rep. Cary Allred, R-Alamance, filed More often than not, that simple ax- munity as a whole. The state’s appel- necessarily relaxes the requirements a bill to reject the newly adopted iom runs contrary to agenda-driven late courts have held previously that for standing.” rules. If that bill dies and others are policy making. CJ such “special damages” are an abso- In her view, the allegations of not taken up to address the situa- lute necessity for seeking court review. damages were simply too vague, as tion, the new rules will go into ef- Chad Adams is vice president for That, the Court of Appeals found, they did not show diminished proper- fect automatically at the end of this development for the John Locke Foun- was the problem with the business ty values, for standing under state law. legislative session. dation, director of the Center for Local owners’ challenge. The case is Mangum v. Raleigh This one rule truly illustrates Innovation, and former vice chairman “In the present case, Petitioners Board of Adjustment, (613PA07). (http:// how badly the process has gone of the Lee County Board of Commis- did not sufficiently allege ‘aggrieved www.aoc.state.nc.us/www/public/ awry, how science gets abandoned, sioners. party’ status,” Judge Linda McGee sc/opinions/sc2008.htm). CJ PAGE 18 MARCH 2009 | CAROLINA JOURNAL

Local Innovation Bulletin Board Durham Looks to Election Crime and the Economy veryone knows that there is 1985-1997, California saw both Scheme to Save Money more crime in economically booms and busts in housing mar- By Michael Lowrey dollar homes are being put up, there’s depressed inner-city neigh- kets. Associate Editor a question as to where the line is.” borhoods than in affluent suburbs. The average house price E RALEIGH The Alamance-Orange That fact leads naturally to the as- peaked in 1989 at $253,617, with an he Durham Board of Elections survey is one of nine the Geo- sumption that if a community be- average loan-to-value ratio of 67 per- is recommending that Durham detic Survey is working on. comes more prosperous, crime cent, and a two-year mobility rate of change how it elects its mayor The results of the new sur- rates will go down, and if income just over 15 percent. Prices in Cali- andT city council. The election board’s vey place the actual boundary as levels decline, crime rates go up, fornia fell in 1991 and bottomed out proposal is driven by a desire to save much as one-third of a mile from says James Q. Wilson, the author of in 1997 to an average house price of the city money, the Durham Herald-Sun where it was thought to be. A num- Thinking About Crime . $201,693, with an average LTV of 78 reports. ber of homes have changed county Economists who have checked percent; the two-year mobility rate N.C. law allows municipalities as a result, with 43 students possi- this view have discovered that it was only 11.7 percent. It was not un- to use one of four methods to elect bly forced to change school districts. is often true, but not always. They til 1998-99 that mobility returned to officials: parti- A m o n g have found, for example, that the a peak level of 15.8 percent. san primary and those who might burglary rate goes up by 2 percent- The Researchers also reported general elec- be affected are age points for every 1-percentage- that demographics play a role in tions; nonpar- Cherokee Eddie Shoe and point increase in the unemployment determining who moves. House- tisan general his wife, who rate. That sounds like a big change hold mobility increases with the elections with a to bought a piece until you realize that if the unem- education of the head of household. runoff if neces- of land 10 years ployment rate rises from 6 percent Whites are more likely to move than sary; nonparti- ago in what they to 8 percent, the burglary rate will nonwhites. Male-headed house- san primary and Currituck thought was Ala- increase by 4 percent. Because bur- holds are less likely to move than general elections; mance County. glaries aren’t measured all that ac- female-headed households. While or nonpartisan “I’m a life- curately — some are never reported, being married is not a significant plurality elections. Durham holds long Republican,” Shoe said to the and police vary in how they report predictor of household mobility, di- nonpartisan primary and general elec- newspaper. “What good is a Repub- the statistics — it’s not certain that vorce is. tions. The elections board encouraged lican in Orange County? ... I never we would even notice so small an the city to adopt nonpartisan plural- felt like politically I had any input at increase. The elderly and driving ity elections instead, under which the all in that part of the world. Politi- A lot of other factors affect the top vote-getter would win regardless cally, Orange County’s a wasteland.” crime rate as well. It often goes up Drivers older than 70 are keep- of whether the candidate received when the population gets younger ing their licenses longer and driv- a majority of the vote. This would Meck building inspections and when drug abuse becomes ing more than earlier generations, eliminate the need for a primary or Building inspections are re- more common. a trend that has led to dire predic- runoff election, and save the city Murder rates are influenced quired at many phases on new- tions about car accident risks for ag- $170,000 to $185,000 per election cycle. home construction. In Mecklenburg profoundly, at least in big cities, by ing baby boomers. But new research “Each of the four authorized gang activity. We don’t have good County, 85 percent of work passed shows that fatal car accidents in- election methods have produced inspection on the first try in Decem- ways of understanding why gang volving older drivers actually have both outstanding and poor leaders,” activity changes, though we sus- ber, an 18 percentage-point improve- declined markedly in the past de- wrote Ronald Gregory, chairman of ment from a decade ago. County pect that changes in behavior are The New York Times cade, says . the elections board, in a letter to Dur- officials and local builders credit a influenced by what the police do According to the Insurance In- ham Mayor Bill Bell and city council. and whether gangs are fighting over variety of factors, including a change stitute for Highway Safety, fatalities “This is not an issue of which type in county policy, for the improve- drugs and other illegal transactions. per capita among older people have of election is better or worse. It is an All these imponderables make ment, reports The Charlotte Observer. decreased 35 percent since 1975 and issue of saving taxpayer money.” One factor is that the slowdown it difficult to understand fully why are now at their lowest level. And “I’m sure there are going to be crime rates rise and fall. in construction has meant that con- while fatal crashes are declining a lot of pros and cons independent of tractors are keeping only their most over all, the rates for older driving the money issue,” Bell said. “If it were able employees. Officials also say Lower mobility ahead? deaths are falling the fastest. From just a money issue, it’s almost a no- that attempts by building inspec- 1997 to 2006, the annual decline in brainer, but it’s much more than that.” tors to coach field superintendents In a weak housing market, fatal crashes among middle-age Alamance-Orange border about the rules are having an impact. households get “locked in” to their drivers was 0.18 per 100,000 licensed A third factor behind the im- homes and are prevented from drivers. By comparison, the decline The border between Alamance provement is a change in how the “moving up” to larger homes and for drivers ages 70 to 74 was 0.55 fa- and Orange counties is being redrawn county schedules building inspec- better neighborhoods, according to tal crashes per 100,000 licensed driv- using modern technology. As a result, tions. In November 2007, the county researchers Fernando Ferreira, Jo- ers, and for those over 80 it was 1.33. some property owners who bought adopted a “back-of-the-line” penalty seph Gyourko, and Joseph Tracy. Further research is being land based upon which county it’s in for contractors that fail a high per- Using data from the Ameri- conducted to determine why the are getting an unwelcome surprise, re- centage of their inspections. Meck- can Housing Survey, 1985-2005, the risks appear to be going down for ports The News & Observer of Raleigh. lenburg County generally performs researchers found that mobility is older drivers. It may be that to- Alamance County originally was building inspections the day after almost 50 percent lower for owners day’s older drivers are simply in created out of Orange County in 1849. a contractor calls in to request one. with negative equity in their homes. better physical and mental shape, The demarcation line between the Under its revised policy, con- They conclude that this does not so they are less likely to make a two never was defined that precisely. tractors who fail 40 percent or more imply that current worries about driving mistake; less frail; and That’s changing now, as a new subdivi- of their inspections have to wait an default and owners having to move better able to survive injuries. sion is being built near the county line. extra two days to get their work in- from their homes are entirely mis- Or it could be that driving “When it was rural farmland spected. The county also offers small placed. patterns among older adults have property, the values weren’t very great rebates on inspection fees if a contrac- The researchers found pro- changed, leading to more highway and the position of the line wasn’t tor’s pass rate is above 85 percent. nounced shifts have occurred over driving, which is safer than driving very important,” said Dennis Lee, “It certainly got everyone’s atten- time in housing values. Between on local roads. CJ a boundary surveyor with the N.C. tion,” said Mark Austin, operations man- Geodetic Survey. “When half-million- ager for Ryland Homes in Charlotte. CJ MARCH 2009 | CAROLINA JOURNAL PAGE 19 Court Weighs in to Fix Imprecise Wording in Trucking Statute

