INSIDE THIS ISSUE: DEPARTMENTS Backers rally North Carolina 2 Local Government 9 to support CAROLINA From Page 1 12 Education 14 $2 billion Books & the Arts 18 bond cam- Interview 19 paign/3 Opinion 20 JOURNALA MONTHLY JOURNAL OF NEWS, ANALYSIS, AND OPINION Parting Shot 24 FROM THE JOHN LOCKE FOUNDATION February 2016 Vol. 25 No. 2 STATEWIDE EDITION Check us out online at carolinajournal.com and johnlocke.org McCrory Says CSX Rail Hub ‘Not A Viable Option’ statewide jobs to North Carolina and provide an estimated $329 million in Reports of eminent public benefits to the state. Enhanc- ing freight movement through eastern domain threats hurt North Carolina and the State Ports is a key part of my 25 Year Transportation early enthusiasm Vision. I am enthusiastic By Don Carrington that CSX, with Executive Editor support from RALEIGH local govern- ess than two weeks after praising ments and a proposed CSX terminal near planning or- Selma as a boon to economic de- ganizations, Lvelopment in eastern North Carolina, a has proposed this project for North spokesman for Gov. Pat McCrory said Carolina.” on Jan. 26 that the proposed transit hub Twelve days later, McCrory “does not appear to spokesman Graham Wilson issued the be a viable option.” following statement: “Based on the The reversal vote of local officials as well as serious occurred amid sub- Don Lassiter, right, and his son Trent in front of their event center, The Farm, on prop- land issues, the current site in Johnston stantial local opposi- erty CSX wanted for the Carolina Connector project. (CJ photo by Don Carrington) County does not appear to be a viable tion to the proposed option. We will continue to work with “Carolina Connec- ect. portation hub is a major step for North CSX to explore alternative sites in or- tor,” a $272 million News reports of CSX telling Carolina, but not at the expense of pri- der to create jobs and enhance our state transit hub, includ- Gov. Pat property owners that the company vate property rights.” And U.S. Rep. ports.” ing a resolution from McCrory would use eminent domain to obtain David Rouzer, who initially supported While CSX officials compared the Johnston County property, and comments from com- the project, later pulled his support the Carolina Connector to similar rail Board of Commissioners rejecting the pany representatives that some land “after learning that the land owners cargo hubs in Chambersburg, Pa., and proposed 450-acre site and the refusal owners viewed as threats, seemed to impacted have had no input on this North Baltimore, Ohio, Carolina Journal of several landowners to sell their prompt some public officials to change project,” according to a news report. reported on Jan. 21 that the railroad property to the railroad, leading CSX their opinions on the project. McCrory announced the project officials to suggest they may use emi- N.C. Agriculture Commissioner in a Jan. 14 press release, saying “over nent domain to seize land for the proj- Steve Troxler said “the proposed trans- time, the project could bring 1,500 Continued as “McCrory,” Page 12 IRS Charges N.C. Couple With $12 Million Fraud PAID Stolen Identity Refund Fraud, or SIRF. RALEIGH, NC U.S. POSTAGE More recently it has labeled the crime PERMIT NO. 1766 NONPROFIT ORG. Arkansas traffic stop Identity Theft tax refund fraud, or IDT refund fraud. The IRS has been aware leads to investigation, of this type of fraud at least since 2011 and recently stepped up efforts to arrest of man, woman catch it. “The critical thing for taxpayers By Don Carrington Executive Editor to know is that new protections will be RALEIGH in place by the time they have to file he Internal Revenue Service This vehicle, apparently owned by Per- their taxes in 2016,” said IRS Commis- Criminal Investigation Divi- fecto Ruano, was on the property of a sioner John Koskinen in June. Carolina store owned by Walda Luna. (CJ photo Journal began reporting on the issue in sion’s Raleigh office filed a by Don Carrington) criminalT complaint on Jan. 8 in federal April 2013. court against a Wallace couple, Walda The complaint says the activity Luna and Ruano made their first Lorena Luna and her husband Perfecto took place between January 2009 and court appearance Jan. 19 at the federal Ruano, claiming the couple used iden- May 2012. Luna and Ruano were ar- courthouse in Wilmington. Each had a tity fraud to obtain 2,760 illegal U. S. rested Jan. 11 and taken to the New court-appointed attorney and a Span- Treasury refund checks with a total Hanover County jail in Wilmington. The John Locke Foundation 200 W. Morgan St., #200 Raleigh, NC 27601 value of $12.1 million. The IRS calls this type of crime Continued as “N.C. Couple,” Page 12 PAGE 2 FEBRUARY 2016 | CAROLINA JOURNAL North Carolina C A R O L I N A Obamacare Premiums Surge More Than 30 Percent

By Dan Way “So what is the point of paying out of pocket for insurance JOURNAL Associate Editor that you can’t use?” RALEIGH “With some of these plans, especially in the individu- Rick Henderson ith a Jan. 31 deadline to obtain an Obamacare- al market, people are facing $12,000 deductibles before an Managing Editor compliant health insurance policy on the federal insurance company covers anything, so you might as well health exchange for 2016, enrollment in the feder- be uninsured,” said Katherine Restrepo, health and human Don Carrington Wal health insurance plan has grown slightly, but individuals services policy analyst for the John Locke Foundation. “Just Executive Editor in 2016 may pay premiums 30 percent or more higher than because you have insurance does not mean you have access those charged last year. to care.” Mitch Kokai, Michael Lowrey According to the Centers for Medicare and Medicaid Parrott’s plan-jumping is becoming typical for Obam- Barry Smith, Kari Travis Services, as of mid-January 563,830 individuals in North acare patients. Dan Way Carolina had enrolled in Obamacare plans. The U.S. De- “Every year now people are having to switch their Associate Editors partment of Health and Human Services said 560,357 were plans,” said Duke research scholar Chris Conover, who enrolled in the federal health monitors the Affordable Care Kristen Blair, Roy Cordato insurance marketplace in 2015. Act’s implementation and im- Becki Gray, Sam A. Hieb Blue Cross and Blue Shield pacts. Lindalyn Kakadelis, Troy Kickler of North Carolina is hiking its Even the administration, George Leef, Michael Lowrey rates for 380,000 customers by which once claimed those who Donna Martinez, Harry Painter Jenna Ashley Robinson an average of 32.5 percent. The liked their plan could keep their Marc Rotterman, Jesse Saffron state’s largest insurer in the plan, now says, “You need to Jay Schalin,Terry Stoops individual market abolished switch plans if you want to get Andy Taylor, Michael Walden some plans in the Charlotte and the best rate,” Conover said. Contributors Triangle regions, directing some “Now we’re going through 55,000 people to seek new cov- this system of endless churn,” he erage in smaller provider net- said. “It’s not an optimal model Joseph Chesser, Zak Hasanin works. for insurance coverage,” espe- Catherine Koniecsny, Charles Logan Austin Pruitt, Matt Shaeffer Coventry Health Care of cially when a consumer can’t Interns the Carolinas, an Aetna com- keep the same doctor. pany, will raise rates an average Devon Herrick, senior fel- of 23.6 percent for 117,000 poli- low and health economist at the Published by cyholders. United Health Care Dallas-based National Center The John Locke Foundation is increasing the average rate for Policy Analysis, said Texas, 200 W. Morgan St., # 200 paid by its 86,223 customers by like North Carolina, has higher- Raleigh, N.C. 27601 20 percent in 2016. than-average losses on the ex- (919) 828-3876 • Fax: 821-5117 According to the Gallup- change plans. www.JohnLocke.org Healthways Well-Being Index, “First, the only people 20.4 percent of North Carolin- Teresa Parrott of Durham says she is unable to use the who are willing to buy coverage health insurance policies she has purchased from the Jon Ham ians had no health insurance in federal health exchange as part of the Affordable Care are those who get subsidies,” Vice President & Publisher 2013. By the middle of 2015, that Act. (CJ photo by Dan Way) Herrick said. Those earning less fell to 14.7 percent. than 250 percent of the federal Kory Swanson The Kaiser Family Foundation puts the number of poverty level get cost-sharing subsidies in addition to pre- President uninsured eligible for an individual Obamacare plan at mium tax credits. 1,138,000. Of those, 25 percent would qualify for a health Because health status and wealth are correlated to a John Hood large degree, “a [low-income] risk pool is likely less healthy Chairman policy premium tax credit; 40 percent would not. Another 21 percent are in the group that would have been eligible for than a wealthy risk pool,” Herrick said. Many exchange en- Charles S. Carter, Charles F. Fuller Medicaid had the state expanded that federal entitlement rollees were uninsured and may not have seen a doctor in Bill Graham, John M. Hood program. years. Christine Mele, Baker A. Mitchell Jr. Teresa Parrott of Durham said her experience with Af- “Imagine what would happen if someone with no out- Paul Slobodian, David Stover fordable Care Act plans has been disastrous. of-pocket costs went to see a doctor for the first time in a de- J.M Bryan Taylor “This Obamacrap. It’s for the birds,” she said. “I don’t cade. I suspect they’d be an easy mark for ‘anything goes,’” Board of Directors see how this is helpful for the average American at all.” Herrick said. “All the people with pre-existing conditions, Parrott was 62 when her job was eliminated in 2013 who had not enrolled in health coverage in years past due Carolina Journal is and she went into early retirement. She found a policy on to the cost, probably jumped at the chance for subsidized a monthly journal of news, coverage.” analysis, and commentary on the federal exchange for a $129 monthly premium, though state and local government she received substantial subsidies. Gaming of the enrollment rules further complicates and public policy issues in “The taxpayers were paying over $600 a month for it. matters. While there are specific open-enrollment periods, North Carolina. And the insurance was no good. I couldn’t use it at any of they were extended in 2014 and 2015 to let more people en- ©2016 by The John Locke Foundation my doctors,” but was able to buy her prescriptions under roll. “Some probably took advantage of that and waited Inc. All opinions expressed in bylined articles the plan, Parrott said. are those of the authors and do not necessarily until they needed medical care before signing up,” Herrick In 2015 her cost for the same policy jumped to more reflect the views of the editors of CJ or the said. than $300 a month “and I still couldn’t use it,” she said. staff and board of the John Locke Foundation. “Once they received surgery or had that baby, many She switched to a less expensive BCBSNC policy, Material published herein may be reprinted as dropped out,” he said. With nearly 30 special enrollment long as appropriate credit is given. Submis- which ended up being the only Blue Cross plan her doctor categories, “It’s rather easy to game the system and wait un- sions and letters are welcome and should be would not accept. directed to the editor. til you’re sick to sign up.” “It’s just a sorry policy basically,” Parrott said. “I paid Indeed, compared with 2014, Blue Cross reported To subscribe, call 919-828-3876. Readers $99.92 a month for 11 months, never used it one time,” and also can request Carolina Journal Weekly that from January to June 2015 its ACA patients had more Report, delivered each weekend by e-mail, meanwhile the government continued providing tax credits. chronic illnesses and higher-than-expected demand for ex- or visit CarolinaJournal.com for news, links, She turns 65 in March and will enroll in Medicare. To pensive health care services, emergency department visits and exclusive content updated each weekday. avoid the $695 penalty for being uninsured, she sought the jumped 27 percent, prescription drug costs rose 33 percent, Those interested in education, economics, cheapest plan available for January and February. and most who dropped coverage used expensive medical higher education, health care or local govern- “So now I have a policy that costs me nothing, but it services before terminating their insurance. ment also can ask to receive weekly e-letters costs the taxpayers over $600 a month. That’s ridiculous, “I don’t believe it’s going to get any better,” Her- covering these issues. and I can’t use it because nobody accepts it,” Parrott said. rick said. CJ FEBRUARY 2016 | CAROLINA JOURNAL PAGE 3 North Carolina Backers Rally to Launch $2 Billion Bond Package Campaign By Barry Smith signs at the event promoting the bond Associate Editor package. RALEIGH Bob Orr, a former N.C. Supreme undreds of supporters of the $2 Court justice and chairman of the Con- billion Connect NC bond refer- nect NC Committee, said now is the endum on the March 15 ballot right time to borrow money for the Hgathered Jan. 5 on N.C. State Univer- building program. sity’s Centennial Campus to kick off “We’re at historically low inter- a campaign they say is essential for a est rates,” Orr said. “This is a smart growing North Carolina. business decision, and it will have Gov. Pat McCrory told the crowd enormous long-term benefits to North at the campus’s Hunt Library that Carolina.” there is a heavy demand for workers In addition to the money for the with certain skill sets. UNC and community college systems, “There is a skills gap right now the bonds would provide $3 million in in our country and in our state,” Mc- matching grants to make local parks Crory said. “Where we’re putting the more accessible for children and vet- money in our university and in our erans with disabilities. Another $309.5 community colleges is to help fill the Jim Rose, regional president of Yadkin Bank and treasurer of the Connect NC bond million is earmarked for local water skills gap we have in North Carolina so committee, rallies supporters at a Jan. 5 kickoff effort at N.C. State University for the and sewer loans and grants. industries can find the talent needed to bonds that will be on the March 15 ballot. (CJ photo by Barry Smith) Another $78.5 million would go continue to grow.” for National Guard readiness centers Maintenance costs in the science North Carolinians,” Blue said. He said The bond proposal earmarks and a Department of Public Safety building at UNC-Charlotte, which was a business school building was needed more than half of the $2 billion for training academy. built in 1985, “are costing more than for UNC-Pembroke to train business various new buildings and renova- the building is worth,” McCrory said. leaders for southeastern North Caro- An additional $94 million would tions on University of North Carolina He also made a push for a new lina. pay for labs at the Department of Agri- system campuses. Another $350 mil- $90 million science building at N.C. Former Democratic Lt. Gov. Wal- culture and Consumer Services. lion would go to community colleges A&T. “We will invest more in our his- ter Dalton joined the bipartisan chorus. State parks and attractions would across the state. torically black colleges and universities “This is not a partisan issue, it get $100 million, including $25 million During his remarks McCrory, to ensure that everyone has the oppor- is a North Carolina issue,” said Dal- designated for the North Carolina Zoo a Republican, alluded to projects the tunity to succeed in their chosen field ton, who is president of Isothermal in Asheboro. bonds would fund at Western Carolina and contribute to North Carolina’s fu- Community College in Spindale. “It is In late January, a group oppos- University, UNC-Charlotte, and N.C. ture,” McCrory said. about keeping North Carolina strong.” ing the measure called NC Against A&T State University. House Speaker Tim Moore, R- Jim Rose, regional president of the Bond filed paperwork to launch McCrory said the natural science Cleveland, said lawmakers were able Yadkin Bank and treasurer of the Con- a formal referendum committee and building at Western Carolina was built to pay for highway projects with ex- nect NC Committee, which is leading raise money for advertising and voter in the early 1970s, when the school had isting tax revenues, so the bond pro- the push for the bonds, said the com- education. Nicole Revels of Lenoir, the 15 nursing majors and no engineering posal doesn’t include money for roads. mittee has collected about $750,000 group’s treasurer, told WRAL News majors. However, he made a push for the com- from donations and has pledges of the committee will rely on the grass- “Today, Western Carolina has munity college component of the bond more than $1.3 million. “Our truthful roots support of about 30 activists and about 2,300 students in health and hu- referendum. “It’s where the rubber goal is really about $3.5 million,” he a mailing list of about 8,000 others who man sciences programs, which we ma- meets the road on worker retraining,” said. have expressed concerns. jorly need right now more than ever,” Moore said. Rose used the occasion to rally Revels added that some of the McCrory said, adding that there are Sen. Dan Blue, D-Wake, offered a supporters, urging them to vote for the opposition to the measure comes from 600 students in technical and engineer- note of bipartisanship. “It’s absolutely bonds and to encourage others to do residents who might support a trans- ing programs, and 500 in biological essentially for this state for its econom- the same. portation bond but say this proposal and physical science programs. ic growth, for creating more jobs for The committee distributed yard funds “luxuries” and “fluff.” CJ PAGE 4 FEBRUARY 2016 | CAROLINA JOURNAL North Carolina Critics Worry About Impact of Connect NC Bonds on Debt Load By Dan Way than it would be without the bond, ris- 2018-19; and $405.9 million in 2019-20. tential bond uses pressing needs “is a Associate Editor ing from $359 million to $510 million. If the state found itself in a rap- real stretch of the imagination. If they RALEIGH “Interest rates are at historic idly rising rate environment “which were pressing needs, then they would hile publicly lobbying for the lows,” outgoing state budget direc- we might have,” Roberts said, “you have been in the budget.” $2 billion Connect NC bond tor Lee Roberts said during recent re- probably would front-load the issu- Brody believes “we would get referendum that will be on marks at the John Locke Foundation. ance. That’s a decision for the treasurer more economic value if we waited a Wthe March 15 ballot, Gov. Pat McCrory “We believe we would be committing and the debt writers at the time of is- few more election cycles and took ad- and members of his administration say fiscal management malpractice not to suance,” when interest rates would be vantage of our surpluses to do certain the measure will be fiscally prudent, take advantage of these historically locked in. things that we really need to do and reducing state General Fund debt over low interest rates to finance these long- Even if the bond were issued at pay off our debt.” the next five years. term infrastructure 5.75 percent inter- The state would have more mon- But a small and growing cho- needs.” est, there would be ey available to spend on its needs with- rus has criticized the bond proposal, Roberts said “ample debt service out raising taxes if it didn’t add the which would support projects related the state is paying capacity, ample af- new debt service and interest, he said. to the UNC system, community col- off its existing debt fordability,” Rob- leges, state and local parks, water and very rapidly. It was erts said. “I’m a very strong, conservative sewer infrastructure, agriculture, and at $7 billion in 2010 The 2015 Debt Republican, and I would not embrace public safety. before dropping to Affordability Ad- this,” Brody said. Asked if the bond “If you remember, we had a fit $5.2 billion at pres- visory Committee package was out of sync with Repub- about $8 billion in debt under [former ent. chaired by Cow- lican values, he replied, “All I’m going Gov.] Bev Perdue, and so we went on “We’ll pay off ell “found that the to say is that this isn’t a strong Mark an austerity program, we paid down 75 percent of our General Fund had Brody philosophy to follow.” our debt,” said state Rep. Mark Brody, existing debt over in excess of $2 bil- “Although we are being told that R-Union, who voted against the bonds. the next 10 years, lion in additional this bond will not lead to tax increases, “And now we want to go back and even with the debt capacity,” I never heard of a bond that didn’t,” up,” Brody said. “It’s just plain ironic issuance of the ad- Young said. “There- said state Rep. Larry Pittman, R-Cabar- to me.” ditional $2 billion fore, at the current rus, who voted against the bonds. “The issuance of the $2 billion we’ll have less debt time it does not ap- “Even if we don’t raise state tax- Connect NC bonds will cause debt ser- five years from now than we do this pear that a tax increase would be nec- es to pay for it, I believe the localities vice to rise,” said Brad Young, press year, and that’s why we’re so confident essary to service the new debt.” involved, in order to meet the match- secretary for state Treasurer Janet Cow- in saying this bond in no way will re- The rating agencies currently ing funds aspect of some of this, will ell. Debt service is the state’s payment quire a tax increase,” Roberts said. consider North Carolina’s debt burden almost certainly have to increase their to retire its debt. Without the $2 billion bond, state to be “low-to-moderate,” and “below taxation to pay their share of it,” Pitt- “The exact amount of the increase debt would drop from its current $5.2 average,” Young said, “and they rec- man said. annually will depend upon the issu- billion to about $3 billion in five years. ognize that state borrowing is subject “I personally would not go out ance schedule and prevailing interest If the bond passes, the debt load would to debt affordability guidelines,” so and buy a house, car, or other item I rates at the time the bonds are issued,” dip slightly from its current level to the state’s AAA rating should not be Young said. $5.1 billion in five years. affected. don’t really need, just because inter- If bonds are issued at a 3.5 percent The state likely would issue the State bonds “historically enjoyed est rates are lower. The state needs to interest rate, annual debt service would bond in four installments so all the very favorable market acceptance and be similarly frugal with the people’s go up by more than $14.8 million in the debt would not come due at the same a very positive reception from inves- money,” he said. first year, 2016-17, from $676.8 million time, Roberts said. tors,” Young said. “At the current time The state should not put up to $691.7 million, according to the leg- According to a Fiscal Research it does not appear that extraordinary new university and community col- islative Fiscal Research Division. document, those installments, would actions will be necessary to success- lege buildings “when they aren’t By 2024-25 the annual debt pay- be $421.6 million in 2016-17; $598.8 fully issue the bonds.” even using all the space they have ment would be $151 million higher million in 2017-18; $573.8 million in Brody said to call any of the po- now,” he said. CJ Free Choice for Workers: A History of the Right to Work Movement

