• Magnet Schools • Community Colleges Attract Controversy C A R O L I N A On President’s Agenda Durham Impact Fee ‘Winning the Future’

Volume 14, Number 3 A Monthly Journal of News, March 2005 Analysis, and Opinion from JOURNAL the John Locke Foundation www.CarolinaJournal.com www.JohnLocke.org Smokestacks Bill Saved Duke From EPA, Audit

of some of their coal-fired power plants. Rate freeze protected EPA also filed an administrative order against the federally owned Tennessee Val- utility from lawsuit, ley Authority for its violations. penalties, and fines Ensuing months and years saw some of the utilities enter settlement agreements with EPA and the USDOJ. The first to reach By PAUL CHESSER an agreement was Tampa Electric Com- Associate Editor pany, which was forced to spend $1 billion RALEIGH to install stronger emissions controls on its ontrary to the stated objectives of coal-fired power plants. The company also its supporters, the 2002 North Caro- agreed to pay a $3.5 million civil penalty C lina Clean Smokestacks law — and to spend $10 million to $11 million on based on controversial environmental as- mitigation projects for its emissions. sumptions used to espouse questionable Other companies later reached costly health benefits — may have been crafted to settlements with the EPA. In April 2003 help protect the state’s two largest electric- Virginia Electric and Power Company ity suppliers from federal lawsuits and fines. agreed to spend $1.2 billion on emissions The plan, signed into law June 2002, controls and to pay a $5.3 million civil pen- was developed by the liberal group Envi- alty and at least $13.9 million on mitigation ronmental Defense, which had joined the projects. Cinergy Corp. of Ohio also agreed federal Environmental Protection Agency to add $1 billion worth of pollution con- in a lawsuit against Duke Energy for al- trols. leged emissions violations at seven coal- In May 2000 EPA issued to Duke Power fired power plants. a Notice of Violations letter for eight of its After EPA filed its lawsuit against Duke Gov. Mike Easley signed the Clean Smokestacks bill into law at the State Capitol in June 2002. coal-fired plants, and the following Decem- for its violations, the company entered into ber added the North Carolina utility to its settlement negotiations with the agency. Asked whether the pending EPA law- were also preserved. Without the Smoke- list of lawsuit defendants. The litigation “We explained the details of what EPA suit influenced Duke’s decision to support stacks law, Duke and Progress Energy was based on a section of the federal Clean and the (U.S.) Department of Justice were the Smokestacks bill, company spokesman would have been subject to a N.C. Utilities Air Act called New Source Review, which looking for,” said Bruce Buckheit, former Thomas Williams said, “Not a bit.” When Commission rate review that would have required utilities to implement the best avail- director of the EPA’s Air Enforcement Divi- informed of Buckheit’s comments, Williams scrutinized all their expenses, including any able emissions reduction technology dur- sion, “then Duke broke off settlement dis- said, “We’re not going to comment on settle- new emissions controls. Had a freeze not ing certain types of upgrades to their plants. cussions while they looked into the Smoke- ment discussions that were going on at been implemented, rates for North Carolin- Progress Energy (then called Carolina stacks legislation.” some point.” ians almost cer- Power & Light) was also under scrutiny by George Givens, a General Assembly Also, as the tainly would have the EPA, and in 1999 and 2000 received analyst who helps write legislation, ac- Smokestacks bill Inside: gone down, per- requests for information by the federal knowledged that the Smokestacks law was passed, Duke Plan Biased, Flawed - P.3 haps significantly. agency about eight of its power plants. Com- helped Duke with its federal difficulties. was under scrutiny “We believe pany spokeswoman Dana Yeganian said “The work required under, and thus from auditors (see Duke Questioned Merits - P. 4 that the goal of the the EPA’s pending litigation against the the cost of compliance with, any federally article, Page 5) Freeze Preceded Audit - P. 5 Clean Smokestacks other utilities did not drive Progress to sup- required upgrade would, at least for the working for utilities Act should be to port the Smokestacks bill. most part, overlap the work required un- regulators in North protect the citizens der, and thus the cost of compliance with Carolina and South Carolina. and the environment, not the excessive prof- Reduce mountain haze [Smokestacks],” Givens wrote in a memo The Charlotte-based power supplier its of Duke,” said Sharon Miller, executive June 8, 2002, just before the bill became law. had been exposed by one of its own accoun- director of the Carolina Utility Customers Concurrently North Carolina residents, A last-minute change in the law said tants for under-reporting its earnings, be- Association, which represents industrial especially in the mountains, and environ- that if the EPA required stronger controls cause Duke was allowed only a 12.5 percent and other customers in the state. mentalist groups pressured lawmakers and than the Smokestacks bill, which was highly return on its equity by the North Carolina utilities to address their complaints about unlikely, then the costs wouldn’t be recov- Utilities Commission. The audit found that EPA files lawsuits increasingly poor air quality. Throughout erable under the new state law. Duke officials made illegal accounting ad- 2000 the groups campaigned for stronger “The intent of this change is to encour- justments in order to hide their excessive In November 1999 the EPA and the U.S. emissions controls on the smokestacks of age rather than discourage settlement of earnings. Department of Justice announced a new the 14 coal-fired power plants in the state any litigation,” Givens wrote, “ensure that What Duke got, as well as Progress enforcement initiative against some South- owned by CP&L and Duke, and crafted an the utilities get the ‘benefit of their bargain’ Energy, out of the Smokestacks law was a ern and Midwestern electric utilities. Attor- effective postcard campaign from citizens under [Smokestacks], and ensure that any promised five-year “rate freeze” from state ney General Janet Reno filed seven lawsuits who begged for the controls. costs that may be incurred beyond [Smoke- lawmakers and regulators, which funded on behalf of the EPA against the utilities stacks] for a violation of federal law will not the costs of the expected $2.3 billion pollu- because of their failure to properly upgrade be covered by [Smokestacks].” tion controls. Duke’s excessive earnings emissions technology on the smokestacks Continued as “No clear health…,” Page 3

$1 Billion for Triangle Rail? The John Locke Foundation NONPROFIT ORG. Contents 200 W. Morgan St., # 200 U.S. POSTAGE Good Investment 27% Raleigh, NC 27601 PAID Not Good Investment 59% RALEIGH NC PERMIT NO. 1766 Not Sure 14% Calendar 2 Education 6 Higher Education 10 Local Government 14 Books & the Arts 18 Opinion 20 Parting Shot 24 % of Wake County Voters in January 2004 JLF Poll C A R O L I N A Contents

ON THE COVER • In 2000, as Aaron Johnson began his • North Carolina’s second highest court, in JOURNAL fourth frustrating year in the public school a ruling Jan. 18, clarified under what cir- • Contrary to the stated objectives of its system, a school employee gave his mom a cumstances a city or town can engage in ac- supporters, the 2002 North Carolina Clean piece of advice she believes rescued her son tivities that private business ordinarily pro- Smokestacks law — based on controversial from a disastrous future: consider home- vide. Page 15 environmental assumptions used to es- schooling. Page 7 pouse questionable health benefits — may THE LEARNING CURVE Richard Wagner have been crafted to help protect the state’s • Lindalyn Kakadelis writes that frustration Editor two largest electricity suppliers from fed- with bureaucratic ineptitude in public edu- • A review of Newt Gingrich’s Winning the eral lawsuits and fines. Page 1 cation is fueling an abundance of parental Future: A 21st Century Contract With America. activism across North Carolina. Page 7 Page 18 Paul Chesser, Michael Lowrey NORTH CAROLINA Donna Martinez • The North Carolina Department of Pub- • Reviews of Abuse of Power: How the Gov- Associate Editors • The North Carolina Clean Smokestacks lic Instruction announced that the dropout ernment Misuses Eminent Domain by Steven Plan, the report on which the state’s land- rate for grades nine to 12 is up from 4.78 Greenhut, and The Not So Wild, Wild West: Karen Palasek, Jon Sanders mark 2002 legislation was built, was writ- percent in 2002-03, to 4.86 percent in 2003- Property Rights on the Frontier by Terry L. Assistant Editors ten by a leftist environmental group and 04. Page 8 Anderson and Peter J. Hill. Page 19 contained several assumptions based on what some call “junk science.” Page 3 HIGHER EDUCATION OPINION Chad Adams, Shannon Blosser, Andrew Cline, Roy Cordato, •When the North Carolina Clean Smoke- • While North Carolina may soon consider • Michael Walden wonders, as the dollar Charles Davenport, Ian Drake, stacks Plan was first presented to the De- possible increases in general fund appro- falls against foreign currencies, are we eco- Tom Fetzer, Bob Fliss, partment of Natural Resources staff, sev- priations for the University of North Caro- nomic hostages to foreigners? Page 22 Nat Fullwood, John Gizzi, eral environmentalist groups and the state’s lina system, Virginia is considering a plan David Hartgen, Summer Hood, Lindalyn Kakadelis, George Leef, two investor-owned electric utilities already that would grant institutions more au- • Dr. Dennis Rondinelli, a professor of man- Kathleen Linder, Marc Rotterman, supported the legislation — if they could tonomy while reducing their money from agement at UNC-Chapel Hill, types on his R.E. Smith Jr., Jack Sommer, get cost recovery — according to docu- the commonwealth. Page 11 Dell Computer an editorial explaining why John Staddon, George Stephens, ments. Page 4 he’s worried about a new era of corporate Jeff Taylor, Michael Walden, • Although most of President Bush’s State welfare in North Carolina. Page 23 Karen Welsh • Despite strong evidence that Duke En- of the Union address Feb. 2 dealt with re- Contributing Editors ergy intentionally fudged its accounting in forms of Social Security and spreading free- • Nathan Tabor writes that expectant moth- order to preserve its level of earnings, the dom throughout the world, the president ers who don’t want their children need to North Carolina Utilities Commission also discussed his higher-education goals. be given an alternative to abortion, and sup- Jenna Ashley Robinson, Paul Messino, Brian McGraw agreed to allow the utility to freeze its rates Page 12 porting crisis pregnancy centers can help Editorial Interns for five years. Page 5 provide that alternative. Page 23 LOCAL GOVERNMENT EDUCATION PARTING SHOT • A recent decision by a local trial court that • With 26 magnet schools spread around Durham County’s impact fee on new hous- • CJ Parody: John Edwards wasn’t hired John Ham its 650 square miles, Guilford County is feel- ing, levied for the support of the public by the Law School at the University of Publisher ing the pinch as it deals with disproportion- schools, is illegal has revived the dispute North Carolina at Chapel Hill for political ate increases in transportation costs for over the controversial revenue-raising reasons. Really. Honest. Promise. Scout’s Don Carrington Executive Editor magnet-school programs. Page 6 method. Page 14 honor. Page 24 Calendar Published by The John Locke Foundation 200 W. Morgan St., # 200 Raleigh, N.C. 27601 Immigration, Trade To Be Debated at Luncheon March 24 (919) 828-3876 • Fax: 821-5117 www.JohnLocke.org n Thursday, March 24, the John Congress and has published articles in The Locke Foundation will host a lun- Washington Post, The New York Times, Com- Bruce Babcock, Herb Berkowitz, O cheon panel discussing immigra- mentary, National Review, and elsewhere, John Carrington, Sandra Fearrington, tion issues, featuring Dan Griswold, direc- and has appeared on “60 Minutes,” Jim Fulghum, William Graham, tor of the Center for Trade Policy Studies at “Nightline,” the “NewsHour with Jim John Hood, Lee Kindberg, the Cato Institute, and Mark Krikorian, ex- Lehrer,” CNN, National Public Radio and Robert Luddy, William Maready, ecutive director of the Center for Immigra- on many other television and radio pro- J. Arthur Pope, Assad Meymandi, tion Studies. grams. Tula Robbins, David Stover, Jess Ward, Andy Wells Griswold has authored or coauthored Krikorian holds a master’s degree from Board of Directors studies on, among other subjects, globaliza- the Fletcher School of Law and Diplomacy tion, the World Trade Organization, trade and a bachelor’s degree from Georgetown and manufacturing, immigration, and trade University, and spent two years at Yerevan and democracy. State University in then-Soviet Armenia. He has been published in the Wall Street Before joining the Center for Immigration Carolina Journal is a monthly jour- Journal, the Los Angeles Times, the Financial Studies in February 1995, he held a variety nal of news, analysis, and commentary on Times, and other major publications and has of editorial and writing positions. state and local government and public policy appeared on C-SPAN, CNN, PBS, the BBC, The cost of the luncheon is $20 per issues in North Carolina. Fox News, MSNBC and numerous other person. TV and radio news and talk shows. Griswold The event will begin at noon at the ©2005 by The John Locke Foundation Top: Dan Griswold; Bottom: Mark Krikorian Inc. All opinions expressed in bylined ar- has testified before congressional commit- Brownstone Hotel in Raleigh. For more in- ticles are those of the authors and do not tees and federal agencies on the U.S. trade formation or to preregister, contact the John necessarily reflect the views of the editors of deficit, steel trade, immigration, and the Locke Foundation at (919)828-3876 or Carolina Journal or the staff and board of costs of protectionism. [email protected]. Learn about more the Locke Foundation. Before joining Cato, Griswold was a special events and speakers at www. congressional press secretary and a daily johnlocke.org. Material published in Carolina Jour- newspaper editorial page editor. nal may be reprinted provided the Locke Foundation receives prior notice and ap- He holds a bachelor’s degree in journal- “The Locker Room” propriate credit is given. Submissions and ism from the University of Wisconsin at letters to the editor are welcome and should Madison and a diploma in economics and a Every weekday, and sometimes on the be directed to the editor. master’s degree in the politics of the world slow news days of Saturday and Sunday, economy from the London School of Eco- staff and friends of the John Locke Foun- Readers of Carolina Journal who wish nomics. dation discuss breaking news on an Internet to receive daily and weekly updates from CJ Krikorian is executive director of the weblog called The Locker Room. editors and reporters on issues of interest to Center for Immigration Studies President John Hood and Carolina Jour- North Carolinians should call 919-828- (www.cis.org), a nonprofit, nonpartisan nal writers and editors monitor political and 3876 and request a free subscription to Carolina Journal Weekly Report, deliv- research organization in Washington, D.C. cultural developments in North Carolina ered each weekend by e-mail, or visit which examines the impact of immigration and across the nation, and write short com- CarolinaJournal.com on the World Wide on the United States. mentaries throughout each day and post Web. Those interested in education, higher The center is animated by a pro-immi- them on the website immediately. education, or local government should also grant, low-immigration vision, which seeks To get a free-market, conservative per- ask to receive weekly e-letters covering these fewer immigrants but a warmer welcome spective on breaking news each day, visit key policy issues. for those admitted. “The Locker Room” at www.johnlocke. Krikorian frequently testifies before org/lockerroom. CJ C A R O L I N A March 2005 JOURNAL 3 No Clear Health Reasons Cited for Support of Smokestacks

Continued From Page 1

The utilities, which acknowledged par- tial responsibility for the state’s ozone lev- North Carolina Clean Smokestacks Bill Timeline els, pushed for less-stringent controls on its plants than environmentalists wanted. CP&L and Duke realized the equipment, called Selective Catalytic Reduction and 1991: Duke Power’s last rate Jan. 2002: At the behest of the “scrubbers,” would cost hundreds of mil- review before N.C. Utilities Utilities Commission, independent lions of dollars and require rate increases. Commission audit of Duke begins over alleged The utilities even started a counter-cam- paign to the environmentalists, asking sup- under-reporting of earnings. porters to write state regulators. According December 2000: EPA sues Duke to an October 2000 News & Observer of Ra- over violations of the New March 2002: Easley renews push for leigh article, former CP&L employee W.G. Source Review provision of the passage of Smokestacks, bringing Bowers of Raleigh wrote that “the company Clean Air Act. Duke & EPA in Utilities Commission to help shouldn’t have to spend millions without any guarantee it will solve the problem.” begin settlement negotiations. pacify industry groups. By March 2001 a dozen liberal activist groups, led by Environmental Defense, Sometime in 2001: Duke leaves May 2002: Carolina Utilities Cus- backed the North Carolina Clean Smoke- negotiating table to “look into tomers Association, which said stacks Plan. The conservationists worked the Smokestacks legislation,” Duke is earning well beyond its with two Western Democratic legislators from Asheville, Sen. Steve Metcalf (now according to an EPA air enforce- permitted rate of return, wants a retired from office) and Rep. Martin Nesbitt ment official. general rate case review before the (now a state senator), to pressure the utili- Utilities Commission. ties and to sponsor the Smokestacks bill in April 2001: Clean Smokestacks bill appears the General Assembly. Nesbitt did not re- with backing of environmental groups and June 2002: Duke & CP&L agree to a rate freeze as turn phone messages seeking comment for this article. N.C.’s two major utilities. NC DENR, Gov. condition of adding scrubbers to smokestacks. “[Nesbitt and Metcalf] kind of played Easley & state Senate also quickly support House approves bill by overwhelming margin. hardball with the utilities,” Michael Shore, bill, which allows utilities to recover costs for Southeast air quality manager for Environ- emissions equipment with a surcharge. Oct. 2002: Audit finds Duke under-reported earn- mental Defense, told The News & Observer in ings to regulators by $125 million, and reaches April 2001. Shore authored the N.C. Smoke- stacks Plan, which served as the basis for April-July 2001: Entities who support Smoke- settlement agreement with Utilities Commission to the bill. stacks struggle to come up with points that pay customers $25 million. But the Smokestacks bill did not pro- show health benefits. vide any new meaningful authority for the August 2003: Federal judge, going against prece- state to force utilities to reduce their emis- August-November, 2001: Representatives for dent in other similar cases, finds in favor of Duke sions. The EPA’s pending litigation and settlement negotiations with Duke would manufacturers and utility customers refuse to in lawsuit filed by EPA. have effectively forced the company to in- support bill because of higher costs it will stall equipment to reduce its emissions of bring. Those problems prevent the bill from November 2004: Attorney General Roy Cooper, sulfur dioxide and oxides of nitrogen. passage in the House, which leaves Smoke- citing provisions from the Clean Smokestacks Act, Nor would the bill have improved vis- stacks in limbo when it adjourns. Surcharge notifies the TVA of his intent to sue over pollution ibility in the mountains (although on sev- eral occasions supporters would promote is a sticking point. from its power plants wafting into NC mountains. the bill as doing so), since pollution sources west of North Carolina were primary re- sponsible for that problem. Provisions in the Smokestacks bill for the state attorney Shore and Environmental Defense pub- general to pursue legal action against other lic information officials did not respond to states already existed in federal law. several e-mails and phone messages seek- Shore’s Plan Based on Dubious Data State senators from both political par- ing comment. ties were brought quickly on board, and Still, air-quality officials, after a meet- By PAUL CHESSER ager, Michael Shore, employed that device even signed a letter April 4 (the date the bill ing April 3 about the Smokestacks bill near Associate Editor in his Smokestacks plan also: “North was filed in the General Assembly) to Presi- Metcalf’s office, began deliberating about RALEIGH Carolina’s air quality consistently ranks dent Bush pleading for the TVA to be inves- how to garner support for it from Easley he North Carolina Clean Smoke- among the least healthy in the nation. For tigated about its emissions. The letter re- and the House. In response to a request stacks Plan, the report on which the example, in 1999, the state had the fifth- vealed that the lawmakers understood that from Ross, Shore e-mailed a list of points for Tstate’s landmark 2002 legislation was highest number of unhealthy air days.” the Smokestacks bill would do little, if any- Ross to use “as you encourage Gov. Easley built, was written by a left-wing environ- In reality North Carolina meets the thing, to improve the visibility problem. to support the N.C. Clean Smokestacks Bill.” mental group and contained assumptions EPA’s standards for carbon monoxide, sul- “Even with [the pending Smokestacks Among Shore’s reasons were: based on what some call “junk science.” fur dioxide, nitrogen oxides, and “coarse” bill] the air quality in the western part of our • “Protect public health and the envi- Environmental Defense, which pro- airborne particulates. Last year in the John state will not be improved,” they wrote. ronment… enumerated in the (Smokestacks duced the plan, usually stakes out positions Locke Foundation’s “Clearing the Air” “Until we address TVA, we cannot begin to Plan). This bill is possibly the most signifi- on issues that are clearly left of center and study, author Joel Schwartz wrote that the recover.” cant piece of air quality legislation in North are often described by critics as “alarmist.” state fell short in a small number of “fine” Carolina in decades.” The group believes the United States should particulate standards and some ozone stan- Selling Smokestacks at DENR • “The bill is endorsed by both the sign on to the 1997 Kyoto Protocol and used dards. But just as North Carolina was on the environmental community and utilities… last year’s big budget film fantasy The Day verge of meeting the ozone standards, Shore, who left employment at North also quite politically safe consider[ing] that After Tomorrow as a launching point to warn Schwartz said “EPA moved the goalposts Carolina’s Department of Natural Resources both sides endorse it.” about the dangers of global warming. in April 2004.” in 2000, was back meeting with his col- • “Strong support in Senate….” “In the coming years, global warming Schwartz is a visiting scholar at the leagues in the Division of Air Quality in • “Easley support is critical to passage is likely to increase the frequency of ‘killer’ American Enterprise Institute and has con- April 2001. His goal: persuade them to sup- in the House. If he supports the bill early, he heat waves,” EDF’s website explains, while ducted air quality studies for several agen- port the bill and get their boss, Gov. Mike can take credit for this clean air initiative.” admitting the movie itself is “implausible, cies and nonprofit organizations. Easley, to commit to its passage as well. • “Easley can… make the Clean Smoke- pure fantasy.” “During the summer of 2003, Shore also claimed in the plan that the Shore’s plan — much of it based on stacks his issue, get significant points with the hottest in at least the past 500 years, state’s coal-fired power plants release pol- questionable data and controversial as- the environmental community and the gen- record heat waves scorched Europe.” lution that “causes thousands of premature sumptions (see related article nearby) — eral public, and fulfill a campaign prom- Consistent weather records were not deaths, hundreds of thousands of asthma was received by DENR Secretary Bill Ross ise.” kept until the late 19th century. But that attacks… and severe reductions in visibility without much scrutiny of the plan’s details. • “Credit by the press… If he waits for tactic is a common one among some envi- in the mountains.” No known data exist on Among Shore’s claims was that Duke and editorials to come out, he will seem like a ronmentalist groups: singling out an atypi- deaths or asthma linkage to North Carolina CP&L’s cost of compliance with the new laggard, even if he eventually supports the cal weather occurrence in a single year and sources of air pollution, and poor visibility emissions standards would be only a com- bill.” declaring it a trend. “In 1995 in Chicago a in the mountains is primary related to out- bined $449 million. Actually, the two utili- heat wave resulted in 525 deaths during a of-state pollution sources. Shore and EDF ties will be writing off $2.3 billion for the five-day period…,” EDF also warned. did not respond to several e-mails and phone equipment in the next seven years. Continued as “Smokestacks,” Page 4 The group’s Southeast air quality man- messages seeking comment. CJ March 2005 C A R O L I N A 4 North Carolina JOURNAL Smokestacks Proponents Backed Bill, Then Found a Reason for It