By Michael Lowrey thousand dollars ($25,000).” Associate Editor Gen. Stat. § 20-118(e)1 and e(3) RALEIGH in turn state that the Department of n 2005, the General Assembly Crime Control and Public Safety shall rewrote laws covering special assess a civil penalty for being above permits that allow trucks to op- axle-weight limits or the weight listed Ierate at weights above the general in a special permit. Unlike Gen. Stat. § 80,000-pound limit. In doing so, the 20-119(d), there is no limit on penalties legislature’s wording apparently was under Gen. Stat. § 20-118(e)1 and e(3). less than precise, for the state’s sec- When interpreting statues, courts ond highest court on Feb. 3 held that a look to give meaning to every section $24,500 fine against a trucking compa- and word. In this case, the Court of Ap- ny was not legal because the law was peals found that there was no way to ambiguous. do so. The facts in the case are simple If the idea was for the Highway enough: Daily Express Inc. obtained Patrol to issue an additional weight a permit from the N.C. Department penalty for operating without enough of Transportation’s Division of High- escort vehicles, the appeals court ways to operate a truck on a single found two ambiguities, that the High- trip through the state at a gross weight way Patrol “may” assess a penalty un- of up to 196,000 pounds. Without the der 20-119(d) but “shall” do so under § “single trip permit,” the legal limit for Court faced the issue of reconciling two separate sections of state law on penalties 20-118(e)1 and e(3), and that penalties the truck and trailer would have been for operating an overweight truck. are capped under 20-119(d) but unlim- 80,000 pounds. gality of the $24,492.03 citation, con- in the special permit,” Judge Robert C. ited under § 20-118(e)1 and e(3). On June 8, 2006, while making tending it should have been issued Hunter wrote for the Court of Appeals. The appeals court noted that use of the permit, the truck pulled only the $500 ticket. After a Superior N.C. Gen. Stat. § 20-119(d) states there was little evidence of what the into a weigh station in Henderson- Court judge ruled in the company’s that the Department of Crime Control Assembly was intending to do when it ville. State regulations required a front favor, the state brought the case before and Public Safety may assess a $500 rewrote the sections in 2005. “In sum, and rear escort for trucks with single- the Court of Appeals. civil penalty for failing to have the re- regardless of the manner in which we trip permits if they weighed 150,000 The issue before the appeals quired number of escort vehicles. The interpret the statutes, some language is pounds or more. Daily Express’ truck court, like the trial court below, was section also provides that: rendered meaningless,” Hunter wrote. weighed 181,180 pounds and had only how to mesh two separate sections of “In addition to the penalties pro- “If the legislature intended to a front escort. state law, 20-119(d) on single-trip per- vided by this subsection, a civil penalty impose an additional weight penalty A state trooper issued a $500 mits and 20-118(e) on penalties for op- in accordance with G.S. 20-118(e)(1) and against a special permit holder as if penalty for the failure to have a second erating an overweight truck. (3) may be assessed if a vehicle is operat- that permit holder had no permit at escort vehicle. He also issued a sepa- “The primary issue … is whether ing without the issuance of a required all, then the language of section 20-119 rate $24,492.03 citation based upon section 20-119(d) and section 20-118(e) permit, operating off permitted route must be clarified to relate that intent. the difference between the truck’s ac- authorize [the Highway Patrol] to is- of travel, operating without the proper Without such unambiguous language, tual weight of 181,180 pounds and the sue an additional overweight penalty number of certified escorts as determined we must construe the statute in favor 80,000-pound limit for trucks without based on the difference between the by the actual loaded weight of the vehicle of plaintiff, the party being penalized.” a special permit. Once a second escort actual weight of the truck (181,180 combination, fails to comply with travel The case is Daily Express, Inc. v. vehicle arrived, the truck was allowed pounds) and the statutory weight list- restrictions of the permit, or operating N.C. Department of Crime Control & Pub- to proceed under its original single- ed in section 20-118(b) (80,000 pounds), with improper license. Fees assessed for lic Safety, (08-562). Link: http://www. trip permit. despite the fact that the actual weight permit violations under this subsection aoc.state.nc.us/www/public/coa/ Daily Express challenged the le- does not violate the weight limit set out shall not exceed a maximum of twenty-five opinions/2009/080562-1.htm. CJ Help us keep our presses rolling Publishing a newspaper is an ex- Visit our Triangle regional page pensive proposition. Just ask the many http://triangle.johnlocke.org daily newspapers that are having trouble making ends meet these days. It takes a large team of editors, re- The John Locke Foundation porters, photographers and copy editors has five regional Web sites span- to bring you the aggressive investigative ning the state from the mountains reporting you have become accustomed to the sea. to seeing in Carolina Journal each month. The Triangle regional page in- Putting their work on newsprint and cludes news, policy reports and then delivering it to more than 100,000 research of interest to people readers each month puts a sizeable dent in the John Locke Foundation’s budget. in the Research Triangle area. That’s why we’re asking you to help defray those costs with a donation. Just It also features the blog Right send a check to: Carolina Journal Fund, Angles, featuring commentary John Locke Foundation, 200 W. Morgan on issues confronting Triangle St., Suite 200, Raleigh, NC 27601. residents. We thank you for your support.

John Locke Foundation | 200 W. Morgan St., Raleigh, NC 27601 | 919-828-3876 The John Locke Foundation | 200 W. Morgan St., Raleigh, NC 27601 | 919-828-3876 PAGE 20 MARCH 2009 | CAROLINA JOURNAL