By George C. Leef ViceDirector President of Research for Research at the at John the W. JohnPope WilliamCenter Popefor HigherCenter forEducation Higher EducationPolicy Policy

“He writes like a buccaneer... recording episodes of bravery, treachery, commitment and vacillation.” Robert Huberty (Call Jameson Books, 1-800-426-1357, to order) Capital Research Center FEBRUARY 2016 | CAROLINA JOURNAL PAGE 5 North Carolina State Bar Complaint Seeks Misconduct Probe of Roy Cooper By Don Carrington per’s ad ran at least three times a day Executive Editor for seven days on more than 20 televi- RALEIGH sion stations. longstanding feud between Ra- The Boyces and Isleys filed their leigh attorney Gene Boyce and lawsuit the day before the election, state Attorney General Roy naming Cooper, the Cooper (political) CooperA that appeared to be over in Committee, and campaign aide Julia 2014 reignited in January, when Boyce White as defendants. In three court fil- filed a complaint against the North ings in 2003 and 2008, Cooper stated, Carolina State Bar claiming that Coo- “The political advertisement is true.” per should be investigated for profes- Gene Boyce assumed the lead sional misconduct. role in the lawsuit against Cooper. Boyce claims that starting in 2000, “That ad was false, and the Cooper Cooper knowingly made false state- team knew it,” Boyce told CJ in 2013. ments harming the reputation of Boyce “They implied we were crooks. I want and his law partners. Seeking to force my name cleared. I did not cheat my an investigation, on Jan. 5 Boyce filed clients. The public record has shown a formal complaint in Wake County the statements in the ad to be libelous. Superior Court against the North Car- My main purpose in pursuing this is Raleigh attorney Gene Boyce has filed a complaint with the State Bar to force an olina State Bar, the state agency that investigation of Roy Cooper for “professional misconduct.” (CJ file photo) to get a decision that the ad is false. I regulates attorneys. want the record to be clear.” In the complaint, Boyce says that since then. He currently is a Democrat- a separate issue that the State Bar must as an attorney he has an obligation to ic candidate for governor. address. Attorney precedent report the professional misconduct of The Boyces and their law part- Boyce has been practicing law ners Philip and Laura Isley in 2000 since 1956. He served as assistant chief Boyce’s complaint states that other attorneys to the State Bar. Ac- the State Bar recently set a precedent filed a defamation lawsuit against counsel to the Senate Watergate Com- cording to the complaint, Boyce has for the Cooper situation in handling Cooper based on ads run by the Coo- mittee, working with U.S. Sen. Sam notified the State Bar on multiple oc- a complaint against Faison Hicks, an per campaign committee. The lawsuit Ervin, D-N.C., on the investigation of casions about Cooper’s alleged mis- attorney who works for Cooper. Since alleged that Cooper and his committee President Nixon’s 1972 presidential conduct but the State Bar has not re- Hicks previously had served as coun- sponded. Boyce also believes the State ran a political ad that was defamatory campaign. sel for the State Bar, the State Bar re- Bar has a conflict of interest because and constituted an unfair and decep- When asked for comment, Boyce ferred the Hicks complaint for an inde- Cooper also serves as the attorney for tive trade practice. It also charged that told Carolina Journal the information in pendent review by the ethics counsel the State Bar. Cooper and his committee participated the complaint spoke for itself. for the State Bar of Georgia for a prob- Boyce is asking the court for a in a conspiracy to violate a North Car- Noelle Talley, Cooper’s spokes- able cause determination. declaratory judgment forcing the State olina law prohibiting false ads during woman at the attorney general’s office, In 2014 the State Bar became Bar to acknowledge Boyce’s claims of election campaigns. A trial court judge said the office had no comment. aware that on two occasions, Hicks dismissed the lawsuit, but appellate Cooper’s misconduct; declare that the The lawsuit signed forms stating he attended con- State Bar has a conflict of interest in the courts ruled in Boyce’s favor on sev- tinuing legal education programs matter; and refer the matter to an ap- eral occasions, and in 2014 the matter One week before the 2000 elec- sponsored by the State Bar. Hicks propriate alternative agency for inves- was scheduled to go to trial. tion, Cooper’s campaign started run- claimed full credit for his attendance tigation, findings of fact, and discipline The dispute appeared to be over ning a television ad that read: “I’m Roy even though he had not attended if appropriate. in April 2014 when Cooper issued a Cooper, candidate for attorney gener- enough hours to qualify for the credit The dispute began in 2000, when written apology to Boyce for state- al, and I sponsored this ad. Dan Boyce: he claimed. Cooper was the Democratic Party’s ments Cooper’s political campaign His law firm sued the state, charging Rule 8.4 of the North Carolina nominee for attorney general and his made in the political ads. The parties $28,000 an hour in lawyer fees to the State Bar provides in part that it is main opponent was Republican Dan signed an agreement ending the civil taxpayers. The judge said it shocks professional misconduct for a lawyer Boyce, Gene’s son. Cooper won that action, but Boyce’s complaint before the conscience. Dan Boyce’s law firm to “engage in conduct involving dis- race and has served as attorney general the State Bar says Cooper’s conduct is wanted more than a police officer’s sal- honesty, fraud, deceit, or misrepresen- ary for each hour’s work. Dan Boyce tation.” Hicks acknowledged that he — wrong for attorney general.” had not attended all the credit hours The ad contained several untrue he claimed, even though he signed the statements. When the advertisement attendance forms. was running, the Boyces and Isleys Instead of handling the disci- were partners at the Boyce & Isley law pline through the State Bar, the matter firm in Raleigh. Dan Boyce did not was referred to Wake County Superior Court Judge Donald Stephens. work on the lawsuit referenced in Coo- “Attorney Hicks has no history of per’s ad (the Smith case), and that case previous attorney misconduct result- predated the foundation of the Boyce ing in disciplinary action and has ad- & Isley law firm. The Smith lawsuit mitted and expressed remorse for this was filed by Gene Boyce and attorneys misconduct. The court finds and con- from the Womble Carlyle Sandridge & cludes that attorney Hicks intentional- Rice law firm. ly engaged in professional misconduct Gene Boyce was not running for and that such was willful and did not attorney general, and he did not charge result from mistake, inadvertence, or taxpayers $28,000 an hour. The judge neglect. The court … finds that a pub- sets legal fees in class-action lawsuits, lic reprimand should be issued in this and the final payment to the attorneys matter. A public reprimand is a serious was much lower than the amount al- form of attorney discipline and is war- leged in the ad. ranted for professional misconduct of On the second day the ad ran, this nature,” Stephens wrote. Boyce & Isley notified Cooper’s com- By issuing a reprimand, Stephens mittee in writing about the statements added, “This sanction shall serve as in the ad and requested an immediate a strong reminder of the high ethical retraction. Cooper ignored the request standards of the legal profession.” and continued running the ads, the Hicks is still employed by the lawsuit stated. Gene Boyce said Coo- N.C. Department of Justice. CJ PAGE 6 FEBRUARY 2016 | CAROLINA JOURNAL North Carolina Lawmakers Surprised at Renewable Energy Tax Credit Costs