Continued From Page 3 representatives of the two utilities. “He would like us to see if we can get a one- • “Be a leader among governors in the pager together summarizing these benefits. Southeast.” The idea would be to have a unified mes- Shore also argued that the bill would be sage to counter the increasing concerns over good for economic development, but ac- costs.” knowledged that “this bill could put N.C. at In the following month Shore and offi- a competitive disadvantage because of mar- cials from DAQ and from the utilities dis- ginally higher energy prices.” cussed the development of “talking points” (see article, this page) to be used to support Health benefits an afterthought? the Smokestacks bill. DENR officials dis- cussed the revision of a memo that they Documents obtained by Carolina Jour- would deliver to Easley’s chief legislative nal largely paint a picture of a bill presented lobbyists, Franklin Freeman and Kevin by an environmental group, not the state Howell, presumably for them to make the agencies that address environmental issues. case for the Smokestacks bill to House mem- Statements show that support was given bers. based on political considerations rather than While DAQ officials wanted to tout air real changes in air quality in the state. Only quality improvements and Shore wanted to after the bill moved through the Senate and promote the Smokestacks bill’s health ben- governor’s office did DENR officials search Former State Rep. (now Sen.) Martin Nesbitt, an Asheville Democrat, helped persuade Duke Energy efits, George Everett, Duke’s vice president for data to validate the bill’s presumed vir- and Progress Energy to support the Smokestacks bill. Department of Natural Resources Secretary for environmental and public policy ob- tues. In other words, no study or modeling Bill Ross (right) helped garner support for the bill from Gov. Mike Easley. jected to both points. of ambient effects were conducted before “The assessments of the impacts of our the widespread backing for the Smokestacks cerns,” Klimek wrote. “I realize we haven’t concerns were greatest — in the mountains. emissions included in the Clean Smoke- bill. even started really thinking about this, but Still, proponents were pushing the bill stacks Plan do not have a sound basis in my “I spoke to Robin Smith (an air quality it would be a healthy (excuse the pun) re- as a solution for the cleansing of mountain opinion,” Everett, Duke’s , wrote in an e- analyst) at DENR and she told me: This is an duction.” air. According to an April 24, 2001 report in mail to Klimek on May 1, 2001. [Environmental Defense] initiative,” wrote Another Klimek e-mail, on April 11, the N&O, state Sen. Steve Metcalf argued By summertime, environmental groups Phil Telfer of the Department of Justice in showed that DAQ officials were scrambling that Smokestacks would improve air qual- had increased their lobbying efforts for the an e-mail to two colleagues April 17, 2001. in anticipation of having to answer ques- ity in western North Carolina. bill. They wrote to Easley asking for him to “It is not a DENR bill, but the gov(ernor) has tions from legislators about the bill. “I have never supported a bill… that I increase his efforts lobbying House mem- said if it passes in its current form he will “On the question of how much good think is more for the children than this bill,” bers to pass the Smokestacks bill, after he sign it.” this could do for [air quality], do we have a Metcalf said during Senate debate. had participated in a Southern regional gov- Communications among DENR and handle on what our annual [sulfur dioxide] Metcalf was a signee to the April 4 ernors’ summit on mountain air quality. DAQ officials in the early days of the bill emissions are and therefore what [percent- Senate letter to the president claiming the Also, environmentalists began making indicate that real data and health benefits age] reduction this means…?” Smokestacks bill would do little to clear a case for year-round reductions in nitro- were not a prerequisite for support of the Other communications among DAQ mountain air. gen oxides, which are a primary factor in Smokestacks bill. On April 6, a day after the officials indicate that some sulfur dioxide the formation of ground-level ozone. How- bill was filed in the Senate, air quality direc- comes from North Carolina sources, but Finding ‘a unified message’ ever, the ozone season runs from May to tor Alan Klimek e-mailed his subordinates that “much sulfate is likely transport(ed).” October, because warm weather is usually seeking information. The Smokestacks bill required that Duke Even after the bill passed the Senate needed for constituent elements to form “Bill Ross has indicated… that it would Power and CP&L reduce nitrogen oxides DENR officials had trouble promoting it. ozone. The state doesn’t even monitor ozone be great if we could get some ‘back of the and sulfur dioxide beyond what federal “Bill Ross discussed with me the fact levels in the state outside those months. envelope’ number on what a reduction from law requires. But the state was already that the proponents of this bill were not able Discussions between DAQ Deputy Di- utilities of 500,000 tons [per year of sulfur meeting federal air quality standards for to make a strong case on its benefits when it dioxide] to 130,000 tons [per year] might do those pollutants, and further reductions in was being debated in the Senate,” Klimek for our future [fine particle pollution] con- emissions would not improve the air where wrote in an e-mail April 27 to Shore and Continued as “Customers,” Page 5 Why Did Duke Energy and Progress Energy Support the Smokestacks Bill?

By PAUL CHESSER Carolina Power & Light, remained mostly the standards. The Smokestacks law elimi- anyone who suggests that reducing emis- Associate Editor silent about the virtues, and problems, of nated the credit buying, forcing Duke and sions will reduce the cases of asthma or RALEIGH the plan. Progress to find other means to meet the other respiratory illnesses.” hen the North Carolina Clean “I do not know of any data to assess the reduction standards in the bill. In an e-mail Brock Nicholson, DAQ’s deputy direc- Smokestacks Plan was first pre- improvements in air quality as a result of May 4, Klimek conceded that no air quality tor, backed Everett’s assertion. W sented to the Department of our emissions reductions,” George Everett, data informed the Smokestacks bill. “George is correct in that there is not Natural Resources staff, several environ- Duke’s vice president for environmental “We did not try to quantify benefits in general belief that ozone is a causal agent mentalist groups and the state’s two inves- and public policy, wrote in an e-mail to any more detail (on the talking points) based for asthma,” Nicholson wrote, “even though tor-owned electric utilities already sup- DAQ Director Alan Klimek on May 1, 2001, on having only limited modeling to ex- there have been some suggesting that is the ported the legislation — if they could get “other than the modeling being done by trapolate from…,” he wrote to Everett, case (no demonstrated proof though).” cost recovery — according to documents. (DAQ).” Wakild, and Shore, “…as well as [Everett]’s So if the utilities officials, at least Duke Despite the state’s compliance with the DENR officials and Easley embraced concern over using values such as listed in Energy, did not believe there were clear EPA’s air quality standards for most pollut- the plan before they knew whether the bill the material sent out by Michael Shore, et health benefits from Smokestacks, why did ants, liberal environmental groups em- would produce real improvements in what al.” they support the bill? braced the bill because it required Duke was already an improving trend in ozone In later drafts of the memo, the negotia- “We [were] asked by leaders in the Energy and Progress Energy to place even levels. In addition to the utilities, emissions tors dropped a point that described the cost General Assembly to work collaboratively stronger emissions controls on the smoke- from other manufacturing plants, from gas- recovery provisions of the bill as “reason- with the environmental groups and others stacks of their coal-fired power plants. powered vehicles, and from out-of-state able,” in order to emphasize air quality to comment and help develop the legisla- After the bill won the support of DENR sources significantly affect air quality here. benefits. However, cost was a big sticking tion,” Duke spokesman Thomas Williams Secretary Bill Ross, Gov. Mike Easley, and “The assessments of the impacts of our point for many House members. said in an e-mail. “We said we could sup- the state Senate, environmentalists faced a emissions included in the Clean Smoke- Further, Shore told the talking-points port the legislation if: hurdle in the House. Representatives of stacks Plan do not have a sound basis in my negotiators that he was concerned that no • The targets were achievable; ratepayer groups objected to the surcharge opinion,” Everett said in the e-mail, which health benefits were included. He acknowl- • The timeframe was realistic — i.e., in the bill that would allow the utilities to was also sent to Charles Wakild, head of edged disagreement with the utilities rep- we were able to get the reductions done in recapture the costs for adding the new equip- Progress’s environmental department, and resentatives on the benefits, but suggested a realistic timeframe and not have to shut ment, called Selective Catalytic Reduction. to Shore. “Thus any estimates of improve- that “a general health-related bullet” be down too many units at once; So utilities representatives, Division of Air ment using the same logic would be com- included: “The emission reductions of both • There was a financial plan for us to Quality representatives, and Smokestacks pounding the mistake.” [sulfur dioxide] and [nitrogen oxides] will recover the costs.” Plan author Michael Shore of Environmen- First drafts of proposed talking points lower rates of asthma, respiratory illness, Williams did not explain why Duke’s tal Defense began to negotiate “talking emphasized emissions reductions from the and other air-related health problems in problems with the merits of the bill were points” to promote the bill. plants, which does not necessarily equate North Carolina.” never an obstacle. Statements and information culled from with improved air. Under federal law utili- However, Everett challenged the state- Progress Energy spokeswoman Dana e-mails, obtained from state agencies by ties are allowed to emit more pollutants ment and said it should not be included. Yeganian said the company also supported Carolina Journal, show that Duke did not than the EPA standard, but can make up for “I have not seen data that supports the the bill because it provided for cost recov- agree that the Smokestacks bill improved it by purchasing “credits” from utilities in statement that Michael Shore proposes,” ery and flexibility in implementing con- air quality. Progress, previously known as other states whose emissions fall far below Everett wrote. “I have never seen a study by trols. CJ C A R O L I N A March 2005 JOURNAL North Carolina 5 Customers Opposed Smokestacks Bill, Wanted Rate Drop from Duke Continued from Page 4 Environmental Defense’s Questionable Data Duke wins in review and in court rector Brock Nicholson and Marc Bernstein After winning passage of the Smoke- of the attorney general’s office illustrated stacks bill, the Grant Thornton audit report further doubt about year-round nitrogen- was completed a month later and was re- oxide reductions. After Nicholson sent out leased in October 2002. CUCA sought a rate “fact sheets” in support of the Smokestacks review for Duke from the N.C. Utilities bill, Bernstein asked, “Should we include in Commission, but the rate freeze contained the… sheet the fact that ozone in NC is not in the Smokestacks bill prevented that. necessarily from NC? This of course is im- According to a report in the Oct. 3, 2003 portant in the long term when dealing with Charlotte Business Journal, Duke’s return on [Georgia and Tennessee]. But (it) may hurt equity was 14.43 percent during the year in the short term for [Smokestacks] so (it) ending June 30, 2003, and had overrun its would have to be worded carefully.” permitted rate of return for three consecu- Bernstein further questioned Nicholson. tive quarters. Each percentage point repre- “You’ve mentioned that ozone is sents about $55 million, meaning Duke’s formed in greater quantities on hot, sunny profit exceeded its permitted rate by more days,” he wrote. “This supports the argu- than $100 million. ment that year-round controls are not nec- Meanwhile Duke, like several other essary. Can you provide any support for utilities that had been targeted by the EPA year-round controls?” that had worked toward settlements while As justification for year-round nitro- still defending themselves in the lawsuits, gen oxide reductions, Shore wrote a memo obtained a favorable court decision in Au- This bar chart was part of Environmental Defense’s ‘North Carolina Clean Smokestacks Plan,’ arguing that reduced pollution of soil and gust 2003. U.S. District Judge Frank W. Bul- upon which the landmark state law was based. The costs, represented at $449 million on the right water would result, as well as visibility in bar, were actually $2.3 billion. The plan also failed to substantiate the $3.5 million figure promoted lock Jr., in contrast to rulings by other courts, the mountains , which was refuted by other as economic “benefits” from the Smokestacks plan. ruled that the basis for the EPA’s actions sources. Still, those requirements ended up against Duke were unlawful. The case is in the Smokestacks law, and both utilities holdup. One e-mail between Department which could serve as a basis for accounting now under appeal. accepted it as long as their costs were recov- of Justice officials said Ross was “anxious to adjustments which could be made to ‘avoid But in the early days of the EPA’s en- ered. try to move this bill and wants our assis- reporting over-earnings to regulators.’” forcement action, Duke, like many other tance in finding a way around the impasse.” Duke vehemently denied any intentional utilities, sought to negotiate with federal Ratepayers’ opposition Compounding the problem was the fact wrongdoing, and a federal investigation authorities. that CUCA wanted the Utilities Commis- produced no indictments. “We set out our demands,” said Bruce But two major groups representing large sion to initiate a general rate case review for While the audit continued and Duke’s Buckheit, former EPA director of air en- industrial ratepayers — the Manufacturers Duke, because they believed the utility had EPA lawsuit was still unsettled, Smoke- forcement, “and Duke took off for about six and Chemical Industry Council of North repeatedly exceeded its 12.5 percent allowed stacks negotiators discussed the concept of months to a year, and popped up with a bill Carolina, and the Carolina Utility Custom- rate of return on its equity. a five-year rate freeze for both utilities in that very nearly met our demands and had ers Association — opposed the bill. Many of CUCA believed a rate review for Duke, exchange for accelerating writeoffs for the a mechanism where the pollution controls their members were enduring difficult eco- even with new emissions controls, would costs of the new emissions controls. would be paid for.” nomic times and laying off a lot of their result in an overall rate decrease for cus- The N.C. Utilities Commission, despite Buckheit, who retired from the EPA in employees. tomers. Duke’s suspected under-reporting, agreed December 2003, said Bullock’s surprise rul- “It was a surprise to us,” said Preston Contributing to suspicions about to allow a rate freeze to become part of the ing delayed a settlement. Meanwhile Duke Howard, president of MCIC. “We worked Duke’s earnings was that the company hid bill. The idea broke the deadlock over cost officials think the company’s legal position hard to keep the bill from coming to the excessive earnings (see article, below) from recovery, bringing Howard in support, but is strong in the case and that the Smoke- floor of the House.” utilities regulators in North Carolina and still leaving CUCA in opposition. stacks bill benefitted all who participated in Howard said his group didn’t object to South Carolina. An audit by accounting However, that was good enough to get its negotiation. the emissions requirements of the Smoke- firm Grant Thornton LLP determined that the bill passed in the House, where only “We’re happy because we got very stacks bill, but did oppose the surcharge. Duke management “met and developed a four members voted against it. Easley signed healthy cost recovery,” Williams said. “We “As you know, both utilities are experi- plan to identify expense and revenue items it into law on June 20, 2002. think it’s excellent legislation.” CJ encing record earnings,” Howard wrote in December 2001 to Alan Hirsch in Easley’s off ice, “while most North Carolina compa- nies and many employees are simply trying Utilities Commission Allowed Rate Freeze Despite Audit to survive in the current economy.” Howard, as well as CUCA, argued that By PAUL CHESSER cials at the North Carolina Utilities Com- sion, without revealing what discussions North Carolina customers, under the Associate Editor mission (NCUC) about Duke’s problems. Utilities Commission officials had with au- Smokestacks bill, would pay the total costs RALEIGH “Certainly (NCUC general counsel Rob- ditors. of the emissions controls while Duke’s and espite strong evidence that Duke ert) Bennink, (operations director) Don CJ also asked N.C. Utilities Commis- Progress’ South Carolina and wholesale Energy intentionally fudged its ac- Hoover and I, when I met with them, I sion chairwoman Jo Anne Sanford, Ervin, customers would pay nothing. He also said Dcounting in order to preserve its expressed to them what I felt the docu- and Bennink in an e-mail how much the the N.C. Utilities Commission could allow level of earnings, the North Carolina Utili- ments demonstrated,” Walsh said. Utilities Commission understood what the both companies to recover their costs under ties Commission agreed to allow the utility Auditors from accounting firm Grant findings of the audit would be before the a general rate review, without need for a to freeze its rates for five years. Thornton LLP, after wrangling with Duke bill’s passage. special surcharge that the Smokestacks bill Barron Stone, a Duke Power accoun- for access to documents, determined that “Not only did we not know what the would call for. tant, reported on numerous occasions to his the company hid $124 million in excessive findings would be before the field work “Governor Easley should ask the two supervisor, and to his employer’s ethics earnings by moving money from its regu- was done and after the bill was passed,” utilities to ‘step up,’” Howard wrote to line, that the company was unethically ad- lated business to its unregulated business. Sanford said, “I’d be hard-pressed to figure Hirsch, “they can afford it.” justing its accounting to show lower earn- Grant Thornton was hired jointly by both out how even [Grant Thornton] would have In the late fall proponents made one ings than it really had. Duke is allowed only states’ utility regulatory agencies to per- known, since they hadn’t finished their re- last “push” for the bill before the legislature a 12.5 percent return on equity in North form the audit. search.” adjourned. Ross wrote to House Speaker Carolina, and a 12.25 percent return in South The audit process began in January 2002, But Walsh said he and Bennink had bi- Jim Black, arguing that the Smokestacks bill Carolina. after the Clean Smokestacks bill had been weekly discussions with Thornton’s audi- would reduce “asthma attacks among our Stone finally got the attention of the left in limbo in the North Carolina House. tors throughout the entire process, and even people” and “haze in our mountains,” de- South Carolina Public Service Commission The legislation was revived again in the more frequently as the audit wound down. spite contrary arguments from his own sub- in mid-July 2001, and subsequently the spring, and signed into law by Gov. Mike He said the auditors updated him and ordinates and from state senators. North Carolina Utilities Commission. Both Easley June 20. Bennink on problems they were running But because the concept of a surcharge agencies required an audit of Duke’s ac- But according to Walsh, the North Caro- into, but did not divulge their conclusions to recover costs for the utilities was so objec- counting practices, which began in January lina Utilities Commission staff understood until their study was complete in July. tionable to ratepayer groups, the Smoke- 2002. the seriousness of the Duke violations, and But Walsh said he knew the informa- stacks bill was left in limbo at the end of the Stone first reported his findings to then- was aware of difficulties Grant Thornton tion provided by Stone was damning for 2001 General Assembly session. SCPSC Executive Director Gary Walsh, who had in obtaining information from Duke. Duke. After the audit report was released, started as an auditor himself for the agency Carolina Journal asked what the nature though, Duke vehemently denied inten- Return of Smokestacks in 2002 in the 1970s. Walsh said Stone gave to him and content of the N.C. Utilities Commis- tional wrongdoing. memos from Duke executives that explained sion officials’ discussions with Thornton’s “I had been in the business, (so) I had By February 2002 proponents in Easley’s what needed to be done to accounting en- auditors was prior to the Smokestacks bill’s my own views of the documents that I had office, in DENR, and in Attorney General tries in order to maintain their higher earn- passage. The commissioners’ responses in my hands,” Walsh said. “[Grant Roy Cooper’s office were discussing the ings ratio. were vague. Commissioner Sam Ervin IV Thornton’s] audit confirmed in my mind Smokestacks bill again. Cost recovery for He said he knew what the auditors responded by reciting official documents how I took the documents I had in my Duke and Progress was the sole remaining were likely to find, and informed two offi- and reports issued publicly by the commis- hands.” CJ March 2005 C A R O L I N A 6 Education JOURNAL

National News In Brief Magnet Schools Attract Controversy Study faults social promotion School districts consider whether higher transportation costs are worthwhile A new study has found ending social promotion leads to significant By SAM A. HIEB Of course, academic improvement for previously Contributing Editor one option low-performing students, the Heart- GREENSBORO would be to dis- land Institute reports. inter in the Piedmont region of band the hub The study, published in December North Carolina presents chal- system, but at a 2004 by the Manhattan Institute for W lenges for school transportation cost $3 million to Policy Research, looked at third-grade officials, especially in Guilford County. The buy the buses to students in Florida who were required county is on the dividing line of many do so. to pass a standardized test in order to weather systems, so it’s hard to predict Board mem- be promoted to the fourth grade. whether it will snow, sleet, or rain. Trying ber Anita Sharpe Researchers Dr. Jay Green, a senior to decide whether the roads are safe to presented an- fellow at the Manhattan Institute, and transport students to school is a difficult other perspec- Marcus Winters, a research associate call. tive. “The prob- at the institute, analyzed data from the But this year, there have been many lem is greater Florida Department of Education. more difficult transportation decisions for than transporta- They compared the gains among low- Guilford County Schools. GCS has 26 mag- tion,” Sharpe scoring third-graders in the first year net schools spread around the 650-square- said. “This board of the retention policy against similarly mile county, and while there may be little needs to figure out if it can afford magnet Transportation systems elsewhere low-scoring third-grade students from doubt that magnet schools benefit students, schools.” the previous year, before the retention GCS is feeling the pinch as it deals with With that in mind, GCS has already Wake County, which has magnet pro- policy had been enacted. disproportionate increases in transporta- begun discussions with the school board grams in 47 schools, has what it calls “ex- The study found that students tion costs for magnet programs. about how it will avoid the fiasco that press transportation,” which is similar to who had been held back improved greeted the start of school this year. Guilford County’s hub system. Students their reading scores on the Florida Hub system aroused confusion “We’ve got a long list of lessons from provide their own transportation to a des- Comprehensive Assessment Test by last fall,” transportation Director Jim Moen ignated stop, which may be another school 4.1 percentile points, and their math At the start of the 2004-05 school year, said. campus, a regional library, etc., and then scores by 9.98 percentile points, com- GCS came under fire from parents and the Since 1995, GCS has provided what has the student is transported to his or her pared to similar students who had not local media when its newly instituted hub been called “a reasonable effort basis to magnet school. been held back. system, designed to transport students more transport magnet students.” That reason- As for the cost of transporting students Commenting on the study, U.S. efficiently, didn’t work out as planned. Stu- able effort basis, in the past, has been de- to magnet schools, Eddy Adams, transpor- Secretary of Education Rod Paige said, dents didn’t know which buses to board, fined as “creating bus stops for magnet tation operations director for Wake County “For too many years, we automatically many went to the wrong schools, and many students, period,” Moen said. Schools, said he has been in his position passed students from one grade to the didn’t arrive home until late in the evening. It helps to realize that, magnet and only a short time and has not had an oppor- next without concern for whether they “My daughter was somewhere in school choice programs aside, there are tunity to evaluate costs of magnet transpor- were actually learning. As a result, our Greensboro, and I didn’t know where,” one annual start-up challenges for transporta- tation. most vulnerable students fell further parent told the Guilford County Board of tion staff, such as fluctuating ridership, late Adams is not overly concerned with and further behind their peers… I ap- Education at a meeting addressing the prob- school registration, and requests for route the cost, saying in an e-mail message he did plaud schools in Florida and across the lem. changes on the first day of school. not “see where the cost would be exorbitant nation that are working to help our Superintendent Terry Grier and the since we would have to be transporting children by stopping the dangerous board once again found themselves on the Higher costs of magnets those students anyway.” practice of social promotion.” hot seat, months after drafting a “school In Charlotte-Mecklenburg, where 54 choice” plan for three High Point-area high Moen recently presented the Board of schools offer 15 magnet programs, students Gangs move into rural areas schools that drew the ire of parents. The Education with costs related to transporta- may apply to any magnet school within the movement to oust Grier (“Get Terry Grier tion to magnet schools. Costs will indeed district but transportation will only be pro- Gangs, once identified mostly Outta Here!” was the rallying cry) and cer- increase; 2003-2004 transportation costs for vided if the school is within the student’s with big cities, are showing up more tain board members only intensified. magnet students was $3.3 million, com- high school feeder area. The system has 14 frequently in smaller communities and So huge was the outcry that the school pared to $1 million if every student at- high school feeder areas. even rural areas in North Carolina, an board meeting addressing the problem had tended school in their home district. It should be noted that other factors investigator of gang activity says. to be held in the county Moen estimates a cost besides magnet programs put the squeeze “We’ve got kids running around courthouse to accommo- of $5.7 million for the on transportation programs in Guilford who are gang members in Duplin date the turnout. “My daughter was 2005-06 school year, in- County and elsewhere. County,” Detective Hunter Glass of the At that meeting GCS cluding $1.7 million for The federal No Child Left Behind law Fayetteville Police Department said. Assistant Superintendent somewhere in Greens- acquisition of new buses allows students to “opt out” of schools that Glass has investigated gangs for John Wright laid out sev- boro, and I didn’t know to accommodate the 700 don’t make academic annual yearly eral factors contributing more students projected progress, and school systems are struggling more than a dozen years. He travels where.” around the state making presentations to transportation prob- to be riding buses. with how far they can transport students about gang behavior. On Feb. 7 he lems: — Concerned parent The hub system will who choose to opt out. taught about 300 school administrators • Transportation Guilford County remain in place, but GCS Last year, GCS made transportation ar- gathered in Fayetteville how to spot forms were turned into will draw a line that rangements for 228 students who made that gang behavior, the Fayetteville Observer the wrong place, includ- would divide the county choice. However, school systems weren’t reported. ing 600 applications that weren’t received into east-west zones, with students being informed which schools didn’t make an- Recently, he said, gangs started in until the first day of school; required to attend the magnet school within nual yearly progress until early August last California among Hispanics have • Staff failure to enter names and trans- that zone. Length of bus rides will still be an year, making it “virtually impossible to started showing up in Sanford. portation requests into the system; issue, however, as Moen recommended ex- anticipate the NCLB opt-out choices,” Moen • Lack of understanding of the trans- tending the ride times to some schools from said. Group to lobby for sex ed portation system and inadequate staff to 65 minutes to 90 minutes for students at- Another problem is transporting stu- handle the overwhelming number of phone tending programs in the High Point choice dents to day-care centers. Moen said that Supporters of comprehensive sex calls and e-mails during the first few days of plan. half the problems he personally had en- education will push the State Board of school. That recommendation concerned some countered this past year had been deliver- Education this year to broaden the sex- school board members. ing students to day-care centers. ed curriculum beyond its “abstinence- Distance and long bus rides “To put that up to 90 minutes one way The major problem, according to Grier, until-marriage” core, the News & Ob- is going back on our word,” said board is families live and go to school in one area, server of Raleigh reports. Then Wright got to the heart of the member Kris Cooke. “I think what that’s then request transportation “to a day-care They point to a recent Department matter: Guilford’s a pretty big county to doing to that plan is not right.” center not on the route, or near the route, of Public Education survey to bolster have so many magnet schools. Getting a kid “Give me a scenario where it would but completely across town.” their case. from Gibsonville, in the eastern part of the take someone in that area 90 minutes to get “We want to work with parents where Most parents want sex ed to begin county, to Penn-Griffin magnet school, in to school,” said board member Susan we can, and we want to be reasonable,” earlier, to involve more class time and the southwestern part of the county, is sim- Mendenhall. Grier said. to include more information about ply going to take a while, he said. Moen said it can’t be helped when there “But we want the board to understand contraceptives and the prevention of “How large a magnet zone will you are two or three students in the northwest there are times when requests are unrea- sexually transmitted disease, the sur- allow and still expect timely transporta- corner of the county attending magnet pro- sonable, and from a practical and financial vey says. Also, the vast majority — 95 tion?” Wright asked the board. “If you don’t grams in High Point. “There are areas along standpoint, we’re not going to be able to percent — think parents and public restrict the magnet zones, you’re going to the Forsyth County line where the roads accommodate those requests.” health officials should set the curricu- have one-and-a-half-hour bus rides. You require some difficult routing,” Moen said. Moen said GCS would “set up a list of lum; only 6.9 percent think politicians need to have some discussions about what Other school systems have already day-care centers we’ll work with, and add you’re willing to do and what you’re will- taken steps to make transportation to mag- more as time goes on. But it can’t become a should. CJ ing to pay to do it.” net schools more efficient. priority.” CJ March 2005 C A R O L I N A JOURNAL Education 7