From the Liberty Library Movie Review

• The media tells us that “de- regulation” and “unfettered free ‘Milk’ Reflects History of the Gay Rights Movement markets” have wrecked our econ- omy and will continue to make things worse without a heavy dose • “Milk”; Focus Features; directed Anita Bryant, who makes several ap- of federal regulation. But the real by Gus Van Sant; written by Dustin pearances via vintage video clips, blame lies elsewhere. Lance Black; starring Sean Penn, Emile inspires Milk to make one more run In Meltdown, best-selling au- Hirsch, James Franco, and Josh Brolin; at City Hall, although the campaign thor Thomas E. Woods Jr. unearths rated R would cost Milk his relationship with the real causes behind the collapse Scott, who missed the laid-back hip- of housing values and the stock By Sam Hieb pie entrepreneur with whom he fell in market — and it turns out the cul- Contributor love. prits reside more in Washington GREENSBORO Helped by an endorsement from than on Wall Street. ong before Barack Obama, an- the San Francisco Chronicle, Milk finally Woods, a senior fellow at the other politician captured the won election to the Board of Supervi- Ludwig von Mises Institute and imagination of many with a sors in November 1977. He pursued a winner of the 2006 Templeton En- Lpromise of hope. gay-rights agenda as opposition con- terprise Award, busts the media That politician was Harvey Milk, tinued to build nationwide. He almost myths and government spin. He the first openly gay man to hold public immediately sponsored the most strin- explains how government inter- office in the United States. Once again gent civil rights bill in the nation bar- vention in the economy — from he’s in the spotlight as Sean Penn ring discrimination based on sexual the Democratic hobby horse called brings the martyred San Francisco city orientation. But he also practiced some Fannie Mae to affirmative action supervisor back to life in “Milk.” more nuanced political maneuvering programs like the Community No doubt, biopics can often be with White, who opposed gay rights Redevelopment Act — actually disappointing, often moving too fast legislation on the grounds that it weak- caused the housing bubble. More through the subject’s life or failing to sign a union contract, they approached ened the family in its role as the corner- at www.regnery.com. capture adequately the mood of the Milk to help get Coors out of the gay stone of society. times. “Milk” falls into neither trap, fo- bars. In return for Milk’s support, the Milk would later propose a deal • In recent years, an inter- cusing exclusively on Milk’s eight-year Teamsters agreed to hire more gay with White whereupon he would nally consistent body of scientific political career, which ended tragically drivers. oppose a mental health facility pro- literature has emerged that argues when he and Mayor George Moscone Soon, Milk was dubbed the posed for White’s district if White cogently for global warming but were shot to death in City Hall by dis- “Mayor of Castro Street” and dove would support his gay-rights bill. But against the gloom-and-doom vi- gruntled city supervisor Dan White. headlong into community organizing. Milk changed his vote on the mental sion of climate change. Director Gus Van Sant (“Good (Where have we been hearing that late- health district, while his gay-rights bill Those who merely call atten- Will Hunting,” “My Own Private Ida- ly?) Convinced he can do more, Milk passed, with White casting the lone tion to this literature, however, are ho”) provides historical context during makes his first run at the Board of Su- dissenting vote. intimidated, blacklisted, and even the opening credits with newspaper pervisors, announcing his candidacy Milk’s final political action driven from prestigious scientific clippings and vintage video docu- in his usual hippie garb, standing on a would be his strong opposition to state employment. Calling the current menting local governments’ raids on wooden box marked “Soap.” Though Sen. John Briggs’ bill to fire gay public scientific environment a “climate gay bars in an effort to crack down on that run at city of- school teachers. Milk publicly debat- of extremes” is an understatement. homosexuality. fice failed, Milk ed Briggs several In Climate of Extremes, clima- Milk is his own narrator, leaving won enough votes times, in spite of tologists Patrick J. Michaels and behind a tape to be played only in the to encourage him the fact that public Robert Balling Jr. explain that cli- “event of assassination,” declaring “if ‘Milk’ was opinion seemed to to continue pursu- mate science is hardly unbiased, a bullet should enter my brain, let that be swayed toward ing public office. another politician even though the global climate bullet destroy every closet door.” antigay sentiment, The “Soap community itself believes that any Milk was working as an actuary evidenced by bills Box” showed off who offered hope new finding has an equal probabil- for a New York insurance company in that passed in oth- Milk’s flamboyant ity of making our climatic future 1970 when he met his future personal and change er cities. But in the style and media appear more or less dire. Learn and political partner, Scott Smith, in end, Proposition 6 savvy. He craved more at www.catostore.org. the subway. While celebrating his to voters failed, thus giving attention, yet the birthday, Milk tells Scott that he’s “40 Milk one last vic- • Renowned scholar Carl years and has never done anything I’m endorsement of tory. J. Richard explores the impact of proud of.” the mainstream After the proposition failed, Greece and Rome on the American “If you keep eating cake, you’ll be media, as well as the mainstream gay White, who had resigned his seat but Founding Fathers in Greeks and Ro- fat by the time you’re 50,” Scott says. community, was proving hard to come was upset when Mayor Moscone re- mans Bearing Gifts: How the Ancients “I’ll never make it to 50,” Milk by. His staff was a ragtag assembly fused his request for reinstatement, Inspired the Founding Fathers. replies. of gay hippies, including Scott Smith entered City Hall through a basement Richard explains how the Tired of the daily grind as well as and Cleve Jones (Emile Hirsch), who window. He shot Moscone during a Founders learned the importance the Greenwich Village gay scene, Milk would go on to conceptualize the AIDS meeting, then calmly walked down the of individual rights from the ab- and Scott move to San Francisco. By quilt. Joints were passed during strat- hall and shot Milk five times — twice sence of those rights in Sparta, the that time Haight-Ashbury had become egy sessions, and campaign cash came in the head at close range. superiority of republican govern- riddled with crime and drugs, so they straight out of the camera shop’s reg- It’s hard to believe, considering ment to monarchy from the Greek opened a camera shop in the Castro ister. the fact that gay rights have been a victory over the Persians, and the Street section. Milk would fail at another City political issue for more than 30 years, importance of virtue to the success Milk’s entry into gay politics was Hall run, but then he made a run at the we’re just now seeing what could be of a republic from early Rome. economy-based. His business was ini- California State Assembly, reinventing considered a definitive historical -per Crucial to the decisions that tially denied entrance into the Castro himself, as many master politicians spective of the gay rights movement, shaped the United States, these Merchants Association, so Milk im- have, by cutting his hair, putting on a much like “Platoon” was for Vietnam lessons remain invaluable to- plored the growing gay community to suit, swearing off weed, and — most vets. day for every citizen concerned shop only at gay-owned businesses. In importantly — staying out of the bath- Such historical perspective with America’s future course. the process, he learned more about po- houses. helps people on both sides of an is- More at www.rowman- litical maneuvering. When the Team- The run for state assembly failed sue better understand where we are littlefield.com. CJ sters planned a boycott of Coors beer also, leaving Milk at a crossroads. But today by taking a look at where the because Coors executives wouldn’t a growing antigay movement led by country’s been. CJ MARCH 2009 | CAROLINA JOURNAL PAGE 21 North Carolina Was Early Leader in Effort to Curb Government n 1788, North Carolina undoubt- delegates chose not to ratify or reject ever, Samuel Spencer became their United States meanwhile encouraged edly played a role in ensuring that the document. Convention delegates spokesman. These men distrusted North Carolina to join the Union. (The the U.S. Constitution included a were divided into two groups: Fed- the central government and believed nation, for example, allowed North IBill of Rights. eralists and Anti-Federalists. (Of the states’ rights best protected individual Carolina vessels to enter U.S. ports Although the nascent United two, the former were nationalists who liberties. After debating for 11 days, free of charge.) Williamson asked for States, under had taken the name Federalists, for it became clear that the Constitution the U.S. government to amend the the Articles of they knew the term resonated among would not be ratified in North Caro- Constitution in ways that might make Confederation, de- a populace who endorsed federalism.) lina until a Bill of Rights was added. it acceptable for North Carolinians. feated the British The Hillsborough Convention By a vote of 184 to 83, North While Williamson garnered good Empire during the allowed leading Federalists and Anti- Carolina decided not to ratify or reject will among Americans, North Caroli- American Revolu- Federalists to articulate constitutional the Constitution and provided a list of na Federalists campaigned for another tion, nationalists arguments. Key Federalists included rights and suggested amendments for ratification convention. considered the James Iredell Sr., who had gained Americans. A second convention was held in existing national widespread respect during the Ameri- During the latter months of Fayetteville. By the time it convened government can Revolution for challenging Black- 1788 and until November 1789, North in November 1789, George Washing- too weak and TROY stone’s ideas regarding parliamentary Carolina was out of the Union, yet at ton had been elected President of the asked for a more KICKLER sovereignty. Before North Carolinians times the state acted as if it were in United States, and almost all expected powerful central convened, Iredell had been declaring the Union. North Carolina remained North Carolina to ratify the Constitu- government. In the necessity and positive elements of out of the Union because its citizens tion; a Bill of Rights had been added the summer of 1787, delegates from the document. feared the national government might to the U.S. Constitution, too. North various states convened in Philadel- At the convention, Iredell encroach on individual liberties. Yet Carolina ratified the U.S. Constitution phia. Many wanted only to revise showcased great oratorical skill and North Carolina levied a tariff on for- on November 21, 1789, and from the the Articles; others wished to draft a answered many Anti-Federalist ques- eign goods and then turned over the beginning, the state enjoyed the same new document and thereby institute a tions concerning the nature of the profit to the United States. rights as existing states. new form of government. After much Constitution and the threat it made Meanwhile, Hugh Williamson, a Although it joined the Union, debate, nationalists reigned supreme: regarding individual liberty. The delegate to the 1787 U.S. Constitution- North Carolina remained skeptical of the U.S. Constitution was drafted and Edenton delegate championed the al Convention, served as an ambas- government power from the begin- submitted to the states for ratification document as a protector of rights sador for North Carolina at Philadel- ning. CJ (approval). because it incorporated rights into phia, then the United States’ capital. North Carolina was one of the document by limiting the central There he expressed that his govern- the latter states to consider the U.S. government’s power. Although he ment acted primarily out of a concern Dr. Troy Kickler is director of the Constitution, and after much debate at said little, Willie Jones (pronounced for liberty rather than abhorrence North Carolina History Project (www. the Hillsborough Convention in 1788, Wiley) led the Anti-Federalists; how- for the new U.S. government. The northcarolinahistory.org) Stay in the know with the JLF blogs Visit our family of weblogs for immediate analysis and commentary on issues great and small www.JohnLocke.org YOUR HOME ON THE WEB FOR The Locker Room is the blog on the main JLF Web site. All JLF employees and many friends of the foundation post on this site every day: http://www.johnlocke.org/lockerroom/ NORTH CAROLINA PUBLIC POLICY Creating your own personal Key Account at www.JohnLocke.org is a great starting place for tracking the critical public policy issues facing North Carolina.