construction of at least 80 percent. Proj- ects 65 megawatt and larger must have Magnitude of been 50 percent complete to qualify for the credit. An independent engineer ‘safe harbor’ credits and certified public accountant must submit notarized copies of written re- a surprise to some ports verifying eligibility. House Majority Leader Mike By Dan Way Hager, R-Rutherford, asked about the Associate Editor Revenue Department’s level of vigi- RALEIGH lance and review of those reports. tate officials, lawmakers, and “There is no exception or addi- renewable energy consultants tional requirement for examinations attempted in early January to or audits,” Freeman said. “The depart- Sdownplay the $937.8 million cost of tax ment certainly does not have the ca- credits sought under the state’s new pacity or knowledge” to do that. Safe Harbor Act — a total more than Hager also expressed his disap- five times higher than initial projec- proval that companies receiving tax tions. credits for investments in renewable Members of the Joint Legisla- energy projects can sell or transfer tive Commission on Energy Policy them to other parties. also discussed who would monitor Legislators were surprised recently at the magnitude of the tax credits awarded Hager said Duke Energy, Blue compliance for those receiving the 35 to renewable energy projects, such as wind and solar, under the state’s new Safe Cross and Blue Shield, Bank of Amer- percent state tax credit for renewable Harbor Act. (CJ file photo) ica, and other large banks and insur- energy investment and how rigorous stallments in a given year are actually applications prompted Rep. Ken Good- ance companies end up with most of that process would be. Some worried used,” Tart confirmed. That does not man, D-Richmond, to wonder how the the tax credits. the tax credit program will be a drain mean the full tax breaks won’t be re- fiscal note got written and whether its The renewable credits are “a on state finances, offering large banks ceived. “That meant they would have numbers presented a realistic cost to sweetheart deal,” Rucho said. “It and insurance companies a windfall at to be carried forward.” the state. doesn’t seem very fair that the tax- the expense of the state treasury. Under the Safe Harbor Act, the “Undoubtedly a portion of those payers are picking up the burden that “It’s the first time I’ve seen the tax credits can be spread out over a de- 200 or so applications that were filed should be done strictly by the private numbers, to be honest about it,” state cade, Tart said. A recipient of the credit will be for projects that maybe never sector.” Sen. Bob Rucho, R-Mecklenburg, said may use it to offset no more than 50 materialize,” Boothby said. “It’s just Rep. John Szoka, R-Cumberland, after the meeting. In December, Caro- percent of tax liability in a single year. too early to tell.” took issue with Rucho. He said renew- lina Journal reported the $937.8 million Instead of losing part of a credit if it ex- Developers must certify by March able energy companies have spent at estimate, provided by the state Depart- ceeds the 50 percent threshold, the tax 1 that they qualify for the tax credits, least $2.6 billion in qualifying expenses ment of Revenue. break can be pushed forward. according to Nelson Freeman, Reve- alone in North Carolina and more in Rucho was a primary sponsor “It’s probably not going to be nue Department legislative liaison, but ancillary costs. of the bill allowing renewable energy quite to the level of what’s suggested total credits actually taken would not “The tax revenue isn’t really lost companies, under specific restrictions, by the applications,” Tart said of the be disclosed until the Revenue Depart- because if you were not doing this, to remain eligible to claim the tax cred- projected tax credits. If some projects ment releases its 2018 Economic Incen- [revenue would be] zero anyway. And its after the credit program expired aren’t pursued, or don’t meet require- tives Report. then the economic activity that this is Dec. 31. ments of the Safe Harbor Act, those tax To be eligible, Freeman said, a generating in the billions of dollars, “The $937 million is exorbitant,” credits won’t be issued. project smaller than 65 megawatts which personally I think is a good Rucho said. “I don’t believe that is a Thomas Boothby, a renewable en- must have incurred costs and partial thing,” Szoka said. CJ real number.” ergy industry accountant with Dixon, When the legislation was debat- Hughes, Goodman of Charlotte, said ed in April before the Senate Finance his company has worked to varying Committee, Jonathan Tart of the legis- degrees with roughly half of the Safe lature’s Fiscal Research Division said Harbor applicants. applications would be limited mostly “My estimate is that probably Share your CJ to “four very large projects of approxi- three-quarters of those applications mately 100 megawatts each, and an- that we’re spending time working on other one for 65 or 75 megawatts” at a are for projects that were placed in cost of $183.5 million. service by Dec. 31, 2015. So in reality, Finished reading all As it turned out, 201 applications was the Safe Harbor law necessary for and $1.9 million in application fees those projects to have received cred- the great articles in this were submitted to the state Depart- its?” Boothby said. “It would not have ment of Revenue by the Oct. 1 dead- been.” month’s Carolina Jour- line. His firm’s clients saw the act as “The applications suggest a much “a well-designed insurance policy” in nal? Don’t just throw it higher level of participation in the safe case weather delays, a backlog of per- harbor than we knew about or pro- mitting, or some unforeseen setback in the recycling bin, pass jected at the time the legislation was at the very end of the project “would passed,” Tart told commission mem- have prevented tax credits from being it along to a friend or bers. “Going down the road, you’re delivered.” just not going to know” the actual fis- It was unclear from Boothby’s cal impact for some time. testimony how many of those projects neighbor, and ask them Rucho said he anticipated only were in the pipeline when the Safe 50 to 60 percent of the credits would be Harbor Act was passed and why the to do the same. taken. numbers provided then by Fiscal Re- “The data that we looked at search were so far off. Thanks. showed 50 to 60 percent of available in- The gap between projections and FEBRUARY 2016 | CAROLINA JOURNAL PAGE 7 North Carolina Groups Keeping Tabs on Tight-Lipped Government PR Officials By Dan Way to be less forthright with journalists. based Civitas Media, which owns more policymakers, the point-of-responsi- Associate Editor Sometimes the PIO demands to sit in than 100 publications in 12 states. bility people are looking for plausible RALEIGH on interviews or requires a list of ques- Not long ago, journalists typical- deniability in some fashion,” Phillips national government watchdog tions in advance of an interview. ly could walk into a government office said. “They want to control the mes- group is collecting examples of “The increasing trend of pushing and sit down for daily conversations or sage. There is nothing helpful” for tax- government employees who are off hard questions or even basic queries briefings unfettered by middle men. payers and voters as a result. responsibleA for providing public infor- to press offices and canned statements “That’s a bygone era,” Lawitz Controlling the message is partly mation but in fact impede the free flow may make public officials’ lives easier said. “It goes part and parcel with how linked to the rise of social media, he of information to journalists. Media in the short term, much more difficult said. executives in North Carolina say the but it robs them of our job is. The wa- “The public officials are fright- problem is pervasive here, especially the chance of truly ters have been mud- ened that they will lose control of the in state government. engaging with their died regarding jour- story” if it goes viral on the Internet, “We hear about this all the time, constituents, and nalism, and I think Phillips said. and it’s happening all over the coun- undermines pub- that government of- Sometimes agency bosses distrust try at all different levels,” from local to lic accountability ficials in some ways the media due to past experiences. federal governments, said Lynn Walsh, and trust,” Muck- use this as a way of “Part of it is self-inflicted, some of a television news producer in San Di- Rock founder Mi- covering their own it is not,” Phillips said. ego and president-elect of the Society chael Morisy said back ends because While he maintains good contacts of Professional Journalists. in announcing the they don’t want to with some state agencies, he said he “There are so many journalists launch of #Access- get in trouble with can “never get an opportunity to talk out there who are really trying to get Denied. their bosses.” to the attorney general.” Shortly after information so they can make their sto- Walsh said an initial survey of Lawitz and Lockwood Phillips, Attorney General Roy Cooper took of- ries better, make them more accurate, reporters and PIOs is now being com- longtime general manager and pub- fice, Phillips wanted to interview him make them better for the community, pleted, and every indication is that ac- lisher of the Carteret County News- for a positive story, but was unable to. and they’re being blocked for various cess has become a substantial problem. Times, and former president of the Na- “He just actually refuses to talk to the reasons” by government communica- She hopes examples of abuses can be tional Newspaper Association, agree public. It’s a fascinating thing.” tions departments, Walsh said. put on a national digital map to show that the access problem is infrequent in “I don’t recall any recent inter- SPJ, an organization that pro- where the cases are and at what levels smaller communities, where govern- view requests from that media outlet,” motes ethics in journalism and open of government. ment officials are more familiar with said Noelle Talley, a spokeswoman for government, is collaborating on a proj- Bridget Munger, a spokeswoman local reporters. Cooper. ect called #AccessDenied with Muck- for the North Carolina Department of “But, yes, at the state level it is a Rock, another government watchdog Environmental Quality who handles headache. … We quite often just auto- “Reporters frequently tell me that group. press inquiries for that agency, is presi- matically anticipate they want to know they find us to be among the most re- MuckRock bills itself as “a news dent of the North Carolina Association what the questions are so we email the sponsive government agencies, the at- site for journalists, researchers, activ- of Government Information Officers. questions to them” in advance, Phillips torney general has done hundreds of ists, and regular citizens to request, She said that organization is said. media interviews during his tenure, analyze, and share government docu- mostly a professional career develop- “But obviously there’s a delay and we often make other experts with ments, making politics more transpar- ment endeavor and declined to dis- so they can look at the questions and the department available to the media ent, and democracies more informed,” cuss the SPJ project. She said she did figure the best way to answer them on general topics,” Talley said. while helping journalists with public not feel comfortable dealing with the without necessarily answering, or an- “The Rules of Professional Con- records requests and investigative sto- political nature of the subject since her swering it in a fashion that somehow duct for lawyers affect media contacts ries. organization is not political. influences the conclusion, if you will. with our office more so than any pro- Walsh said there is a trend among “I don’t think that there’s any I don’t want to say spin it, but, yeah, tocol, for example, limiting our ability government agencies to force reporters doubt that there are more barriers in they spin it,” Phillips said. to comment on or do interviews about to go through a public information of- our ability to get to the stakeholders He doesn’t blame the PIOs. pending legal matters or things that ficer before speaking to other employ- these days,” said Jim Lawitz, edito- In today’s politically charged en- may become litigation involving the ees, which tends to encourage staff rial vice president for Davidson, N.C.- vironment, “The decision makers, the state,” Talley said. 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PAGE 8 FEBRUARY 2016 | CAROLINA JOURNAL North Carolina NCGA Looks at Ending or Revising Job Licensing Requirements By Barry Smith state occupational licensing require- Associate Editor ments by the Institute for Justice, RALEIGH North Carolina ranked 29th in overall embers of a legislative sub- licensing burdens. committee heard recommen- Chuck Hefren, principal program dations Jan. 21 to eliminate evaluator for the General Assembly’s Mthe requirement for occupational li- Program Evaluation Division, pre- censes in many jobs, and instead move sented a report recommending that the to a voluntary certification process. General Assembly establish a commis- A subcommittee of the Legislative sion to oversee licensing boards, elimi- Administrative Procedure Oversight nate a dozen boards, and consolidate Committee is considering changes and 10 other boards. modifications to the state’s occupa- Bill Rowe, general counsel and tional licensing boards. Backers of the director of advocacy at the N.C. Justice changes say they would enhance op- Center, supported the legislature’s de- portunities for potential entrepreneurs cision to take a fresh look at licensing while protecting consumer health and requirements. safety. Opponents lodged safety con- “We think it’s a very good idea cerns if occupations went unregulat- to review your occupational licensing ed and suggested an end to licensing boards, particularly looking at costs,” would harm existing business owners. Rowe said. He said that was particu- John Locke Foundation staffers Becki Gray, left, and Jon Sanders, right, speaking Jon Sanders, director of regula- larly true for low-income residents at a subcommittee of the Legislative Administrative Procedure Oversight Committee hoping to enter businesses regulated tory studies at the John Locke Founda- on Jan. 21. (CJ photo by Barry Smith) tion, referred lawmakers to a provision by the licensing boards. in the state constitution saying resi- “Licensure costs are very large They can find someone who might do The N.C. State Board of Opticians dents have a right to the fruits of their hurdles for the poor,” Sanders said. it under the table.” is one of 12 boards that the Program labor. Getting licensed usually requires a fee, Sanders said that moving to a Evaluation Division has recommended costly education, and training, which voluntary certification model was pref- Sanders said voluntary certifica- reviewing. are more burdensome for poorer work- erable to a licensure model. tion is a better alternative to licensing Jack Nichols, counsel for the op- ers, he said. Becki Gray, vice president for ticians board, said the board was nec- in occupations where practitioners Sanders said that restrictive licen- outreach at JLF, told the subcommittee essary to protect public safety. Instead who offer poor or ineffective services sure tends to boost the overall earnings that North Carolina has 154 licensed of eliminating the board, he suggested pose minimal risk of harm to the pub- of those already in a particular field, re- job categories compared with South that the General Assembly increase the lic. stricts the supply of labor to the occu- Carolina’s 49. maximum licensing fee from $200 to “Significant risk to the public is pation, and drives up the price of labor. “These restrictions ripple through $300 so that the board can have more a very high standard, and it should be “Restricting the supply of labor our economy, preventing people from financial leeway. reserved for really significant risks,” also restricts the supply of jobs,” Sand- pursuing their dreams, driving up the Nichols said 10 percent to 15 per- Sanders said. ers said. He said that leads to higher cost of services, impacting individuals, cent of drivers licensed in North Caro- If the state moved toward volun- costs for consumers. families, communities, the state’s econ- lina are designated with a requirement tary certification of occupations, then Those higher costs can affect con- omy, and whether businesses want to to wear corrective lenses. “That alone I it also should impose penalties seri- sumers’ behavior, Sanders said. expand or grow here,” Gray said. believe establishes the need to protect ous enough to discourage fraudulent Rather than use a licensed pro- North Carolina ranked 39th na- the public,” Nichols said. claims of certification, Sanders said. fessional, consumers “might decide tionally in the “occupational licensing Nichols also said that the increas- Sanders said that moving toward to forgo necessary work,” Sanders freedom” category in the most recent ing trend of big-box department stores a certification process for occupational said. “People might choose to do it “Freedom in the 50 States” study by to have in-store optician shops threat- regulation would open up “greater av- themselves. They may seek out a fam- the Mercatus Center at George Mason ens the viability of independent opti- enues” for lower-income residents. ily member or a friend who can do it. University. In a 2012 comparison of cians’ shops. CJ FEBRUARY 2016 | CAROLINA JOURNAL PAGE 9 North Carolina Lawmakers Not Concerned About Duke ‘Green Claims’ Program

By Dan Way of their load with renewable energy, one of the co-chairmen of the Energy be rolled out to other customer classes Associate Editor paying a premium for the power.” Policy commission. and possibly “other jurisdictions.” The RALEIGH Likely participants in the pro- As Carolina Journal has reported, program is not offered in Duke Caroli- wo leading legislative critics of gram include universities, data cen- when Google announced the deal it nas’ South Carolina market. tax incentives for the renew- ters, large manufacturers, and indus- said the agreement allows it to pur- The enrollment period is sched- able energy industry have not trial plants, she said. To date, three chase solar power “in enough volume uled to end at the end of December takenT issue with an unusual new pro- customers have to power one of 2016, or earlier if 1 million megawatt gram used by Duke Energy allowing signed on. Pro- our data cen- hours of new renewable power are high-consumption electricity custom- gram rules pre- ters.” brought online. Bowman did not say ers using traditional energy to claim vent disclosure Some crit- how many new renewable megawatt- their plants are powered by renewable of the partici- ics have said hours are currently in use or sched- sources. pants’ names such promo- uled, but said it is likely enrollment Neither House Majority Leader without their tions are de- will extend to the end of the year. Mike Hager, R-Rutherford, nor Sen. consent. Google ceptive, as they Bowman and Sam Watson, gen- Bob Rucho, R-Mecklenburg, expressed is the only cus- suggest the eral counsel of the Utilities Commis- concerns about Duke Energy’s Green tomer to go large facilities sion, also gave an update on Duke’s Source Rider program during a Jan. 5 public. are connected rate increase case. meeting of the Joint Legislative Com- The rest of directly to the Bowman said the typical Duke mission on Energy Policy. the customer base “is held harmless” renewable sources while in fact they Energy Progress customer using 1,000 The initiative, approved by the from paying the higher rates for new are getting electricity from the grid kilowatt-hours of power per month state Utilities Commission in 2013, renewable energy sources brought that powers other utility customers. would pay $1.59 less when all the in- allows big electricity users to pay a onto the power grid, Bowman said. Google did not mention that the entire creases and decreases of fuel costs, Caldwell County data center complex premium when placing new sources Duke Energy Carolinas entered taxes, and various riders are tabulated. of costlier renewable energy of their into an agreement with Google for Cy- would not receive any of the new solar Watson said the decrease was $1.52, choosing on the power grid. press Creek Renewables, a California power. It will continue to receive all of going from $36.43 to $34.91 per month. Duke Energy either adds renew- firm, to build a 61-megawatt solar fa- its power from Duke Energy’s tradi- Watson said a decrease in fuel able power from one of its sources or cility in Rutherford County expected tional fossil fuel/hydro/nuclear mix. costs, mostly in natural gas, resulted negotiates a deal with a renewable to go online in late 2017, she said. The CJ also reported other potentially in a $5.64 decrease in that average cus- company. The Duke customer could solar facility would offset the electric- deceptive claims from large energy us- purchase as much as 100 percent of ity demand for Google’s new data cen- ers that are not part of this rider pro- tomer’s bill. the energy it uses from Duke’s less ex- ter in Caldwell County, 50 miles away gram. But the cost of the Renewable pensive coal, natural gas, and nuclear near Lenoir. Amazon says its data center near Energy Portfolio Standard that re- sources while claiming its operations “I think this is a great project,” Dulles International Airport in north- quires utilities to purchase increasing instead are fueled by renewable power. said Hager, a former Duke employee ern Virginia would be powered by a amounts of renewable energy went “The Green Source Rider is a who represents the district where the wind farm under construction near up 34 cents, from 83 cents to $1.17 per voluntary pilot program,” Kendall solar farm is being built. “It doesn’t im- Elizabeth City when, in fact, it will not month. A Demand Side Management/ Bowman, Duke Energy vice president pact taxpayers. It doesn’t hit ratepay- be connected to that wind farm. Ap- Energy Efficiency Rider went up $1.95, of regulatory affairs and policy, told ers. If someone wants to pay more for ple claimed its data center in Maiden, from $4.26 to $6.21. members of the legislative commis- electricity, then they can pay more for N.C., is 100 percent renewable-pow- Riders allow Duke to pass vari- sion. it. That’s the free-market solution for ered even though it purchases all of ous allowable costs to customers. The Participants’ power bills “will this.” its energy from Duke and the utility’s new Joint Agency Asset Rider for Duke represent the premium associated with “I don’t know enough about that traditional fuel mix primarily of coal, Energy Progress’s purchase of gener- renewable energy,” Bowman said. to comment. I’m not chairing this com- natural gas, nuclear, and hydro. ating assets from the North Carolina “These Green Source Rider customers mittee anymore,” Rucho said when Bowman said if the Green Source Eastern Municipality Power Agency are willing so that they can offset some asked if he agreed with Hager, who is Rider program is successful, it could added $1.83 to the average bill. CJ