Children thrive in positive environments Empowered Parents Home-Schooling Rescues Families Challenge the System By DONNA MARTINEZ Associate Editor cross North Carolina, frustration with bu- RALEIGH reaucratic ineptitude in public education is Editor’s Note: Carolina Journal agreed to provide fueling an abundance of parental activism. anonymity to the home-schooled families fea- A Some of these empowered parents are seeking to tured in this story. Their names have been changed transform the system from within, lobbying for a to ensure their privacy. change in school policies. Others think their only recourse is to remove children from unresponsive n 2000, as Aaron Johnson began his fourth schools and proceed with legal action. frustrating year in the public school system, As I speak with parents, I hear increasingly of a Ia school employee gave his mom a piece of palpable sense of dissatisfaction with public educa- advice she believes rescued her son from a disas- tion, coupled with a fervent desire to effect change. trous future: consider home-schooling Aaron. Recently, a mother contacted me about a required Kathy Johnson had heard of home schooling book that her 8-year-old daughter had read at school. but knew little of what was involved or required. Maniac Magee, by Jerry Spinelli, She spent hours scouring the Internet in a desper- uses profanity and refers to one ate search for a way to avoid the consequences of home as a “pisshole.” In addi- the alarming conclusion she had reached: Her tion, the book’s characters young son’s future was being jeopardized by an Carolina Journal photo by Hal Young “curse,” “belch” and “fart.” inflexible, one-size-fits-all public school system. John Calvin Young (left) and Caleb Young dissect a crawfish at their home. This mother, along with a group of parents, pressured Negative attitude at school started early families have chosen the home-school option for about school leaders to remove the 60,000 children. Nationally, the number of children who book from the reading list. The frustrating family journey began in Aaron’s first- are home-schooled reportedly tops one million. When the school dismissed grade classroom when a teacher harshly told the boy his Some home-school parents question why they can’t their concerns, these parents writing was sloppy. Kathy was concerned he was being tap into the taxes they contribute for public education and forged ahead, eventually win- Lindalyn subjected to negativity that would become a self-fulfilling use the money to pay for home-schooling expenses. Young ning over administrators at the Kakadelis prophecy. “I didn’t want a teacher telling him he couldn’t thinks that action would undermine a fundamental ele- district office. The book was do it,” she said. ment of the movement: independence from government purged from the K-third-grade-reading list, but only The situation degenerated over time. Aaron told his regulations and oversight. at this one school. mom the teachers didn’t help him much. Worried, she “The problem you can get into with taking tax money In my book, any parent who takes on the educa- began visiting his class and writing letters to the teacher is that the government has the right and responsibility to tion bureaucracy is empowered. Viewing parental and principal. The school tried to address Aaron’s reading oversee it,” he said. involvement through the lens of power is construc- deficiency by putting him in special classes. His skills “Thirty thousand have chosen to step out without state tive — many parents feel disenfranchised and pow- improved marginally, but he fell further behind. Kathy funding, and we think it’s worth it.” Young said that many erless when it comes to tackling entrenched school tried to move her son to a magnet school in the Triad, where families are drawn to the movement for fundamental rea- policies, even when (as the above example demon- he had done well in a summer camp program. She was sons: the desire to include religious principles in education strates) such policies are grossly inappropriate. In willing to make the 16-mile round trip each day, but the and concerns over public school curricula and the social fact, one of the parents who helped to successfully school’s waiting list was long. She was told the best she environment. sideline Maniac Magee said to me recently, “Thank could hope for was the possibility of a seat for Aaron the you for choosing to use the word ‘empowered.’ Most following year. Family seeks flexibility, religious teaching of the time when I think about this issue, I end up As mom and son sat together to share a book, it was thinking more along the lines of ‘hopelessly shut out clear to Kathy that Aaron could barely read. She was While Kathy and Aaron came to home-schooling as the by bureaucracy.’” appalled when she realized he was also unable to perform last stop on a difficult road, a central North Carolina family While these parents prevailed in their quest to basic subtraction. Even worse, Aaron told her he was being made the choice for very different reasons: scheduling change school policy, many parents are, in fact, shut bullied. Unsure of what the future held, but convinced she flexibility and religion. Kevin and Debbie Morris have six out by bureaucracy. Consider the case of a single must take bold action, Kathy accepted responsibility for children —– five of them school-age. Kevin’s broadcasting mother whose child has verbal apraxia, a learning her son’s education and became a home-school mom. That job requires him to work evenings and weekends. A tradi- disability requiring intervention through speech meant learning to be a teacher, shouldering the costs for tional school schedule would leave little time with his therapy. The school system her child attends was curriculum and materials, and juggling the school day with children, and that prospect was unacceptable to the close- refusing to allow speech pathologists to work with her job doing medical transcription from home. knit, religious family. students. So she, along with several other parents, “The first year was hard,” she said, shaking her head. “Family time can be minimal,” Kevin said of the typical retained a lawyer to try to force the system to provide “He was frustrated. Math was hard; he would cry.” Kathy, family’s rushed lifestyle built around getting to and from speech help. In the interim, these parents are home- a single mom, coped alone with the challenges posed by her school and work. “We wanted to raise our kids. We wanted schooling their children, and paying for extensive new role. to teach them what we believe.” tutoring. This mother told me, “My son is entitled to With stair-step youngsters ranging from 2 to 15 years, the tax money given for his education, but he can Aaron made substantial progress there are numerous teaching duties for the couple to share. only receive it if I allow him to go to an inferior Debbie focuses on the younger children, while the older education provider that doesn’t meet his needs. I Ultimately, it was Aaron’s academic progress that kept siblings study more independently. Dad is the go-to man want the system to get fixed, but I cannot allow it to Kathy’s spirits and commitment high. She could tell he was for math and science. Home-schooling also allows the be fixed on the back of my child. Something must learning, but she had no proof. There was no baseline parents to broaden their children’s interests and experi- change!” testing data from his public school days with which to ences, when and how they choose. Sometimes that’s through Clearly, these children are not receiving the qual- compare his new end-of-year test results — a yearly, na- their church. Other times, it’s by joining community groups. ity of education guaranteed to them by law. Last tionally normed assessment that’s required by state law. By Five children are competitive swimmers, two are orchestra year, a number of students, parents and officials in year three, Kathy had plenty of confirmation in hand. members, and a teen-age son is a burgeoning chef. The several North Carolina counties sued the state, de- Aaron’s progress in reading was remarkable. His scores on family has visited 42 states on frequent road trips — part manding more equitable funding to receive a “sound, an Iowa Achievement Test demonstrated three years of vacation, part education opportunity. “That’s denied in a basic education” — the constitutional right estab- gains in just one school year. regular school system because you couldn’t pluck the kids lished by the court’s finding in the Leandro case. I Kathy is equally thankful for home-schooling’s impact out any time of the year to go across country.” wonder how long it will take for dissatisfied parents on her relationship with her son. The two have bonded in Now that the Morris’ oldest daughter is 15, the family in our state to file suit demanding “equitable fund- a way she believes wouldn’t have been possible otherwise. is preparing her for a more regimented college schedule by ing” for a “sound, basic education” from schools Yet despite his progress, and to her dismay, Kathy says enrolling part time in a private school. The older children outside the system. neighborhood parents advise her to re-enroll Aaron in also plan to learn Spanish at a community college. While In fact, a court decision in Georgia could be a public school. She’s not about to turn back. some parents may wonder whether the freedom and op- legal bellwether, setting a precedent for lawsuits in “This mom is my hero,” said Lindalyn Kakadelis, portunity translates into legitimate learning, Debbie proudly other states. While Georgia already has a pending director of the North Carolina Education Alliance. “She recites a more traditional measure of achievement to which case similar to Leandro, another case joined the fray in took control when the traditional education setting, which all parents can relate: her children’s impressive test scores. January. Several Atlanta parents are asking that the works for some kids, was failing him.” The women became As home-schooling grows, so does the participation of state’s educational system be declared unconstitu- acquainted last year when Kathy contacted Kakadelis for ethnic minorities. Young estimates that 5 percent of North tional. They think the state should make fundamen- advice on finding financial assistance to buy Aaron’s eighth- Carolina home-schoolers are black. Another 1 to 2 percent tal changes to increase educational choices. grade curriculum. The young man who once could barely are Hispanic, and because that demographic group is Around the state, disaffected parents are ready read will soon study Latin, which is part of the curriculum growing so rapidly, NCHE is preparing to launch an initia- to do battle with public education’s bureaucratic Kathy has selected. tive with El Hogar Educador, a Mexico-based group, to behemoth. If current trends are any indication, in- The average home-school family spends $500 to $600 bring Spanish-language home-schooling materials to North transigent school systems may increasingly find their per child per year on new materials, said Hal Young, Carolina. “You’ve got to learn English, but while you’re resistance rewarded with fractious legal skirmishes. president of the service and support group, North Carolin- getting that up to standard, you can be learning in Span- For now, all eyes are on Georgia. CJ ians for Home Education. Nearly 30,000 North Carolina ish,” Young said. CJ March 2005 C A R O L I N A 8 Education JOURNAL

School News: State Still, education leaders will toughen graduation requirements

Charters have few dropouts High School Dropout Rate Is On The Rise Again

The North Carolina Dropout Report revealed some interesting By KAREN PALASEK differences between the state’s Assistant Editor regular school districts and its char- RALEIGH ter schools. he North Carolina Department of For purposes of reporting, Public Instruction has just released charter schools are their own Lo- T some discouraging news for cal Education Agencies (LEAs), a schools, parents, and students. According single-school school district. That to DPI, the dropout rate for grades nine to gives the state 212 “districts” to 12 is up from 4.78 percent in 2002-03, to 4.86 track in the Dropout Data Report percent in 2003-04. The rate represents 2003-04. 20,035 students, a 1.7 percent increase over According to the data, about the 19,000 students reported as dropouts the half of the regular school districts previous year. in North Carolina experienced an “Every student who drops out of school increase in their dropout rates from represents lost potential for the student, for 2002-03 to 2003-04. Less than 2 per- his or her family, for the community, and cent of the state’s charter schools, for the state,” State Superintendent Patricia meanwhile, had higher rates last Willoughby said in a press release in early year. February. “It is vitally important for all stu- dents to earn high school diplomas and to Teacher fired for poor ethics be well-prepared for adulthood.” The State Board of Education is not rais- Controversy continues to sur- ing an alarm over the dropout situation, but round the Sallie B. Howard School there is renewed interest at the State Board for the Arts and Education in Wil- in raising the compulsory school attendance son. So far, questions remain about age from 16 to 17 years old. DPI, mean- high school at all. Understating the drop- not enrolled on day 20, or has not gradu- the school, its former test coordi- while, notes that the grade nine to 12 drop- out problem doesn’t help, he said, and he ated because of transfer, temporary absence, nator, the two teachers accused of out rate has actually fallen by 28.3 percent wants the state to make it clear to parents or death. The state’s count is called the du- altering test scores, and a teacher since 1998. that there is a graduation crisis among mi- plicated count because it is possible to count who made accusations of wrong- nority students, particularly young minor- the same student as a separate dropout ev- doing in the first place. Statistics are no cause for alarm ity males. ery year. Two teachers at Sallie B. The dropout rates for some student Since the state measure is a year-to-year Howard were accused, by a third Not so, says Brunswick County parent subgroups were substantially higher than count, it does not reveal what percentage teacher, of altering the answers on J. Fanti, who worries that parents of black the 4.86 percent state average. American In- of students make it through all four high students’ end-of-grade tests to in- teen-age boys, in particular, are getting the dians had the highest rate, at 9.78 percent, school years. The current dropout rate tells sure a higher score. Independent wrong message with the latest state statis- followed by Hispanics at 8.67, blacks at 5.91 us that for students in grades nine to 12, on investigation confirmed that the tics. “They think there’s nothing to worry percent, whites at 4.46 average, 4.86 percent test tampering had taken place, about,” Fanti said, “so they aren’t motivated percent, and Asians at fewer students in each and the school’s test coordinator, to do anything differently.” 2.57 percent. The most frequent rea- grade were enrolled dur- Dr. Laura Edwards, resigned. In a discussion with Carolina Journal The most frequent ing the 20-day counting The teacher that made the ac- about the lack of role models, lack of par- reason for dropping out? son for dropping out? period than were enrolled cusations of possible wrongdoing ent support, and lack of honesty with par- Poor attendance, in an Attendance, in an over- the previous year. It does and exposed the tampering case ents about the state of education in public overwhelming 59 per- whelming 59 percent not mean that 95 percent was fired. According to reports in high schools, Fanti expressed frustration cent of cases. Moving ac- of students who enrolled The News and Observer of Raleigh, and annoyance. In his case, teachers in- counted for about 11 per- of cases...academic in the ninth grade gradu- Wilson County public schools said formed him that they “didn’t want my son cent of dropouts, while problems ranked third. ated four years later. the whistleblower was fired for to get in trouble,” by returning calls he academic problems This difference is violations “of both state and school made asking about his child’s progress. ranked third, responsible what has some parents rules of conduct and ethics.” As a result, this parent learned about for slightly less than 9 percent of North alarmed. In 1999, North Carolina enrolled The fired employee must dem- school work problems after it was too late Carolina’s high school dropouts. 116,861 ninth grade students in public high onstrate that the dismissal was or- to take remedial action at home. He isn’t schools. In 2002-03, there were 73,523 12th- dered in retaliation for bona fide surprised that kids with absent parents, or How many ways to measure? grade students enrolled. Based on final en- information. The dismissal will ones who don’t care, don’t make it through rollment figures, 37 percent, or 43,338 stu- stand if the accusations prove ma- Along with parents, edu- dents, dropped out during that four-year licious or false. cation research organizations period. That means that only 63 percent of such as the Manhattan Insti- the entering class graduated, a figure that “No” to land, “yes” to travel tute question the validity of sounds far more ominous than the 4.86 per- using high school dropout cent dropout rate. Wake County Schools turned rates to measure school suc- A June 2004 Johns Hopkins University down an offer of 14 acres of free cess. They insist that the four- study reinforces the sense of concern about land within the Wakefield Planta- year high school graduation graduation, and minorities in particular. Ac- tion community. According to the rate provides a much more ac- cording to Locating the Dropout Crisis, high N&O, the offer came from an curate measure of who, and schools that serve mostly minority students owner who hoped Wake County how many students are mak- are five times more likely than mostly white would place a modular school in ing it through high school. schools to have “weak promoting power” Wakefield, rather than farther Jay Greene and Greg — to graduate 50 percent or fewer fresh- away on a site in Wake Forest. Forster, in their MI study men to senior status on time. Recent winter weather condi- “Public High School Gradua- tions in the Triangle underlined the tion Rates and College Readi- Making it tougher to graduate hazards of trying to transport chil- ness Rates in the United States, dren across long distances when 2003,” determined that North State education officials are planning to road and traffic conditions become Carolina high schools gradu- make it tougher to graduate, despite the ris- hazardous, according to WRAL ated only 63 percent of the stu- ing dropout rates. Students will have to News. dents who started high school pass 20 high school courses, including five Parents are concerned about four years earlier. Even among core curriculum courses. Potential gradu- long hours on a bus and the possi- the graduates, only 40 percent ates must also pass reading and math tests bility that young children may be were “college ready,” accord- geared to eighth-grade competency. In ad- forced to stay overnight at their ing to the report. dition, the state end-of-course tests may schools if the weather is bad. Some There is a big difference count more heavily toward passing a schools are buying blankets and between a dropout rate and a course, toward graduation, or both. other sleeping gear. graduation rate. The North According to state officials, if these re- Reassignment in Wake County Carolina Dropout Data Report quirements had been in place in the 2003- has also increased many parents’ counts as a dropout a student 04 school year, only about half of last year’s resistance to long-distance travel who “was enrolled in school high school students would have gradu- between home and school. CJ at some time during the pre- ated, and only 20 percent of minority stu- Bunker Hill High School, Catawba County, N.C. vious year,” and either was dents could have done so in 2003-04. CJ March 2005 C A R O L I N A JOURNAL Education 9

What Works Best in Education Communities in Schools Program Addresses the Dropout Problem

By PAIGE HOLLAND HAMP interests, or career expectations. A caring Contributing Editor grandmother and a strong faith in God kept RALEIGH him going — and CIS provided a helping ropping out of school is a hot topic hand as well. The CIS site coordinator at again at the national, state, and Acton’s high school made sure he had trans- Dlocal levels. President Bush, in his portation to school, dental and health care, State of the Union address, asked the First and connections to community support Lady to lead a $150 million effort to help at- personnel. She also became a mentor and a risk youths, with a particular focus on boys, friend. He was exposed to college and ca- stay in school and have a successful future. reer experiences and encouraged to form Gov. Mike Easley’s Education First Task goals for himself. Force is charged with creating a plan so that Did it make a difference? “Without CIS all students graduate and have the oppor- I would have probably ended up like my tunity for post-secondary education or en- friends,” Acton said, “either dead or in jail.” ter the job market. But thanks to his own dedication and hard News and Observer of Raleigh Publisher, work, and a little help from CIS, Acton is Orage Quarles, is spearheading the High- now a senior at North Carolina State Uni- Five Initiative, which has a goal of reducing versity, majoring in business management. dropouts and increasing graduation rates Acton is definitely prepared for life. in Wake, Durham, Johnston, Orange, and Chapel Hill-Carrboro Public Schools. CIS comes at a bargain price The dropout problem is not new, but to CIS founder Bill Milliken with CIS Executive Directors Cynthia Tart and Cynthia Marshall solve any problem, first one needs accurate That leaves the third word: inexpen- and timely information. Getting school dis- Schools (CIS) and it is efficient, effective, tor. If a child is struggling with math, CIS sive. Governed by a savvy board of busi- tricts to provide that information has been and inexpensive. Don’t let that last word gets him a tutor. If a child is failing because ness leaders and led by a top-notch entre- challenging. There is a significant disparity throw you… yes programs can be both he can’t see the blackboard, CIS gets him preneurial staff, CIS uses existing resources, between reported dropout rates and gradu- effective and inexpensive, but let’s start glasses. CIS has one goal to keep kids in leverages investments, and relies on an army ation rates in North Carolina. The N.C. with the word that makes that possible. school so they will succeed in life. CIS uses of volunteers to meet the goal of keeping Department of Public Instruction reported whatever strategy is needed to reach that kids in school. For every $1 invested by the a 5.72 percent dropout rate in 2001, but in Communities In Schools works goal and does not employ the one-size-fits- state, the CIS network raises an additional the same year, the Urban Institute reported all mentality that permeates our education $16 in goods in services. that North Carolina’s graduation rate was Communities In Schools is the largest system. In addition, last year 13,665 volunteers 63.5 percent. Without spending too much dropout prevention program in the nation. CIS is also effective. While CIS students contributed more than 250,000 hours of man- time arguing the details, suffice it to say that Founded in 1977 by Bill Milliken, CIS serves are those at the highest risk of dropping out, power. That is why CIS is inexpensive. CIS about four of every 10 students in North more than 2 million children across the once part of the CIS network, 96 percent of spends an average of $220 per child per Carolina drop out of school. The social and United States. In a nutshell, CIS, working the students stay in school; 92 percent were year. In stark contrast, SmartStart spends economic implications are staggering. with school personnel and parents, targets promoted to the next grade, and 95 percent about $2,000 per child served annually and children at highest risk for dropping out of CIS seniors graduate from high school. since 1993 the state has invested $1.5 billion The costs of dropping out and helps them succeed. CIS does not serve The best way to understand how effective in SmartStart. Mike Stephens, chief opera- all children, however, an entire school cli- CIS is, is to meet one of the young people the tions officer of CIS of NC, said, “If we re- According to The National Dropout mate is enriched when a program serves. ceived a $1.5 billion investment, we could Prevention Center, each year’s class of drop- CIS site coordinator is part Acton Archie is a fine put a CIS program in every county with a outs will cost the country more than $200 of the school team. young man and a former coordinator in every middle and high school billion during their lifetimes in lost earn- Jimmi Williams, ex- While CIS students are CIS student from Char- for over 40 years.” ings and unrealized tax revenue. The center ecutive director of CIS of those at the highest lotte. Growing up, Acton CIS is working hard to serve North also reported that more than 75 percent of Greater Greensboro, says risk of dropping out, moved from one public Carolina’s children. CIS has programs in 32 North Carolina’s prison inmates are high it best: “CIS works. It housing development to counties and serves more than 76,000 stu- school dropouts. works because it’s simple once part of the net- another — 12 times in 12 dents. But there are 350,000 children who An accompanying report by The Alli- (not to be confused with work, 96 percent of stu- years. His father was need CIS services. So to those in leadership ance for Educational Excellence explains easy). It is a way for the murdered when Acton positions, to solve the dropout problem the that we could save $1.4 billion in incarcera- community to invest time, dents stay in school. was a second-grader; his answer is, in the words of Jimmi Williams, tion costs annually, or about $2,100 per money, and energy mother was a drug ad- “simple”… invest in CIS. male high school graduate, with just a 1 into the success of children by tapping ex- dict. Each day was a struggle, walking past “The Communities in Schools track percent increase in high school graduation isting resources and getting them to the drugs and crime on the way to and from record of helping young people prepare for rates. kids who really need them.” school, and waking up with no power or life has is absolutely amazing,” said Graeme The center also identifies several criti- And there you have it: the heart of what water in the house. Acton remembers that Keith, chairman of the Board of CISNC. cal components for a successful dropout CIS is all about. CIS identifies the highest- many days he worried about whether he “The CIS program is the finest that has ever prevention program, which include: a one- risk students, determines the impediment would even have a home when he returned. been developed to prevent school dropout, on-one relationship with a caring adult and keeping them from succeeding, and helps As a teen-ager, he made some bad and we must find a way to continue ex- a safe learning environment. So, is there a fix the problem. If a child doesn’t have a choices, struggling through the ninth grade, panding this program throughout our solution? Absolutely… Communities In caring adult in his life, CIS gets him a men- often absent, with no direction, personal state.” CJ