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Short Takes on Culture Book review ‘Doubt’ Has Dramatic Flair Teaching Economics Via Fiction • “Doubt” equally clueless manager, Murray • Russell Roberts: The Price of Every- Goodspeed Productions (Rhys Darby). thing: A Parable of Possibility and Pros- Directed by John Patrick Shanley It would be easy to compare perity; Princeton University Press; “Flight of the Conchords” to the 2008; 216 pp; $24.95 nyone seeking to watch a mys- 1960s pop group The Monkees, terious flick that has dramatic who also played fictionalized ver- By E. Frank Stephenson flair can find it in the movie sions of themselves in a TV series. Contributor “Doubt.”A From the use of up-close Like the Monkees, McKenzie and ROME, Ga. camera shots to effective lighting, Clement break up supplement plot he Price of Everything is George the film evokes a desire to know the lines with short MTV-style music Mason University economist truth in what is perceived as a taboo, videos. Russell Roberts’ third novel for controversial discussion. But while the Monkees’ Tteaching economic principles. As with What won’t be found in the humor was slapstick, “Flight of the his previous offerings, The Choice and movie is any unexpected Hollywood Conchords” has more of a dry Brit- The Invisible Heart, The Price of Every- elements, but rather a momentous ish-style humor, like “The Office.” thing is outstanding. buildup and a powerful dialogue You really have to pay attention to The primary characters in The broaching topics of religion and rela- catch the jokes, so the show might Price of Everything are Ruth Lieber, an tionships, exposing the most human not be best for late-night viewing economics professor and provost at side of dealing with uncomfortable or for those with tendencies toward Stanford University, and Ramon Fer- certainties. attention deficit disorder. nandez, a Cuban immigrant tennis Sister Aloysius, played by an But if you appreciate the prodigy who attends Stanford. Ra- amazingly stoic Meryl Streep, as well ongoing struggles of starving musi- mon is saturated with hostility toward as the charismatic priest, Father Flynn, cians everywhere, then you will the market process, while Ruth has a entrepreneurial discovery embodied played by Philip Seymour Hoffman, enjoy “Flight of the Conchords.” strong appreciation of markets and lib- in emergent order are necessary for who is being questioned about his — SAM HIEB erty. Their conversations, serves, and increasing human productivity and relations with the Catholic school’s volleys of economic ideas are the core prosperity. only black student, draw you into the of the book. Along the journey of explaining reality of power abuse and exploited Whereas The Choice explained the prices, emergent order, and prosperity, trust. While Father Flynn doesn’t ever • The Retro Television Network economics of international trade and Roberts works several other economics truly confess to having an inappropri- Prime time shows from ’70s & ’80s was largely a response to early-1990s topics into Ruth’s and Ramon’s con- ate relationship with the student, he Channel 50.2 on digital TV hysteria over competition from Japan, versations. Among these are so-called clearly fights to make the sisters at the and The Invisible Heart explored the price gouging, when Ramon leads a school believe his innocence beyond Now that I have my converter morality of capitalism, Roberts’ pri- protest against Big Box after the ficti- a shadow of a doubt. box hooked up and my brand new mary interest in The Price of Everything tious retailer doubles its prices in re- The true depth of the movie is four-bowtie antenna installed, I is spontaneous order. That order can sponse to an earthquake, alleged ex- brought into view as the longstand- have arrived in the digital age. My emerge without human design — in- ploitation of workers by Wal-mart, and ing, strong Sister Aloysius, while television reception is better than deed, that human design is antithetical to order — is a difficult concept, but the fallacy that labor markets share the having won a battle of wit and bluff ever. zero-sum nature of a game of musical against her nemesis Father Flynn, At first I thought that the Roberts’ exposition is first-rate. He of- fers schools of fish, flocks of birds, and chairs — for example, the fixed num- breaks down in a battle of her own antenna manufacturer’s claim that ber of jobs fallacy. conflicted feelings of truth and doubt the picture from an antenna is bet- language as readily observable exam- ples of emergent order. Freeman read- Although Roberts turns back when she watches someone whom ter than cable or satellite was just caricatures of economists, one can also she believes to be a danger toward propaganda to sell antennas, but ers will delight in Roberts’ homage to Leonard Read’s “I, Pencil”: Ruth uses — at the risk of overanalyzing — de- children receive a promotion. seeing is believing. I have an in- tect criticism of the current state of eco- It’s not the most uplifting movie, credibly sharp picture, or at least as artifacts from a visit to a pencil factory as show-and-tell items while leading a nomics instruction. Ramon has taken yet the powerful execution of it can be sharp as you can get on a 30-year- an introductory economics course. He perceived easily as a portrayal of real- old television. class discussion of how manufacturing pencils illustrates emergent order. recalls that supply and demand curves time religious issues, even though its My favorite new channel is look like an “X” and is quick to note setting was in the 1960s. 50.2, offering the Retro Television Since planning is often useful in conducting our daily lives, it’s only that government can improve upon — JANA BENSCOTER Network (RTN), which is also avail- “market failure” arising from pollu- able on some cable systems. RTN’s natural for students such as Ramon to press Ruth for a deeper understanding tion. Nonetheless, Ramon’s semester motto is “prime time all the time,” of economics apparently has not ex- featuring all of the old TV shows of how order can emerge with an in- visible hand instead of a guiding hand. posed him to Hayek or the notion of • “Flight of the Conchords” from the ’70s and ’80s. emergent order or dispelled any of his HBO RTN’s offerings include “The Here Roberts explains the crucial role that prices play in conveying “the misguided thinking about the market Produced by Stu Smiley A-Team,” with George Peppard and process. Fortunately, there is an easy Mr. T and “Marcus Welby, MD,” particular circumstances of time and place” and coordinating the disparate way for instructors to rectify such defi- What happens when a couple with Robert Young (aka “Father ciencies in their teaching — adopt The of clueless musicians from New Knows Best”) and James Brolin. plans of individuals. Just as Ricardo and Smith were the inspiration for Price of Everything for their courses. Zealand take on the Big Apple in RTN also features “The Rock- Tyler Cowen, Roberts’ colleague search of fame and fortune? ford Files” every weekday night at Roberts’ two previous novels, econo- mist Friedrich Hayek underlies The at George Mason, called The Price of Ev- We’re still waiting to find out 10 p.m. James Garner is back as Jim erything “the best attempt to teach eco- as the HBO series “Flight of the Rockford, the LA private investiga- Price of Everything. An especially clever nomics through fiction that the world Conchords” starts its second sea- tor who solves the cases that the analogy between ant pheromones and has seen to date.” That’s high praise, son. The first season, which is cur- police won’t handle. He does have prices as efficient mechanisms for dis- seminating information among beings but well-deserved praise, for this mar- rently out on DVD, chronicles the some help from his police sergeant that cannot possibly acquire or process velous book. CJ misadventures of folk parody duo friend Becker, his dad Rocky, and all available knowledge helps Roberts Bret McKenzie and Jemaine Clem- Angel, the ex-con who is always illustrate this challenging idea. Frank Stephenson (efstephenson@ ent as they seek out the elusive trying to work the angles. Just as prices are fundamental berry.edu) chairs the Department of Eco- big gig, with little help from their — MICHAEL SANERA CJ to the market process, Roberts has nomics at Berry College in Rome, Ga. He Ruth explain that the dynamism and blogs at divisionoflabour.com. MARCH 2009 | CAROLINA JOURNAL PAGE 23 Medved’s 10 Big Lies Puts to Rest Many Myths About America • Michael Medved: The 10 Big Lies cans.” Medved notes then gives Census Bu- chase Sudanese slaves in order to free About America: Combating Destructive that Hollywood, mu- reau statistics that will them,” Medved said. Distortions About Our Nation; Crown sicians, and academics astound the reader. Of all the groups who have Forum; 280 pp; $26.95 hardcover all have worked to cre- In addressing a “long, savage history” of slavery, ate the myth of mass Ward Churchill and “Muslim slavers and their descen- By Melissa Mitchell genocide by European his firing from the dants” are the worst, Medved says. Contributor settlers against Native University of Colo- For this reason, Medved cannot under- RALEIGH Americans. rado for “research stand the “trendy sentimental attach- hen I first heard about Mi- Medved points misconduct,” Medved ment of many African-Americans to an chael Medved’s newest out that the term tells a funny story alien Islamic culture that abused their book, The 10 Big Lies About “genocide” is defined about how one promi- ancestors and still afflicts their cous- America:W Combating Destructive Distor- in the New American nent Native American ins.” tions About Our Nation, I dismissed it as Heritage Dictionary author and activist Medved also provides the “Afro- just another rant book by a talk-show as the “systematic and addressed Churchill’s centrists,” who fantasize about a bet- host. However, after taking a closer planned extermination fraudulent claims of ter life had they been born in Africa, look at Medved’s background, I real- of a whole national, ra- Indian ancestry and some amazing statistics. Had these ized that I could not have been more cial, political or ethnic his writing about Na- African-Americans been born in one mistaken. No one is more qualified to group.” “Other defini- tive American history. of the slave-collection regions, their write a book that addresses common tions all stress deliber- “Of course, he’s not life expectancy would be 46.6 years misconceptions about our country’s ate, systematic or both,” Medved says. Indian,” the writer said, “but we have compared to 73.1 years in America. In history than Medved. Medved eared Medved does not dispute that the first given him an Indian name. We call U.S. dollars, they could expect to earn an average yearly salary of $640, com- a degree in American history, with de- four centuries after European contact him, ‘Walking Eagle.’… Because this pared to $31,969 in the United States. partment honors, from Yale. He also at- brought a devastating decline in the bird is so full of s—t he can’t fly.” For a real eyeopener, he recommends tended Yale Law School. number of Native Americans, but he is The second big lie Medved ex- that they read Keith B. Richburg’s Like me, Medved is old enough adamant that it was not genocide. poses is that the “United States is book, Out of America: A Black Man Con- Uniquely Guilty for the Crime of Slav- to remember when it was all right to Medved uses historical records fronts Africa. ery.” Once again, Medved does not be proud of America, and Medved be- and common sense to dismiss the idea With today’s bailout package excuse slavery. He readily dispels the lieves, he said, “Most Americans feel that germ warfare was used against and the promise of government pro- instinctive indignation over the false Native Americans. He also uses this notion that the United States was the grams that are going to save us from charges against our country, but they same systematic approach to address worst purveyor of slavery and that disaster, Medved’s big lies numbers lack the arguments or information to the violent warfare and myths sur- African-Americans would be better off five and six set the record straight counteract them. This book hopes to rounding the battles known as the had their ancestors remained in Africa. on how big business does not hurt fill that void.” Mystic Massacre, Sand Creek Massa- The practice of slavery started America and how New Deal programs Medved takes what he deems the cre, and Custer’s attack on the Chey- in 4,000 B.C., and many nations have a failed. During 1931, the worst year of top 10 lies about America and presents enne. But he really enlightens the read- far worse record than the United States the Depression, unemployment was them in 10 well-written chapters full er about the encounter at Wounded does. Czarist Russia might count as 17.4 percent. “Seven years later after of historical and well-documented evi- Knee, which has been romanticized the greatest slaveholding society of all more than five years of FDR and liter- dence to fight these lies. He puts to rest by the best-seller, Bury My Heart at time, Medved says. Medved notes that ally hundreds … of new government such myths as America as an imperial- Wounded Knee and the HBO miniseries. the United States outlawed slavery programs … the unemployment rate ist nation, that the two-party systems Medved also takes academics more than 200 years ago, but that Sau- stood at 17.4 percent,” Medved says. is broken, and that America is in the to task for their lack of scholarship in di Arabia did not outlaw slavery until This is a well-written and well- midst of an irreversible moral decline. addressing the historical record and 1962 and that the Republic of Maurita- documented book, but it is also a The first chapter addresses the for perpetuating myths about Na- nia did not until 1981. quick read. It’s easy enough for a “Big Lie” that “America Was Founded tive Americans, asking the question, “The organization Christian Soli- high school student, but it will not on Genocide Against Native Ameri- “Where did all the Indians go?” He darity International continues to pur- bore a college student or an adult. CJ Books authored By JLF staFFers Free Choice for Workers: Selling the Dream A History of the Right to Work Movement Why Advertising is Good Business

