POLITICS AND ELECTIONS 2018 CONSTITUTIONAL AMENDMENTS HIGHER EDUCATION

Federal judges General Assembly What to do with reject N.C. con- approves rewritten Silent Sam? UNC gressional districts amendments for Board of Trustees after review November ballot will present plan ONLINE ONLINE ONLINE

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JOHN TRUMP Forgetting MANAGING EDITOR ead distiller Chris Jude steps through a door at the High Wire Distilling Co. in Charleston, South Carolina. Jude, Hwho’s from Boone, enters the tast- ing room and bar, making the short trip from the place spirits are made to the place spirits are served. our ABCs Customers sitting at the long bar can distract themselves by peer- ing through large glass windows, revealing the distillery. At the still and mash tuns, the grain and the barrels, filled with aging bourbon, sorghum, rye, and single malt whis- North Carolina’s monopolistic kies. A series of shelves to the left of the bar are filled with the distillery’s products, including amaro — a com- system of controlling liquor is pilation of macerated herbs, botan- icals, fruits — including Charleston Black Tea — and sweetened with broken, but will lawmakers fix it? sugar cane. So, what do you want to try, Ju- de, every bit the proud father, asks from behind the bar? A listing of the spirits has been laid in front of each bar stool, along with a small card — a cocktail rec- MORE STORIES IN THIS ISSUE: ipe made with High Wire products. Ruby Slippers to Old Fashioneds. Specials like a Strawberry Gin Fiz or PAGE 10: ABC cost state about $13.5 PAGE 13: Virginia is a control state, a Hat Trick Daisy, made with gin, million because it failed to properly but its model is friendly to that lemon, and habanero bitters. Whis- oversee contract, audit finds state’s distillers key flights and Irish coffee. A law passed in South Carolina PAGE 12: Recent turmoil at ABC PAGE 13: N.C. distillers want to be in summer 2017 allows the state’s suggests reforms are overdue, treated the same way state treats McGrady says breweries, wineries distilleries to sell cocktails and mixed drinks, and it doubles tasting limits — from 1.5 ounces to three.

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U.S. POSTAGE U.S. PAGE 18 NONPROFIT ORG. NONPROFIT www.carolinajournal.com [email protected] 2 CAROLINA JOURNAL // SEPTEMBER 2018 QUICK TAKES Former governors join Cooper in opposing two constitutional amendments

t wasn’t about partisan politics, forming an official committee, rais- EDITOR-IN-CHIEF former Gov. Jim Martin said. It ing money, and running ad cam- Rick Henderson was something much worse. paigns. @deregulator Martin, and the four other liv- They also urged media outlets to MANAGING EDITOR Iing former North Carolina gov- inform the public about the amend- John Trump ernors, held a news conference ments and let voters make up their @stillnbarrel Aug. 13 in the State Capitol build- own minds on the measures — ing, standing in bipartisan opposi- though Perdue added she wanted EXECUTIVE EDITOR tion to two constitutional amend- voters to reject them. Don Carrington ments they say would limit execu- Democratic Gov. Roy Cooper [email protected] tive power. filed a lawsuit challenging the two Martin said he arranged the amendments. He argued the bal- ASSOCIATE EDITORS meeting with his colleagues Jim lot questions are misleading, unfair, Mitch Kokai Hunt, Mike Easley, Beverly Per- and incomplete. His lawyers say @mitchkokai due, and Pat McCrory because they they’re unconstitutional because Lindsay Marchello agreed the proposed amendments ballot questions must accurately CARRINGTON DON BY PHOTO CJ @LynnMarch007 — House Bill 913 and Senate Bill describe the effect of the amend- FORMER GOVERNORS. The five living former N.C. governors held a press Kari Travis 814 — would damage separation of ment. A three-judge panel agreed. conference Aug. 13 announcing their opposition to two constitutional amend- @karilynntravis powers. They also would shift too H.B. 913 creates a new ments. At lectern is Republican Jim Martin. From left, Democrats Jim Hunt, Dan Way much control away from the exec- eight-member Bipartisan Board of Mike Easley, Bev Perdue, and Republican Pat McCrory. @danway_carolina utive and judicial branches of gov- Elections and Ethics Enforcement ernment to the legislature. The gov- appointed by the legislature and INTERN ernors planned to meet with politi- outside the authority of the execu- governor to the legislature. S.B. 814 General Assembly, which would Julie Havlak cal strategist Paul Shumaker to dis- tive branch; it also wrests authori- deals with filling judicial vacancies. make nominations to the governor. [email protected] cuss ways to oppose the amend- ty for making other board and com- It creates merit commissions to rec- DESIGNER ments, including the possibility of mission appointments from the ommend judicial candidates to the Will Rierson Greg de Deugd [email protected] PUBLISHED BY Cooper urges patience as