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http://carolinajournal.com PAGE 10 FEBRUARY 2016 | CAROLINA JOURNAL Local Government Landowners Await Ruling by Supreme Court on Map Act Suit By Barry Smith ers are unable to sell their property, Associate Editor Bryant said. “The marketplace doesn’t WINSTON-SALEM reward it,” he said. hen Gene Kirby bought While Kirby waits for NCDOT nearly 42 acres of land along to act, he’s using his land to board and High Point Road in the early train Labrador retrievers. The property 1980s,W he envisioned eventually going has a mobile home for trainers, a ken- into business with his son and building nel for the dogs, ponds, a mound, and apartments on the property. fields for training purposes. By the late 1990s, when his son Kirby, who will turn 82 just days was an adult and the Kirbys were after his case is scheduled to be heard ready to start building, the North Car- in the Supreme Court, said he hopes olina Department of Transportation the issue is resolved while he is alive. had other plans for his property. The issues are complex, and he doesn’t “We went to the planning and want his family to have to deal with zoning department of the city of Winston-Salem and said how do we them, he said. go about getting a building permit,” Ben Harris, another plaintiff in the case, turns 65 later this year. In the Kirby said. “And they said, oh, no, you Gene Kirby has been unable to improve the Forsyth County property he has owned can’t do that. This is in the protected early 1990s, he built 15 houses on prop- for years because it’s inside a highway corridor designated by the state’s Map Act. erty in the corridor. corridor. You won’t be able to do any- The Supreme Court later this month will hear a challenge to the law. (CJ photo by thing in here.” Barry Smith) “I started when I was 40,” Harris NCDOT had invoked North said. “I’m going to be 65 this year. How Carolina’s Map Act on Kirby’s prop- Wake, Cleveland, and Pender counties. States Constitution and the Constitu- many more years can I fight?” erty, which was within the corridor Matthew Bryant, lead attorney for tion of North Carolina, including the Harris said the case has placed a of a planned highway bypass around the plaintiffs, said if they win at the Su- rights to equal protection, due process, financial strain on him. Winston-Salem. Under the state’s Map preme Court, NCDOT would have to and just compensation,” Guze wrote. Bryant said others are in simi- Act law, when the DOT files the map pay the landowners just compensation. Calvin Leggett, the head of NC- lar situations. Many of the plaintiffs with local governments, those govern- “It’s clearly well north of $300 DOT’s program development branch, are aging. He said he fields calls from ments aren’t allowed to issue building million to $400 million,” Bryant said said last January that by and large, the children of plaintiffs wanting to know permits within the corridor. The mora- of the amount of payments across the Map Act has worked well. when their aging parents can sell their torium on development is supposed to state that would have to be made. Leggett said a lot of the frustra- homes so they can make arrangements tion attributed to the Map Act actually end three years after the map is filed, Bryant called the Map Act “a gi- to move to other places. is a result of the state’s open planning but it can extend much longer than ant train wreck,” saying it has allowed Efforts have been made to repeal NCDOT to lower its property acquisi- process for building highways. That that if NCDOT has difficulty gaining the Map Act. Last year, a bill sponsored tion costs by shortchanging a handful process identifies potential parcels of clearance from environmental or other by Rep. Rayne Brown, R-Davidson, of landowners. land being considered for future high- regulators to begin construction. passed the House, 114-0. But the bill Kirby and other property owners “The government will never ad- way construction, he said, and land- mit that it’s wrong,” Bryant said. “It owners are aware that their property never made it out of the Senate Trans- have sued NCDOT, and last February portation Committee. won a unanimous ruling from the N.C. has to be told that it’s wrong.” He’s may be part of a highway corridor. hoping the Supreme Court will do just Bryant counters that the Map The chairman of the committee, Court of Appeals. If the Supreme Court Sen. Bill Rabon, R-Brunswick, said the upholds the appeal, then NCDOT that. Act destroys the market for affected upcoming case in the Supreme Court could be on the hook for hundreds of The case has drawn a lot of atten- properties. “It’s a three-year wait for had an affect on the legislation. millions of dollars in compensation to tion from policy and advocacy groups a building permit,” Bryant said. “The “We’re at the point now, let’s property owners in those areas where across the ideological and political map, however, lasts forever.” it has invoked the Map Act. spectrum. Practically speaking, nobody wait and see what the Supreme Court The Appeals Court ruled that The John Locke Foundation, Pa- makes improvements to property does,” Rabon said. “We will probably when NCDOT invoked the Map Act, cific Legal Foundation, Civitas Center within the corridors because landown- adjust, based on their decision.” CJ it exercised its power of eminent do- for Law and Freedom, N.C. Justice main. Chief Judge Linda McGee wrote Center, N.C. Association of Realtors, that when that power is exercised, it and N.C. Advocates for Justice have all “requires the payment of just compen- filed amicus — or friend-of-the-court — brief supporting the property own- Keep Up With the sation.” NCDOT appealed, and on Feb. 16 ers in this case. The Wilmington Urban the N.C. Supreme Court is scheduled Area Metropolitan Planning Organiza- tion has filed a brief supporting NC- to hear that appeal. DOT. General Assembly North Carolina is one of 13 states “Our research contradicts a num- with Map Act statutes. However, ber of points that the NCDOT raises in North Carolina’s three-year moratori- its appeal,” said Jon Guze, director of Be sure to visit CarolinaJournal.com um on building permits is longer than legal studies at the John Locke Foun- in other states, where restrictions range dation. “We wanted to bring those con- often for the latest on what’s going on dur- between 80 and 365 days and requires tradictions to the court’s attention.” the states to allow property owners to Guze pointed to NCDOT’s asser- ing the North Carolina General Assembly. use their land when that moratorium tion that, by invoking the Map Act, the ends. state is using its regulatory powers and CJ writers are posting several news sto- The Map Act was intended in not eminent domain — which would part to keep the cost down for the De- require the state to compensate land- ries daily. And for real-time coverage of partment of Transportation when it owners for the loss of value or use of does take property to build roads. their property. The Map Act’s powers breaking events, be sure to follow us on While the case before the Su- do not resemble those in other legis- preme Court involves properties in lation that governs conventional land Twitter: Forsyth County, the ultimate Supreme use planning in the state, Guze wrote Court decision is likely to affect proj- in his brief. CAROLINA JOURNAL: http://www.twitter.com/CarolinaJournal ects across the state. The Map Act has “It is blatantly unfair; it is patent- been invoked and lawsuits also have ly unnecessary; and it violates funda- JOHN LOCKE FOUNDATION: http://www.twitter.com/JohnLockeNC been filed in Guilford, Cumberland, mental rights protected by the United FEBRUARY 2016 | CAROLINA JOURNAL PAGE 11 Local Government Raleigh Preparing to Scrap Many New Rules on Outdoor Dining

By Kari Travis tive, versus going to the city attorney Associate Editor — though at some point we’re going to RALEIGH have to [do that, too],” said O’Haver. owntown restaurant and bar “We’ve got a good group of folks here owners could see sidewalk-din- who [are designers]. That’s their fo- ing restrictions eased yet again cus.” Dthis year if the city council adopts rec- A week later, the commission ommendations being discussed by the recommended the repeal of a rule re- Raleigh Appearance Commission. quiring restaurants and bars with pa- Tasked by the city council in De- tios to post signs stating where patrons cember to discuss patio borders, ca- could and could not drink. Restaurant pacity limits, outdoor furniture, and owners and patrons, along with Jen- outdoor signage for sidewalk dining nifer Martin, director of Shop Local areas, on Jan. 13 the commission dis- Raleigh, an advocacy group for down- cussed changes that would end the town businesses, told the commission requirement for restaurants to sepa- the signs are an eyesore. Members also rate their patios from public sidewalks were told the signs were redundant, with stanchions. since state law requires restaurants Instead, patio space might be set and bars to control where their patrons apart by placing medallions into the consume alcohol. Fayetteville Street resident Will Marks (right) shares his concerns about late-night sidewalk, a move that would allow for Discussions about tighter regu- revelry at a Jan. 13 meeting of the Raleigh Appearance Commission. (CJ photo by easier pedestrian passage, said com- lations for dining on public spaces Kari Travis) mission chairman Brian O’Haver. began in mid-May last year, when res- downtown. the noise level drop].” “We’re trying to figure it out and idents complained about overcrowd- The city initially proposed ban- Others who live downtown say look at it from our [design] perspec- ing, noise, and sidewalk disturbances ning sidewalk seating at bars (but not the regulations now being considered restaurants), and, after much protest, it could still use some tweaking for the enacted a pilot program in August re- sake of both residents and business quiring stanchions, maximum capacity owners. Help us keep our presses rolling limits, and curfews for all dining areas “I think this conversation is tak- on city sidewalks. ing place … because there were pieces Publishing a newspaper is an ex- In December, the council relaxed of this ordinance that worked really pensive proposition. Just ask the many the curfews but called for further dis- well, and there were pieces of this or- daily newspapers that are having trouble cussions before removing stanchion dinance that really need some work,” making ends meet these days. stipulations or changing capacity lim- said Ashley Melville, director of busi- It takes a large team of editors, re- its. ness development for the Downtown porters, photographers and copy editors Some Fayetteville Street resi- Raleigh Alliance. “And so I don’t think to bring you the aggressive investigative dents, who were satisfied with the de- that either side is being ignored or is reporting you have become accustomed creased noise levels during the city’s being influenced heavily in any direc- to seeing in Carolina Journal each test of stanchions and curfews, worry tion.” month. that fewer restrictions would signal a Ultimately, businesses want a Putting their work on newsprint and step in the wrong direction. practical solution that works for resi- then delivering it to more than 100,000 “What concerns me is that a holis- dents, merchants, and enforcers, say readers each month puts a sizeable dent tic view isn’t being taken in this,” said the owners of several downtown bars Fayetteville Street resident Will Marks. and restaurants. Removing physical in the John Locke Foundation’s budget. “Nobody wants to see businesses pun- stanchion requirements will allow bars That’s why we’re asking you to help ished, singled out, or demonized. And to maintain order more efficiently. defray those costs with a donation. Just I don’t think anybody wants to see res- “I don’t think anyone wants to go send a check to: Carolina Journal Fund, idents treated that way. But residents back to the way it was, where the en- John Locke Foundation, 200 W. Morgan have had to put up with sleep depri- tire sidewalk was covered with people St., Suite 200, Raleigh, NC 27601. vation, which is a recognized health standing and drinking,” said Ben Yan- We thank you for your support. threat. What we would like is the same essa, co-owner of Fayetteville Street’s amount of consideration in this issue Paddy O’Beers. “No one is asking for John Locke Foundation | 200 W. Morgan St., Raleigh, NC 27601 | 919-828-3876 that says whatever is working [helped that.” CJ FIRST IN FREEDOM Transforming Ideas into Consequences for North Carolina In First in Freedom the John Locke Foundation’s president and research staff apply the timeless ideas of 20th-century con- servative thinkers to such 21st-century challenges as economic stagnation, tax and regulatory burdens, and educational medi- ocrity. To get your copy, go to JohnLockeStore.com. Cost: $10.