By John Hood President of the John Locke Foundation By George C. Leef Vice President for Research at the John William Pope Center for Higher “[Selling the Dream] provides a Education Policy fascinating look into the world of advertising and beyond ... “He writes like a buccaneer... Highly recommended.” recording episodes of bravery, Choice treachery, commitment and April 2006 vacillation.” Robert Huberty www.praeger.com (Call Jameson Books, 1-800-426-1357, to order) Capital Research Center PAGE 24 MARCH 2009 | CAROLINA JOURNAL

COMMENTARY The Giant Flushing Sound

t’s become passé to compare energy-efficient toilets. The goal government spending with was to get homeowners to ditch flushing taxpayer dollars down their water-hogging models in favor Ithe porcelain pedestal. This is the of EPA-designated WaterSense age of porkulus, after all. When toilets that use 1.3 gallons per flush. lawmakers view a $787 billion Those who make the swap get a stimulus package as a pared-down $150 rebate. compromise, analogies between The program got a shout out government waste and, well, certain from Cary Mayor Harold Wein- flushing functions lose their origi- brecht during his 2009 State of the nality. Town address. But I’m going to be a prig and “Cary made huge strides in do it anyway. environmental planning and pres- Reports about new taxes in ervation in 2008 that will carry over foreign countries always worry me into this year,” he said. because I know these ploys will end Updated numbers from the EDITORIAL up in the United States town’s budget office show sooner rather than later. that Cary issued 542 high- Case in point: Aus- efficiency toilet rebates Kicking the Can tralia’s proposed toilet tax. between June and Janu- Yes, you read that right. ary. Including extra funds In addition to alliterating devoted to the program in Down the Road well, the toilet tax is sup- October, Cary has spent posed to fight the Out- a total of $89,000 on the hen your child leaves home warned for years about state govern- back’s “epic drought” (as retrofit. The toilets are es- for college or the working ment’s “spend-and-tax” mentality. In described by the Indepen- timated to have saved 4.2 world, will you give her economic good times, when money dent World). DAVID N. million gallons per year, Wyour credit card with no strings at- is rolling in to the N.C. Department The move would or about 7,750 gallons per BASS tached? The one that would allow her of Revenue more quickly than ex- abolish Australia’s cur- toilet. to rack up thousands of dollars of debt pected, lawmakers have found novel rent system of sewage The town operates for you before the first bill comes due? new ways to spend surplus funds. charges, which is based on on a tiered pricing system, If you answered yes, stop read- Instead of setting a strict budgetary property value, and replace it with with fees increasing for extra water ing this editorial. You must have diet — one focusing on core govern- a per-flush tax. Think of it as a pay- used. Assuming average water enough resources that these words are ment functions — they’ve decided to as-you-go system. consumption per household of not likely to help you. fund a bumper crop of new programs One representative of the Aus- between 5,001 and 8,000 gallons per If you answered no, read on. (such as elementary school class-size tralian Commonwealth Scientific month, homeowners who install the We’re guessing you might have reduction and More At Four) without and Industrial Research Organiza- energy-efficient toilets save $2.42 for reacted the same way Carolina Journal bothering to determine whether those tion suggested the toilet tax would each toilet per month. did when learning details of state programs do any good. help prepare the country for “the Consider the extra cost of government’s take from the federal When times are tight, lawmak- potential impact of climate change,” purchasing a high-efficiency toilet stimulus package. “Wait a minute. ers show little interest in scrapping according to the Sunday Telegraph. and you begin to see that this is a These people turned billion-dollar the new programs. Their alternative is He didn’t explain how con- net economic loss for homeown- state budget surpluses into multibil- boosting taxes — especially those tax- serving toilet flushes would con- ers. Many Cary residents are happy lion-dollar shortfalls in just a couple of es that target behavior the lawmakers years. And we’re going to give them don’t like — and finding novel ways serve the polar ice caps. But I can to make that trade-off, no doubt, more money to do even more dam- to sidestep state constitutional provi- easily picture an environmental- but should the town encourage age?” sions requiring a balanced budget. ist ad campaign that encourages it through taxpayer-sponsored Apparently so. Among the many Now that times are really tight, homeowners to buy energy-efficient rebates? problems associated with February’s the General Assembly faces a great toilets to prevent the arctic plumb- And that brings me to the federal stimulus package was its im- opportunity to retrench. State budget ing from overflowing. cold, hard, and, dare I say, stinky pact on state capitals. Put simply, the writers could explain to the interest Closer to home, municipali- fiscal reality municipalities face package bails out state governments groups clamoring for cash: “Sorry. We ties in North Carolina are taking on today: shrinking tax revenues and for poor fiscal management. can’t give you more. In fact, we’ll have toilets in a crusade to curb drought. hefty budget shortfalls. Cary has The worse the mismanagement, to scrap your handouts and focus on Fighting the giant bogeyman of $303 million in debt for fiscal 2009. it seems, the bigger the bailout. This the essentials.” global warming is probably the un- Including principal and interest, it means North Carolina taxpayers will Instead, the federal stimulus derlying rationale for most of these carries $27 million in debt service be net payers into the bailout, not package kicks the can of fiscal reckon- initiatives. for fiscal 2009, up 12 percent from net recipients of bailout cash. News- ing down the road. Lawmakers will Take Cary as an example. last year. paper headlines might proclaim that make some cuts in the next budget, Known for enacting its share of Given those numbers, the the “federal government” will cover but they will not engage in the seri- Soviet-style restrictions, the town town can’t afford to flush $89,000 a chunk of North Carolina’s state ous revisions that would help N.C. council has now entered the one down the toilet, even an energy- budget gap. Don’t be fooled. Those government establish the firm footing room you thought Big Brother efficient one. CJ headlines are wrong. it needs to withstand future financial Every “federal” dollar the Gen- downturns. would never touch: the bathroom. eral Assembly appropriates is coming Like the kid with the credit card During the drought last out of the pockets of current or future funded by Mom and Dad, state law- David N. Bass is an associate edi- year, Cary town council members North Carolinians. makers can avoid learning an impor- approved a rebate program for tor of Carolina Journal. John Locke Foundation fis- tant life lesson about setting priorities cal policy analyst Joseph Coletti has with the money they have. CJ MARCH 2009 | CAROLINA JOURNAL PAGE 25