Today’s Study Questions:

Do We Need Standardized Testing? Should Parents Have More Choice of Schools? Do Good Teachers Get Paid Enough? Does North Carolina Have a Solid Curriculum? Your Home on the Web for North Carolina Public Policy Are School Districts Equitably Funded? The John Locke Foundation’s brand new, completely redesigned home page is your best source of research, analysis, and information on the critical public You can look up the answers to these and other ques- policy issues facing North Carolina state and local governments. tions in North Carolina education policy by visiting NCEducationAlliance.org, the site of the North Carolina A fully searchable, comprehensive database of reports, studies, briefing Education Alliance. Each day it brings you the latest papers, datasets, press releases, events notifications, and articles can provide news headlines, opinions, and research reports on one an excellent starting place for those drafting legislation, researching policy of the most critical issues facing our state and na- issues, preparing news stories, planning political or lobbying campaigns, or tion. seeking information with which to be an informed voter and citizen. Go to www.NCEducationAlliance.org March 2005 C A R O L I N A 10 Higher Education JOURNAL

Bats in the Belltower Report Questions Tuition Waiver Program A twisted consistency in belief

The Chapel Hill indymedia types For Grads of NC School of Science and Math are busy ignoring freedom coming to the Ukraine and Iraq by gazing wist- By BRIAN SOPP fully southward toward the Castro be- Editorial Intern neath Castro, Hugo Chavez. CHAPEL HILL On Feb. 3, the “news” service — study recently released by the John brought to you on your dime through W. Pope Center for Higher Educa- three departments at UNC-Chapel tion Policy argues that a North Hill: the School of Journalism and Mass A Carolina tuition program is discriminatory Communication, the School of Infor- and wasteful. mation and Library Science, and Infor- The report, “Tuition Waivers at the N.C. mation Technology Services — breath- School of Science and Math: How NC lessly “reported” their new favorite wastes money on a tuition grant program” tyrant’s recent pronouncement. (Inquiry No. 19-Jan. 26, 2005) was written “Everyday I become more con- by Shannon Blosser, staff writer for the Pope vinced, there is no doubt in my mind, Center, and George Leef, executive direc- and as many intellectuals have said, tor of the center. that it is necessary to transcend capi- Blosser and Leef argue that the waiver talism. But capitalism can’t be tran- program, passed in 2003 by the General scended from within capitalism itself, Assembly for graduates of NCSSM, “pro- but through socialism, true socialism, duces no public benefit, costs the state with equality and justice. But I’m also money, and unfairly discriminates in favor convinced that it is possible to do it of NCSSM graduates.” under democracy, but not in the type There are two reasons given for the of democracy being imposed from waiver, Blosser and Leef note. One is that it Washington” supposedly has a positive effect on North It’s a trademark of Marxist tyrants Carolina’s economy by keeping bright stu- to speak grandly of transcending or dents in the state and thereby improving somehow moving beyond capitalism. the quality of the state’s labor force. The Nevertheless, rather than doing so in report quotes Sen. Kay Hagan of Greens- practice, they become the worst capi- boro, who pushed the waiver because talists on the planet — after all, they’re NCSSM students “are going to be the en- the ones who try to usurp all the capi- trepreneurs and business leaders and the tal for themselves. really hard workers” of the state. Chavez’s mention of “democracy” The other is that it would also positively is rather humorous, since — in the affect recruiting efforts at NCSSM. Gerald proud tradition of Marxist tyrants, of Boarman, president of NCSSM, supported course — he thwarted democracy this argument, saying that it would com- when the voters turned against him. pensate students for the “sacrifices” of at- Last August, Chavez appeared to tending NCSSM, living away from home survive a recall vote despite exit poll- and not being able to keep a car on cam- ing showing him losing by a nearly 2- pus. 1 ratio. Blosser and Leef, however, find both Former President Jimmy Carter arguments to be erroneous. They argue that and election observers from the Carter the waiver program will not help the state’s Center were on hand and, despite the The Watts Hospital on the campus of the N.C. School of Science and Math. (Photo: NCSSM) economy because North Carolina is not a anomaly, immediately declared the single economic entity but one part of the posed sacrifice of attending.” been rising. The scores at Raleigh Charter election valid. free market. North Carolina businesses In addition to questioning the reason High School, for example, have risen 51 A study conducted shortly there- compete for employees in an international for tuition waivers for NCSSM graduates, points since 2002. after by Massachusetts Institute of labor market, Blosser and Leef point out, the report examines further the “‘economic The report also cites recruitment tactics Technology economists Ricardo so it does not matter where workers are benefits’ argument in favor of the tuition as a possible reason for the decline. Rather Hausmann of Harvard and Roberto educated. Similarly, because college gradu- waiver [which] is based on the premise that than simply accepting the most academi- Rigobon provided strong evidence that ates are part of an international labor pool, NCSSM is a markedly superior school.” The cally qualified students, the administration Carter and Venezuela voters were, as attending a state university does not nec- authors give evidence of declining quality has been pushing for more diversity. Blosser the Sept. 9 headline in The Wall Street essarily mean that students will remain in at NCSSM in several areas. and Leef state that NCSSM’s “increased Journal put it, “Conned in Caracas.” the state. emphasis on student racial diversity is Hausmann and Rigobon showed Furthermore, the authors argue that the Inflated grades, falling SAT scores working at cross-purposes with the objec- with over 99 percent confidence that waiver is unnecessary to keep students in tive of recruiting the top students in North the election had indeed been stolen. North Carolina. Grade reports show that grade inflation Carolina to the school.” Also on Feb. 3, our publicly sup- “From 1998 to 2003, is taking root at NCSSM. Finally, the authors claim that the move ported citizen-reporters took issue before the tuition waiver The report shows that from a semester system to a trimester sys- with the idea that “communism was a was enacted, 663 NCSSM between the graduating tem effectively makes the school less rigor- failure-and that any hopes of a radi- graduates chose to attend Faculty whose grades class of 1999 and the ous academically. Boarman favored the cally different and liberated alternative a UNC system school. An graduating class of 2003, move on the basis that students were over- to capitalism are a false hope.” In fact, were “too low” were additional 494 graduates the percentage of A’s worked under the old system and needed they “reported”, “communism was no enrolled in one of the told by school officials given rose from 43.5 per- a change. shipwreck!” Mirabile dictu! There was state’s private institu- to avoid being “strict” cent to 52.9 percent. One Blosser and Leef argue that few stu- much more to this “news,” but here is tions,” they write. “There- teacher, speaking on the dents left the school, suggesting they are not a highlight: with their grade distri- fore, the tuition waiver condition of anonymity, being overworked. “The trimester system “Bursting through the cracks of the means that the state fore- butions. told Blosser and Leef that has reduced the class time that teachers 20th-century lumbering imperialist goes the tuition payments administration officials have to instruct students in their subjects,” death machine, the workers and peas- from many students who told her in a meeting that they write. They quote a faculty member ants in Russia in 1917 and in China in would have remained in North Carolina the school wanted grades for students that who complained that the trimester system 1949 made revolution and accom- anyway.” colleges can look at. allows only for two-thirds of a course to be plished amazing things. They went In a subsequent article for the Pope “There is a lot of overturning of taught. from unspeakable poverty and misery Center, Leef wrote that “the projected cost grades,” one faculty member told the au- Blosser and Leef conclude that the tu- to becoming the people who, for the for the tuition waiver is about $3 million thors. As they write, “teachers whose ition waiver for NCSSM graduates is un- first time in history, started to con- per year once four graduating NCSSM grades have been ‘too low’ have had to meet justifiable, and they advise the General As- sciously transform society and them- classes are in college.” with school officials in closed-door sessions sembly to consider repealing this “costly selves.” As for recruitment at NCSSM, Blosser and told to avoid being ‘strict’ with their and discriminatory” program. Not only One can see a twisted consistency and Leef show that from 1999 to 2003, grade distributions.” does it not help the state economically, but between believing capital is “tran- NCSSM enrolled less than half its appli- The report also finds SAT scores at also it puts an additional burden on taxpay- scended” by being absconded and be- cants. “The school was turning away ap- NCSSM dropping. The average score for the ers to pay NCSSM graduates’ tuitions at lieving people and society are “trans- plicants prior to the institution of the tu- 2004 graduating class was 13 points lower UNC schools while “reward[ing] a school formed” by being tortured and starved ition waiver,” they write, “so it is impos- than that of graduating class of 2002. While that has allowed its standards to fall.” to death. CJ sible to give credence to the notion that it is NCSSM’s scores have been on the decline, The report is at www.popecenter.org/ necessary to have it to overcome the sup- scores at other North Carolina schools have research/display_story.html?id=1514. CJ March 2005 C A R O L I N A JOURNAL Higher Education 11 Other states have made similar moves What Do You Give Virginia Higher Education Plan Would Seek A Failed Candidate?

Greater Autonomy Among Institutions ust three months after his campaign to become the vice president of the United States ended, By SHANNON BLOSSER The plan would also include the school’s academic, Jformer Sen. John Edwards has been given a new job that seems designed to keep him, at least occa- Contributing Writer financial, and enrollment plans for the period as well as sionally, in the public eye. CHAPEL HILL anticipated tuition and fee charges. hile North Carolina may soon consider possible The plan is nothing new to Virginia and to other states Edwards will become the director of a new Cen- increases in general fund appropriations for the that have already approved similar proposals. In 1996, Vir- ter on Poverty, Work, and Opportunity, officially a University of North Carolina system, Virginia ginia approved legislation to give Virginia Commonwealth part of the Law School at W UNC-Chapel Hill. His is considering a plan that would grant institutions more University’s medical school the same autonomy that the autonomy while reducing their money from the common- current legislation calls for. Colorado, Maryland, and Mas- title will be university wealth. sachusetts have also approved similar autonomy agree- professor. He will give The Virginia Senate has overwhelmingly approved the ments. occasional guest lectures comprehensive legislation, known as the Restructured Sullivan said the plan is a better alternative to a cen- and do whatever direct- Higher Education Act. It began simply as a proposal for tralized higher education system similar to that of the UNC ing the CPWO entails. For the University of Virginia, Virginia Polytechnic Institute system and a similar system in Maryland. He said a cen- that work, he will be paid and State University, and The College of William and Mary, tralized system would have meant bigger institutions, but $40,000 annually. but it has grown to include all colleges in the common- not necessarily better. According to UNC’s wealth. The proposal now goes to the House of Delegates, “If Virginia has the most diverse system of higher edu- press release, CPWO will where it is expected to be approved. cation in the nation — and I believe that we do — then it is bring together “UNC- Chapel Hill faculty and The effort has been spearheaded by U.Va. President because you were willing to reject the one-size-fits-all ap- George C. Leef John T. Casteen, III, Virginia Tech President Charles Steger, proach and opt for a system tailored to institutional indi- other national public and W&M President Timothy Sullivan. Virginia Republi- viduality and initiative,” Sullivan said in the meeting with policy experts to examine can State Sen. Thomas Norment is the lead sponsor of the legislators in October. innovative and practical ideas for moving more bill. Steger said, in a letter last year, the plan would allow Americans out of poverty and into the middle class.” “While structured to strengthen every public college universities more options when faced with cuts in general- But what kind of ideas are all those “public policy and university, the initiative has the flexibility to accom- fund appropriations. experts” apt to find innovative? Practical ones aren’t modate and enhance the wonderfully distinctive institu- “If the state cannot fund us, we ask for greater flexibil- likely to interest the CPWO experts because they tions of our system,” Sullivan said. “Open to the partici- ity in managing ourselves to address the funding prob- don’t involve government, except to shrink it. pation of all institutions, the proposal presents a menu of lem,” Steger said. That language — “moving more Americans out options that can be individually negotiated and adjusted Nothing like the Virginia plan is under consideration of poverty” — is perfectly consistent with the leftist to suit the particular needs of [Virginia] and the individual in North Carolina, which spends nearly $1.9 billion annu- view that poverty isn’t something individuals need strengths of colleges and universities.” ally to fund the UNC system. Of that, North Carolina State to overcome by their own efforts, but a condition that If approved, qualifying institutions would be known receives $410 million, or $18,018 per undergraduate stu- society has imposed on some and which they can be as chartered universities. Each would be allowed more au- dent, while UNC-Chapel Hill receives $325 million, or moved out of with the right, “innovative” govern- tonomy in setting tuition rates, selling property, entering $19,667 per undergraduate student. ment policy. Edwards is full of such ideas. The press into contracts, and appointing professional and faculty Dr. Gretchen Bataille, senior vice president for aca- release says, “Edwards spent six years in the U.S. Sen- staff. In return for the increased autonomy, each institu- demic affairs for the UNC system, said the system is pay- ate. In that time, he championed policy initiatives tion would receive a reduced amount of appropriations ing attention to what is transpiring in Virginia. However, such as raising the minimum wage, expanding the from the commonwealth. she said, the system is not interested in using the Virginia earned income tax credit, creating matching saving Each institution must also prepare a six-year plan, plan as a model in North Carolina. accounts for low-income families, and providing in- which would be reviewed annually, that would be based “We [at UNC] have a lot more state funding,” Bataille centives for teachers to teach in low-income schools.” on the premise of not receiving additional general-fund said. “Our campuses, I don’t think, our interested in be- Good grief. Appointing someone who believes appropriations outside of incremental support for in-state coming private institutions. They would lose a lot of state that raising the minimum wage is a way to move people out of poverty, is about as sensible as appoint- tuition costs. support.” CJ ing someone to head the National Institutes of Health who believes that bleeding patients is a good way to cure disease. Economists have known for at least a century that if the government artificially raises the Resolution Before the U.S. House Would Support price of labor, less labor will be demanded. The mini- mum wage is a feel-good antipoverty nostrum that’s Military Recruiters’ Access to College Campuses actually counterproductive. The CPWO is supposed to be nonpartisan, but I’ll bet that it won’t be nonideological. Would By SHANNON BLOSSER Even with the resolution, the Solomon Amendment Edwards consider for a second any study exploring Contributing Writer stands in limbo through the legal process. Members of the the possibility that government is the obstacle to suc- CHAPEL HILL Forum for Academic and Institutional Rights and other cess for many of America’s poor? There are moun- ep. Robin Hayes, R-N.C., was among the leaders groups sued the government, claiming the Solomon tains of evidence that the only way to stimulate eco- of a recent U.S. House resolution to express sup- Amendment was a violation of the First Amendment right nomic growth and job creation is reducing govern- R port for the continuation of a federal law that de- to free speech. ment’s drag on the economy by tax and spending nies federal funding to colleges that do not allow military According to court documents, FAIR claims that law cuts, deregulation, and freer trade. Edwards, how- recruiters on campus. The resolution is in response to a schools have a long-standing practice to bar employment ever, has never had anything good to say about those U.S. District Court of Appeals ruling in November that recruiters from companies that discriminate on the basis policies, which don’t fit in with his populist image. struck down the law. of sexual orientation. Law schools were barring military Praising the selection of Edwards to direct the Hayes was one of 24 cosponsors of the bill, which was recruiters because the military does not allow homosexu- CPWO — was anyone else was considered? — Law introduced by Rep. Mike Rogers, R-Ala. The resolution als to join the military. School Dean Gene Nichol called him “one of the best offered continued support for the Solomon Amendment, A U.S. District Court upheld the Solomon Amendment lawyers in America.” But lawyers don’t have any par- which was adopted in 1994. At the time, the amendment arguing against FAIR’s claims. A three-judge panel of the ticular expertise in the policy issues the CPWO is to the Department of Defense appropriations bill called for Third District U.S. Court of Appeals ruled that the Solomon supposed to analyze. All Edwards brings is high the Department of Defense to deny federal funding to col- Amendment, on appeal, violated First Amendment pro- name-recognition and a penchant for pushing pie- leges that do not allow military recruiters the same access tections. in-the-sky ideas to voters who mistakenly believe that as other employment recruiters. Writing the majority opinion, U.S. Circuit Judge Tho- any problem can be solved as long as the govern- Since the amendment was first introduced, it has been mas Ambro wrote that law schools can bar the military ment has good intentions and spends enough money. expanded to include other branches of the government. from recruiting students. On the off chance that Edwards is really inter- “I am a strong proponent of allowing our military re- Law schools, Ambro wrote, have a right to express the ested in policies that will help reduce poverty and cruiters the same access that other potential employers have views they deem appropriate and the government, in this give people greater opportunity to improve their cir- on campus and believe that their ability to recruit should case the military, cannot force an opposing view on a law cumstances, I recommend that he start by reading be unimpeded,” Hayes said. schools. Doing so would be a free speech violation, Ambro Henry Hazlitt’s classic book The Conquest of Poverty. Twelve of North Carolina’s 13 members of the House wrote. He should then proceed to Charles Murray’s Losing voted for the measure when it was approved Feb. 2, 327- “The Solomon Amendment requires law schools to Ground, which explains how the federal government’s 84. Rep. Mel Watt, D-N.C., was the only member of the express a message that is incompatible with their educa- great “war on poverty” actually made things worse. North Carolina delegation to vote against the resolution. tional objectives, and no compelling government interest Edwards loves to say that poverty is a “moral “By denying recruiters the chance to offer these young has been shown to deny this freedom,” Ambro wrote. issue.” I’m inclined to agree with him in this way: men and women the opportunity to serve, these colleges “While no doubt military lawyers are critical to the effi- It’s immoral for politicians to continue policies that and universities are doing a disservice to the safety and cient operation of the armed forces, mere incantation of harm poor people. If the CPWO ever advocates the security of the United States,” Rep. John Kline, R-Minn., the need for legal talent cannot override a clear First repeal of any such policies, I’ll be amazed. CJ said in a press statement in January. Amendment impairment.” CJ March 2005 C A R O L I N A 12 Higher Education JOURNAL

Course of the Month Bush Higher-Ed Agenda Involves A Near-Perfect Example of Pell Grants, Community Colleges This Section’s Favorite Things By SHANNON BLOSSER Regarding community colleges, Bush Contributing Writer aims to spend $125 million in the fiscal 2006 CHAPEL HILL budget to promote a dual-enrollment pro- his month CM would like to salute class do you watch music videos in[?]” lthough most of President Bush’s gram that would allow high school students a class in sociology at North Caro- (For the uninitiated, “wtf” is Internet State of the Union address Feb. 2 to earn college credit at community col- Tlina State University that has pro- shorthand for “what the [expletive]?”) A dealt with reforms of Social Secu- leges. He plans to spend $250 million to con- vided a tidy illustration of several major At first, the only answer given was rity and spreading freedom throughout the tinue the Community-Based Job Training problems in academe: leftist bias in the “soc.” world, the president also discussed his Grants to train workers in skills in demand classroom, dumbing down of course con- Another student from the class higher-education goals. by local employers. tent, barely literate students who some- then posted about the “hilarious” stu- During his fifth State of the Union ad- Some of Bush’s proposals have already how gained admission to a major re- dent: “i was sitting there saying ‘some- dress, Bush advocated increasing Pell Grant been introduced in Congress. Both houses search institution, and academically dis- one is gonna be offended by this’ and funding as well as providing more fund- of Congress have introduced separate engaged students. not 4 seconds later did she turn around ing for workforce training initiatives for pieces of legislation regarding Pell Grant Here is the class: to her friend saying THIS IS community colleges. Both proposals were increases. The House bill (H.R. 507) would REDICULOUS,” she wrote, adding ways, Bush said, “to make our economy seek to expand Pell Grant awards to as SOC 202: PRINCIPLES OF SOCIOLOGY “when we were walking out of class she stronger and more dynamic.” much as $5,800 per award, simplify the col- Introduction to sociology. Analyses of started saying ‘I CANT BELIEVE Bush had earlier outlined his plans for lege aid application process, and reduce key processes and institutions including in- PEOPLE THINK THIS WAR IS ALL higher education in a Jan. 14 forum at fees students pay on loans. A similar bill teraction, inequality, organization, socializa- ABOUT OIL[.]’ I was laughing right be- Florida Community College in Jacksonville, failed during the previous session. tion, and social change. Includes core socio- hind her repeating what she said[.] Fla. During that speech, Bush said he “The Higher Education Act’s first mis- logical concepts, methods, theories. soooooooooooo funny when she wanted to increase Pell Grant awards by sion is to improve college access for low- started crying in the brickyard and her $100 a year during the next five years. That and middle-income students,” said Rep. A section of this class came to CM’s friend had to console her[.]” would raise the grant to low-income stu- John Boehner, R-Ohio, chairman of the attention Jan. 25 by way of an Internet She summed up her impression: “i dents to $4,550, an estimated $15 billion in- House Education and the Workforce Com- discussion forum for NCSU students, on mean really....why get worked vestment over time. An additional $1,000 mittee. “It has drifted away from that focus a thread titled “Outraged girl in class.” up...atleast he stopped lecturing to play would be available to students who take a over the years, at the expense of the very The opening post discussed an incident some [expletive] music.” rigorous course load. The proposal also students it was written to serve. We’ve got in the day’s class. Here is that post ver- Later on, a poster asked, “who’s the seeks to eliminate a $4.3 billion shortfall in to change that.” batim: professor? is it Dr. Tom? he always used the program by changing how student Boehner said the proposed legislation “Ok so we are sitting in class, and at to play cool music videos in class[.]” loans are gathered and administered. would stop the government from “robbing the end the professor usually plays mu- The answer was in the affirmative, Bush also proposed spending $100 mil- Peter” to pay Paul. “This bill will reverse sic video stuff. Well today he played a and other students chimed in with their lion for a Presidential Math and Science that transaction,” Boehner said, “by shut- music video saying basicly the war is impressions of the professor. He’s “so Scholars Fund. The fund would provide ting down excess subsidies to lenders and about oil. We are sheeps of society that chill,” “didnt care what party you were $5,000 in grants for 20,000 Pell-eligible stu- non-students, and restoring fairness in dis- watch tv, yada yada. This girls (definatly reppin’ just make a change,” “hardcore dents to study science or math. tribution of student aid.” CJ a conservative) stands up saying this is hippy, cool as [expletive] though.” Also, not what the war is about. This is not “just wait until he starts talking about what it means, crying. Honestly shee his pro-marijuana movement.” looked as if it was her first election she One poster wasn’t satisfied with ever voted in in teh first place. Are you knowing only that the class was in the AROLINA OURNAL kidding me. PLease talk amongst Sociology Dept. He pressed for more C J Publisher yourselfs, all i could do is laugh.” detail: “Hey, what class was this in?? I Several subsequent posters dis- wanna know what I can take to watch John Hood Garners Praise cussed the girl, the idea of crying in class, music videos of bush-slamming.” and other instances of people losing con- The first response he received to his trol during class. One asked, “your prof question was rather abrupt, however. for His Most Recent Book: was playing ‘Counting Bodies Like It began with a profanity, then advised Sheep To The Rhythm Of The War him to “blindfold yourself, flip to a ran- Drums’ from A Perfect Circle wasn’t dom page in a TRACS book [the book he[?]” to which the answer was “Yeah listing the courses offered at NCSU], exactly!!” and stick your finger somewhere on the Shortly afterward someone asked page. chances are, you’ll get a liberal Investor Politics the question CM had been expecting: “wtf pinko professor[.]” CJ The New Force That Will Transform American Business, Government, and Politics in the 21st Century