The John Locke Foundation, 200 W. Morgan St. Suite 200, Raleigh, NC, 27601 919-828-3876 • JohnLocke.org • CarolinaJournal.com • [email protected] PAGE 12 FEBRUARY 2016 | CAROLINA JOURNAL From Page 1 McCrory Says CSX Rail Hub ‘Not a Viable Option’ Continued from Page 1 McCrory said CSX and the Upper Coastal Plain Regional Planning Organization submitted the proj- did not use eminent domain to acquire property for ect for $100 million in Strategic Transportation In- either project. Nor did the railroad receive significant vestments funding, which helps pay for new infra- state subsidies for the Pennsylvania or Ohio projects, structure. He said STI uses the “Strategic Mobility even though the company has said the Carolina Con- Formula, a data-driven system for allocating avail- nector depended upon at least $100 million in state able revenues that allows NCDOT to more efficiently transportation funding promised by the McCrory invest its transportation dollars.” administration. McCrory spokesman Graham Wilson con- Through a spokeswoman, the railroad main- firmed that CSX has received no guarantees that Car- tained confidence the project would be completed. olina Connector will receive any state funding. On Jan. 20, McCrory spokesman Wilson told CJ Wilson said CSX requested funding for the proj- the CSX terminal would compete with other trans- ect in October or November. To secure STI funding, a portation projects for state funding — a point the project must be evaluated on four criteria — cost ef- governor did not mention in his Jan. 14 press release fectiveness; system health; safety and suitability; and on the Carolina Connector — and no decisions about project support — and “be compared against other funding would be made until March. statewide mobility project scores, including eligible The Carolina Connector, which company of- An aerial photo shows a concert held recently at The highway and aviation projects,” Wilson said. ficials say will cover 450 acres, spurred immediate Farm on land that was being sought by CSX. The railroad “If the project scores high enough, it will be roadbed is at the treeline. (Photo courtesy of The Farm) opposition from local property owners and other included in the list of statewide mobility projects to residents. Don Lassiter, 63, who owns about 45 acres Both Gottschalk and Ross said that little if any be funded in the next Draft State Transportation Im- between the CSX rail line and Batten Road, told CJ state funds went into the CSX projects in their areas, provement Program. This list should be available by that at 8:30 a.m. Jan. 14 — two hours before McCrory but CSX probably received some federal funds for the end of March,” he said. issued a press release announcing the project — CSX each project. WTVD first reported on the Lassiters’ involve- acquisitions director Cameron Wilson came to Las- CSX spokeswoman Kristen Seay confirmed in ment with CSX and the experience of another land- siter’s home and said the railroad needed some of his an email that CSX did not use eminent domain in owner, Jennifer Edwards. According to WTVD, a land for the Carolina Connector terminal. CSX employee told Edwards she had six months to Lassiter, whose 28-year-old son Trent was pres- Ohio or Pennsylvania. And she added, “CSX has a move. “I’ve lived here 58 years. There is no price on ent at the meeting, said he was not interested in sell- proven record of coming to agreement with property my property. This is my life,” she said. ing. The Lassiters then said Wilson told them they owners on infrastructure developments across our network without employing eminent domain. We are had no choice, and that if they could not agree with CSX moving forward? CSX on a price, the railroad’s legal team would han- beginning a lengthy dialogue with property owners dle the matter, implying that CSX would use eminent in Johnston County and are committed to working Even though the McCrory administration domain. closely with each individual owner to address his or seems to have no interest in supporting the Carolina Trent Lassiter told CJ his family has owned the her specific concerns. We are confident that we will Connector at the proposed Selma location, CSX con- land since the 1700s. On the property is The Farm, a be able to come to an agreement to ensure this project tinues pursuing the project. special-event facility that Trent Lassiter completed in is positive for the owners and the community.” On Jan. 27, the day after Wilson suggested the 2013. The Farm hosts wedding receptions, business She also confirmed there “was no state funding Johnston County site was “not viable,” CSX project meetings, parties, and concerts. “American Idol” associated with the development of either the North- consultant Caitlin Farhat, who works at the Raleigh winner Scotty McCreery has played there and is west Ohio or Chambersburg terminal.” office of the public relations firm APCO Worldwide, scheduled for another concert June 4. Trent Lassiter Announcement premature issued the following statement: is engaged to McCreery’s sister Ashley. “CSX is committed to this infrastructure proj- In the Jan. 14 press release announcing the Car- ect, which will create jobs, deliver a distinct competi- Other states olina Connector project, McCrory did not mention tive advantage for large and small businesses, and Wood County, Ohio, Economic Development that final approval from the state might not be issued spur economic development. We look forward to Commission executive director Wade Gottschalk until the end of March. working with all interested stakeholders to address told CJ that CSX did not use eminent domain to ac- CSX issued a statement the same day, say- concerns and move the project forward.” quire the land for its North Baltimore project. ing the company would spend $150 million on the It is unclear how CSX will acquire prop- Franklin County, Pa., Area Development Cor- project, but that the “development of the terminal is erty for the terminal if the landowners re- poration president Mike Ross also told CJ that CSX contingent upon securing an additional $100 million main unwilling to sell and whether the compa- did not use eminent domain to acquire the land for through the state of North Carolina’s Strategic Trans- ny would underwrite the entire cost of the rail the company’s Chambersburg facility. portation Investment program.” hub without state subsidies. CJ N.C. Couple Charged With Stealing $12 Million from IRS Continued from Page 1 according to the complaing. In May bers to foreign individuals working in checks for cash, the complaint states. 2014, Arkansas State Police stopped the United States, giving them a means ish translator served both defendants. the couple and found them carrying of filing income tax returns and paying Background The attorneys filed motions to with- nearly $1.8 million in cash, the com- taxes on income earned. Luna is a native of Honduras draw from the case because they said plaint states. The police notified the Luna and Ruano allegedly fabri- who obtained temporary protective Luna and Ruano were in the process of Duplin County Sheriff’s Department, cated W-2 wage and tax statements for status in November 2006. She entered hiring their own attorneys. U.S. Mag- and within days law enforcement of- each name using the names of real em- the United States illegally in 1993. istrate Judge Robert Jones approved ficials seized tax documents from the ployers, then prepared tax returns and Since February 2010, she operated a the motions and will continue with couple’s North Carolina home and submitted refund claims to the IRS. small convenience store named Bever- the case when the new attorneys are business. The refund checks were sent to post ly Tienda, located on North Norwood secured. According to the complaint, office boxes rented by Luna or Ruano. Street in Wallace. For the 2009 through It was not IRS computers that Luna and Ruano obtained Individual The average refund check was $4,385. 2012 calendar years, Luna reported an- detected the couple’s alleged activi- Taxpayer Identification Numbers for The checks were all deposited in a nual incomes from the store of $16,000, ties. Instead, the agency first learned of at least 300 names that may represent First Bank business account that Luna $18,000, $17,481 and $24,915, respec- the alleged tax fraud because of a traf- real or fictitious people. The IRS issues had opened in 2006. Luna withdrew tively. She reported no other income. fic stop in Arkansas two years earlier, ITINs instead of Social Security Num- $11,888,300 in cash by writing 252 Continued as “N.C. Couple,” Page 13 FEBRUARY 2016 | CAROLINA JOURNAL PAGE 13 From Page 1 N.C. Couple Charged With Stealing $12 million from IRS Continued from Page 12 Ruano is a native of Guatemala, who obtained legal permanent resi- dent status in 1988. For 2009 through 2012 he reported business income from several sources for a total of $18,560, $26,204, $27,002, and $59,123, respec- tively. He reported no other income. Duplin County birth records show they are the parents of three chil- dren. On Jan. 18, CJ visited the fam- ily home at 413 North Duplin Street. There were three vehicles in the yard and driveway. There was also a large Nativity scene in the front yard. Searches produced evidence Members of the Duplin County Sheriff’s Office, accompanied bya federal agent from the Department of Homeland Security, first visited the family home on May 2, 2014, the day after the Arkansas traffic stop. Their adult daughter, Beverly Ruano, con- Three vehicles and a Nativity scene were seen recently at the home of Perfecto Ruano and Lorena Luna in Wallace, where the sented to a search. The officers saw a couple live with their three children. (CJ photo by Don Carrington) business ledger consistent with use for 179 wage and tax statements issued to called it the “No. 1 tax scam for 2013.” roadmap to the IDT criminal and un- documenting tax preparation services. names other than Luna or Ruano, and In March 2015, Koskinen con- dermine the effectiveness of these ele- After about 30 minutes, the com- handwritten ledgers appearing to de- vened a “Security Summit” meeting ments to protect taxpayers from IDT plaint states, Beverly Ruano advised tail the flow of tax refunds sought and with IRS officials, the CEOs of the refund fraud,” stated the report from the officers she needed to leave to at- checks received. leading tax preparation firms, software the summit. “As such, this report will tend school. The officers left the resi- Charlotte-based IRS special agent developers, and state tax administra- not provide extensive details or specif- dence and went to Beverly Tienda, the and agency spokesman Rajender West tors “to discuss common challenges ics related to these new elements.” retail business owned by Luna. They said the IRS had taken significant and ways to leverage our collective The report also mentioned a pro- spoke with Luna’s sister, Dunia Mejia steps to combat Stolen Identity Refund resources and efforts.” Three work- posal that could prevent fraud signifi- Lopez, who said she was operating the Fraud. “The Internal Revenue Service, ing groups were established using the cantly: advancing the deadline for em- business while Luna and Ruano were themes of authentication, information ployers to submit earnings statements on the way to Los Angeles to visit an- along with our law enforcement and community partners, continue to com- sharing, and strategic threat assess- (W-2, 1099, etc.). That would give the other sister. Lopez permitted the offi- ment and response. IRS more time to compare W-2 earn- cers to search the business premises. bat the serious, continuing threat of that identity theft,” said West. The groups made several recom- ings statements, such as those submit- The officers saw photocopies of tax mendations, but improving IRS com- ted by Luna and Ruano, with those preparation documents and comput- Stopping SIRF puting capabilities to identify suspect submitted by an employer before any ers. refunds appeared to be one of the most refund requests were processed. The officers then obtained- war In 2011, IRS officials began tes- important recommendations. The de- rants to search both properties for tifying to congressional committees tails of the program will not be made CJ reporting from 2013 evidence of filing fraudulent income about the growing SIRF problem. Two public. CJ initially reported on SIRF in tax returns. The officers seized more years later, IRS Inspector General for “Extensive public discussion of March 2013, identifying fraud schemes than 300 ITIN letters issued by the IRS, Tax Administration Russell George these new elements would provide a over the course of several months in Durham, Clinton, Union County, and Long Island, N.Y. CJ also reported that the IRS had been aware of the issue for years but rarely had discussed it pub- licly. In July 2012, George’s office is- sued a report stating that for tax year 2011, the IRS reported that it had de- tected 938,644 tax returns involving identity theft and prevented the issu- ance of fraudulent tax refunds totaling $6.5 billion. But the losses from unde- tected identity fraud are substantial. His office’s analysis of data from the 2010 tax year identified 1.5 million re- turns, amounting to $5.2 billion, that likely were filed by identity thieves. To combat SIRF the report stated, “Access to third-party income and withholding information at the time the tax returns are processed is the single most important tool that the IRS could have to identify and pre- vent tax refund fraud. However, most of the third-party information is not Lorena Luna and Perfecto Ruano are charged with having IRS checks from their fraudulent tax returns sent to post office boxes available until well after tax return fil- in this post office in Wallace, N.C. (CJ photo by Don Carrington) ing begins.” CJ PAGE 14 FEBRUARY 2016 | CAROLINA JOURNAL Education Anti-Spellings Protesters Scuffle With Police at BOG Meeting By Kari Travis system shows, facilities use is below Associate Editor the established targets for nearly every CHAPEL HILL school — for both classroom and labo- ven though Margaret Spellings ratory space.” will not take over as president Concerns about support for his- of the UNC system until March torically black colleges and universi- E1, protests against the hiring of the ties also continue to resonate, particu- former secretary of education in the larly since the December resignation of George W. Bush Administration con- former Elizabeth City State University tinue to escalate, as protesters scuffled chancellor Stacey Franklin Jones. Over with police at the Jan. 26 meeting of the the last five years, ECSU has seen its system’s Board of Governors. revenues drop by 10 million and its en- Four students — Madeleine rollment decline by more than 50 per- Scanlon, Irving David Allen, Olufemi cent. Shittu, and Jennifer Myers — were ar- During the meeting, by unani- rested following an outbreak of chaotic mous vote the Board of Governors protests during a special meeting of elected former ECSU vice chancellor the board. Thomas Conway to take the reins of The demonstration began in si- the struggling university, saying that lence, but erupted into shouts and they hope new leadership will boost demands during the board’s discus- morale and performance. sion about program cuts at East Caro- But some faculty and students lina University. Students swarmed the Student Madeleine Scanlon shouts through the microphone of a UNC Board of worry that schools such as ECSU have boardroom table, chanting and shout- Governors member on Jan. 26 just before being arrested by UNC Campus Police for an uncertain future — given the di- ing before being removed forcibly by disrupting the board’s meeting. (CJ photo by Kari Travis) rection of the university system as a police. Scanlon, who was one of the first a protest at the board’s Dec. 11 meet- whole, Zach Robinson said. Several students occupied the to fight back against the officers, was ing, during which at least four faculty “This is about Margaret Spellings board members’ seats and used the mi- charged with resisting and obstructing members were removed for disrupting leading the system in the wrong direc- crophones to shout and chant, “Stand an officer, disorderly conduct, and as- board proceedings during roll call. A tion,” Robinson said. “Spellings holds up, fight back,” and “No justice, no sault inflicting serious injury on a law discussion about disciplinary action a record of attacks on diversity. She has peace.” One student took the gavel at openly attempted to suppress positive enforcer. Allen and Shittu faced lesser followed, but no action was taken. the chairman’s seat and pounded it depiction of a same-sex household on charges, while all counts against Myers No faculty members participated against the table in rhythm with the public television. As secretary of edu- ultimately were dropped. in the Jan. 26 disruption, but profes- chants. cation she neglected to apply for mil- “I think the behavior and the re- sors made their sentiments known in “See what you’re participating a quiet protest before the start of the lions in funding for historically black in?” One student yelled as officers sponse of the officers here was com- colleges and universities. We think pletely dictated by the behavior of the meeting. escorted protesters from the room. Zach Robinson, professor of there is ample evidence that she is not “See what you’re allowing to happen protesters today,” said Jeff McCracken, somebody who is prepared to accept chief of the Campus Police at UNC- mathematics at East Carolina Univer- to students? That’s some scary s--t. sity, has helped the Faculty Forward the challenges of leading a diverse fac- Chapel Hill. “We hate that we had You’re letting a student be dragged Network — a New York City-based ulty and student body to success.” to take any action, but that was their out of here. What is wrong with you? coalition of professors, students, and The Faculty Forward Network choice.” You should all be scared. Look at what parents affiliated with the Service Em- and NAACP college division have “We have approximately 40 of- you’re doing to us!” ployees International Union — con- attempted to request meetings with Law officers, who took several ficers [on duty],” McCracken added. duct a survey of 1,400 UNC faculty members of the board to no avail, Rob- minutes to subdue the frenzy, say they “This whole situation’s not normal. We members, many of whom are deeply inson said. acted well within the boundaries of the were expecting a protest but were hop- unhappy with the direction of the sys- “The Faculty Forward Network law as protesters showed unnecessary ing they would not be violent.” tem, particularly the lack of funding stands ready to meet and confer with resistance. This most recent incident follows for new construction. management and administration on “Over the last 10 years or so, we this and a number of issues, and if estimate that there’s been approxi- they’re willing to do that, we would mately 30 percent reduction in con- look forward to such a meeting,” he struction expenditures in the system,” said. Robinson said. “For a system that has a “I don’t know that there has been constitutional mandate to provide free such a [meeting] request made [by education for the people of this state — Faculty Forward],” said UNC spokes- as is practical — reduction in funding woman Joni Worthington. “But obvi- for construction is not only [taking us] ously there are processes in place for in the wrong direction, it’s actually un- faculty input to the board. There are constitutional.” processes in place for student input to Examining UNC’s construction the board. The Faculty Assembly in- spending in isolation is a mistake, cludes members elected by the faculty. however, as spending for the system We have an Association of Student as a whole has increased in the past 10 Governments that includes representa- years, said Jenna Robinson, president tives from multiple campuses. Those of the Pope Center for Higher Educa- are the kinds of avenues that students tion Policy. and faculty across the university can “The UNC system is very gen- use.” erously funded by the state of North In an effort to reach out to stu- Carolina, [with] the fourth-highest per- dents and faculty members — despite student expenditures in the nation,” ongoing opposition — board members she said. “Moreover, we should expect said Spellings would visit student and Student protesters with signs chant and shout at the UNC Board of Governors meet- construction expenditures to be tied to faculty groups on every UNC campus ing on Jan. 26 in Chapel Hill. (CJ photo by Kari Travis) usage and need. As data from the UNC as soon as she takes office. CJ FEBRUARY 2016 | CAROLINA JOURNAL PAGE 15 Education More Parents, Students Seeing Benefits of Opportunity Scholarships

By Kari Travis an uptick in participation statewide,” Associate Editor Moss said. RALEIGH Enacted by legislation in 2013, en year-old Donovan Coates-St. the Opportunity Scholarship Program Remy loves science club, geog- was subjected to a host of legal chal- raphy club, and his Windows lenges regarding the use of public tax 10T ThinkPad. He would have none of dollars to fund private school tuitions these things if not for North Carolina’s before July 2015, when the North Caro- Opportunity Scholarship Program, a lina Supreme Court ruled the law con- tuition voucher system that provides stitutional. funding so he can attend Cathedral The program now has awarded School, a private Roman Catholic insti- more than 2,500 children $4,200 vouch- tution in Raleigh. ers to attend private schools during the “This year is our first year with 2015-16 school year, and is on more sol- the Opportunity Scholarship Pro- id footing with parents who are look- gram,” said Donovan’s mother, Betti ing for reliable education options, says Coates-St. Remy. “I didn’t really know Terry Stoops, director of research and about it until I’d read up on it. When education studies at the John Locke we applied [for the scholarship] I was Foundation. But though the voucher like, ‘If we get in, we’re definitely do- program is moving forward, challeng- ing this.’ And we did. We were just so es remain. excited.” “There is still some alignment Donovan attended a charter necessary between private schools and school prior to enrolling at Cathedral Donovan Coates-St. Remy and his mother, Betti, are using an opportunity scholar- the State Education Assistance Author- School, and though the institution was ship to help pay for tuition at the Cathedral School, a Roman Catholic institution in ity,” Stoops said. “And these are issues good, the atmosphere didn’t provide Raleigh. (CJ photo by Kari Travis) that can be worked out with minor enough of an academic challenge for select options they believe will serve about [opportunity scholarships], if changes to the law, or minor changes her bright, precocious middle school their children better — using vouchers, they knew they had the chance to go to put in place by the SEAA that makes it easier for parents and private schools boy, Betti said. enrolling in charter schools, or educat- another school that accepted [vouch- to accommodate the scholarship pro- “I really try not to put emphasis ing their children at home. National ers], then they might think, ‘Well, this gram.” on test scores,” Betti said. “But I looked School Choice Week, a nationwide is an alternative for me,’” Betti said. “If at them and thought, ‘My son can do One of those issues is a conflict educational and promotional cam- my child is over here, and this is not between private school and scholar- so much better than this.’” paign highlighting these options and working for us, I can move my child That’s when she decided to ex- ship enrollment periods, Moss said. advocating wider availability of them, over here to a different school.” “At this point it’s a question of plore other options. After discovering comprised thousands of events nation- Donovan is just one of eight stu- whether or not seats are left to be had the school voucher program through ally (including more than 200 in North dents at Cathedral School who have when a parent comes to enroll, their online research, and after visiting sev- Carolina) from Jan. 24-30. received an opportunity scholarship, child as an opportunity scholar, Moss eral private schools in the area, she and “I feel the greatest gift you can and school principal Donna Moss said. “As the program becomes more her husband decided the learning op- give your child is a good education,” would like to see the program grow in well-known and widespread, I would portunities and hands-on instruction Betti said. “I really do. I figure as a par- the coming year — not only within her like to think that the private school at Cathedral School would be the best ent, if I do my part, it’s up to him what institution, but also statewide. administrators could suggest some fit for their son. he does with that. But at least I can say, “Parents don’t like uncertainty tweaks that could better serve the fam- Donovan is one of thousands of ‘Donovan, you have the opportunity.’” about whether their child is going to ilies.” North Carolina students who have Since his enrollment, Donovan’s be able to get a scholarship, or whether Families will continue to benefit benefited from at least one version of grades have increased, and his attitude the program will continue, and I think from opportunity scholarships, accord- school choice, which allows parents toward academics also has improved, that now that we’re certain that the ing to Betti, who says she’s blessed to from every economic background to Betti said. program will continue and we can start give her son the education and future depart traditional public schools and “I just think if people knew more utilizing it effectively, I think we’ll see he deserves. CJ Keep Up With the General Assembly Be sure to visit CarolinaJournal.com often for the latest on what’s going on dur- ing the North Carolina General Assembly. CJ writers are posting several news sto- ries daily. And for real-time coverage of breaking events, be sure to follow us on Twitter:

CAROLINA JOURNAL: http://www.twitter.com/CarolinaJournal JOHN LOCKE FOUNDATION: http://www.twitter.com/JohnLockeNC PAGE 16 FEBRUARY 2016 | CAROLINA JOURNAL Education Opinion Concussions: The Latest P.R. Battle That College Athletics Is Facing he multibillion-dollar college According however. Stricter regulations regarding head athletics industry is under at- to the CTE Center Accord- injuries could originate at the confer- tack. While there is no shortage at Boston Univer- Issues ing to the NCAA ence level, from state lawmakers, from Tof reports on academic and financial sity, CTE can be Major Infraction university systems, or the schools abuses, a new problem is emerging: caused by impacts in Database, which themselves. evidence of long-term neurological at the subconcus- tracks violations of One reason no one has taken ac- effects caused by high-impact head sive level, meaning Higher Education NCAA regulations, tion unilaterally may be that doing so trauma in football. that players who since 2004 there would mean accepting legal liability This problem exhibit no obvi- have been 138 in- for medical crises. has gained noto- ous signs of head stances of Division However, not all schools have riety from a new trauma may be I schools violating dropped the ball. The Ivy League movie, “Concus- subjecting them- NCAA regulations. is already unique in that it does not sion,” which tells selves to slow-developing, irreparable Sixty-two of those were related lower admission criteria for student- the story of a doc- brain damage. Furthermore, medical to football, including several viola- athletes or offer athletic scholarships. tor trying to link professionals agree that no helmet tions of health and safety regulations. Additionally, the Ivy League adopted previous head currently in use is capable of avoiding Even though these violations carry concussion regulations in 2010, four trauma to some the trauma to the penalties such as years before the NCAA issued its deaths among pro- brain caused by probation, vacat- guidelines. fessional football football. ing wins, and The regulations seem to be players. STEPHANIE The NCAA The movie substantial fines, working well; none of the 501 concus- In the last KEAVENEY often has been it is clear that uni- sions reported since 2013 occurred at three seasons of criticized for poor ‘Concussion’ versities regularly an Ivy League school. The regulations the National Col- handling of con- violate protocols. adopted by the Ivies are very simi- legiate Athletic Association Division I cussions in college has raised the Since the lar to the NCAA guidelines, but the football, there have been 501 publicly football, and in beginning of the universities may apply the rules more reported concussions. But that greatly 2011, a former visibility of 2013 season, 27 strictly. understates the extent of the problem, player for Eastern college athletes Modern college football basically many feel. For while concussions Illinois University CTE in football have ended their operates as a minor-league companion cause immediate neurological effects, filed a concussion- football careers to the National Football League. Yet the unreported “dings” — substantial related lawsuit due to concus- only 1.6 percent of the college athletes hits to the head that do not exhibit against the NCAA. Eleven additional sions. Students who choose this path are drafted, and a few others make it outward signs of concussion — may lawsuits later were added to the origi- not only guarantee the end of their as free agents. That means that educa- prove more serious over the long nal complaint, and it became a class prospects of playing football profes- tion is important to the futures of term. action suit, which was settled in 2014. sionally, but also risk losing their roughly 98 percent of college football Football players, more than any The NCAA agreed to provide scholarships and have no access to players. other athletes, are at high risk for a $70 million to fund medical monitor- funding from the NCAA to continue While medical professionals are condition known as chronic traumatic ing for student-athletes and $5 million their college education. Students also quick to caution the public about ex- encephalopathy. CTE, which can- for research into head injuries. Ad- are severely limited in their options aggerated fears based on movies like not be diagnosed definitively while ditionally, the NCAA was required for covering concussion-related medi- “Concussion,” perhaps it is time to the sufferer is alive, causes severe to establish return-to-play guidelines cal expenses. Schools are under no ob- consider that college exists to improve depression, early onset dementia or and a concussion education require- ligation to provide any medical care. minds, not damage them. CJ Alzheimer’s, and schizophrenia. The ment for student-athletes. It’s not Although critics tend to aim one definitive shared variable among clear if the universities would adhere their fire at the NCAA for doing so Stephanie Keaveney is a policy those diagnosed with CTE is repeated to NCAA concussion guidelines even little, plenty of other decisionmakers associate at the John W. Pope Center for trauma to the head. if they were codified as regulations, could have taken action at any time. Higher Education Policy. FEBRUARY 2016 | CAROLINA JOURNAL PAGE 17 Education

COMMENTARY COMMENTARY A Humdrum SAT A Sober for ‘The Real World’ Appraisal een geniuses and word wiz- Based Reading and Writing. orth Carolina’s public uni- academic preparedness of enter- ards just lost their competi- Why change the once venera- versity system is a multi- ing students. The schools enroll- tive edge with the nation’s ble SAT? The adoption of Common billion-dollar organization ing students with high SAT scores Tmost established college admis- Core by most states has played a thatN affects virtually every region and high school GPAs also have sions exam. There’s a new SAT pivotal role, as testing companies of North Carolina — socially and (relatively) high graduation rates, in town, and this one favors the have raced to ensure assessments economically. It employs more than and vice versa. Even though UNC mundane over the arcane. are aligned with the standards. The Debuting in March, this latest chief architect of Common Core, 47,000 people across 17 campuses, system schools have improved version of the SAT represents the David Coleman, is the man behind making it by far the largest state slightly over the years in admitting test’s most substantive revision in the new SAT: Coleman became the entity. As such, it is essential for better-qualified students, it is clear decades. Proponents say it assesses College Board’s president in 2012. policymakers and taxpayers to that standards need to be raised the skills necessary for college and If you don’t like Common Core, know whether it is managed ef- much higher. career more accurately. Detractors you probably won’t like this test. ficiently and whether the 220,000 While The State of the State say it has been dumbed down fol- What else is fueling the shift? students attending UNC schools University 2015 offers plenty of lowing years of declining scores. Economics, plain and simple. Fac- are succeeding. insight into universities’ academic One thing is clear: The SAT ing dwindling market share, the The Pope Center’s standards, it also sheds has drifted far from its College Board has cre- latest research report light on their spending early moorings as an ap- ated a test that resembles goes a long way toward priorities. First, despite titude test. The focus of the ACT, students’ now- the new SAT, like every- preferred college admis- answering those ques- contrary claims, fac- thing else in education sions exam nationally. tions. The State of the State ulty members across the right now, is on “the real The ACT also enjoys mar- University 2015: Critical system are paid very world.” High schoolers ket dominance in North Facts about the University well. The average faculty are tested on vocabulary Carolina, a trend fueled of North Carolina System member earns almost 33 they’ll use “long after test in part by the fact that the (available at popecenter. percent more than the day,” according to the state began requiring all org) analyzes a decade average income earner in SAT’s publisher, the Col- public school 11th-grad- of data covering, among North Carolina, and most lege Board. Reading re- KRISTEN JESSE ers to take the test in 2012 other things, tuition, earn more than the na- quires analysis of mostly BLAIR as part of its accountabil- SAFFRON nonfiction texts and is graduation rates, student tional average for public ity program. debt levels, and admin- university faculty. “about the everyday.” I Students elsewhere istrative growth and salaries. The Also, from 2003-04 to 2012- slogged through a sample may find themselves locked into 13, there was increased waste in reading passage and infographic the new SAT as some states — pre- resulting picture shows minimal about the time costs of commuting. the form of administrative bloat. viously committed to end-of-year progress in some key areas and The College Board isn’t kidding. Common Core exams developed cause for concern in several others. That is, the number of employees Welcome, kids, to the tedium of the by national consortia ― defect in For example, North Carolina who do not teach increased by 20.6 workaday world. has the fourth-highest per-student percent. As a result, today almost Deep, favor of the redesigned admissions state funding in the country. The every campus has more than twice not broad, the exam. Already, a number of UNC system has been well-funded as many noninstructional employ- SAT’s new ees as it has faculty members. math section states have since its inception in 1971; today, its The SAT has Many top-level university hones in on indicated they overall annual budget is roughly three areas: drifted far from will use the SAT $9.5 billion, with about $2.6 billion leaders and state politicians want linear equa- or ACT instead coming from the state. Despite to increase enrollment (which, tions and sys- its early moorings of consortium that abundance, tuition and fees by the way, increased by 20 per- tems; problem tests. have gone up by 65 percent in 10 cent over the last decade) and the solving and as an Perhaps years. Moreover, student aid pack- percentage of North Carolinians data analysis; most funda- ages have not kept up with those with college degrees. But unless and complex aptitude test mentally, this they confront the numerous is- increases. equations, SAT will deepen sues raised by the Pope Center’s Results of these trends according to education’s latest report, the future social and include an increase in the percent- the College divide over the economic costs of pursuing such age of students with loan debt, an Board. Expect multiple steps and following question: What do we expansion may far outweigh the increase in the inflation-adjusted loads of word problems about want students to know, and how benefits. real-world scenarios. Gary Gruber, should we test whether they know amount of such debt, and an The State of the State University an expert on standardized testing it? Of course, this issue is far bigger increase in loan default rates. 2015: Critical Facts about the Uni- and founder of Gruber Prep, says than the SAT. But the new test says While such problems are troubling the new SAT focuses less on critical versity of North Carolina System is a much about where we’re headed. enough for those who graduate, we must-read for students, parents, tax- thinking; many questions, espe- Think China, for rote learning pat- know that they can be downright cially in math, are “either very easy payers, and policymakers who want terns. debilitating for those who do not. UNC to achieve its highest potential or very tedious,” he says. If tedium continues to trump Students are likely to cheer, Six universities in the UNC — and its peak efficiency. Here’s critical thinking and creativity, not bemoan, other changes. The system — Elizabeth City State hoping that, instead of sugarcoating we’ll incentivize and reward a guessing penalty ― a quarter-point University, Fayetteville State Uni- the shortcomings identified in this different kind of student. This new deduction for each wrong answer versity, N.C. A&T, N..C Central, report, in 2016 North Carolina lead- SAT, says Gruber, “is not going ― is gone. Multiple-choice answer UNC-Pembroke, and Winston- ers choose instead to address them to tap the smarter kids, the real options have been trimmed from Salem State University — have six- head on. CJ five to four, bumping up the odds creative kids.” That’s a shame. The year graduation rates at or below of choosing correctly. The essay real world needs them. CJ 50 percent. Jesse Saffron is a senior writer is optional. Scoring reverts to a Universities’ graduation 1,600-point scale for two sections: Kristen Blair is a Chapel Hill- at the John W. Pope Center for Higher Math and the renamed Evidence- based education writer. rates reflect, to a large extent, the Education Policy. PAGE 18 FEBRUARY 2016 | CAROLINA JOURNAL Books & the Arts N.C. A Battleground State Long Before Presidential Politics s I’ve discussed in recent col- pendence. On Feb. 27, 1776, approxi- was seized and often sold. Before tinued in different forms after Ameri- umns, North Carolina was a mately 1,600 Highlanders (Loyalists) the war, Committees of Safety were cans won independence. Although battleground state long before were poised to battle approximately alerted of Tory sentiment (perceived Loyalist property had been seized mediaA pundits started calling it one. In 1,100 Minutemen (Patriots). Casual- or real) in their communities. during the war, many historians have particular, the Old ties, however, were minimal; many The notorious David Fanning considered their treatment to be mild North State was Loyalists fled the scene after an effec- led what historians have called the compared to that in other areas. Some divided politically tive Patriot salvo. Even so, according Tory War from 1780-82. One famous former Loyalists tried to reclaim during the Ameri- to historian William Powell, the Patri- incident occurred in Moore County at their property, and those with small can Revolution. ots captured the Highlander leader, what is now called the House in the amounts, Troxler writes, probably During the approximately half of the opposing Horseshoe, where Fanning and his decided it was not worth the effort. Revolutionary force, and much weaponry (cannons band of Tories from adjacent counties In the end, the courts settled War, many sided and rifles), and later discovered a siz- engaged Patriot militia. many of the property disputes. One with the Brit- able amount of money. Another example occurred Oct. significant legal precedent resulted ish while others A large Loyalist population lived 7, 1780, when nearly 1,800 Overmoun- from this process — the concept of supported the in North Carolina. Their numbers and tain Men battled almost 1,000 Tories judicial review in Bayard v. Singleton. former American TROY the number of Loyalist/Patriot en- at King’s Mountain. The American In this case, Elizabeth Bayard, the colonies. American KICKLER counters have prompted some histori- victory was the beginning of the end daughter of a Loyalist whose property allies of the Brit- ans to describe events during the war for the British forces in the American was seized during the war, sued to ish were labeled Loyalists or Tories. for independence as a civil war. Carole South and the prelude to the brilliant get it back. She did not win her case, Those championing the American Watterson Troxler has reminded military maneuvers displayed by Gen. but the state’s appellate court ruled cause were called Patriots or Whigs. readers, though, that the proportion Nathanael Greene against Lord Corn- that the original confiscation law was In North Carolina, both camps existed of Loyalists in the Old North State wallis in North Carolina. At the Battle unconstitutional. and at times confronted each other on “may have been greater than that of of Guilford Courthouse on March 15, As the upcoming primary and actual battlefields. Pennsylvania and Connecticut,” but 1781, a sizable Patriot force clashed general elections near, North Carolin- In fact, North Carolinians met it “seems to have lagged behind New with a substantial British force. When ians will express differing opinions. each other on the battlefield before York’s and Georgia’s Loyalist popula- the firing ceased and the smoke And the Old North State once again April 12, 1776, when the Halifax tion.” cleared, Cornwallis and his men will be a political battleground state Resolves passed by a unanimous vote, In any case, many North Caro- claimed the field. Cornwallis’ success with national significance. CJ not to mention before three North Car- lina Loyalists left for friendlier envi- was a Pyrrhic victory, however; his olinians (John Penn, Joseph Hewes, ronments. The state legislature had army never fully recovered from the Troy Kickler is director of the North and William Hooper) in July of that passed aggressive confiscation legisla- harsh battle and heavy casualties. Carolina History Project (northcarolina- year signed the Declaration of Inde- tion, and, as a result, Loyalist property The Patriot/Loyalist divide con- history.org).

BOOKS BY JOHN LOCKE FOUNDATION AUTHORS

If you don’t know about Edenton, North Carolina, your knowledge of U.S. history is incomplete and your knowledge of North Carolina insufficient. Organized women’s political activity in America was born in Eden- ton. The concept of judicial review—that courts can declare legislative acts unconstitutional—was champi- oned here. Ideas for a national navy and defense were implemented here. Many passages of the N.C. Con- stitution (1776) and the U.S. Constitution originated here. Leading proponents of the U.S. Constitution (a.k.a. Federalists) lived in this small place, and so did nationally known jurists and politicians. Dr. Troy Kickler, founding director of the North Carolina History Project, brings Edenton, its people, and its actions into proper and full focus in his book, The King’s Trouble Makers. Go to northcarolinahistory.org for more information. PAGE 19 FEBRUARY 2016 | CAROLINA JOURNAL Interview Taylor: Apply Incentives To Everyone, Don’t Target Them to Just a Few

By CJ Staff RALEIGH “[Y]ou want a general set of incen- t’s no secret that America’s econo- my hasn’t been growing as quickly tives that applies to everyone. The as anyone would like since the of- targeted incentives that apply to ficialI end of the Great Recession. The economic recovery has been far slower some people in certain circum- than recoveries from previous eco- nomic downturns. Economist John stances, that goes against the B. Taylor, senior fellow at the Hoover Institution and professor at Stanford predictability principle, where you University, believes a change in gov- ernment policies could help produce know what’s going to happen.” better economic outcomes. He shared his ideas in a 2015 John W. Pope Lec- John B. Taylor ture at N.C. State University titled “A Senior Fellow, Hoover Institution Renewal of First Principles.” Taylor Professor, Stanford University discussed these principles with Mitch Kokai for Carolina Journal Radio. (Head to http://www.carolinajournal. com/cjradio/ to find a station near you or to learn about the weekly CJ Radio podcast.)