EDITORIALS COMMENTARY Statistics and Students Personal Responsibility: Busing’s advantages don’t pan out Is it Good or Evil? n a recent Sunday package, report- in CMS. The statewide average for ers from The Charlotte Observer and these students was 48 percent. hile the current debate the lottery bill. Raleigh News & Observer worked We went straight to the data about business bailouts So now North Carolina is Itogether to explore the controversial source, from the Department of Public and economic stimulus knee-deep in moral decrepitude, its subject of school assignment. The two Instruction, and further narrowed the hasW its share of learned arguments state officials seeking continuously largest school systems in the state, focus to the share of disadvantaged and sophisticated analysis, there’s to find new ways to trick people Wake and Charlotte-Mecklenburg, students passing both the reading a quick way to get to the into buying lottery tickets have chosen differing policies in re- and math tests. In CMS, that rate core of the issue. so the state can make its sponse to federal litigation striking was 31 percent in 2007-08. In Wake, Is personal respon- revenue projections. down race-based school assignments. it was also 31 percent. For the state sibility a social good or a In fairness, the state Wake preserved forced busing as a whole, it was 33 percent. As for social evil? already had waded a bit by substituting household income bragging rights, urban school systems The Obama admin- into the swamp before for race, hoping to enhance student outperforming both Wake and CMS istration, the Democratic the lottery’s passage. For performance by avoiding high concen- among lower-income kids included Congress, and like-mind- years, North Carolina’s trations of low-income students. CMS Cumberland (33 percent), New Ha- ed politicians and activ- official policy toward adopted voluntary busing based on nover (34 percent), Chapel Hill-Car- ists in North Carolina cigarettes and alcohol had neighborhood zones and choice op- rboro (34 percent), Asheville City (38 justify the new bill with been that you ought not tions, directing additional resources to percent), and Buncombe (44 percent). the archaic Keynesian to indulge yourself too notion that consumer JOHN much — but you ought to schools with high at-risk populations. There’s little more that needs to HOOD Meaningful conclusions can be be said — not that some busing advo- spending is good and indulge yourself enough consumer saving is bad. to help finance your share drawn only after performance on state cates haven’t been huffing and puffing The new “Making Work of programs funded by tests is broken out by such factors as anyway, trying to blow this statistical Pay” tax credit, for example, is special excise taxes on cigarettes race and socioeconomic status. The house down. explicitly designed to discourage and alcohol. result? “Despite the different ap- Admittedly, there would be people from using their checks to The latest vice championed by proaches,” writes reporter Keung Hui, another way to test the proposition. pay down their mortgages or credit government is that North Carolin- “the academic results among minority Rather than rely on systemwide aver- card balances. Yet the same politi- ians ought to spend beyond their and at-risk students are very similar ages, we could track the performance cians are promising another costly means and stop saving for a rainy in both districts, with only a narrow of individual students as they are wave of deficit spending to bail out day. Any parent imparting this les- gap in test scores.” Indeed, the gap transferred into schools under Wake’s businesses and consumers strug- son to his kids would be properly is insignificant given the fuzziness of assignment scheme, to see how the gling to handle their excessive debt viewed as grossly irresponsible. For the underlying data the newspapers transfers affect their individual perfor- loads. all their paternalistic pretensions, reported. About 46 percent of Wake’s mance on state tests. This is not just contradictory. however, politicians are now saying lower-income students passed either But that is precisely the study It’s revolting and dangerous. precisely this. the reading or math exam last year, vs. that Wake school officials have refused Nearly 15 years ago, I helped But recessions are not caused 45 percent of lower-income students to perform. Wonder why? CJ found a broad ideological coalition by increased personal savings. They to block the creation of a state-run are the cause of increased personal lottery in North Carolina. Some savings. As booms sustained by ar- members of the coalition opposed tificially easy money become pain- the lottery because they didn’t think ful busts, misallocations of capital Education Reform there should be legal gambling at become evident. Some business all in our state. Others opposed it models are exposed as unsustain- Budget crunch no excuse for lack of progress because they saw state lotteries as able. Some investments prove to be a regressive way to finance govern- unsound. As capital is reallocated he 2009 session of the General The state of North Carolina will ment. to more productive uses, some jobs Assembly isn’t going to result spend nearly $8 billion on elementary Although I didn’t think state go poof, and others are threatened. in a big increase in taxpayer and secondary education this year. government needed any more rev- Households and businesses ratio- Tfunding for the public schools, but Counties will spend billions more on enue to squander, my main motiva- nally respond to these scary events tion for opposing a state lottery was by cutting costs, reducing debts, that doesn’t mean lawmakers can’t operations and school construction. that I didn’t want government to be and increasing savings. advance education reform in North The investment, in other words, is in the gambling business, or in the Unless these savings are stuck Carolina. already huge. business of promoting gambling. in someone’s mattress, they expand There are plenty of good ideas Here are some ways that state Whatever you think the legal status the pool of loanable funds and be- for boosting student achievement that policymakers could increase the re- of gambling should be — I think come the seed corn for future entre- would require little or no additional turn on this investment in 2009, while individuals in a free society enjoy preneurial investments that create public expenditures. While North saving taxpayer money in the process: the inalienable right to make poor jobs and the potential for profitable Carolina’s public schools aren’t expen- • Eliminate the statewide cap of decisions with their own time and economic harvests. sive by national standards, they have 100 charter schools. money — surely I could convince Savings are even necessary for seen a real increase of 53 percent in • Adopt a state tax credit for you that state leaders should not go the federal government to engage expenditures per pupil over the past private educational investment by out and actively encourage people in deficit spending in the first place. 20 years, much of it occurring during families and businesses. to gamble their money away. Apparently, it’s bad if Americans Jim Hunt’s third and fourth terms in • Junk the state’s own end-of- Or so I thought. Actually, if save but good if foreigners save. the 1990s. grade tests in favor of purchasing the General Assembly had followed Or something like that. If you’re Big increases in state school independent national tests. the state constitution and their own searching for consistency or com- funding have not been associated • Make it easier for talented pro- rules, the lottery wouldn’t have mon sense, you won’t find it in the with commensurate gains in school fessionals to enter North Carolina’s passed back in 2005. Silly me, I current bailout/stimulus mania. CJ outcomes. Just as the most expensive classrooms. thought that those intent on sacri- programs started hitting the state The state’s yawning budget gap ficing their integrity to scam a few John Hood is president of the budget in the mid-1990s, North Caro- is no excuse for a lack of progress on bucks from lottery players wouldn’t John Locke Foundation and publisher of lina’s rate of improvement on credible education reform. Given the stakes, first sacrifice their integrity to pass CarolinaJournal.com. national achievement tests began to in fact, we shouldn’t accept any more slow. excuses. CJ PAGE 26 MARCH 2009 | CAROLINA JOURNAL