The John Locke Foundation Matthew victims wait for help 200 W. Morgan St., # 200 Raleigh, N.C. 27601 BENJAMIN PHILLIPS won’t forget as though he was living in a third- (919) 828-3876 • Fax: 821-5117 the day Hurricane Matthew plowed world country. www.JohnLocke.org into his house in Lumberton. He Repairs on his house began about Kory Swanson was watching a baseball game when two weeks before Cooper’s visit. President & Publisher news of the coming storm interrupt- The CDBG-DR grants aren’t the John Hood ed the broadcast. only disaster relief money available. “We never thought we were go- Other options include the Hazard Chairman ing to get hit like that,” Phillips said. Mitigation Grant Program, which Bill Graham, John M. Hood “You could be near the beach, and the Federal Emergency Manage- Ted Hicks, Christine Mele they got nothing like we got here.” ment Agency oversees. NCEM said Brad Muller, Paul Slobodian Matthew ravaged eastern North $82 million in HMGP funds for haz- David Stover, J.M Bryan Taylor Carolina almost two years ago in Oc- ard mitigation have been awarded Edwin Thomas tober, yet many communities strug- in North Carolina. The state has en- Board of Directors gle to recover. The storm took the couraged people to visit disaster re- lives of 31 North Carolinians and lief application sites or to call 211 for ISSN 2578-8167 Carolina Journal is a monthly journal of news, analysis, racked up at least $4.8 billion in information on the kind of help they and commentary on state and local damage. Thousands of homes and can receive. government and public policy issues

businesses were destroyed in the MARCHELLO LINDSAY BY PHOTO CJ While Cooper was on his tour in North Carolina. storm and subsequent flooding. A SLOW RECOVERY. Brenda Jacobs, a Lumberton resident, shows Gov. Roy of eastern North Carolina, lawmak- ©2018 by The John Locke Foundation On Aug. 13, Gov. Roy Cooper Cooper the repairs done to her house nearly two years after Hurricane Mat- ers in Raleigh held the first meeting Inc. All opinions expressed in bylined toured Lumberton in Robeson Coun- thew tore through the area. of the re-established House Select articles are those of the authors and do not necessarily reflect the views ty and Fair Bluff in Columbus Coun- Committee on Disaster Relief. N.C. of the editors of CJ or the staff and ty to survey reconstruction efforts. Emergency Management Director board of the John Locke Foundation. Robeson and Columbus counties faced criticism over its handling of start receiving CDBG-DR money. Mike Sprayberry gave legislators an Material published herein may be re- printed as long as appropriate credit were some of the hardest hit in the the disaster. Other counties, including Columbus, update on recovery efforts. Legisla- is given. Submissions and letters are state. About $230 million in Commu- are awaiting an environmental im- tors were less hostile to NCEM than welcome and should be directed to Recovery efforts have been slow, nity Development Block Grants for pact assessment to wrap up before in previous meetings, in which they the editor. and reconstruction of damaged Disaster Relief was approved a few they can receive any CDBG-DR mon- aggressively questioned state offi- To subscribe, call 919-828-3876. buildings and roadways is still in the months after the hurricane by the ey. Cumberland, Edgecombe, and cials about the slow progress. Readers also can request Carolina works. The N.C. Emergency Manage- U.S. Department of Housing and Ur- Wayne are waiting for approval of Sprayberry said the CDBG-DR Journal Weekly Report, delivered each weekend by e-mail, or visit ment agency estimates more than ban Development. But a lengthy ap- environmental impact studies. program is ramping up. Seven appli- CarolinaJournal.com for news, links, $700 million in disaster relief money plication process and time-consum- Phillips was one of the few in cation centers are open in the state, and exclusive content updated each is on the ground, but millions in fed- ing environmental studies are keep- Robeson County to get aid through and more than 2,100 housing appli- weekday. Those interested in educa- tion, economics, higher education, eral aid has yet to reach thousands ing most of the money out of home- the HUD grant program. Phillips cations have been submitted. health care or local government also affected by the storm. owners’ reach. said his house was damaged se- can ask to receive weekly e-letters Cooper’s administration has Robeson County is the first to verely during the storm, and he felt Lindsay Marchello covering these issues. CAROLINA JOURNAL // SEPTEMBER 2018 3 QUICK TAKES High-level departures continue at State Board of Education