Kokai: We should mention that portant. ing to happen. If you happen to have Kokai: I want to circle back to this speech at N.C. State University a different profession which is treated something you mentioned earlier be- [was] tied, at least in some respects, to Kokai: You also emphasize the differently, or somehow the govern- cause people who know you in the eco- a book you wrote a few years ago titled rule of law. ment gives a break or requires a license nomics profession probably know you First Principles. What’s it all about? for that, that’s really not predictable for monetary policy and something Taylor: It goes part and parcel and that’s really targeted. called the Taylor Rule, where you re- Taylor: Well, when I look at the with predictability. The rule of law Sometimes it’s targeted disincen- ally call for something very different episodes like you just referred to in the is needed to know what’s going to tives. You have to go through a lot of than what we’ve seen in recent years beginning, that the economy is not do- happen when you buy this property. hoops to get a license to practice, even from the Federal Reserve. Why is the ing as well as it could, which I agree What’s going to happen when you to be a hairdresser. And that’s not what Federal Reserve acting in a way that’s with, I ask, “Why?” And I think it’s open this business? Are you going you want for a good, strong-perform- contrary to what it should be doing? largely policy. It’s actually the kind of to be able to have the rights to that ing economy. policies I teach my students, and that is in the future? Is the government go- Taylor: That’s a good question. a deviation from economic policy, too. ing to change its policy? What about Kokai: We talked about strong In fact, it’s an especially good ques- So to describe that I wanted to the health care law: Are they going to incentives. You mentioned the reliance tion since when they acted according list these principles, the principles of change the health care law to exclude on markets as a fourth principle, and to a rules-based policy like this, things economic freedom, which I think char- something that I took advantage of? another one was a clearly limited role worked well in the ’80s and ’90s, until acterizes good economic policy. And All those things are so important. for government. Why is that so impor- recently. When they deviated, it hasn’t when we deviate from those, things And I think what’s also important, it tant? worked well. don’t go so well, and that’s how it’s creates a better economy. It’s some- I think they’re maybe trying to do been, I think, for the last 10 years or so. thing that we forget about sometimes. Taylor: What we’ve learned, I too much. Perfect became the enemy of And when we’re on track with those Economists too often don’t emphasize think, from history and just from ba- the good, and they deviated from the things, it’s much better, and that’s the rule of law. But in certain situations sic economics [is] that there are a few good policy. And then the crisis came, I maybe the ’80s and ’90s, until recently. like the fall apart of the Soviet Union, things that government can do well think, as a result of this deviation. And we thought it was going to be great as and government should do those. once a crisis occurs, then all sorts of Kokai: For those who have read economists, market economy and all That’s maybe national defense. It’s changes occur. You figure you’ve got the book, they will note that there are that, but there was no real substantive the obvious ones that economists talk to do this for the special circumstance, several principles that are spelled out rule of law. And as result, things have about. special firm, a bailout, an intervention very easily. Let’s talk about some of not worked well. But there are so many other here and there, and suddenly you’re them. One of them is a predictable pol- things that the market does well, or deviating from good policy all over the icy framework. Why is that important? Kokai: Another pillar that you people do well on their own, without place. mentioned is strong incentives, and Taylor: It’s essential for anybody the government. And what you have Kokai: deciding on a job, or deciding to start some people listening will think, “Oh, to do is limit the role of government to And what you’d like to a business, to know what policy is go- that means we need these targeted the things that government is appro- see is the Fed set up some sort of, or ing to be. What’s the tax policy going tax incentives or targeted tax breaks.” priate for. So again, national defense someone, set up some sort of rule rath- to be, what’s the inflation rate going to That’s not what you’re talking about. is an obvious one. When government er than have the Board of Governors of be, what’s the treatment of investment goes beyond that, actually the extreme the Federal Reserve making decisions going to be, all those things, and that’s Taylor: No. In fact, the best way — runs industries or takes over certain here and there and changing their what we mean by predictable. You’ve to get incentives, and this is really an- sectors of the economy — then you’re minds, correct? got to know what’s going to happen. other principle, is through the market. in trouble. A predictable policy, I think it’s The market rewards people for making Then you lose those incentives. Taylor: I would like the Federal probably most important in an area an investment in education so you get You lose the ability to improve the Reserve itself to set up a process or which I like to think about: monetary a better job. Doing a good job itself so economy, to grow. It’s really the pri- rule. You know, after all, in the ’80s policy. So what’s the Fed up to? Are you get a promotion, that’s the incen- vate sector that you want to empha- and ’90s, they came pretty close to that. they going to raise interest rates and tives. size as much as you can, because that’s ... They followed a fairly predictable, how and when? So that predictability In a way you want a general set where the innovation comes from, the rule-like policy focused originally on helps. Same with taxes. If you keep of incentives that applies to everyone. rewards. So that’s why you want a lim- getting inflation down and then keep- changing the tax law constantly, you The targeted incentives that apply to ited [government]. It doesn’t mean you ing it steady, and, boy, the economy don’t know what to do. You don’t some people in certain circumstances, cut it to zero. You limit it to what gov- really did pretty well during that pe- know what the return is going to be. that goes against the predictability ernment is good at. Use cost-benefit riod. In more recent years they haven’t So predictability of policy is very im- principle, where you know what’s go- analysis. done that. CJ PAGE 20 FEBRUARY 2016 | CAROLINA JOURNAL Opinion

COMMENTARY States Take The Wheel hen America was a young that pay for construction projects up country, the federal gov- front and then are reimbursed by ernment had a much more USDOT. Wprominent role in transportation The Congressional Budget than it does today. Federal transpor- Office projects that the highway tation programs required extensive account will have a shortfall of $1 collaboration among the states to billion in 2016, and that shortfall ensure consistent standards, in- will grow to $108 billion by 2025, terconnectivity of facilities, and with an additional shortfall of $40 sufficient investments for a national billion in the transit account. Delay- infrastructure. ing reimbursements to states could Today, the U.S. Department become an annual event. of Transportation has changed its Since 2012, 21 states, includ- focus, and now its priority is to pro- ing North Carolina, have approved mote policies tangentially plans to raise additional EDITORIAL related to highways such transportation revenues. as environmental sustain- During the 2015 legisla- ability, economic expan- tive session, N.C. lawmak- sion, and social welfare. ers changed the way the Keep Reaching All levels of govern- state gas tax was calculat- ment historically have ed to make that revenue funded transportation. source more sustainable. For the STARS The federal government, The gas tax rate was via the federal gas tax, reduced in stages from lmost 15 years ago, the John Core standards in reading and math. funds approximately 25 SARAH 37.5 cents per gallon in Locke Foundation released an In some cases, this was a major im- percent of transportation CURRY 2015 and will wind up education reform plan titled provement. In others, it proved to be costs while states and lo- at 34 cents per gallon by “ReachA for the STARS,” a five-point either wrongheaded or controversial. cal governments pay for the end of 2016. Starting agenda arguing that low levels of The State Board of Education now has the rest. in January 2017, the gas proficiency in reading and math, the opportunity to revise the reading Some states, however, rely tax will be adjusted automatically particularly among poor and minority and math standards to address the more heavily on the federal govern- based on increases in population students, were robbing the next gen- flaws. We’ll see if they do. ment than others. North Carolina’s and changes in the Consumer Price eration of opportunity and inhibiting On tenure, North Carolina no Department of Transportation Index. our future growth. longer offers it to newly hired teach- receives nearly $1.2 billion from the North Carolina made another Now, 15 years later, North Caro- ers. In the future, superintendents and lina policymakers have moved in the federal government, comprising 27 important decision to hedge the principals will have the flexibility they right direction in four of these areas percent of the state’s total funding. risk against the federal govern- need to protect students from the ill and are considering action on the fifth. The money the federal govern- ment’s funding shortfall. During effects of ineffective teachers. The acronym “STARS” referred ment disburses for transportation the 2015 session, lawmakers ended On regulation, North Carolina to five elements: standards, tenure, has abolished the charter-school comes primarily from the fed- a transfer from the Highway Fund accounts, regulation, and scholar- eral gas tax, yet two-thirds of the into the General Fund that had cap and given local districts more ships. The proposals were: 1) adopt budgetary flexibility. Some school programs funded are not highway diverted hundreds of millions of more rigorous academic standards programs. Due to a reduction in dollars away from highway projects systems also have been experiment- and independent, national tests; 2) ing with differentiated pay and other highway miles driven per person, over the last few decades. Using abolish teacher tenure for new hires increased construction costs, and transportation money solely for innovative practices. Lawmakers are and phase it out for others; 3) cre- now studying ideas such as student- more efficient vehicles, the gas tax transportation-related projects is ate education savings accounts into centered funding and pay-for-perfor- no longer can cover all of the High- necessary to prepare for an eventual which parents could deposit funds, mance pilots. That’s fantastic. way Fund’s transportation needs, cut in our federal transportation receive tax credits, and then use the And on school choice, North especially if some of the money allotment. money for educational services; 4) Carolina is giving private-school pays for nonhighway projects. The long-term solution for reduce state regulation of local schools scholarships to thousands of low- The federal gas tax rate has transportation needs in America by abolishing the statewide cap on income and special-needs students. not increased since 1993, and some is to shift transportation decisions charter schools and giving superinten- Competition is just as valuable in are arguing to increase the rate. and funding away from the federal dents and principals more flexibility education as it is in other sectors. Our Congress has decided not to in- government and to the states. Over on budgets; and 5) offer private-school voucher plan has withstood legal chal- crease the excise tax on motor fuel, the last 30 years, states have been scholarships for low-income students lenge and should expand to help more and in 2012, the federal legislation given more discretion over how and those trapped in low-performing families of modest means find the best authorizing spending on federal they spend federal transportation public schools. On standards and testing, North educational match for their children. highway programs also approved dollars. Now it’s time to adopt the fifth a General Fund transfer to fill the In the wake of Congress’ con- Carolina’s public schools have ad- opted the ACT battery of tests for all plank: education savings accounts. At gap left from inadequate fuel tax tinual short-term funding continu- a minimum, all parents should have revenue. ations for the Highway Trust Fund, high-school students. Our new state tests in earlier grades are more rigor- the ability to take tax deductions for In 2015, the U.S. Department it only makes sense for states to ESA deposits. The money parents of Transportation warned states that take over their own transportation ous, no longer so wildly out of sync with the National Assessment of Edu- spend on their children’s education it would need to delay payments to programs. CJ cational Progress exams administered is no less an investment in the future prevent the account balance of the to fourth- and eighth-grade students than the money they put in a 401(k) or Sarah Curry is director of fiscal highway and transit accounts from every other year. IRA. dipping below a required threshold. policy studies for the John Locke Foun- Like most states, North Carolina North Carolina should continue This is worrisome for many states dation. adjusted its Standard Course of Study reaching for the STARS. Our future for public schools to the Common depends on it. CJ FEBRUARY 2016 | CAROLINA JOURNAL PAGE 21 Opinion