EDITORIAL BRIEFS Write-off Boon

he main business tax cuts proposed by President Obama likely are to be a windfall for two industries particularly tiedT to the current economic meltdown: Wall Street investment banks and homebuilders, The Wall Street Journal reports. Under the proposal being crafted by the Obama administration and congressional Democrats, companies would be able to use their so-called tax losses to offset taxable U.S. profits earned in the past five years. Typically, companies can carry back such losses only two years. The Obama proposals likely would mean that companies with enormous losses from last year and this year could use the losses to help wipe out tax obligations from the previous five years and receive sizable tax-refund checks from the U.S. Treasury Department. The tax cut would be particularly helpful to industries that were flying high for the past several years, but now aren’t expected to report much profit for the foreseeable future, such as Wall Street firms, homebuilders, and construction companies. Typically, such tax losses still can be taken What’s the Exit Strategy? as deductions in the future. But for companies expecting slim or nonexistent profits for the im- mediate future, that can mean years before they xits can be as important as entrances. That creation and low interest rates, higher inflation will realize the full benefit of the deductions stem- is, once you get into something, it’s good to surface in a few years. Some analysts think this is ming from the tax losses. know beforehand how you’ll get out. This is exactly what the Fed wants to do. By inflating, the anE idea that applies to military incursions, business value of our over-leveraged debts will drop, so in- The same break was included in a stimu- campaigns, and — important in the current envi- flation is a way effectively to pay off our red ink. lus package enacted in 2002, and homebuilders ronment — government economic policy. Unfor- But if potentially double-digit inflation is to had lobbied Congress for a nearly identical tax tunately, it’s something that’s often taken as an be avoided, the Fed will eventually, and soon, pare break last year. CJ afterthought. money growth and raise interest rates. This could Rightly or wrongly, we know the federal be tricky, because too fast a move in this direction government has been trying to could choke off the economic recovery, while mov- Wages and Productivity stimulate the economy out of ing too slowly will jack up inflationary expectations. the recession. This stimulation The task might even be harder for the fiscal he relation between wages and worker is occurring in two forms. First, side. Already the federal government is on track to productivity is a key determinant of the from the Federal Reserve have add almost $2 trillion to the national debt in only standard of living. According to research come super-low interest rates a couple of years. Add to this the fact that the “big byT economist Martin Feldstein in a National and ample supplies of money three” entitlement programs — Social Security, Bureau of Economic Research working paper, and credit designed to motivate Medicare, and Medicaid — are continuing to grow the share of national income going to employ- borrowing and spending. at breakneck speed and could add trillions more to ees is at about the same level as it was in 1970. Second, the Bush admin- the national debt. The result will be an exploding Feldstein notes that the level of productivity istration and Congress, work- MICHAEL public debt, ever-expanding interest payments, and (measured as output per hour) doubled in the ing through the federal budget, WALDEN either a crowding-out of other federal spending or U.S. nonfarm business sector between 1970 implemented a tax rebate plan sharp increases in taxes. and 2006. last summer with the objective This means that having a plan to contain this Wages, or more accurately total compen- of increasing consumer spending. Now, a second debt and limit the growth of the three entitlement sation per hour, increased at about the same an- stimulus will be coming from the Obama adminis- programs will be of crucial importance once the nual rate during that period, when adjusted for tration and Congress and will be composed of both recession is over. Could the Obama administration inflation. tax cuts and increased federal spending. The price pull a “Nixon goes to China” strategy and be the tag might be almost $1 trillion. one to deal finally and effectively with entitlement According to Feldstein, the doubling of Hundreds of articles and books have been programs? If not, it could face a 1980-style economy productivity since 1970 represented a 1.9 per- written by professional economists on whether such in 2012 — sluggish growth, high inflation, and cent annual rate of increase, while real com- monetary and fiscal stimuli work. While realizing either high taxes or high debt — or both. pensation per hour rose at 1.7 percent per year. any summary leaves out many important details Winning the peace often has been as important Between 2000 and 2007, productivity rose at a and nuances, suffice it to say the consensus view as winning the war. By many estimates, the Treaty more rapid 2.9 percent per year, and compensa- is that the monetary stimulus, from the Federal of Versailles after World War I was a disaster that tion rose nearly as fast, at 2.5 percent per year. Reserve, works best and gets the nod over the fiscal directly led to World War II. In contrast, the after- Feldstein concludes that two measure- stimulus. Regarding the fiscal stimulus, economists math of World War II, with the Marshall Plan in ment mistakes have led some analysts to are sharply divided over (a) whether it works at all, Europe and the move to democracy in Japan, has conclude that labor income growth has not and (b) if it does work, whether tax cuts or spending been hailed as a success. Although recessions aren’t kept up with productivity growth. The first is a increases work best. the equivalent of war, the lesson is that post-reces- focus on wages rather than total compensation. My purpose here is not to settle these issues. sionary economic policies can be just as important The second measurement problem is the Instead, my goal is to look ahead, past the reces- as antirecessionary programs. way in which nominal output and nominal sion and to when the economy is back on its feet We could end the recession, but still set our- compensation are converted to real values us- and growing again. How do we “de-stimulate” the selves up for just a different kind of “hard times” ing two different deflators. He concludes one economy and avoid the potential real future costs later. CJ deflator should be used for measuring both associated with the stimulus programs? productivity and compensation. CJ Let’s start with the Federal Reserve and mon- Michael L. Walden is a William Neal Reynolds dis- etary policy. If the Fed continues its massive money tinguished professor at North Carolina State University. MARCH 2009 | CAROLINA JOURNAL PAGE 27 North Carolina and the Stimulus