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Look for Investor Politics in bookstores or at www.TempletonPress.org. March 2005 C A R O L I N A JOURNAL Higher Education 13

The annual silliness of ‘The Vagina Monologues’ Guilt and Genitalia — How College Leftists ‘Celebrate’ Valentine’s Day

By JON SANDERS Week events! All Newman wrote, our rapists and abusers,” Newman said. Assistant Editor profits from sales go “my mother pointed “I speak as a working-class ‘heartland’ RALEIGH to support the Or- out the similarities American when I say that this population henever Eve Ensler’s “The Va- ange County Rape Issues in between these and needs to check its values,” she later wrote. gina Monologues” (TVM) Crisis Center.” vaginas and she told “Many working class whites uphold an W comes to campus, several things The announce- Higher me that vaginas image of ourselves as moral, pious people occur. TVM advocates and women’s cen- ment listed several were just as beauti- but this hides an all too common reality of ters do vulgar promotions that sound like events before TVM. ful.” abuse, incest and rape. Instead of address- lame hijinks by drunken fraternity boys. One was a docu- Education That’s odd, but ing the real issues in our communities, we Student columnists ape TVM literature and mentary and discus- nothing compared transfer our own filth and pain onto people write seriously as if TVM were a revolution- sion of female geni- with, “When I was of color.” ary work that challenges the unquestioned tal mutilations. four years old, a existence of a Big Evil Male Hegemony that There was also a teenage family Campus press love fest keeps women from saying the word “va- “fun and informative sex-positive party!” member tried to molest me.” Newman con- gina.” And, of course, anyone on campus It featured a “[p]resentation on fun and safe cluded that her family was dysfunctional. The following day, the Chronicle an- with a sense of decorum or logic who dares sex techniques (for all sexualities) given by Then she concluded that your family is nounced that this year at Duke, the V-Day question such absurdities is well-shrieked the Center for Healthy Student Behaviors, dysfunctional, too. celebration would have a new twist: “the at. make your own Vagina Swirl to eat, Safe “I think we live in a nation of dysfunc- debut of the Vagina Lock-In.” The article The movement arrogates the holiday Sex and Period Party Bags will be given tional families,” she wrote. “From my con- described the change to a particular scene Valentine’s Day to supplant that historic cel- away, as well as tantalizing prizes.” There versations with other women I have discov- in which “an older woman … shamefully ebration of romantic, selfless love with its was also a symbolic gesture called “Gentle ered that the woman who has not been discusses her feelings on ‘down there.’ In own focus on genitalia and denouncing vio- Hands” in which men “pledge not to harm raped or molested or abused is in the lucky last year’s show, the woman was the only lence against women. It appears that the women by putting your hand print and sig- minority” (emphasis added). actress on stage, and her delivery was saint has a name that begins with the same nature on our banner.” What can one say to a person who rea- aimed solely at the audience. This year, consonant as vagina and violence. No mi- sons thus? however, the rest of The Vagina Mono- sogynist could have crafted a more offen- So much more than one’s genitalia It is a shame that she was nearly mo- logues cast gathers around the grand- sive parody of feminism, but never mind lested, yes, but to conclude that her experi- mother-figure as she tells her story, re- that. Again, anyone who dares to question Meanwhile, at Duke, on Feb. 10 the first ence is normal? In doing that, Newman sponding in much the same way as children their tactics are personally attacked, while obligatory TVM column ran in the Duke goes well beyond even the rape-scare stats would to a riveting tale.” Gather ‘round the substance of his or her criticism is a- Chronicle. This one hit the (the soundly-discredited- vulvas, and you’ll hear a tale… Voided. requisite high notes: “I’m but-still-repeated “fact- One of the directors, Dylan Parkes, said In February, TVM made appearances so much more than my oid” that one in four col- that TVM would continue “until it is nec- at, among other places, the University of vagina, but it has and will “Until we talk more lege-aged women will be essary to stop. We need The Vagina Mono- North Carolina at Chapel Hill and Duke always shape my life,” about vaginas, we can’t raped) that feminists at logues until conversations that are being re- University. wrote student columnist progress to a world Duke and elsewhere are enacted and performed for us begin occur- At UNC-CH, a full week was set aside Bridget Newman. “Until so fond of. ring on an everyday basis between real in preparation for the play. The group we talk more about vagi- where all of us are safe, Newman was merely people.” “Carolina V-Day Initiative” announced Feb. nas, we can’t progress to happy and respected.” getting started, however. On Monday, Feb. 14, known outside the 7-12 as “V-Week,” calling it “A week to cel- a world where all of us — Bridget Newman Having established that a campuses as Valentine’s Day, The Daily Tar ebrate Vaginas, to raise your Voice against are safe, happy and re- majority of women are Heel reported on UNC-CH’s presentation Violence against women (in all forms), to spected.” raped and abused, she of TVM. Again, the news article was full of go see The Vagina Monologues, and to sup- That was the conclu- started to place blame — cant, with one comment about attendees port local organizations that work to end sion of the article, however. Earlier, and being in an American institution of having “bought tickets to hear about vagi- Violence against women!” It continued, Newman delved into areas outside the higher education, she naturally finds her nas, a part of the female anatomy so taboo “Look for us in the pit next week to buy TVM. What she presented was utterly, ut- enemies among guess who. Right — men, and unmentionable in global society…” tickets to The Vagina Monologues, raffle terly pitiable. the rich, the religious, and whites. Of course, the DTH gave the news ar- tickets for a bunch of great prizes, I Heart “While other children innocently col- “We don’t want to admit that our fami- ticle the headline “Crowd wowed by touch- Vaginas t-shirts, and to get more info on V- ored pictures of butterflies and flowers,” lies are so dysfunctional or that we loved ing ‘Vagina.’” CJ

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• Reports and columns on the legislature, politics, culture, and local Your Home on the Web for North Carolina Public Policy government from Carolina Journal editors and reporters. The John Locke Foundation’s brand new, completely redesigned home page is • Carolina Journal Publisher John Hood’s exclusive “Daily Journal.” your best source of research, analysis, and information on the critical public policy issues facing North Carolina state and local governments. • Timely links to important stories and editorials from the state’s major newspapers, magazines, and other media organizations. A fully searchable, comprehensive database of reports, studies, briefing papers, datasets, press releases, events notifications, and articles can provide • Instant access to state & national columnists, wire reports, and the an excellent starting place for those drafting legislation, researching policy John Locke Foundation’s other public policy web sites. issues, preparing news stories, planning political or lobbying campaigns, or seeking information with which to be an informed voter and citizen. See what one Raleigh paper called “Matt Drudge with Class” March 2005 C A R O L I N A 14 Local Government JOURNAL

Town and Country Durham County’s Impact Fee Festers

Developers sue Wilson County appeals rejection by lower court, continues collecting the fee

A lawsuit filed in February in By MAXIMILIAN LONGLEY office doesn’t federal court by two developers ac- Contributing Editor track who is new cuses the city and county of Wilson DURHAM to the county, so of helping a rival by promising recent decision by a local trial court she can’t say how more than $2 million to land a Tar- that Durham County’s impact fee many new homes get store, the Daily Reflector of Aon new housing, levied for the sup- are being bought Greenville reports. port of the public schools, is illegal has by new residents David James and Russell revived the dispute over the controversial and how many Hesmer, who filed the lawsuit, are revenue-raising method. are being bought owners and developers of Wilson’s Meanwhile, the county is appealing the by established West Village shopping center. trial court’s decision to the N.C. Court of residents of The rival is Heritage Place, a Appeals. The county is allowed to continue Durham. shopping center planned for 90 collecting the fee, depending on further A resolution acres in Wilson County. Under a court action. If the Court of Appeals says by the Durham deal worked out last year, the de- the fee is illegal, developers or homeowners County commis- velopers of Heritage Place agreed who paid the fee will get refunds (a total of sioners allows to pay Target Corp. $2 million to put $2.2 million). The impact fee actually im- some of the im- one of its stores in their center. posed by Durham County is $2,000 for a pact fees for low- The city and county would re- new single-family unit and $1,155 for a new income housing imburse Heritage Place the $2 mil- multi-family unit. The lawsuit is Durham to be paid out of Photo courtesy of Flying Fotos and Durham Convention and Visitors Downtown Durham’s skyline, as seen from the Duke University campus. lion, plus interest, once Target Landowners Association v. Durham County. the county bud- opened and raised property values. The consulting firm of Tischler & Asso- get. James and Hesmer said they ciates, which prepared a report for the According to the resolution, a 501(c)(3) Visser explains the background of his got no such incentives when they county in September 2001, evaluated what nonprofit group that provides housing to county’s legislatively authorized school put a Wal-Mart in Wilson a decade level of impact fee would be “supportable” low-income buyers or renters can make an impact fee. ago. They want a permanent injunc- in light of the costs imposed on public application to the commissioners to have In the 1980s, the legislature authorized tion prohibiting the city and county schools by each student and the number of their impact fee for a particular housing Orange County to impose an impact fee, from making the payments. students generated by single-family hous- unit paid out of the county budget. The denying the county’s original request for a The lawsuit is believed to be the ing units and by type of units (generally commissioners may grant the request, re- graduated tax on new homes. Orange first challenging incentives in North meaning apartment building). The con- sources permitting. County first exercised its legislative-granted Carolina since the state Supreme sultant’s maximum supportable impact fee The commissioners have granted ap- power to impose impact fees in 1993, and Court in 1996 held that local gov- for a single-family detached housing unit plications from 50 nonprofit groups to avoid impact fees have remained in place to this ernments could offer cash, tax was $4,936. The maximum impact fee for having to pay the impact fee, and have only day, during a time of increased residential breaks and other perks to new and any other type of housing unit was $2,851. denied one group’s application, Duer said. growth and growth of the student popula- expanding businesses. When the Durham County commis- Rich Lee, executive director of the tion in local public schools. Some observers The lawsuit accuses the city and sioners were first debating the impact fee, Durham Affordable Housing Coalition, said could say the impact fee did not apprecia- county of “acting as surrogates for the Home Builders Association claimed the his group is trying to persuade Durham bly dampen the county’s growth, Visser local consumers and adopting the fee would slow housing growth. A News County to expand the terms of its low- said. Reimbursement to affordable-hous- presumed brand preference of some and Observer of Raleigh article Jan. 24 pur- income housing impact-fee policy so as to ing nonprofits is allowed for as in Durham local citizens as official government ported to cast doubt on the prediction. The benefit for-profit groups that build low- County’s scheme. policy.” article cited a 3.8 percent increase in resi- income housing, rather than solely benefit- Bunkey Morgan, chairman of the dential building permits in 2004 (when the ing nonprofit groups as is the case now. Lee Chatham County commissioners, said that Water permit for FedEx hub ordinance was in force) over 2003. Oppo- cites several for-profit companies that are the county’s impact fee is a “necessity for us nents of the impact fee assert it was too interested in building housing in Durham because of schools.” He said that he’s “glad A state review panel has upheld early to rule out the idea of an adverse for low-income people. The impact fee, Lee that we got” the impact fee, because schools a water quality permit needed to impact on home sales, and added that there said, is “one of the disincentives” that dis- have to be paid for one way or the other, and build the FedEx hub at Piedmont is certainly going to be an impact on lower- courages for-profit organizations from pro- that without an impact fee the county would Triad International Airport, the income buyers. viding low-income housing. The coalition have to raise property taxes. News-Record of Greensboro reports. has “not reached agreement… with the Morgan supports a proposal to vary the The N.C. Environmental Man- Homebuilders oppose fee county” on the matter. impact fee for new single-family homes, agement Commission ruled Feb. 10 depending on which portion of the county that the state’s Division of Water Nick Tennyson, the former Durham Legislature allowed exclusive fees the home is built in. Instead of the current Quality was correct in issuing the mayor who heads the county’s Home Build- uniform fee of $1,500, Morgan proposes water quality permit in 2003. ers Association, was not a party to the law- A key issue in the litigation over variable rates, from no fee in the southeast- That permit allows PTI to fill in suit but he is following it and is encouraged Durham’s impact fee is that the General ern part of the county to $4,000 in the wetlands and streams along Brush by the trial court’s decision. He says the Assembly has specifically authorized school county’s northeast portion. The proposal, Creek as it builds the hub. The per- impact fee is based on a “completely wrong impact in two counties — Orange and justified by differential growth rates in dif- mit declares that the project would assumption” about how public schools Chatham — but has not made any specific ferent parts of the county, has been deferred not severely affect the creek and should be funded. Since “public schools are authorization for other counties to have by the commissioners. streams that are part of Greens- an indivisible good,” they should be “jointly such fees. Opponents of Durham’s fee as- Keith Megginson, director of the boro’s water supply if the airport funded” by everyone in the community. sert that by giving specific permission to Chatham County Planning Department, takes preventive steps. Tennyson said he thinks that if one two specific counties to impose impact fees, reviews the history of the impact fee in his But opponents, who said they group (in this case new-home buyers) has the Assembly is implicitly withholding per- county. The county commissioners enacted might continue their appeal of the to pay more than other groups to support mission from other counties, including the impact fee in 2000, but they had ob- permit, feel the amount of storm- public schools, the fee is “like tuition.” “The Durham. tained legislative authorization in the 1980s. water runoff and pollution will be government may as well charge an impact Tim Kent, executive vice president of Chatham’s fee is $1,500 for new homes and more than the state or airport an- fee on people who reach their sixty-fifth the North Carolina Association of Realtors, $500 for new apartments. Housing for the ticipates. Fifteen individuals and birthday in order to pay for the social ser- said Durham’s impact fee is a “direct chal- elderly (people over 65) is exempt from the two hub opposition groups filed the vices they will receive as they get older,” lenge to the North Carolina General fee so long as children are excluded from appeal. Tennyson said. In any event, Tennyson said Assembly’s authority.” living there. Nonprofit groups that provide A state administrative law he thinks that, in the long run, growth pro- Realtors and homebuilders have housing to low-income people can apply judge upheld the permit in August. duces enough tax revenue to pay for the worked together since the late 1980s to pre- for reimbursement of their fee on a case-by- The Environmental Management extra school costs associated with such vent the legislature from authorizing local case basis, just as in Durham and Orange. Commission was required by law growth. governments to enact impact fees and trans- Megginson said he hasn’t noticed that to review the case and either uphold Tennyson asserts that “[m]ost new fer taxes (taxes on the transfer of real estate), the fee has had any effect on the number of the judge’s decision or send it back homeowners are already residents of the he said. Such levies “drive up the cost of building permits issued in the county. to the judge for a full hearing. county.” Tony Craver, president of the housing and put housing out of the reach of Homebuilding in Chatham is “rolling right David M. Clark, a lawyer rep- Durham Regional Association of Realtors, many North Carolinians,” Kent said. If along.” The county’s overall rate of growth resenting the opponents, argued to agrees with this claim. He said that most of Durham County won the court case, it would hasn’t been slowed, but Megginson men- the commission that the hub would his clients who move into new homes are “open the floodgates for every other county tions the possibility that the impact fee “may increase the amount of storm-wa- moving within the county, and that people in North Carolina” to put this allegedly have eliminated some [lower income] ter runoff and flood properties near moving in from outside the county tend to unfair taxes on homebuyers. people from the [housing] market.” the creeks and streams. He also ar- purchase existing homes rather than newly An examination of the impact fees in Chatham County authorities have gued that the hub would pollute the built ones. Orange and Chatham Counties shows some sought permission from the legislature to waterways with oil, dirt, and Heidi Duer, the assistant county man- of the same issues involved in Durham’s change the impact fee to a graduated tax, chemicals from de-icing planes. CJ ager for Durham County who is respon- impact fee. but the Assembly has not responded, sible for administering impact fees, said her Assistant Orange County Manager Rod Megginson said. CJ March 2005 C A R O L I N A JOURNAL Local Government 15

N.C. Court of Appeals ruling Court Allows Laurinburg Internet System The ‘Pillow Effect’ Softens Budgets By MICHAEL LOWREY Associate Editor RALEIGH orth Carolina’s second highest f you’ve ever served as a local elected official, court in a ruling Jan. 18 clari- you’re probably familiar with the “pillow effect.” N fied under what circumstances I It might be called something different. You may a city or town can engage in activities even have your own name for it, but essentially, in the that private business ordinarily provide. city-county manager form of government it has long The ruling comes in a case about the been used as a tool to protect or enhance the position legality of the fiber-optic network of your local manager. Laurinburg was using to provide So what is it? Essentially it works like this: The Internet access to itself and outside gov- county tax manager prepares a forecast as to what the ernmental and institutional users. The coming year will bring with Court of Appeals held that because the respect to revenues. The tax wording of state law defining what con- manager prepares the report stitutes a cable television system was for the county manager. If ambiguous, the town could operate the they’re smart, the pillow ef- network, even if it didn’t offer cable TV. fect has already begun. Thus In 1996, Laurinburg established a the tax manager essentially fiber-optic link between its city hall and St. Andrews College was among the users that connected to Laurinburg’s network underestimates revenue its public works building. Two years slightly so that actual rev- later, it laid additional fiber-optic lines to create what system or facility that, by means of … wires or cables alone, enues will run above his pro- amounted to a 19-mile loop. The town soon entered into an receives, amplifies, modifies, transmits, or distributes any jections and make everybody agreement with School Link, Inc, under which the com- television, radio, or electronic signal, audio or video or happy. Chad Adams pany would become the town’s Internet service provider. both, to subscribing members of the public for compensa- The city-county manager To generate the volume of business needed to make the tion.” then looks at the forecast from arrangement feasible, Scotland County government, the The Court of Appeals noted that the law does not the finance director and tax manager so they can grasp Scotland County schools, St. Andrews College, and Scot- restrict a municipal cable system to any particular technol- what’s going on, not only with property taxes, but also land Memorial Hospital also hooked into the town’s fiber- ogy or define or limit the content of the electronic signals. with sales taxes and other fees or grants. In this budget optic lines and received their Internet service from School “Stated differently,” wrote the appellate court, “the picture there is again an incentive to build in a pillow Link. language of this statute is ambiguous as to whether the as well. Though technically able to carry cable television sig- fiber optic network run by Laurinburg falls within its So, by the time local elected boards begin their nals via its network, Laurinburg has never offered that contours. Thus, we apply N.C. Gen. Stat. § 160A-4’s broad budget debates (ultimately it’s all about the tax rate) service and has no plans to. rule of construction.” both the manager and the tax man have built in some BellSouth, which had previous been the ISP for most of “Laurinburg’s network is run over fiber optic ‘wires or degree of assurance that actual revenues will be better the governmental and institutional users that School Link cable,’ providing a ‘system‘ for ‘transmit[ting]‘ and than predicted. This system seems to keep everybody serves via the town’s network, sued contending in part that ‘receiv[ing]‘ electronic signals capable of being converted happy and protect the longevity of the manager. Laurinburg lacked the legal authority to offer the service. to ‘audio’ and/or ‘video’ streams of information… We But there’s another pillow effect that often occurs believe this fits within a broad construction of the defini- at the county level that has to do with education. The What are municipalities allowed to do? tion of a CTS.“ K-12 system also builds into the budget picture some The court thus found that Laurinburg was authorized cushion based on the mixture of federal, state, and The answer to whether the town could legally offer the to operate the system. local funding. Most have a permanent cushion called service depends greatly, the Court of Appeals acknowl- a “fund balance” that they are typically trying to build edged, upon how one views the powers of municipal Entering new fields up as a result of unspent money from the previous government. North Carolina has traditionally followed year. “Dillon’s Rule”, named after the 19th century jurist John “We acknowledge that Laurinburg’s fiber optics net- Briefly, the fund balance is that wonderful area of Dillon: work was most likely not something the legislature envi- the county budget whence revenues that have been “[A] municipal corporation possesses and can exercise sioned in 1971 when they enacted the statute allowing a deposited flow back to pay for county government. the following powers and no others: First, those granted in municipality to operate a CTS as a public enterprise,” The state sets a guideline for counties to have 8.5 express words; second, those necessarily or fairly implied wrote Judge McCullough. percent of their overall annual budget in their in or incident to the powers expressly granted; third, those “However, if Laurinburg were currently offering the undesignated fund balance. This was primarily done essential to the accomplishment of the kind of cable programming in place in when property taxes were collected once a year. It declared objects and purposes of the cor- 1971, and doing so over their fiber optic ensures that when a rough time hit, a county would poration,— not simply convenient, but “Without authority to network, they clearly would be autho- have enough to cover debt and expenses to stay sol- indispensable.” rized to offer the current bundle of net- vent. In 1971, however, the General As- offer the bundled CTS work services over these same lines as Many counties keep more than the minimum sembly adopted N.C. Gen. Stat. § 160A-4, services, no municipal- ‘additional and supplementary powers required, and in the coming years, because of changes which states that municipal charters “shall that are reasonably necessary or expedi- in tax collections, the 8.5 percent minimum may be be broadly construed and grants of power ity could effectively op- ent.’” lowered. When counties go below that amount they shall be construed to include any addi- erate in today’s mar- “Without authority to offer the receive a curt letter from the Local Government Com- tional and supplementary powers that ket.” bundled CTS services, no municipality mission telling them to get their financial house in are reasonably necessary or expedient to could effectively operate in today’s mar- order because they may be jeopardizing their bond carry them into execution and effect.” ket. Moreover, just as BellSouth is able to ratings. North Carolina appellate courts have leverage its telephone infrastructure to Schools aren’t required to keep a fund balance, been less than clear in the past in reconciling the two visions provide low cost DSL broadband services in the market, so but do so anyway despite the fact that they have no of town authority; indeed, the N.C. Supreme Court had too should a municipality be able to leverage its CTS bond-selling capacity or debt. When looking to save carefully avoided addressing the issue in several past infrastructure. money, ask your local school board members how rulings. “We believe it would elevate form over function, against much they have in their fund balance. The public As a first step in determining whether Laurinburg the intent of our legislature’s mandate for broad construc- deserves to know. could operate the system, the Court of Appeals addressed tion, to first demand 1971-type cable programming be in When counties enjoy good financial times you this issue. “The narrow Dillon’s Rule of statutory construc- place before a 2004 CTS could be authorized as a public might think that the pillow effect is somewhat unethi- tion used when interpreting municipal powers has been enterprise. Rather, the legislature’s intent in 1971 was to cal and ultimately leads to wasteful spending and an replaced by N.C. Gen. Stat. § 160A-4’s mandate that the enable the municipality’s public enterprise to grow in arbitrarily high tax rate. While there may be a hint of language of Chapter 160A be construed in favor of extend- reasonable stride with technological advancements, as it is truth to that, I would also caution you that in the past ing powers to a municipality where there is an ambiguity this advancement which marks the ever-approaching hori- four years when counties and cities have had some of in the authorizing language, or the powers clearly autho- zon of necessity.” their worst budgetary pictures, the pillow was lean rized reasonably necessitate ‘additional and supplemen- Rulings by the N.C. Court of Appeals are controlling beyond comfort. In some instances, had the pillow not tary powers’ ‘to carry them into execution and effect’”, interpretations of North Carolina law unless overturned been there, the budget would actually have forced the wrote Judge Douglas McCullough for the court. “How- by the N.C. Supreme Court. Because the ruling by the fund balances to drop far below 8.5 percent and caused ever, where the plain meaning of the statute is without three-judge panel of the appeals court was unanimous, if substantial property tax increases. ambiguity, it ‘must be enforced as written.’” BellSouth seeks further review before the N.C. Supreme So, as our economy continues to transition and Court, the high court would not have to hear the case unless improve in North Carolina, it might be worthwhile to What’s a cable system? it chooses to. take into account the truth about your local pillow The case is BellSouth Telecomms., Inc. v. City of Laurinburg, effect and ask about the local school board’s fund The appeals court then turned to the language of the (04-145). The Court of Appeal’s decision is available online balance. It might make some folks uncomfortable, but 1971 law allowing towns to operate cable television sys- at http://www.aoc.state.nc.us/www/public/coa/opin- it is important to recall that it isn’t their money. CJ tems. The statue defines a cable television system as: “any ions/2005/040145-1.htm CJ March 2005 C A R O L I N A 16 Local Government JOURNAL