EDITORIALS COMMENTARY Big Questions Most Arts Funding Right answers are needed

ublic education, health care, ing on roads and bridges. Is Private and transportation were major Even with these gains, plenty of hether you think the For those of us who consider issues during the 2015 legisla- hard work remains. National Endowment the arts to be indispensible elements Ptive session. They will continue to be The General Assembly chose for the Arts is a wonder- of a thriving culture, then, the free- major issues for many years to come. not to enact major changes in North fulW organization deserving tax- dom I celebrate leads inevitably to a During the last session, the Gen- Carolina’s academic standards or test- payer support or an example of the responsibility to act. As president of eral Assembly took action on all three ing programs. Instead, it asked state federal government exceeding its the John William Pope Foundation, fronts. On public education, lawmak- panels and commissions to come up proper bounds, I’m willing to bet a Raleigh-based grantmaker about ers funded the next phase of a strategy with reforms. Some may prove useful. you believe the NEA plays a bigger to celebrate its 30th anniversary, I’ve to shift the state’s teacher compensa- Others passed the buck right back to role than it actually does. been working to sustain and build tion system away from irrelevant the State Board of Education or the Here’s the reality, straight on an impressive legacy of support from the NEA: Of all the money for arts and cultural organizations credentials and seniority in favor of legislature itself. spent on nonprofit artistic and cul- in our state. recruiting high performers into the As for Medicaid reform, the 2015 tural programming across the coun- Over the years, the Pope profession. On health care, they finally legislation only began a process that try each year, the federal govern- Foundation has given millions of approved a reform model for the will take many years. North Carolina’s ment — the NEA plus other federal dollars to educational programs, state’s costly Medicaid program that new system will combine statewide agencies — is responsible community groups, and will blend provider-led networks and options with regional networks. No for about 1 percent of the institutions such as the commercial insurers in a new system one knows what all this will look like. total. Adding in direct Carolina Ballet, the North to provide more fiscal certainty. Regarding transportation, the appropriations from state Carolina Theatre, the And on transportation, lawmak- state’s funding gap was reduced, not and local governments, North Carolina Sym- ers took three steps to reduce the gap eliminated. We still need billions of plus grants from tax-fund- phony, and the North between what the state needs to spend dollars worth of new and refurbished ed organizations such as Carolina Museum of Art. on its highway network and what roads that cannot be financed at cur- the North Carolina Arts Recently the United Arts revenue it could expect from existing rent tax rates. Some policymakers Council, increases govern- Council of Wake County taxes and fees. They included chang- favor higher gas or car taxes, others ment’s share of total arts recognized the Pope ing the gas tax to reduce the rate in prefer more reliance on direct user funding to just 7 percent. Foundation’s efforts with the short run but keep it higher in the charges, and still others would elimi- In other words, 93 JOHN the 2016 Business Support long run, increasing car registration nate state funding for transit systems percent of the money HOOD for the Arts Award. fees to cover departmental expenses, and political boondoggles. spent by American We also just and ending a longstanding annual Even the busy legislative session nonprofits every year launched a new statewide transfer of more than $200 million of 2015 left many big questions on to produce plays, stage concerts program, the Joy Pope Memorial from the Highway Fund. Together, the the table. North Carolina’s continued and dance performances, exhibit Grant in the Arts, to identify cre- changes deliver hundreds of millions growth and development depend on visual art, and finance other fine ative ways to make one-time gifts of dollars a year in additional spend- coming up with the right answers. CJ and performing arts comes from with ongoing benefits to artists, private sources — from ticket sales students, and their communities. and other “earned revenue” as well The 2016 recipient of this annual as voluntary contributions from $100,000 grant is the Fayetteville foundations, corporations, and Symphony, which will use the N.C.’s Good Example individuals. money to create an instrument lend- Keep in mind that these ing library for students from Cum- We cut spending, D.C. didn’t figures reflect only the nonprofit berland, Hoke, Lee, Moore, and arts sector. The for-profit sector is Robeson counties who participate in f you think government is too large state budget funded through gener- even larger, encompassing commer- its youth orchestra program. and wields too much power, then ally applied taxes and fees, rather than cial art, live and recorded music, There’s plenty of room for you have plenty of reasons to be from federal funds or highway taxes Broadway, film, and commercial additional private support. If you Idismayed by recent national develop- — have risen 10 percent since 2010. publishing. share my view that government’s ments. But if you live in North Caro- But the state’s economy has grown The overwhelmingly private role in this area ought to be limited, lina, there is some good news mixed faster. nature of the arts in America clearly then I would urge you to find the in with the bad. As a share of GDP, the state’s distinguishes our society from cause closest to your heart — teach- Since the onset of the Great General Fund budget has gone down. much of the rest of the developed ing children to play classical music, Recession in 2007, the federal govern- During the current 2015-16 fiscal year, world. On a per-capita basis, the teaching retirees to paint and sculpt, ment has expanded vastly. Although it will be approximately 4.1 percent Canadian equivalent of the NEA hosting a poetry reading, or produc- federal spending peaked in 2011 at of North Carolina’s GDP. By compari- spends about 11 times what the ing Shakespeare in the park — and 23.4 percent of gross domestic product son, on average state General Fund NEA spends. The English equiva- give your time and money to it. and has declined a bit since then, it re- spending was 5 percent of GDP from lent spends 29 times as much. Among its many lessons, art mains elevated. In the 10 years before 1997-2008. Because our sector is over- teaches how to connect our past to the Great Recession, federal spending In Washington, the next presi- whelmingly private, it is more our future. “Without tradition, art averaged 18.6 percent. During the dent and Congress should eliminate innovative, energetic, and entrepre- is a flock of sheep without a shep- current 2015-16 fiscal year, the Obama low-priority spending such as corpo- neurial. There is robust competi- herd,” Winston Churchill once said. administration estimates it will be 21.5 rate welfare, reduce annual growth tion for talent, ideas, patronage, “Without innovation, it is a corpse.” percent. rates of entitlement programs such as and audience. And our approach Private initiative sustains both In North Carolina, the Repub- Social Security and Medicare, and de- to funding the arts minimizes the tradition and innovation. Let’s have lican takeover of the state legislature volve programs such as Medicaid and extent to which we force taxpayers more of it. CJ in 2010 and the election of Gov. Pat transportation to the states. Bringing to fund artistic work about which McCrory in 2012 have led to a differ- federal spending down to the prere- they feel disdain or a complete lack John Hood is chairman of the ent result. The state’s General Fund cession average of 18.6 percent of GDP of interest. John Locke Foundation. expenditures — the portion of the may balance the federal budget. CJ PAGE 22 FEBRUARY 2016 | CAROLINA JOURNAL Opinion MEDIA MANGLE Reporters And Sources n another life I was a governor’s press secre- tary, during the campaign and then after he took office. I I came to the job directly from a newspaper job. I’d never been a flack before. And I brought with me the same values that reporters, at least 30 years ago, brought to the job of journalism. My feeling was that you could answer a question three ways: 1) You could lie, 2) you could say “no comment,” and 3) you could answer truth- fully. Since I was incapable of the first, I used the other two. The other set of rules governed when what I said could be reported by people interviewing me. My rules were pretty elaborate. I JON would explicitly, before an- HAM swering or telling something to a reporter, say whether it was free to be used with at- tribution to me; whether it was free to be used as N.C. May Borrow to Build information that must be confirmed by someone orth Carolinians are being asked to consider are different. else; whether it was for use only as background a big mortgage for the state. Totaling $2 Bond financing of state projects is exactly in their reporting, with no connection to be made billion, the mortgage would allow the state like mortgage financing of a home. By borrowing to me or the governor’s office; or whether it was toN build a variety of projects, including university the money, the state gets to build the projects now never to see the light of day, and was being told only as a friend to a friend. and community college facilities, water and sewer and pay for them while residents benefit from the I would never take a nod or a blank look infrastructure, and recreational offerings. projects. The alternative is to wait until the state has as assent to my stated rules, but required in There are two key questions for voters to saved the money to pay cash, meaning the projects advance a verbal promise from the reporter to ponder. First, is mortgage financing appropriate? will not be developed until years later. However, abide by them. Looking back, I can say not one Second, are the projects worthy? with such “build as you have the cash” financing, reporter ever stabbed me in the back by ignoring To address the first question, consider a newly interest costs are avoided. our agreement. married couple named the This difference in financing methods leads to I was reminded of all this after reading a Smiths. They are renting now, the second question: How worthwhile are the proj- column at Medium.com (http://bit.ly/205bjIO) but they’ve decided to start a ects to be financed by the state bonds? If the Smiths in which the author, a marketing professional, family and think owning a home have decided an owned home is the best type of stated categorically, “Never, EVER say ANY- would be preferable. residence for raising their children and aging into THING you don’t want to see in print. Period. Yet the problem the Smiths midlife, then the sooner the Smiths can have the That’s it.” face is money. The home they home, the better for them. He went on to say that reporters’ first duty want to purchase is priced at North Carolinians have the same question to is to inform the public, so they will freely ignore $200,000. Although the Smiths answer about the bond package: How important your “off the record” admonitions in order to have some money saved, it is it to have the projects funded by the bonds built perform that duty. Maybe that’s the case today, would take them several years MICHAEL now rather than later? but it never happened to me. — maybe 20 — to have enough WALDEN Advocates point to several factors. The state is Several reporters responded in comments for the full purchase price. And expected to add 3 million new people over the next that the column writer was off base, and that by that time, the home’s price several decades. This means more use of state parks, reporters do, and must, respect such rules from would be more and interest rates may be higher. more flows through our water and sewer systems, sources if they are to maintain a relationship with The alternative for the Smiths is to borrow and more students learning at our public commu- that source. most of the purchase price through a long-term nity college and university buildings — all functions I know reporters have a reputation that loan called a mortgage. They repay the mortgage that would receive funding for expansion from the can’t get much lower, but the marketing pro- in monthly payments — each payment pays inter- bonds. fessional who wrote the column assumes that Two-thirds of the bond money would pay for est on the loan as well as a part of the original loan reporters will lie to your face, feign agreement on higher education construction projects. Many futur- amount — over several decades. your rules for use, and then turn around and do ists think higher education facilities will be crucial Using mortgage financing, the upside for the the opposite. I never found that to be the case. for training a 21st-century work force. Smiths is they get the home now, and they are able Some confusion no doubt comes from a lack Then there is the cost of the bond financing. of specificity on the part of the news source. You to use and enjoy the home while paying for it. If Interest rates are now at near-historic lows. But the can’t just say “this is off the record” and think they had to wait perhaps 20 years until they could Federal Reserve already has announced a plan to that covers all bases. And you can’t assume that pay cash for the home, their children could be in raise interest rates in the future. So borrowing now a smile or a nod from the reporter is assent. Make college! could lock in today’s relatively low rates. them say it out loud. The big downside of mortgage financing is the Still, even with the low interest rates, there will There’s also another motivating factor for Smiths will pay more total dollars over time to pur- be extra dollars paid in interest costs using the bond playing it straight. In 1991 the Supreme Court chase the home. If they bought the home with cash, financing. So, just like for the Smiths, the essential ruled that a newspaper loses First Amendment they would pay $200,000. Using today’s interest question is: How much do we want the projects protection from a lawsuit if it reneges on a prom- rates and a 30-year repayment plan with a $200,000 funded by the bonds? Do we want them now, or can CJ ise to keep a source confidential. mortgage, the Smiths would pay $340,000 over three we wait until later? CJ decades. Recognize, however, most financial ana- Jon Ham is publisher of and a Carolina Journal lysts argue the two amounts aren’t directly compa- Michael Walden is a Reynolds Distinguished Pro- vice president of the John Locke Foundation. rable because the dollars are paid at different points fessor at N.C. State University. He does not speak for the in time when the purchasing power of the dollars university. FEBRUARY 2016 | CAROLINA JOURNAL PAGE 23 Opinion Growth, Equality Issues Will Shape Campaign t is clear, even several months only with economic growth, a force tual on the back of such work, stated Rubio’s proposed new child care before the parties’ nominees have unleashed not by government but inequality was unimportant so long as credit, and Ben Carson’s and Donald been selected, that a central feature a robust business community with commercial exchange was voluntary Trump’s plans to exempt people in ofI this year’s presidential election will resources available to reinvest in and economic outcomes reflected the roughly the bottom third from pay- be an intense debate over growth and capacity. distribution of effort and talent across ing any individual income tax at all. equality. On the Democratic side, self- individuals. Some Democrats understand that The Republican nominee will proclaimed “socialist” Bernie Sanders I tell my students I believe Rawls growth is important — Clinton speaks advocate policies directed toward has a spending wish list estimated at has an “incentive” problem because of a “growth and fairness economy” stimulating our $18 trillion over the coming decade. It predetermination, an inevitable ef- in which government investment in anemic economy, includes a single-payer health system, fect of forced equalization, leads to things like infrastructure and educa- one that barely has tuition-free public higher education, free-riding and a decline in collective tion stimulates economic activity. Re- expanded since the and paid family and medical leave. productivity. Nozick has an “original Great Recession. Although, according to Joe Biden, a position” problem. To what extent do publicans believe there can be greater The Democrat will “newcomer” when it comes to the inherited social advantages, rather equality only with growth; Democrats reiterate President issue of inequality, Hillary Clinton than business acumen or a person’s counter that growth follows equality. Obama’s asser- has focused on taxing capital gains effort and talent, shape economic We desperately need growth. tion, made during and slapping a surcharge on the rich. results? Republicans tend to get that better a 2011 speech in Both she and Sanders want to raise the I think Americans today find than Democrats. Without it, efforts to Osawatomie, Kan., minimum wage to at least $12 an hour themselves somewhere between equalize outcomes become punitive that dramatic and ANDY and oppose the liberalizing Trans-Pa- Rawls and Nozick and possibly close and divisive. Firms become uninter- widening econom- TAYLOR cific Partnership trade deal pushed for to this year’s Nobel Prize winner in ested in generating genuine wealth ic disparities con- by Obama. The principal Democratic economics, Angus Deaton. Deaton’s and instead chase profits through stitute “the defin- goal is to increase the incomes of those work on global health and wealth re- rent-seeking or lobbying government ing issue of our time.” near the bottom. veals inequality to be valuable in that officials. To get growth, policymak- We know all this because, This debate is reminiscent of it fosters aspiration and innovation ers need to assess regulations, invest although the primary campaigns have one that has taken part in philosophi- among those lower down the pecking strategically in infrastructure, and cut seen some quite nasty intramural cal circles over the past half century order. Extreme inequality, however, taxes, especially on corporations. But fighting, the economic plans for- and that I discuss in my classes. In can place so many burdens on those we simultaneously must find a way warded by Republicans are strikingly his famous 1971 book, A Theory of toward the bottom that emulation is similar; those by Democrats share the Justice, John Rawls essentially argued worthless, diminishing social mobility for those near the bottom to believe same themes. There are, of course, inequality should reflect the amount and economic competition. once again that they can rise to the some meaningful within-party dif- of relative personal deprivation In fact, several of the presidential top. CJ ferences, but the goals are always the individuals were willing to tolerate to candidates on both sides recognize same. avoid entering a lottery to determine this middle ground. Republicans do Andy Taylor is a professor of politi- For the GOP, taxes must be their wealth and social standing. By worry about inequality — as demon- cal science at the School of International reduced and simplified, spending cut. way of response Robert Nozick, who strated by John Kasich’s call to expand and Public Affairs at N.C. State Univer- Job and wealth creation will occur became a leading libertarian intellec- the earned-income tax credit, Marco sity. He does not speak for the university. Occupational Licensing Reform and Freedom ver the last four years, compre- olina, with only 49. sion, the state auditor’s office, the In- to open a barber shop in his low-income hensive reforms have turned There are inconsistencies stitute for Justice, the Mercatus Center neighborhood and provide access to a our state around, with higher- throughout the system. It costs $300 at George Mason University, the Gold- quality service at an affordable price — Othan-expected state revenues, grow- for a license to practice law but $923 to water Institute, and even the White but with 1,528 hours of experience and ing income statewide and per resident, become a sign language interpreter. It House. training required to get a license, plus and the creation of 234,000 net new takes 169 hours of training to earn an The findings are pretty consis- passing three different exams, becom- jobs. North Carolina has become a emergency medical technician license tent: ing a barber is out of reach. model, not only in our region, but also but 1528 hours for a barber. • When it’s harder to enter a pro- It’s for the military spouse who for the nation. Some requirements for state li- fession, there are fewer employment has worked as an optician in one of But until every North Carolinian censing leave you scratching your opportunities, excluded workers earn the 28 states that do not require a li- has the opportu- head. Makeup artists, landscape con- lower wages, and consumer costs rise. cense and finds that when her spouse nity to find a job, tractors, and travel guides must be li- • Inconsistencies within profes- is transferred to Fort Bragg, her expe- until every barrier censed in North Carolina. sions and variations across states cre- rience is irrelevant. She must log 3½ to succeed is re- These restrictions ripple through ate barriers for workers to relocate, and years of apprenticeship training, pay a moved, until the our economy, preventing people from inefficiencies for businesses are a drag $250 fee, and pass various exams to get freedom to choose pursuing their dreams and driving up on the economy. a license here. Continuing in her pro- is open to all, there the costs of services. • The cost of licensing falls dis- is still work to do. Who benefits? It’s often those al- proportionately on low-income work- fession is out of reach. A recent U.S. ready in a profession who want to pro- ers. It’s for the handyman dad who Supreme Court de- tect what they perceive as their turf, • Well-designed and carefully wants to open his own business — cision struck down keep out competition, and inflate costs implemented licensing requirements installing security alarms. But with a North Carolina BECKI for their financial and professional can benefit consumers while allowing 1,095 days of training and experience Dental Board li- GRAY benefit. qualified workers to pursue freely the required to obtain a license, the obliga- censing require- But it’s also complicated. We occupations they choose. tions of his current full-time job, and ment for people want to open opportunity while ensur- Implementing a system that bal- his family commitments, the dream who whiten teeth but perform no other ing public health and safety. It’s a bal- ances safety and freedom will make of starting his own business is out of dental services. The General Assembly ance between appropriate government North Carolina a model in occupation- reach. is taking a hard look at North Caro- oversight and the freedom to choose al licensing, just as North Carolina has North Carolina’s restrictive occu- lina’s occupational licensing laws to your occupation. become a model in other reforms. pational licensing requirements create clean up a very messy system. That’s something we’ve been The need for reform goes beyond barriers for real people. That’s why re- North Carolina has one of the studying at the John Locke Founda- data. Reform can help every North form is absolutely necessary. CJ more restrictive occupational licensing tion. There is a lot of research on occu- Carolinian who is shut out of opportu- regimes in the country — 154 licensed pational licensing — from the General nities to pursue his or her dreams. Becki Gray is vice president for out- job categories, compared to South Car- Assembly’s Program Evaluation Divi- It’s for the young man who wants reach at the John Locke Foundation. PAGE 24 FEBRUARY 2016 | CAROLINA JOURNAL Parting Shot CSX Plans to Buy and Close I-95 Attractions, Say Documents (a CJ parody) By Casey Jones portion of the corridor will boost the Railroad Correspondent economy of Northeast Florida by $16.5 RALEIGH billion annually and create 2,700 jobs ven though the administration of in the region,” another CSX/JAX doc- Gov. Pat McCrory has called the ument stated. “The company’s cost of controversial proposal by CSX to land acquisition, particularly if some of buildE a railroad terminal in Johnston the cost is offset by state and local gov- County near Selma “not viable,” the ernment incentives, will pale in com- rail giant continues pursuing the proj- parison to the economic development ect as one component of a larger plan the region and the company will enjoy. to buy out entertainment attractions Our goal is to obtain as much support along the Interstate 95 corridor be- from governments outside Florida as tween Washington, D.C., and northern possible to reduce our capital outlays Florida, Carolina Journal has learned. and risk.” The Johnston County proposal, One CSX employee, who asked known as the Carolina Connector, re- not to be identified, said one attraction portedly would cover 450 acres and in particular has been a problem. “That serve as a cargo hub linking containers damn Pedro and all his signs have cost brought by rail from coastal ports to The South of the Border attraction just across the N.C. state line in South Carolina Florida and Jacksonville in particular the highway corridor, where the con- has cost Florida and Jacksonville “millions of dollars over the years,” say Florida millions of dollars over the years,” he tainers would be transferred to trucks. and CSX officials, and is at the top of the list of entertainment attractions they want said. “Yankees spend all their money The project drew media attention to buy and then close. (CJ file photo) on novelty items made with cypress, when several landowners in the proj- aka the JAX Chamber, plan to acquire “Confidential” stated. like outhouses and roach killers, and ect’s footprint told reporters that CSX and then demolish several venues in The documents list four attrac- they don’t spend as much down here.” officials had threatened to use eminent the I-95 corridor, including one at the tions for acquisition and destruction: The Carolina Connector project domain if they would not agree to the Selma site.The documents say the pur- the Kings Dominion theme park near has an anticipated cost of $272 million. company’s offers to purchase the prop- pose is to shift entertainment-related Ashland, Va.; the Roanoke Rapids The- CSX documents say the project would erty. tourism closer to the railroad compa- atre (formerly the Randy Parton The- not be viable without $100 million in A Jan. 26 statement by McCrory ny’s headquarters in Jacksonville, Fla. atre) in Roanoke Rapids; the Farm, a transportation funding from the state spokesman Graham Wilson said the “It is the goal of the company and small entertainment venue within the of North Carolina. administration would work with the the JAX Chamber to ensure that tour- Carolina Connector’s proposed loca- Publicly, CSX has compared the company to pursue “alternative sites.” ists seeking entertainment and attrac- tion in Johnston County; and the South Carolina Connector proposal to other But CSX has shown no interest tions along the I-95 corridor make as of the Border tourist attraction near the rail hubs the company owns in Penn- in other locations. The Carolina Con- few stops as possible between Virginia North Carolina-South Carolina state sylvania and Ohio, but company of- nector is not the only project CSX is Exit 177C [the George Washington line. ficials also have confirmed that those considering along I-95. Based on docu- Parkway exit] and Florida Mile Marker “Based on the JAX Chamber’s projects did not require eminent do- ments CJ has obtained, CSX and the 362 [the Jacksonville International Air- economic model, removing these com- main and did not receive significant Jacksonville Chamber of Commerce, port exit],” a CSX document marked peting attractions from the northern state subsidies. CJ

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