way from the media glare and these data, we’ve been, according wins the North Carolina primary, but Doughton. No post-Civil War chair of the debate over the appropri- to the nonpartisan Tax Foundation, that’s only because we go so late in the spending committee, Appropria- ate role of government in the anywhere between 27th and 42nd the process that there’s hardly anyone tions, has been from North Carolina. economy,A the federal stimulus bill rep- for each year over the past quarter but him to choose from. The story is the same in the resented a mad scramble among leg- century. This might not sound terribly Most of the variation in the geo- Senate. Since party leaders were first islators to secure as much federal lar- bad. But since much federal spending graphic dispersal of pork is explained formally selected in the 1920s, neither gesse for their own constituents as they is directed at poorer states — and on a by congressional politics, however. the Democrats nor the Republicans possibly could. per-capita income basis we’re well in Two things are particularly critical. have picked a North Carolinian to If you look at the legislation in the bottom half — the performance is First, it’s helpful to have your state head them. this purely dis- really quite abysmal. delegation dominated by the majority As with the House, there has tributive fashion, The observation begs the ques- party. Since we are no one-party state, been no North Carolina Appropria- North Carolina tion: Why aren’t we very good at we have not flourished recently under tions chair. The only Finance, or tax- faired poorly. Ac- getting stuff from Washington? One either Democratic or Republican rule. writing, Committee chair from our cording to the reason is that the Senate, with its dis- During Jesse Helms’ tenure our state was Furnifold Simmons, who liberal Center for regard for population, gives dispro- Senate delegation was often split, as served during World War I. American Prog- portionate influence to small states. neither party seemed capable of hold- More recently, only Sam Ervin, ress we are to see Wyoming has two senators just like ing on to the other seat. With Richard Jr. and Helms have been around long $16.14 billion of the California. Given that we are now the Burr and Kay Hagan, the parties are enough to do much. Ervin’s great 69 percent of funds 10th most populous state in the union, sharing spoils again. Our House legacy is not economic — it is the Sen- from the bill that ANDY we lose with this rule. delegation has been divided in recent ate’s Watergate investigation. Helms can be attributed to Research on the president’s role decades, too, especially since the big was most adroit as a veto player in the states. This ac- TAYLOR in directing pork also sheds a little Republican gains of 1994. Washington, not an agenda setter. counts for 2-3 per- light. Strong blue and red states — The second secret to generating It’s not that Tar Heels don’t like cen less than we those where the outcome of the presi- pork is to have members in positions pork. After all, we devour barbecue ought to receive if spending were dis- dential election is usually very one- of influence. North Carolina has been and are second in the nation in hog tributed purely on a per-capita basis. sided — tend to receive more. We are particularly unskilled in this regard. production. It’s just that the people The data reflect a pattern. North not really among this group. Political You have to go back to 1807 to find we send to Washington don’t seem Carolina normally does not get its fair scientists attribute this to “payback” North Carolina’s one-and-only House to be able to bring home the bacon. share of the federal pie. It is true that by the president for a state’s support. Speaker, Nathaniel Macon. Claude Come to think of it, perhaps we since the mid-1990s we’ve been receiv- I have published a paper that Kitchin is the state’s only House should start a national trend. CJ ing a few cents over a buck for every shows states with early primaries tend majority leader, serving during World dollar we send to Washington, but to get more federal procurement — War I. that’s essentially due to annual federal especially if they support the candi- To find the last Tar Heel to chair Andy Taylor is Professor and Chair deficits and the big premiums wealthy date who eventually goes on to win the big tax-writing committee, Ways of Political Science in the School of Public Northeastern states pay. When it the White House. The candidate who and Means, you have to reach back to and International Affairs at N.C. State comes to ranking the states using will become president nearly always the 1950s for Democrat “Farmer” Bob University. Snuff Out the Smoking Ban

here is a debate going on at the places, and state government vehicles. apartments, private country clubs, should be outlawed. Using this logic, General Assembly that some The statewide ban includes, but is not beaches and parks, bus stops, down- then, government should outlaw all claim is between smokers and limited to, all restaurants and bars. town outdoor gatherings, and even in behavior that might endanger health. nonsmokers.T The debate is about a Smoking would be prohibited in all home-based businesses, regardless of Government would decide “for our statewide smoking ban, but it is not private and public workplaces, even if access to the public. Fines for viola- own good” what we could eat, what just about smoking. It is between the business owner is the only em- tions go as high as $2,500. we could drink, games we play, our those who want more government ployee; in any enclosed area to which Proponents of the bill, who sexual behavior, and how much we control and those the public is invited; in any private apparently believe the government exercise. If government officials are who value per- home that is licensed to care for chil- should outlaw a legal activity and allowed to outlaw smoking, what is sonal freedom. dren or adults; and in 80 percent of industry that has supported North to stop them from outlawing other oc- Freedom is about the rooms in any hotel. Tobacco shops Carolina’s economy for decades, cupations that carry a health danger, choices, even if and tobacco manufacturing facilities claim a smoking ban would be good such as commercial fishing, construc- some of those would be exempt. The bill requires for us. They say restaurant patrons tion, and tree removal, to name a few? choices are bad local governments to comply with the and workers should not be forced to There are several options avail- ones. law and encourages them to pass even breath secondhand smoke. Of course able to lawmakers. They could vote Not everyone more restrictive ordinances in their they shouldn’t, and under current law the statewide ban down as Alabama, makes good deci- communities. The local health direc- no one is required to enter a building Indiana, Kansas, South Dakota, and sions. Some people tors would be in charge of enforcing where smoking is allowed. We get Wyoming have done, or they could choose to smoke, BECKI this law with penalties up to $200 to choose which establishments we require proprietors and employers to drink too much, GRAY per violation. There is no mention of patronize and where we work. Busi- post signs conspicuous to the public not exercise, save where local governments would get ness owners are free to solicit business view stating whether smoking is al- inadequately for retirement, eat too the money for enforcement, from whomever they choose and to lowed and let consumers choose. much, or take up dangerous hobbies. The first smoking ban was enact- compete for good employees. If there Instead of thinking of ways to re- The point is they get to choose. When ed in California in 1993, and 23 states is not a market for what they offer, duce our freedoms, legislators should government attempts to engineer our currently have statewide bans in ef- they will either change their business instead focus on the growing budget behavior “for our own good,” it takes fect. Almost 3,000 municipalities have model or go out of business. It is their gap, the state health plan, the school that choice away and takes away our passed local laws that restrict smok- choice. dropout rate, roads and bridges, and freedom. ing. Some of those restrictions include Government-control advocates the economy. CJ The proposed smoking ban, no smoking in private cars with riders argue smokers, covered by Medicare House Bill 2, would outlaw smoking under the age of 21, in parking lots and Medicaid, are an additional cost Becki Gray is vice president for out- in all public places, private work- and walkways of condominiums and to taxpayers and that their bad choice reach at the John Locke Foundation. PAGE 28 MARCH 2009 | CAROLINA JOURNAL Parting Shot N.C. to Lead Federal Crayola Job-Coding Project (a CJ parody) By Justin Green Ralls said his new initiative, “Code Green,” will ex- Spectrum Specialist pand training opportunities for green jobs of the fu- WASHINGTON ture. “We are working to identify green jobs for com- orth Carolina will play a key role in a “green” panies currently in and looking to move to North job-coding initiative, which will begin im- Carolina,” he said. mediately, a U.S. Bureau of Labor Statistics Hall also said that Obama wants to go further officialN says. than national standards for green jobs. He wants BLS “Since some of our stimulus money is tied to to color-code all jobs before Jan. 1, 2010. creating green jobs, our nation needs to develop very BLS developed and currently uses a classifica- specific guidelines for labeling a job as green,” BLS tion system and standardized job descriptions for Commissioner Keith Hall said Feb. 28. more than 800 occupations in 400 specific industry Hall said he expects to adopt a job color-cod- categories. But adding color-coding, he said, poses ing system based on the 120 core colors used by the some serous challenges for the analysts. Crayola crayon company. “We can’t just wing this,” he said. “We need a Crayola has 20 specific colors in the green fami- coalition of all stakeholders, sort of a rainbow coali- ly, including Asparagus, Electric Lime, Fern, Granny tion, as it were, to come up with a color-coding sys- Smith Apple, and Magic Mint. tem that is fair and equitable to all jobs, even those But not all jobs are green jobs, Hall said. So the that are below the living wage level.” job color-coding system will include a vast array of To carry out this ticklish assignment, analysts colors that aren’t in the green part of the spectrum. N.C. officials will concentrate on the green crayons in from the N.C. Community College system and the “Every worker is entitled to a have job color, the Crayola spectrum, but will give all jobs a color so N.C. Employment Security Commission will team even if it isn’t in the green family,” he said. For exam- that no one can accuse them of being unfair and biased. up with an emergency task force of 400 middle school ple, Hall said, reporters might be classified as gray, data on the U.S. labor force and the economic condi- art teachers who understand what ROYGBIV means. while firefighters might be colored a shade of orange. tions of the country. The Community College system will direct the Law-enforcement occupations might end up in the Hall said he selected North Carolina to lead the project, and Ralls said he will name a project leader blue category, and elected officials might be yellow. effort after learning that the N.C. Community Col- by the end of March. “Tobacco farming jobs should be classified lege system was launching a green-jobs initiative. Ralls is trying to secure office space in somewhere in the green family, but that will prob- “The educational leaders in North Carolina are the Research Triangle Park. He said while ably upset a lot of people,” he said. truly visionary, but we can’t let this green-job enthu- the project is supposed to be temporary, The BLS is the principal fact-finding agency for siasm get out of hand. President Obama told me that he hopes it becomes an ongoing operation. the federal government in the broad field of labor the nation cannot let one state get out front with de- “We need the jobs in North Carolina, and dis- economics and statistics. fining just what a green job is,” Hall said. putes over the proper color designation should The agency’s mission is to provide accurate Community College System President Scott keep the analysts busy for many years,” he said. CJ

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