Local Innovation Bulletin Board From Cherokee to Currituck Charlotte Considers Limiting Urban Growth and the Military Length of Stay in Public Housing he nation’s military bases face an value of all central-city homes, regard- ever-encroaching threat — sub- less of owner, dropped 6 percent, to 10 By MICHAEL LOWREY idea,’’ County Commissioner John Henley urban development. The need to percent. T Associate Editor said to The Fayetteville Observer. protect base land for military training The racial difference is not surpris- CHARLOTTE The additional sales tax would also have has the brass forming an unlikely alli- ing, because both riot damage and the harlotte is considering overhauling to be approved by the General Assembly. ance with conservation groups, observ- perceived risk of future riots were con- its public housing policies in an ers say. centrated in predominately black neigh- effort to reduce reliance upon gov- Raleigh traffic lights Albeit for different reasons, the mili- borhoods. C ernment handouts. The move comes as fed- tary and conservation groups share the Again, these numbers reflect not just eral dollars have become scarcer and the Raleigh will spend $28 million over the same goal: to preserve open space. Con- immediate property damage but long- city’s waiting list to get into public housing next six years to design and install a state- servationists say that the 25 million acres term declines. If it is more expensive or has grown rapidly. of-art new traffic signal system. When com- owned by the Defense Department is less desirable to live or work in a particu- A key element of a draft plan being pleted, divers will spend less time waiting home to almost 330 endangered species, lar neighborhood, property prices will developed by Charlotte Housing Authority at red lights, enjoy faster commutes, and while the DOD needs the land for valu- drop, the economists say. Chief Executive Officer Charles Woodyard spend less on gasoline. Air pollution will able training exercises. is a time limit on how long residents can also be reduced. As a result, states are trying to bal- Being a pedestrian is dangerous stay in public housing. Woodyard has not “This will do more for air quality than ance the needs of the military, conserva- decided what the time limit would be. In anything else we could possibly do,” Joe tion groups, and homeowners, observ- Walking is the most dangerous form any case, it would not apply to disabled and Bryan of Knightdale, chairman of the Capi- ers say: of transportation, accounting for 11.3 elderly residents. The proposal would also tal Area Metropolitan Planning Organiza- • In Fayetteville, the Army and state percent of transportation fatalities na- require the approval of federal housing of- tion, said of the new system to the News & and local conservation groups formed a tionwide, according to the Surface Trans- ficials. Observer of Raleigh. partnership to protect 9,100 acres near portation Policy Project. “The current system tends to trap fami- The backbone of the new system will be Fort Bragg for training and woodpecker In 2003 a total of 4,827 pedestrians lies here for years,” Woodyard told The a 185-mile-long fiber-optic network. habitat. were killed while crossing the street and Charlotte Observer. Housing authority “Once you put a fiber system together, • In Florida, the Defense Depart- an additional 70,000 were injured. records show that the average stay is eight you can hang all different types of technol- ment and conservation groups are work- The most dangerous cities, STPP years, though some families stay far longer. ogy off it,” said Eric Lamb, Raleigh trans- ing to create buffer zones, protected from says, are characterized by wide, high- Democratic Charlotte City Councilman portation services director. suburban development, for the flight speed arterial roads that are hazardous James Mitchell agreed. “There is a cycle that Traffic engineers will be able to get real- paths of five Air Force and Navy bases. for pedestrians. seems to exist,” he said to the newspaper. In time data on traffic conditions from traffic • The army and environmental The majority (about 52 percent) of some cases, he said, “you have three or four cameras and pavement sensors. They can groups in Fort Carson, Colo. are work- pedestrian fatalities occurred on arterial generations of families that stay in public then adjust the timing of signal lights to ing with ranchers to limit the develop- roads, while less than 15 percent oc- housing.” optimize traffic flow. The fiber-optic sys- ment of nearby ranchland, which would curred on interstates and freeways, how- The proposal is consistent with the hous- tem can also be used to relay information to impede the Army’s artillery and tank ever, more than 40 percent of pedestri- ing authority’s vision to eliminate tradi- drivers via roadside signs, the Internet, or warfare training. ans were killed in areas where no cross- tional public housing by 2030. The focus future technologies so they can avoid con- Fifteen states allow local govern- walk was available. would instead be on gested areas ahead. ments to restrict development around Between 2002-2003, three Florida mixed-income housing It will take two years military facilities. Not all suburbanites metropolitan areas topped the list of the built in part by private The proposal is con- to design the system and like the idea of restrictions, claiming that three most dangerous cities to walk: Or- developers. another four years install- such zoning reduces property values and lando, Tampa-St. Petersburg-Clearwater The proposal comes sistent with the hous- ing it. Drivers will start prevents land from be- and West-Palm Beach- as the housing authority’s ing authority’s vision to seeing benefits as the net- ing used for more prof- Boca Raton. Ironically, waiting list exceeds 2,500 eliminate traditional work comes online in dif- itable economic uses. In Fayetteville, the the Orlando and St. Pe- applications. The author- ferent parts of the city. However, military tersburg areas spend public housing by Army and conserva- ity currently has 3,200 ten- Raleigh officials had observers argue that more federal funds per ants plus 4,500 more fami- 2030. tried for a number of years bases that are restricted tion groups formed a capita on pedestrian lies in Section 8 housing. to get state money to up- from training exercises partnership to protect and bicycle facilities Woodyard is also grade its traffic lights but because of the disrup- than any of the 50 larg- considering asking for federal approval to road projects kept winning out. Most of the tion to nearby neigh- 9,100 acres near Fort est metropolitan areas. change how much rent the authority money for the new system will come from a bors will be subject to Bragg. STPP notes that charges. Federal rules require the residents federal program aimed at reducing pollu- another round of base between 1994 and pay 30 percent of their income in rent or a tion and congestion; the city’s share of the closings, which also 2003, pedestrian fatali- minimum of $25 per month. Woodyard cost is $7 million. drains local economies, observers say. ties have declined by almost 13 percent, would like to set a fixed monthly amount, Reported in USA Today. however, the percentage of people walk- so rent doesn’t go up as a family’s income Greensboro recycling cashes in ing to work declined at an even greater increases. Lingering effects of 1960s riots rates. Greensboro city officials are extremely North Carolina had 178 pedestrian Fayetteville transit tax? pleased with the returns this year from its Cities struck by race riots during the fatalities in 2002 and 150 in 2003 for an recycling program. While recycling has in 1960s have suffered a number of long- average of 1.96 annual pedestrian fatali- Fayetteville’s transit director has rec- the past often been a financial nonstarter, term economic consequences: lower male ties per 100,000 residents. ommended that Cumberland County adopt recent increases in demand for recycled employment, reduced black family in- Within the state, pedestrian fatality an additional half-cent local sales tax to pay paper has turned the program into a money- come and a fall in property values, the rates varied widely. In the state’s three for a bigger bus system. The tax would maker for the city. New York Times says. large urban areas, pedestrian fatalities generate an estimated $12 million a year, Revenues were $858,417 for fiscal 2003- Between 1964 and 1971 there were accounted for 10.2 percent to 12.6 per- with most of the money going to offset 04, up more than threefold compared to more than 750 riots, killing 228 people cent of all traffic deaths. higher operating loses from a transit system only two years earlier. And this year should and injuring 12,741. After more than By contrast, in the Wilmington area, which, under transit director Jerome be even better, with revenues of $429,545 15,000 incidents of arson, many black 24 percent of those killed in 2002 and Brown’s proposal, would more than triple through the fiscal year’s first three months. urban neighborhoods were in ruins. 2003 in traffic accidents were pedestri- in cost. The money goes into the city’s general fund Compared to similar cities that had ans, an average of 3.65 annual pedestrian Brown’s recommendation comes in re- and helps keep taxes down. little or no rioting, economists from fatalities per 100,000 residents. The STPP sponse to a decision by city leaders last year “All of the mills are loudly demanding Vanderbilt University found that cities also rated Goldsboro and Rocky Mount to increase the Fayetteville Area System of more (recyclable) materials,” said Bill with major riots had depressed economic as particularly dangerous places to walk Transit’s ridership. Under the proposal, Leonidas, a spokesman for FCR, the com- indicators. The median black income along streets. FAST would grow to a $12.9 million-a-year pany that manages the city’s recycling pro- dropped by about 9 percent from 1960 to At the other extreme were the operation with a yearly operating deficit of gram. “The problem has been flipped. Sup- 1970. From 1960 to 1980, male employ- Greenville, Asheville, and Jacksonville nearly $10 million. The current system costs ply no longer exceeds demand.” ment dropped 4 to 7 percentage points. metropolitan or micropolotan areas. In $3.9 million to operate with a $1.3 million “The biggest factor is the influence of The impact on property values is the Asheville MSA, only 7.3 of traffic deficit covered by Fayetteville taxpayers. the export market,” Ken McEntee, the edi- even more striking. In cities with severe fatalities were pedestrians. The rate was The additional funds would allow FAST tor and publisher of the Paper Stock Report, riots, researchers found, the median even lower, 3.9 percent, in Jacksonville. to increase hours of operation and serve said to the News & Record of Greensboro. value of black-owned homes dropped Jacksonville also had the lowest rate pe- outlying communities such as Eastover, “China has a lot of demand, and they’re from 14 percent to 20 percent, compared destrian fatality rate per 100,000 resi- Hope Mills, and Spring Lake. coming here to get it.” McEntee’s publica- with cities that experienced little or no dents in North Carolina at 0.68. Asheville ‘’I think we have to be very cautious tion reports that in 2004 China bought 1.3 CJ rioting, from 1960 to 1970. The median was second at 0.87. about adding taxes, but upgrading the tran- million tons more of U.S.-generated scrap sit system to make it more effective is a good paper. CJ March 2005 C A R O L I N A JOURNAL CJ Interview 17 Fox News’ Fred Barnes: The Republican Moment is Now

By CAROLINA JOURNAL STAFF form. So he created a commission headed RALEIGH by two former senators, John Breaux the red Barnes is the cohost of Fox News’ Democrat and Connie Mack the Republi- “Beltway Boys,” and a regular panel can, who is a supply-sider and a real tax F ist on “Special Report with Brit reformer. Here is what you want from tax Hume” on Fox News. Barnes also helped reform. You want a simpler system with found The Weekly Standard in 1995, a maga- lower rates. If you don’t get that, it’s not real zine covering politics in the United States tax reform. And I think that is what we’re and elsewhere. He was a recent speaker at going to get from this commission. the Headliner luncheon series hosted in Raleigh by the John Locke Foundation. Hood: We’ve talked some about President Bush When Barnes was in town, John Hood inter- and the Republicans, let’s talk for a moment viewed him for Carolina Journal. about Democrats. What is their response going to be to the Republican agenda? Hood: You talked in your remarks to the John Locke Foundation about President Bush, the Barnes:Well, I think so far we’ve seen what 109th Congress, and what’s happening now in their response is, and that is they are going Washington. What do you think are President to be obstructionists, and they don’t seem to Bush’s top priorities in the next three months? have learned the lesson of Tom Daschle, Fred Barnes of Fox News spoke at a John Locke Foundation luncheon recently. and they have fewer members. I think it is Barnes: He has a lot of huge issues on his tionary liberals who think that every pro- now, and the White House, is trying to going to be harder in the Senate for them to agenda, but two stand out. One, in the gram that was created during the years of fashion a bill that all these factions will block Republican measures than it was over foreign policy area, is Iraq, where there is an liberal hegemony, you know, from the ‘30s agree on. The ones who don’t want to do the last several years with Tom Daschle, election on January 30th. There will be two right into the ‘90s, has to be saved or ex- anything, you can just sort of beat them into who was aggressive, obsessive, and cer- more elections this year. And Iraq is mov- panded. submission, but Newt Gingrich and Jack tainly highly opposed anything that Presi- ing, amidst great violence, toward a democ- Kemp and those people are important and dent Bush or Republicans came up with. racy and he wants it to be a stable, perma- Hood: And they probably have a particular are taken seriously. nent democracy. On the domestic side, it’s attraction to preserving Social Security in its Hood: What happens if Howard Dean becomes Social Security reform — to allow people to current form, because they view it as sort of the Hood: Another issue that President Bush talked the DNC chairman? invest some of their payroll taxes in private touchstone of the welfare state as created in the a lot about during the re-election campaign that accounts that they’d own, and also, to make 1930s. If Bush was able to succeed in moving gets a lot of conservative hearts aflutter is the Barnes: Probably not much. Dean, you it solvent throughout the rest of the 21st Social Security in at least a moderately market- idea of fundamental tax reform. If we under- know, back before he got all intoxicated century. oriented direction… They are worried, I think, stand that Social Security is taking the front with running for president and being the about the precedent that was set. seat, and tax reform going to a national sales tax champion of the left in the Democratic Party, Hood: We’ve talked on this program before with or a flat income tax or some version of that is sort was actually more of a centrist governor. lots of different folks about Social Security‘s Barnes: It would set a precedent. And Demo- of the middle of the bus. Is that the way you hear fiscal problems, the economic attraction of ac- crats are not very excited about the creation it and does that make sense? Hood: He got a B once from the CATO Institute counts, the political attraction of having a new of a larger investor class, because they think for his fiscal management. investor class in America. You’ve written re- investors are people who are interested in Barnes:Well, I’m not sure where these dif- cently in The Weekly Standard about the markets, and will tend to move to the Re- ferent ideas are in the bus. If this is really tax Barnes:He did. I’ve talked to Steve Moore political prospects of the actual bill that would publican Party rather than stay in the Demo- reform, the president has, in effect, put off who was at CATO then and making these come out of negotiations. What are some of the cratic Party. But here is what I think is until 2006, and I agree with that. You don’t ratings. And he thought Howard Dean was factions that are going to influence the outcome? important right now in Washington. The want to try to everything in one year. This is pretty good for a Democrat. We’ll see. Maybe Wall Street Journal has written about a Re- the year — 2005 is for Social Security re- he’ll return to that. CJ Barnes: Social Security is never the third publican Moment. And this is a Republican rail of politics that it used to be — you know, Moment where you have a strong, ambi- touch it and you die. President Bush has tious, tough president who is very engaged. touched it a number of times and has been You have majorities for Republicans in the re-elected. But the first thing he has to do is House and the Senate. And you have this get Republicans together. There are a num- large agenda. Now is the time. This is the ber of Republicans who don’t want to have time for conservative Republicans who are anything to do with it. They say, “We’ve in charge in both places — the White House gotten this great majority in the House and and Congress — to move. It’s not room for Attention City & County Officials the Senate, why jeopardize it by going after excuses by saying, “Well, we’ll get the So- Social Security?” cial Security later.” And others with a strong interest in local government issues

Hood: There was one member of Congress that Hood: You’d have to have a filibuster from the said, “Who cares about 2042? I’ll be dead.” majority or something like that. You now have some handy new ways to track the latest news, analysis, Barnes: Yes, that was Rob Simmons of Con- Barnes: Exactly. It is these two years that commentary, and policy research on city and county governance. necticut, and I think he’ll come along and be they have to act in. These moments don’t on the president’s side. You have another come very often. Remember, for FDR it The Center for Local Innovation, a special project of the John Locke group that doesn’t want to do anything. It came from 1932 to 1934. He was not able to Foundation, has launched a new website: www.LocalInnovation.org. doesn’t want to meet the solvency chal- do nearly as much after that. We had an lenge at all. They want to have the accounts episode from 1964 to 1966 when Lyndon Updated daily with headlines, opinion columns, interviews, and links — the individual accounts for people to use Johnson was president and installed the to new studies from a variety of sources, LocalInnovation.org is a their payroll money to invest in stocks or Great Society and did so many — and Medi- great place to start your day if your interests include such issues as bonds and so on. And then there is the care — to enlarge government’s role in local taxes and budgets, land-use regulation, privatization and competi- president, who wants to take on — who American life. There is a chance now, an tion, transportation policy, annexation, and other local matters. wants to create the accounts, but also do opportunity, for this to be one of those something on the solvency side, which may moments to move in a conservative direc- involve slowing the growth of benefits, tion — to free up government, to move Also this summer, the John Locke Foundation unveiled the first in a which, of course, grow at a faster rate than government from something where bureau- series of specialized pages within www.JohnLocke.org devoted to inflation. crats decide, but where individuals have regional news and issues in North Carolina. Its “JLF-Charlotte” page is more choice and control over their health regularly updated with original articles and links to other news and Hood: Because they are indexed to wages not to care, over their money and so on. prices. information about Charlotte, Mecklenburg, and surrounding cities and Hood: I think Jack Kemp, perhaps, the former counties. In the future, similar pages will be devoted to the Triangle, Barnes: Right. vice-presidential candidate, and some other Re- the Triad, and other parts of North Carolina — so stay tuned! publicans argued that Bush may be acting too Hood: We assume wages grow faster than prices, quickly, or at least too aggressively in scenarios or else we are in bigger trouble than we are. like making changes in Social Security on the benefits side. They say, “Just create accounts, Barnes: What I’m suggesting is what the but don’t do anything on the benefits side.” first thing the president has to do is get Republicans together, and I think that’s Barnes: Well, their argument is simply that achievable. And then he will probably have we’re not going to get these new accounts if to pick off a few Democrats. He’s not going we tinker at all on the benefits side. It’s a to get many. They are dominated by reac- political argument. And the president is March 2005 C A R O L I N A 18 Learning Curve JOURNAL

From the Liberty Library Book review

• These days the Constitution is no Winning the Future: God and Military to the Fore restraint on our out-of-control Supreme Court, writes radio talk show host and Newt Gingrich: Winning the Future: A 21st ing as House legal scholar Mark Levin. The court im- • Century Contract With America; Regnery speaker. Love him periously strikes down laws and im- Publishing, Inc.; 2005; 243 pp.; $27.95. or hate him, Ging- poses new ones on its own arbitrary rich is self-confi- whims, and even though liberals are By JOHN PLECNIK dent and opinion- repeatedly defeated at the polls, the Contributing Editor ated. majority on the “allegedly conserva- RALEIGH As such, Ging- tive” Supreme Court reflects their ewt Gingrich’s Winning the Future rich throws politi- views and wields absolute power. In starts with the proposition that cal correctness out Men in Black: How the Supreme Court Is 21st century America could be de- the window before Destroying America, Levin dissects the N stroyed. The fivefold threats of terrorism, he even finishes his judicial tyranny that is robbing free- secularism, lack of patriotism, declining book’s introduc- doms and stuffing the ballot box in fa- technological prowess, and overtaxed en- tion. At the outset, vor of liberal policies. Learn more at titlements loom on the horizon. Gingrich readers are asked to www.regnery.com. posits that these threats, capable of crip- take a test in order pling our society, can be overcome, but only to find where they • Since his appointment to the Su- by fighting an entrenched political system stand on the “grow- preme Court in 1986, Associate Justice and news media. ing gap between Antonin Scalia has become perhaps the traditional Ameri- best-known justice on the Supreme can values and the Court today and certainly the most Gingrich’s sweeping scope of issues secular liberalism controversial. Yet most Americans have Stylistically and substantively, the text of the Left.” Each probably not read even one of his sev- is well-written. Gingrich, who organized question consists of eral hundred Supreme Court opinions. the book topic by topic, hits most of the a social, economic, In Scalia Dissents, Kevin Ring, former major issues of our time and purports to or religious state- counsel to the U.S. Senate’s Constitu- provide solutions to each. Everything from ment of the conser- tion subcommittee, lets Scalia speak for education to environmentalism and energy vative persuasion. himself. The volume showcases the policy is covered. More often than not, the Readers are asked quotable justice’s take on many of former West Georgia College professor puts how strongly they today’s most contentious constitutional his doctorate in history to good use and agree or disagree debates, including affirmative action, includes an academic discussion of the past. with each state- religious freedom, judicial activism, This book proves that Gingrich is qualified ment (i.e. whether and abortion. Ring’s compilation con- to be president (of a major American uni- they “believe in tains more than a dozen of the justice’s versity). God”). Notably, most controversial opinions, and the Seriously speaking, Gingrich is right- “recent poll num- author-editor also provides helpful wing and right on the money. In response to bers” accompany the questions to reflect background on the opinions and a Cataclysmic threat of terrorism these five deadly threats, the former speaker public opinion, and the least popular state- primer on Scalia’s judicial philosophy. of the U.S. House demands a stronger na- ment received 73 percent approval. Gingrich On the topic of terrorism, Gingrich fo- Also from Regnery. tional defense, acknowledgment of God as tops off his pop quiz by asserting that those cuses our attention on weapons of mass the source of our inalienable rights, an in- scoring at least 51 out of 100 points should destruction, ranking nuclear devices as the • Natan Sharansky believes that formed love of country, better schools with read on because, “[t]his book is about how most worrisome, followed by biological and the truest expression of democracy is more students of math and science, and you can protect and defend America’s tra- chemical, then electromagnetic pulse. He the ability to stand in the middle of a private-sector ingenuity to replace costly ditions and values.” notes how a “Nobel Prize winner told [him] town square and express one’s views government bureaucracies. A continuous theme, throughout Win- that an engineered biological attack could without fear of imprisonment. He Winning the Future should be a primer ning the Future, is the centrality and impor- kill 140 million Americans.” As such, should know. A dissident in the Soviet of choice for college Republicans and young tance of God in America’s past and present. Gingrich characterizes the war on terror as Union, Sharansky was jailed for nine conservatives. Complex issues such as the Though an entire chapter is devoted to this a war of survival. Adding emphasis to the years for challenging Soviet policies. constitutionality of judicial activism are dis- topic, it pervades the whole text and seems danger, he writes “and we could lose that During that time he reinforced his cussed in great detail, but at a level that to be part of Gingrich’s central thesis. For war.” moral conviction that democracy is es- laymen can easily instance, he be- Referring to al Qaeda’s followers as sential to both protecting human rights understand. Even moans how liberal “Irreconcilable Islamists,” Gingrich talks of and maintaining global peace and se- the Kyoto Treaty is judges, on the 9th defeating the radical wing of Islam in Bush- curity. Sharansky was catapulted onto broken down from Circuit and Su- like terms. He says that the terrorists hate the Israeli political stage in 1996. In the statesmen’s gibber- preme Court, are our way of life and hence, are “irreconcil- last eight years, he has served as a min- ish to dollars-and- free to misinterpret able” with America. Gingrich also sees two ister in four different Israeli cabinets, cents common sense. the U.S. Constitu- immediate opponents: terrorists, and the including a stint as deputy prime min- It’s best to give credit tion with impunity. rogue dictatorships that empower them. ister, playing a key role in government where credit is due: One of the chief mis- Like Bush, Gingrich focuses on beefing decision making from the peace nego- Gingrich knows his interpretations he up the U.S. intelligence community, while tiations at Wye to the war against Pal- stuff (or at a mini- cites is the concep- allowing increased cooperation between estinian terror. Drawing on a lifetime mum, has good tual fabrication of various homeland defense and crime-fight- of experience of democracy and its ab- ghostwriters). the separation of ing organizations such as the FBI, Border sence, Sharansky writes in The Case for With the release church and state. Patrol, and Coast Guard. Democracy that only democracy can of Winning the Future, When Gingrich Gingrich also sees the need for a larger, safeguard the well-being of societies. rabid speculation en- discusses America’s stronger military — desiring forces capable More at www.publicaffairsbooks.com. sued that Gingrich is duty to its poor and of handling wars in two or three theaters at running for presi- infirm, he immedi- once. • Nationally syndicated talk-radio dent in 2008. Heh. ately brings faith- Gingrich hazards some guesses as to host and film critic Michael Medved Newt versus Hillary: based initiatives to when the war on terror will end. Gingrich has gone from liberal activist to outspo- I can almost see the the forefront, say- cites 2070 as a “reasonable estimate,” but ken conservative. In Right Turns: Un- bumper stickers. A ing, “Faith provides speculates that an optimist could make the conventional Lessons from a Controversial good bit of press was hope, guidance, and case for winning by 2025 or 2030. Like a true Life, Medved chronicles the adventures undoubtedly cooked self-discipline while politician, however, he covers his bet by that taught him many lessons — the up to promote book bureaucratization positing that the conflict could last several startling events that propelled him sales. However, the and welfare encour- centuries like the Catholic-Protestant wars from Vietnam protest leader to optimis- speculation is understandable. Chapter by ages passivity and undermines and embit- during the Reformation and Counter Ref- tic promoter of American patriotism, chapter, Gingrich opines on virtually every ters people…” He goes so far as to say that ormation. from secularism to religion, from ad- hard policy question that a presidential can- a phone number “as universal as 911” should On the whole, Winning the Future is venturous single guy to doting hus- didate is supposed to answer. He also speaks be established to link the nation with faith- well-written and right on the issues. band and father. In the process he of mass-movements and grassroots cam- based organizations. Gingrich gives conservatives quite a wish skewers leftist orthodoxy, revealing paigning. In fairness, this book could be Gingrich includes a special feature in list for 2005 and beyond. If enough voters why the Right is right and why his seen, and may well be, early groundwork Appendix B, “Our Creator in the Capital: A believed the Gingrich could deliver the re- former colleagues on the Left remain for a presidential run. Walking Tour of God in Washington, D.C.” forms he advocates, the man would be nomi- hopelessly wrong on every cultural, More likely, however, the presidential The feature functions like a do-it-yourself nated for president. political, and social issue. Details at feel flows from Gingrich’s authoritative tour guide and outlines numerous refer- My verdict on Gingrich’s latest: It’s www.randomhouse.com/crown/ style. It’s been said that Gingrich acted like ences to God, everywhere from the Library worth the read, and worth keeping. Not forum.html. CJ he was president from 1994-95, when serv- of Congress to the World War II Memorial. bad, Mr. Speaker. CJ March 2005 C A R O L I N A JOURNAL Learning Curve 19

Book Review Abuse of Power? Government Routinely Puts Land to ‘Better’ Use

• Steven Greenhut: Abuse of Power: How the lic uses — roads, for example — the amount offered, the legal expenses involve gener- Government Misuses Eminent Domain; Seven of damage was fairly small, however. ally mean a considerable net loss in wealth Locks Press; 2004; 276 pages; $17.95 The problem, Greenhut informs us, is for him. that eminent domain is now routinely used By GEORGE C. LEEF to take land from people not for some actual Judges join in the takeover Contributing Editor public use, but instead to advance anything RALEIGH that might vaguely be called a public pur- Where is the judiciary in all of this? he essential difference between a pose. By eliminating the restriction that Won’t judges step in to stop these seizures market economy and a socialist one eminent domain may be used only for pub- for what is obviously private use or at least T is that in the former, individual lic uses, the courts (naturally, the U.S. Su- compel just compensation to the dispos- owners decide how to use the resources preme Court is the main culprit) have al- sessed owners? they own, whereas in the latter, govern- lowed an almost limitless expansion of Unfortunately, Greenhut demonstrates, ment officials make the resource use deci- eminent domain. no. Judges are often indifferent to the plight sions. As Greenhut shows with many, many of individuals targeted for removal. Many The market system is consistent with cases, eminent domain is now routinely of them seem to share the mindset of the individual liberty and works well without used to transfer land from one owner to politicians that people who fight against the use of coercion. The socialist system is another simply because politicians believe eminent domain are greedy opponents of not consistent with individual liberty and that it will be put to “better” use by some social progress. works poorly because it necessitates the use party other than the original owner. “Bet- Not even churches are safe from emi- of coercion. ter” here simply means “paying more in nent domain. Actually, tax-exempt prop- America at one time was a market taxes.” erty is among the least desirable of all uses economy, but as the country has aged, we An old house or a small business brings from the standpoint of tax-hungry politi- have slid toward socialism in many respects. in a small tax take. Condemning the prop- cians. Greenhut’s cases where churches have It’s like the aging of a human being with a erty and forcing its sale in order to hand it been eminent domain victims will raise the slowly advancing case of arteriosclerosis over to a big commercial enterprise that reader’s ire further. caused by a long procession of bad dietary lowed this subject for years. What Greenhut will generate far more in tax revenue is An instructive side lesson is that many decisions. gives us is a thorough investigation of the regarded by many politicians as a public of the politicians guilty of eminent domain rampaging growth of this assault on pri- purpose and they have no qualms about atrocities are “liberals” whose campaign Government grabs the land vate property that frequently leaves the slapping the label “blighted” on people’s rhetoric oozes with “compassion” for the reader shaking his head in disbelief at the homes or businesses so they can force them supposedly downtrodden citizens. Among the ways we’re sliding into so- villainy of the process. out. They don’t mind trodding all over real cialism is the loss of freedom of landowners The original concept of eminent do- Forced transfers to satisfy politicians people, however, if it will enable them to to control the use of their land. That’s the main sanctioned in the Constitution is that and well-heeled developers are appalling achieve the supreme objective of an ex- case with farmers, for example, who must government may take private property enough, but the other side of the transaction panded tax base, enabling them to spend abide by government regulations on the where it is necessary to do so for a public is also terrible. The requirement of “just more on their favorite projects and con- crops they may grow. It’s the case with use, and then only if just compensation is compensation,” Greenhut contends, is of- stituencies. Eminent domain is another piece urban land owners, who must abide by paid to the owner. Even that is a dangerous ten ignored. “Almost always,” he writes, of evidence for the Public Choice econo- zoning regulations. And it’s also the case departure from libertarian principles; gov- “the government tries to lowball the prop- mists. when land is taken from owners under ernment should no more make anyone “an erty owner, in many cases offering a frac- At the book’s end, Greenhut offers help- what is called eminent domain. Eminent offer he can’t refuse” than should criminals. tion of the property’s value.” The unfortu- ful advice to people who find that they need domain is the subject of Abuse of Power by So long as eminent domain was limited nate property owner usually loses. Even if to fight back. It can be done. Bravo to the journalist Steven Greenhut, who has fol- only to property seizures only for true pub- he hires a lawyer to contest the amount author for showing how. CJ Book Review No So Wild, Wild West: Things Ran Well Until Government Showed Up • By Terry L. Anderson and Peter J. Hill: The Anderson and Hill look at the West thing, the incentives of the Army were Not So Wild, Wild West; Stanford Press; 2004; from numerous angles, all yielding fasci- aligned with combat — the more of it, the 250 pages; $24.95 nating insights. Their chapter entitled “Prop- more the chance for higher rank and pay. erty Rights in Indian Country” dispels the The authors quote General Sherman, who By GEORGE C. LEEF myth that Indians lived in a kind of social- once lamented how hard it was to “make a Contributing Editor istic utopia with no taint of private property decent excuse for an Indian war.” RALEIGH rights. Depending on their circumstances, More importantly, those who were in- remember very well the images of the which varied greatly in different regions, terested in taking Indian land could spread American West I received as a child. Indian tribes developed property rights in- the cost and risk among the rest of the I Movies, TV shows, and books con- stitutions ranging from communal to “sys- population, and didn’t hesitate to do so. vinced me that the West was excitingly wild tems hardly less individualistic than our The book makes it clear that the problem and violent, with wars and gunfights staples own.” Indian cultures devised private prop- wasn’t “the white man,” but rather the fact of everyday life. No doubt, millions of oth- erty where resources required long-term that some white men were in a position to ers have grown up with the same idea, and investments and care to avoid what we now make others bear the cost of aggression a corollary — that the West was tamed by call the tragedy of the commons. Among when they could use what Franz Oppen- the extension of governmental authority the Paiute, for example, groves of pinon heimer termed “the political means” (orga- into the region to bring about order and trees were treated as family property sub- nized coercion) to achieve their objectives. peace. ject to inheritance and they had rules against Rationality rather than conflict was Guess what? It’s a fable. trespass. The romantic leftist notion that similarly the rule with frontier mining claims In their book The Not So Wild, Wild American Indians prove the superiority of and the allocation of water rights. The book West: Property Rights on the Frontier, econo- socialism has lain in intellectual ruins for also has a wonderfully insightful chapter mists Terry Anderson and Peter Hill mas- years. If you need a cogent refutation (per- on the economics of wagon trains, and its terfully demonstrate that the West was not haps to use against teachers who use the discussion of the irrationality, inefficiency, at all like the common view. Not only was because the benefits and costs of institu- Chief Seattle myth to push students into and utter folly of federal intervention with violence not particularly prevalent, but also tional change redounded to small, well- opposing capitalism), you can’t do better the natural order that had previously arisen stable socio-economic relationships arose defined groups or communities. As long as than this book. should be imported into college economics spontaneously before there was much gov- new institutions evolved locally and volun- What about all the warfare with Indi- and public policy courses. ernmental presence. tarily, the costs of conflict and the benefits ans? Most readers will be surprised to learn The Not So Wild, Wild West is a beauti- In fact, Anderson and Hill repeatedly of cooperation were internalized by the that there wasn’t much of it in the 18th and fully written and printed volume that show, the arrival of governmental author- decision makers.” Whether the issue was well into the 19th centuries. In those years, teaches us much about the American West, ity usually made matters worse, as politi- cattle, mining claims, water, or anything trading and negotiation were the norm and but also about human nature and the eco- cians and interest groups were able to upset else, people were remarkably good at de- warfare rare. nomic way of thinking. Congratulations to the arrangements that people had worked vising efficient rules and structures in order The famous Indian wars of the 1870s Terry Anderson and P.J. Hill for an out- out to maximize the benefits they could to make the most out of the conditions they and 1880s had to do mainly with the arrival standing book. CJ derive from the land and its resources and faced. Putting it in a nutshell, the American of the regular U.S. Army. “Maintaining a minimize conflict. West was a laboratory in which Hayekian standing army, as opposed to raising local Writing from the vantage point of “new ideas about the benefits of spontaneous militia, shifted the cost of fighting to others George C. Leef is the executive director of the institutional economics,” the authors ex- order were put to the test and found to hold and predictably increased the number of Pope Center for Higher Education Policy and a plain that “cooperation dominated conflict true. battles,” Anderson and Hill say. For one contributing editor of Carolina Journal. March 2005 C A R O L I N A 20 Opinion JOURNAL

Christians Should Pick Their Battles

hristian conservatives have a problem, and it’s not SpongeBob SquarePants, Barney, or even C Buster Baxter. The cartoon characters, some of which have been embraced as icons by the homosexual culture, have been accused by Christian activists of indirectly pro- moting the acceptance of same-sex relationships to young children. SpongeBob and Barney are two of dozens of popular children’s TV heroes featured in a video redo of the disco hit “We Are Family,” which will be dis- tributed in March to 61,000 public and private schools. The third character stars in PBS’s “Postcards From Buster,” part of the federal Ready to Learn program, which was de- signed to promote diversity. New U.S. Secretary of Educa- tion Margaret Spellings, whose Paul Chesser department sponsors the se- ries, busted the bunny for spreading the diversity message to include children with homosexual parents. Upon Spellings’ objections, PBS intercepted the gay-friendly Buster broadcast before it hit the air- waves nationally, although some local public broad- Supreme Court held that, “In our review, we have found no casting stations will still air it. Other episodes have Editorials indication that Congress’ intent in passing [the Help featured children from Muslim, Jewish, Mormon, and America Vote Act], or our state legislature’s intent in evangelical Christian families. passing N.C.G.S. § 163-166.11 [authorizing provisional “The show is about children,” said Brigid Sullivan, ballots], was to enable voters to cast valid ballots outside vice president for children’s programming at WGBH GETTING IT RIGHT their precincts of residence when such a vote would not in Boston, which produces it. “It’s not about the par- otherwise be supported by state law.” ents. It’s about letting children validate children as Court ruling in ballot dispute draws fire • The high court also noted that the specific conditions children, regardless of the family they live in.” under which provisional ballots can be used is set out in the Fair enough. Children need to be taught to be nice North Carolina Administrative Code (8 NCAC 10B .0103(d) to children, regardless of their religion and family nce again, the N.C. Supreme Court is at the center (Supp. 2004)). It states that a “person is eligible to vote an structure. Can’t conservative Christians even agree of controversy, this time over its Feb. 4 ruling on official provisional ballot if the person resides in the precinct” with that value of the diversity movement, and that it’s O provision ballots. The high court held that exist- and meets one of four other conditions. something that needs to be taught, not assumed? ing state election law does not allow the use of provisional • And what if voting officials learn that a person is Public schools, after all, can be cruel, and undoubt- ballots in state and local elections by those attempting to trying to vote out of precinct? If “the responsible judge of edly children from homosexual homes can become vote on election date at some place besides their assigned election learns from the person that the person resides in a targets of both verbal and physical taunts and threats. precinct. different precinct, the responsible judge shall provide the This is not the way responsible parents, Christian or The ruling came in the disputed race for state superin- person with adequate information in order to direct the otherwise, want their children to behave or to be tendent of public instruction. Republican candidate Bill person to the proper voting place.” (8 NCAC 10B .0103(d) treated. Fletcher sought to have at least 11,310 out-of-precinct pro- (Supp. 2004)) But peer pressure, prejudices, and misconceptions visional votes thrown out. Fletcher trails Democratic can- “It is indeed unfortunate that the statutorily unautho- do stir mean-spirited behavior in kids who don’t carry didate June Atkinson by about 8,500 votes. rized actions of the State Board of Elections denied thou- that sensitivity gene, training, or whatever you want to The reaction by portions of the political class, plus sands of citizens the right to vote on election day,” wrote call it. You can’t count on every child’s parents to instill several of the usual suspects in the media, to the Supreme Justice George Wainwright for the Supreme Court. “This civility, so educators feel compelled to use gimmickry Court decision was instructive. Preening like peacocks, Court is without power to rectify the Board’s unilateral to teach it themselves. They want to show it’s equally they proudly proclaimed to all who would listen the great decision to instruct voters to cast provisional ballots in a wrong to pick on the kid with same-gender parents as achievement that the General Assembly had brought in its manner not authorized by State law. To permit unlawful it is to pick on the one wearing a turban or yarmulke. 2001 and 2003 changes to state election votes to be counted along with lawful Hence the problem for Christians, who seem per- law and questioned how the court could ballots in contested elections effectively petually poised to whack public educators every time possibly “misinterpret” their efforts. The While one may cer- ’disenfranchises’ those voters who cast they accommodate homosexuals even in the slightest provisions enacted, they claim, were af- legal ballots, at least where the counting manner. In this case, despite their intentions, Christian ter all quite clear. tainly question the of unlawful votes determines an election’s activists are excessive in their protestation. The “We “We meant what we said the first court’s remedy, as- outcome.” Are Family” video is harmless, which Christian lead- time,” said Sen. Dan Clodfelter, D- saults on its compe- While one may certainly question ers acknowledge, but those such as Dr. James Dobson Mecklenburg. the remedy that the court held was neces- warn of an underlying motive. But the high court disagreed. The tence and integrity land sary — throwing out the votes in ques- Evangelicals’ deeper problem, which most of them General Assembly had never effectively well wide of the mark. tion — much of the subsequent assault say or do little about, is that they continue to place their changed state law to allow out-of-pre- on the court’s competence and integrity children in public schools. It’s an old theme, but gov- cinct provisional voting, it found, regard- has landed well wide of the mark. ernment institutions are going to draw from the melt- less of intentions stated afterwards. A far better question to ask is why exactly the State ing pot of society without regard for heritage or moral The actual language governing who can vote and Board of Election instructed local boards of election to background. That’s not going to change and the schools where is clear enough, the court noted: allow the provisional ballots in the first place, given the will always have the good and bad. Kids have to go to • Qualifications to vote: “Every person born in the evident lack of clarity in the law as well as the existence of school somewhere. United States, and every person who has been naturalized, conflicting language in the state constitution (an issue that Whether the diversity advocates’ intent extends and who shall have resided in the State of North Carolina the high court did not address in its decision). beyond the video’s message is irrelevant. If the issue is and in the precinct in which he offers to register and vote for Then again, given the state elections board’s obviously about their own children, then conservative Chris- 30 days next preceding the ensuing election, shall, if other- off-base actions in the agriculture commissioner’s race — tians, who in large numbers object to gambling, roll the wise qualified as prescribed in this Chapter, be qualified to two of the board’s proposals to address lost ballots in dice every time the place their children in public register and vote in the precinct in which he resides: Provided, Carteret County were rejected by state judges as “arbitrary schools. Beyond simple lessons in diversity, they are that removal from one precinct to another in this State shall and capricious” or in gross violation of state election law — subject to chance meetings with any number of teach- not operate to deprive any person of the right to vote in the perhaps we shouldn’t be surprised. ings, influences and experiences that are objectionable precinct from which he has removed until 30 days after his Unfortunately, as the legislature rushes headlong to to their values. That goes for everybody: homosexuals, removal.” (emphasis in decision)(N.C.G.S. § 163-55) correct the flaws in state election law identified by the Mormons, Muslims, etc. • Unreported Move to Another Precinct Within the Supreme Court, it seems intent on upon building upon the Yes, Christian activists must still oppose indoctri- County: “If the registrant appears at the old precinct, the worst elements of the 2004 election experience. By seeking nation efforts from immoral interests in public educa- precinct officials there shall send the registrant to the new to establish itself as the only arbiter of executive and tion. But they should let the civility lesson go forward, precinct or, if the registrant prefers, to the central location, legislative branch election disputes, the legislature risks and get worked up when the message has more clearly according to rules which shall be prescribed by the State adopting a method that puts politics over reason, the gone awry. CJ Board of Elections.” (N.C.G.S. § 163-182.15e) separation of powers, and the rule of law. Such overreach- • Allowing Out-of-Precinct Ballots to Count: The ing could have serious and adverse consequences. CJ March 2005 C A R O L I N A JOURNAL Opinion 21

according to market conditions, rather than with cross-sub- sidies from non-users. AT A CROSSROADS Second, highway-derived revenues—taxes levied on Politicians, Please gas and cars—should be devoted to highways, not diverted elsewhere. As much as possible, these revenues ought to State needs to make transportation choice be invested in new or resurfaced roadways geographically Butt Out of Taxes close to where they are collected, since the sale of fuel and automobiles is roughly correlated with usage. orth Carolina’s political class cares so much ith quite possibly the tritest turn of phrase you’ll Finally, the state’s goal in transportation policy should about smokers that it is about to punish read this month, we submit that North Caro- be to move people and freight at the lowest possible cost them with hundreds of dollars in taxes. lina transportation policy has reached a cross- in dollars, safety, and freedom. It should not be to steer N W Think of it as a fiscal spanking: “You’re doing some roads. Sorry we can’t be more creative. The metaphor economic development or radically transform the way we wrong, children, and now it’s time to pay.” works. live, work, shop, and play to fit the preconceived notions That’s not the way proponents of higher cigarette On a host of long-debated issues—equity in road fund- of elites cloistered in urban-planning departments or taxes put it. They say that raising the tax by as much ing, the state-local relationship, mass transit, intercity pas- “smart growth” conferences. as 75 cents a pack, or more than half a billion dollars, senger rail, freight transportation—the first week of Feb- It’s critical to the future of our state that policymakers will be a win-win situation. The extra revenue will ruary has brought us important news, new proposals, and make the right turn here—so to speak. help close a projected budget deficit of more than $1 calls to action. billion for fiscal 2005-06, while providing in the long More generally, both North Carolina policymakers and run a source of funds for all manner of wonderful their constituents seem now to share the conclusion that educational and health programs. there is something fundamentally wrong with our state’s INCENTIVE LOSERS Most important, say the activists, it will save lives approach to the issue, though they do not share a common because a 75-cent price increase is painful enough to view of which direction to go. Lawsuit reveals cost of business subsidies deter young North Carolinians from smoking. Since Some of the early-February news came from Washing- smoking is associated with serious illnesses, the tax ton. The Bush administration released its proposed bud- increase will essentially get, which put about $55 million more into a light-rail line t was only a matter of time. Two owners of a Wal-Mart pay for itself by heading in Charlotte but left out entirely a rail project in the Tri- in Wilson have filed suit in federal court to challenge off costs to Medicaid. angle. In the latter case, federal officials properly question $2 million in local-government incentives for a That’s the theory. It’s some preposterous claims about what traffic would be like I planned Target store in the county. “This is a very peculiar rather flimsy, actually. in the absence of rail, and have not yet affixed a “recom- thing to have the government decide it wants a particular First, North Carolina mended” label to the Triangle plan. brand of store, and it’s willing to pay it $2 million to come doesn’t have state deficits For other parts of North Carolina, the Bush budget also to town,” said the plaintiffs’ lawyer. because its citizens are had some fateful news: It called for an end to subsidies for North Carolina’s escalating use of tax subsidies to undertaxed. The problem Amtrak. If Congress stumbles across enough common “close deals” with potential private employers was des- is that politicians have sense to go along with this idea, there will be some disap- tined to provoke the state’s existing businesses. While there promised voters more of John Hood pointed officials in communities from Asheville to are many different arguments, both legal and economic, other people’s money, di- Wilmington. They have been lobbying for years to secure against such targeted incentives, among the most persua- rectly or indirectly, than there are “other people” will- intercity passenger rail, a service that will never pay for sive is that “targeting” incentives to some companies in- ing to be subjected to pilferage. Thus long-term itself by charging users. evitably means targeting other companies not for benefits spending promises exceed reasonable revenue pro- but for costs. jections. A half-billion-dollar influx of cash in 2005 Transport options and who pays When state or local government gives a subsidy to will enlarge the politicians’ appetite for new pro- Company A, it may make Company B better off, too (if it is grams and endless meddling, the costs of which will According to the U.S. Bureau of Transportation Statis- a supplier or customer to Company A, for example) but it soon enough exceed the revenue enhancement. tics, Amtrak receives a tax subsidy of $186 per thousand is far more likely to make Company B worse off. Which is, by the way, questionable. There are miles of passenger travel. This is far greater than the sub- risks in relying on cigarette taxes for long-term fiscal sidy for airlines (ticket taxes pay for much of airport op- How incentives can hurt balance or, worse, new spending. Excise taxes are rev- erations but fall short about $6 per thousand passenger enue sources of the past, not the future, taxing only miles) and is even worse than the performance of mass Here are some of the potentially negative consequences goods and those that, after all, public officials are try- transit, at $118 per thousand miles. for Company B: ing to discourage people from buying. Highway users, on the other hand, pay about $2 more • Company A may use the subsidy to bid against Com- Which brings me to the notion that cigarette taxes per thousand miles than it costs to build and maintain the pany B for a piece of land that both wanted to use for a are a public-health program. Even advocates claim roads they traverse. Some analysts claim that highways facility. Even if Company B prevails, its final purchase price only their steep tax increase of 75 cents would reduce are themselves grossly subsidized, because of such uncom- might be pushed up because of government intrusion. smoking by only 17 percent. The vast majority of pensated costs as deadly accidents, air pollution, and • Similarly, Company A may be in competition with smokers just get poorer. In other words, the real plan Middle East wars, but careful study reveals these claims is to fob off the cost of government serving millions Company B for other inputs, such as workers. While the to be wildly inflated. of people onto a small group of smokers who are dis- resulting upward pressure on wages might be attractive The highest fatality rates in surface transportation ac- proportionately less affluent, less white, and less in some ways, it will raise the cost of doing business for cidents are from commuter and light rail, not auto com- healthy than their fellow citizens. They’d need to con- Company B, perhaps so high that Company B can no longer mutes. Pollution has actually been falling for decades, de- tinue their smoking habit, you understand, or else afford to add or retain the personnel. spite rising auto traffic (much of the previously external the fiscal plan goes haywire. • Another possibility is that Company A and Company costs of pollution has essentially been internalized by driv- But what about the budget savings? They are ers in the form of more expensive, less-polluting cars and B will be competing for customers. That’s one of the claims unclear. Simplistic analysis that examines only parts fuels). that the local businessmen are making about the incentives of the overall budget won’t suffice. At the national Whether you support the president’s policy in Iraq— arrangement in Wilson: Why should taxpayers assist Tar- level, the data show me that smokers already pay or believe, wrongly, that it is all about oil—it is important get in competing against Wal-Mart or other retailers in the more in taxes than the net cost (if any) they impose to remember that fossil fuels would be a critical part of the area? on the public sector. I haven’t seen the numbers bro- world’s economy, and thus its sources the subject of stra- • There might be adverse consequences for Company ken out by state (this matters because states gain noth- tegic concern, even if many more Americans drove their B in the area of public finance, as well. That’s because taxes ing fiscally from savings in Social Security) but it personal automobiles less and commuted more on buses on business property are really a means to tax individuals seems unlikely that the math works out the way the or trains run by diesel engines or electricity generated in who benefit from local public services. tax advocates claim. part with natural gas. These beneficiaries include the owners and sharehold- Here’s my bottom line: If you want to play nanny In North Carolina, the dispute isn’t just about roads ers of the company, who may see their investment returns with other people’s lives, do it straightforwardly. vs. transit but also about how to raise and distribute road grow because of better policing, more street access, or im- Advocate prohibition. But if cigarettes are to be le- funds. Urban areas are crying foul about an impending provements in the education level of the workforce. Ben- gal, their consumption should bear the same tax as transfer of gas-tax dollars to rural areas, a transfer predi- eficiaries may also include executives and employees, who any other consumption. Yes, as it is currently struc- cated on a state “equity” formula that fails adequately to consume a variety of local city and county services rang- tured, state government may force bystanders to help take into consideration the current and expected levels of ing from police and the courts to schools and parks, as well shoulder the consequences of bad choices. That’s an traffic in major urban areas. as customers, whether near or faraway, who use local in- argument for state government becoming less pater- Some local governments are even pressing the Gen- frastructure. nalistic, not more so. eral Assembly to give them more authority to levy sales or If subsidies push Company A’s effective tax rate lower The tax code is not a behavior-modification de- motor-fuels taxes for transportation, and to build their own than Company B’s (and sometimes all the way to zero), vice. It is a means of raising revenue for necessary projects rather than having to wait in a statewide queue. that doesn’t mean that its various constituencies—share- government programs, which are few, and should holders, employees, customers, etc.—don’t continue to spread that cost equitably, which cigarette taxes do Some principles for transportation reform benefit from services provided by state or local govern- not. As a nonsmoker, I think it unethical to coerce my ments. It just means that these beneficiaries aren’t paying smoking neighbors to pay my share of taxes. I find it We would never claim that these issues are simple and as much of the cost anymore, so someone else has to— fascinating that so many “progressives” have con- the choices easy to make. But we would offer these basic frequently the shareholders, employees, and customers of cluded otherwise. principles: Company B. The income of North Carolinians is not an allow- First, the state’s role in transportation should be con- These are real harms, and actionable ones as far as ance that politicians, acting as surrogate parents, centrated on infrastructure, such as city streets and high- we’re concerned. With the new federal lawsuit against in- should have the right to withhold if we don’t do what ways, for which it is extremely difficult to charge people centives in Wilson, and likely litigation coming soon else- they say. It is our money to do with as we please. per use. Airports, railways, and limited-access highways where in North Carolina, we’ll find out what the judiciary Butt out. CJ can and should financed by charging real prices, variable has to say. CJ March 2005 C A R O L I N A 22 Opinion JOURNAL

Editorial Briefs

Federal outsourcing saves

The Bush administration estimates that the fed- eral government could save about $7 billion annually if more federal services were outsourced to private companies, Investor’s Business Daily says. Federal employee unions are opposed to out- sourcing, because federal employees tend to receive above-average wages and better retirement benefits than their private-sector counterparts. According to the Office of Management and Budget, however, civil servants who compete against the private sector find ways to reduce costs and become more efficient. Last year, civil servants who competed against the private sector won 89 percent of competitions, resulting in more efficient operations from federal employees and about $1.1 billion savings to taxpay- ers. Three agencies, the IRS, Forest Service, and De- partment of Energy were opened to private-sector competition; federal employees won all contracts and became more efficient in the process. One agency, the General Services Administration, awarded 147 jobs to the private sector, resulting in $14 million in sav- ings. While outsourcing may reduce years of expertise, the private sector will find ways to innovate, stream- lining bureaucracy and reducing costs. Government and taxpayers will benefit, IBD says. Perception of poverty inaccurate Are We Economic Hostages to Foreigners? With the poverty rate increasing from 11.3 per- cent in 2000 to 12.5 percent in 2003, there are worries By MICHAEL L. WALDEN percent of all U.S. assets. that America’s underclass is being left behind. These Contributing Editor One kind of investment foreign owners can make is in concerns are without foundation, says Robert Rector RALEIGH U.S. government securities issued to cover federal borrow- in a study by the Heritage Foundation. he dollar is falling against foreign currencies. Our ing. Some see trouble here, claiming foreign countries own There are two main reasons why policy makers trade deficit has swollen to record levels. Foreign such a large amount of U.S. government debt that they should not react to the slight change in poverty in Tinvestors have bought large quantities of our gov- could inflict havoc on our economy if they decided to sell America. Poverty is a lagging economic indicator — ernment debt. With all these financial facts, it’s easy to get these investments. even though formal recessions usually last less than the idea that foreign interests are getting the best of our Yet when this foreign investing is put in context, it one year, the poverty rate almost always continues to economy. In fact, some observers argue that foreign coun- seems much less ominous. Foreign ownership of U.S. gov- rise for several years after a recession. The poverty tries now effectively control our economy. Let’s see if this ernment debt has increased by only 3 percentage points in rate rose by a relatively small 1.2 percentage points. In is a real concern of if it’s misplaced anxiety. the last five years, and almost 60 percent of privately held contrast, during the recession in 1980, poverty went There are three economic concepts at work here: for- U.S. government debt is still owned by U.S. citizens. U.S. up 3.3 percentage points; in the recession that began eign trade, foreign investment, and the value of the dollar government debt accounts for less than 12 percent of all in 1990, the poverty rate was up 2.0 percentage points. against foreign currencies, technically known as the ex- domestic debt. Although there’s been much hand-wring- The actual conditions of those in poverty are far change rate value of the dollar. Although ing about federal borrowing in recent years, from the destitution often portrayed by the press and each has its own identity, the three ideas are total U.S. government debt (a.k.a., the “na- social activists. Forty-six percent of all poor house- also fundamentally inter-related. tional” debt) as a percent of national income is holds own their own homes; the average home is a lower today than in most of the 1990s. three-bedroom house with one-and-a-half baths and Is red bad? a garage. Nearly three-fourths of poor households Dollar doldrums? own a car, with 30 percent owning two or more Start with foreign trade. For most of the vehicles. Ninety-seven percent of households have a last three decades, U.S. consumers have What about the third concept — the color television, 78 percent own a VCR or DVD player, bought more foreign-made products and ser- dollar’s value against foreign currencies? Is it and 62 percent have cable or satellite TV reception. vices than U.S. companies have sold to for- worrisome when the dollar’s value falls? Rector says that while poor people experience eign buyers. That is, the United States has Should our goal be a “strong” dollar? hardships and do not exactly live in opulence, it is usually run a trade deficit, or, as some like to These are two of the most misunderstood nonetheless true that to be in poverty today reflects a say, the United States has run up a lot of “red questions in economics. There is no “correct” lifestyle that would be judged as comfortable or well ink” in foreign trade. value of the dollar. When the dollar’s value off just a few generations ago. Is this bad? Most people say ‘yes’, but rises (the dollar gets “stronger”), foreign-made Michael L. Walden reality is more complicated. The United States products become cheaper for U.S. citizens to Forest reforms benefit environment is the richest country in the world, by far, in buy, so the U.S. trade deficit increases and terms of annual income. Our consumers have huge appe- foreigners accumulate more dollars as investments. Changes to forest regulations will improve man- tites for all kinds of products. It makes sense that many The reverse happens when the dollar’s value falls. U.S. agement and sustainability of forests, the Wall Street foreign companies will want to sell in our country and exports are now less expensive for foreigners to purchase, Journal reports. many U.S. consumers will find foreign-made products to so the trade deficit falls and foreigners accumulate fewer Environmentalists have raised objections, but the their liking. dollars for purchases of U.S. investments. newspaper says the old rules are outdated, no longer And although we do buy more from foreign countries So if you worry about the trade deficit and foreign work, and needed to be changed. The Government than they buy from us, this trade deficit should be kept in ownership of U.S. debt, a weaker dollar is what you want. Accountability Office estimates that one in three for- perspective. While large in dollar terms ($600 billion), it is On the other hand, a stronger dollar will increase the trade est acres is dead or dying, which has contributed to a still only about 5 percent of our total annual income. It’s deficit and foreign ownership of U.S. investments. rise in wildfires. Of the 1,300 species of wildlife the hard for me to believe 5 percent is driving the other 95 government has listed for protection over the past 30 percent. Sleep well years, 12 have recovered (been removed from the endangered list). In and out with investments While there are many economic issues that may cause The new regulations will put environmental you to lose sleep at night, in this humble economist’s policy back at the local level, where managers will be But, you might ask, doesn’t the trade deficit mean opinion, international issues such as foreign trade, foreign more capable at adapting to new threats and at much we’re effectively exporting jobs to other countries? If all the investment, and the dollar’s foreign exchange value less cost. Managers of each of the nation’s 155 national products bought from foreign countries instead had been shouldn’t be among them. Instead, I recommend you use forests and 20 grasslands now must adopt an envi- purchased from U.S. companies, wouldn’t that mean more your allocated “economic worry time” to focus on taxes, ronmental management system, which have been jobs for U.S. workers? government spending, and using our resources to achieve standard in the private sector for years. EMS allow This reasoning ignores what happens to U.S. dollars the highest levels of personal satisfaction and business local managers to introduce new science or tech- paid to foreign producers. Eventually they end up as profits possible. CJ niques as forest conditions demand. Major revisions investments in the United States. These foreign invest- to management plans should take two to three years, ments, in U.S. manufacturing plants, office buildings, and rather than an average of seven under the existing stocks and bonds, in turn create their own jobs here at Michael L. Walden is a William Neal Reynolds distinguished system. CJ home. The major difference is the ownership is foreign. But professor at North Carolina State University and an adjunct this foreign ownership today accounts for less than 10 scholar with the John Locke Foundation. March 2005 C A R O L I N A JOURNAL Opinion 23

Multibillion-dollar Dell doesn’t need the money Are We Entering a New Era of Corporate Welfare in N. C. ?

By DENNIS A. RONDINELLI everything from cars and gas to office space, golf member- Elon University on the factors that international firms Guest Contributor ships, and meal discounts. consider in investing in North Carolina show clearly that CHAPEL HILL A second worry is about whether providing lavish they gave far higher value to location assets — good on’t get me wrong. I like Dell. I use its computers incentives is good public policy or, for that matter, good transportation, trained work forces, schools, and access to at home and at my office. It makes good-quality business policy. Dell, which can easily afford to build a markets and materials — and incentives were far down the D products at affordable prices. Once plant anywhere without welfare, is receiving list of selection criteria. No company made location deci- you get over the fact that your customer incentives from North Carolina paid for by sions on the basis of incentives. service agent is talking to you from India you other businesses, some of which are its com- Despite the fact that Dell claimed it would have looked can get pretty reliable help with the glitches petitors, and by citizens throughout the state elsewhere if it did not receive a large incentive package, that bug all computers. for a couple of thousand relatively low-pay- even a Dell company spokesperson admitted to a local And it’s nice to think that Dell will be ing jobs and the hope that the plant will spur newspaper that “incentives in and of themselves do not producing some of its products in North Caro- other businesses. make the decision.” North Carolina may have given away lina. Although an advisor to Gov. Mike Easley too much to get too little, or may have been the favored But I don’t think that Dell, a multibillion- claims that the state will receive $4 for every location regardless of how much it gave away. dollar company, deserves welfare from a state $1 it invests, that may be a wildly hopeful These and longer-term questions are likely to haunt government that is running a more than $1 guesstimate. Even if Dell and its suppliers future state legislators and governors. Has North Carolina billion-dollar budget shortfall. create additional jobs, the state gave away slipped down a deep slope that will make it difficult in the North Carolina’s new breakthrough in incentives worth millions of dollars with no future to attract any major company without offering simi- corporate welfare is worrisome in several Dr. Dennis Rondinelli good way of calculating the real return. larly lavish incentives? Would have investing more instead ways. Although Dell hired slightly more work- in education, infrastructure, and other location assets been First, does Dell need welfare? Last year, the company ers than it projected when Tennessee offered a large incen- a better use of public funds that could benefit all of the made more than $2.6 billion in profits on more than $41 tive package for its plant there, Gov. Phil Bredesen told his state’s businesses and citizens? If the state felt compelled to billion in sales, 17 percent higher than in 2003. It reported hometown newspaper that the thousands of hoped-for be a leader in corporate welfare, why did it not invest more a 50 percent return on total capital and holds more than $20 jobs outside the plant never materialized. heavily in helping local small companies and entrepre- billion in assets. Dell controls 31 percent of the U.S. market “There was always a hope that the industry would neurial startups, which grow jobs faster and at higher rates for its products and nearly 17 percent worldwide. It’s not explode and there’d be 8,000 jobs or 18,000 jobs here,” than big corporations, to expand here at home? exactly a pauper in a fast-growing industry. Bredesen told The Tennessean. “That hasn’t happened.” And yes, as I worry about the new era of corporate Yet, when Dell announced that it was looking for a site Another worry is whether incentives really determine welfare in North Carolina, I am typing this on a Dell to build a $115 million plant employing 2,000 workers, where corporations locate their facilities. The fact is that if computer. CJ North Carolina offered more than $242 million in tax and Dell was not already attracted to the Piedmont, it would other incentives over 20 years. The total package came out not have considered Forsythe County as a location, regard- to $121,000 per job. Local officials in Forsythe County less of incentives. Dr. Dennis Rondinelli is professor of management at UNC began foaming at the mouth, considering giveaways of Several studies I carried out with Dr. William Burpitt of Kenan-Flagler Business School. To the Editor: Playing With School Schedule Won’t Improve Education

To the editor, that former Rep. Connie Wilson is now a well-heeled of “dual enrollment” at the community colleges while I have just finished reading the article by Karen Welsh employee of Carowinds. Explain that one! finishing their high school degree because their schedules entitled, “School in Summer Yields to Grassroots Effort.” And your paper seems to espouse in getting “big conflict now. My son is one of those students. Thank you, What a sham! I have asked many who supported this bill to government” off our backs. This bill does just the opposite. Connie Wilson, for improving education in my home explain to me how taking away two to three weeks in Big Brothers in Raleigh are dictating to the local boards of county! August and replacing them with two to three additional education how to operate their school systems. Ron Strickland weeks in June is going to lengthen the summers? So far, I I’m all for whatever it takes to improve education. If Asheville, N.C. haven’t gotten a single response that answered my ques- going to school on Christmas Day does it, then I say let’s do P.S. By the way, if this is what improving education is tion. it. But this bill had nothing to do with improving education. all about, then please leave it to our local boards of educa- And this is not supposed to be a “tourism vs. educa- In fact, what I’m reading now is that several thousand high tion. They seem to have a much better track record than the tion” bill! Dream on! You conveniently forgot to mention school students will not get to continue to take advantage “ivory tower” personnel in Raleigh. How about adopting children? We Should Give Expectant Mothers an Alternative to Abortion

By NATHAN TABOR There are many in America who preach against abor- in America take place only because of a couple’s infertility. Guest Contributor tion — which I completely agree with. But there are few I understand we must be careful about who adopts chil- KERNERSVILLE who preach for the adoption of innocent children who are dren and their intentions. Still, we need to streamline the rowds of pro-life Americans filled the streets of “rescued” from abortion. Frankly, this reeks of hypocrisy. process and lower the cost of adoptions in the United Washington, D.C. in late January to protest the 32 Abortion-rights activists are always challenging pro-life States. C years of bloody infanticide that have followed the Christians about whether they have adopted children. I On a personal note, my parents were foster parents, so immoral Roe v. Wade decision of 1973. March for Life believe this is quite fair. Remember the I grew up with other children sitting organizers estimated that more than 250,000 hardy souls familiar phrase, “Put your money where around the table with my two natural braved the bitter cold to stand in defense of innocent your mouth is”? brothers and me. I saw firsthand how unborn children. We say we revere human life, and we Yes, we want those much good a loving family can do in the A variety of speakers urged the assembled activists to repudiate the heartless mother who babies protected by life of a child who has no one else. stay the course, promising victory ahead. With several would slay the innocent child within her Last week, my wife Jordan gave birth appointments to the Supreme Court in the offing, the womb. But do we care enough to take law, but are we willing to our first child, a precious baby girl. We prospect for reversing the Roe decision seems more real that unwanted child into our own home to make personal sac- have talked and both agree that we would than it has in recent years. and give it the love and nurturing that it like to adopt a child one day. What about President Bush encouraged the marchers by telephone needs to grow up to adulthood? We need rifices to welcome you? from Camp David. “We’re making progress in Washing- to show our love not only in word but them into life? According to their 2003-04 Annual ton,” Bush said, on issues such as partial birth abortion, also in deed. Report, Planned Parenthood’s clinics legal protection for infants that survive attempted abor- Bush spoke of “The America of our aborted 138 children for every one time tions, the right of doctors and nurses to refuse to perform dreams, where every child is welcomed in life, and pro- they referred their clients to an outside agency for adop- abortions on the ground of conscience, and criminal pros- tected by law.” Yes, we want those babies protected by law, tion. But Crisis Pregnancy Centers are the pro-life alterna- ecution for those who harm or kill a fetus while committing but are we willing to make personal sacrifices to welcome tive to Planned Parenthood clinics. They offer a haven of a crime against the mother. These are all positive develop- them into life? hope and unconditional love for both the unwed mother ments. Adoption truly is the alternative to abortion. Showing and her unborn child. I serve on the board of the Hope “We are working to promote a culture of life, to pro- birth mothers that their little ones will have a safe and Crisis Pregnancy Center in King, N.C. mote compassion for women and their unborn babies,” the loving home will go a long way toward changing their We need to support these centers with both our time president said. But Bush also issued a solemn challenge to hearts. and our money. CJ the crowd. “I encourage you to take heart from our achieve- It is a fact that an abortion is fairly simple to attain as ments, because a true culture of life cannot be sustained well as inexpensive, while adoption is quite a tedious and solely by changing laws. We need, most of all, to change costly process. Many parents are forced to go overseas to Nathan Tabor is a political activist based in Kernersville and a hearts,” Bush said. adopt because of the regulations and costs. Most adoptions contributing editor at www.theconservativevoice.com. March 2005 C A R O L I N A 24 Parting Shot JOURNAL UNC Law, Edwards Ostensibly to Fight Poverty New center faces first hurdle: convincing people it’s not about keeping John Edwards’ presidential hopes alive

By CLARE LEE Nichol said that he looked for- Not a Political Correspondent, No Way ward to working with Edwards. CHAPEL HILL “Whatever you do, don’t think this fter a long and extensive national search that no is about politics,” Nichol said. “This one knew about, the Law School of the Univer- is about what a law school can do A sity of North Carolina at Chapel Hill announced to solve poverty.” in early February its selection for the director of its new Asked what a law school can do Center on Poverty, Work and Opportunity. It will be former to solve poverty, Richard Posner, U.S. Senator and candidate for vice president John former chief judge of the U.S. Court Edwards. of Appeals for the Seventh Circuit UNC-CH Chancellor James Moeser praised the selec- and senior lecturer at the University tion and said the center would be nonpartisan. “We don’t of the Chicago Law School, said, “I want people to get the mistaken impression that this new told you, no stupid questions.” center would be used as a political platform,” Moeser said. Pressed for more information, “Edwards promised.” the author of Economic Analysis of Through a spokesman, Edwards indicated his pleasure Law, Public Intellectuals: A Study of at his selection. EDWARDS IN 2008 spokesman A. Dewey Decline, and many more works, said, Fullum said Edwards saw the issue was very important, “I’m serious. I’m right in the middle and could even be pivotal. of three books and 12 journal ar- Edwards was in Manchester, N.H., site of the first presi- ticles. Can’t you tell what this is dential primary in 2008, where he announced his selection about without me?” at a Democrat fund-raiser. “We have some UNC grads in The idea of the new UNC-CH Manchester,” Edwards explained later. “What about Drew center was first broached in early Cline?” November. At the same time, some Edwards told his Manchester audience of his ambi- UNC-CH faculty members and grad tions with the center. “I intend to put as much time and students were protesting the idea of effort toward addressing the needs of the poor at this Cen- a new curriculum in Western civili- ter as I did in the Senate,” he pledged. zation ostensibly because the school UNC Law has budgeted four working days a year for had approached a conservative Edwards at the CPWO. Edwards will make $40,000 a year. foundation for funding. Protesters Law School Dean Gene R. Nichol was positively giddy said the outside donors would taint about the selection. “After looking over the lengthy and the university because of their ideas. Richard Williams, chair of UNC-CH’s Board of Trust- impressive list of candidates,” Nichol said, in between fits There were no protests for the new center, Nichol re- ees, was pleased at how quickly and smoothly the process of coughing, “Senator Edwards was the obvious, the only, ported. It will be supported by private grants to the uni- went from a Tuesday-night idea to a full-blown center with choice.” versity. a marquee director. CJ

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