ajor staff changes continue band full-time in their beach house in el staff members. Chief financial -of to shake up the N.C. public Carteret County, which isn’t in the re- ficer Adam Levinson and Chief ac- education system. gion she was appointed to represent. ademic officer Stacey Wilson-Nor- State Board of Education mem- Alcorn said his primary reason man will no longer work at DPI. Mber Greg Alcorn announced his res- for leaving is to spend more time SBE hired Levinson in March ignation Aug. 10. He was the third with his early childhood education 2017, despite objections from State member to leave the education nonprofit called ApSeed. Superintendent Mark Johnson. board that month. Board member Gov. Roy Cooper now has the Johnson’s objections can be found Becky Taylor announced her depar- chance to appoint three people to fill in an affidavit, obtained by WRAL, ture Aug. 3, and Chairman Bill Cobey the vacancies until the terms end in from a now-settled lawsuit between sent his resignation letter Aug.1. March. The appointments do not re- SBE and Johnson. Alcorn, Taylor, and Cobey will quire legislative approval. The Gen- Johnson also objected to SBE hir- stay on the board until the conclu- eral Assembly recently rejected two ing Wilson-Norman in September sion of the Sept. 6 monthly educa- Cooper nominees to the board. while the lawsuit was pending. The tion board meeting. “The State Board of Education state superintendent argued a bill Cobey first announced in July will look much different at this time passed during a 2016 special session that he wasn’t seeking another term next year, but it is not clear how granted him authority to fill senior as chairman, simply saying “5 1/2 those changes will alter the trajec- positions. SBE disagreed. years as chairman is long enough.” tory of education policymaking in The N.C. Supreme Court settled Cobey, along with Taylor and North Carolina,” said Terry Stoops, the dispute between SBE and John- Alcorn, were appointed to the vice president of research and direc- son in June in a 6-0 ruling and up- board in 2013 by former Republi- tor of education studies at the John held the constitutionality of House CJ PHOTO BY DON CARRINGTON DON BY PHOTO CJ can Gov. Pat McCrory. Locke Foundation. Bill 17. EDUCATION SHAKE-UP. N.C. Superintendent of Public Instruction Mark John- In her resignation letter, Taylor The Department of Public In- son, pictured here in his office. said she will be living with her hus- struction is also losing two high-lev- Lindsay Marchello Lawsuit by NCSBA, school districts seeks $730 million from state

Plaintiffs say il fines and penalties to N.C. public fer into the Civil Penalty and For- state to develop a payment plan. schools for their technology needs. feiture Fund more than $747 mil- Once the money is collected into state hasn't kept About 20 school districts joined lion collected by state agencies be- the forfeiture fund, each school dis- As a state, we have NCSBA in filing the complaint. tween 1996 and 2005. The General trict would get its share based on two choices: Invest in up payments The plaintiffs announced the Assembly created the fund in 2005 student population. technology and have lawsuit Aug. 1 at George Watts Mon- and required the money to go toward Since the original court order, a from a 2008 tessori Magnet School in Durham. school technology. handful of lawmakers tried to pass our students compete court order for “As a state, we have two choic- School districts have received legislation to address the issue, with the best and the es: Invest in technology and have $18 million of the $747 million owed. but the bills never gained traction. brightest on a level school technology our students compete with the best With the 2008 order scheduled Rep. Jason Saine, R-Lincoln, filed and the brightest on a level playing to expire in August, NCSBA filed a House Bill 554 on April 5, 2017. playing field, or stick spending field, or stick with the status quo complaint to extend the deadline. That bill would have allowed for with the status quo and have our students potentially “North Carolina’s public school overcollection of fines and penal- and have our students watching from the sidelines,” Min- students deserve a 21st-century ed- ties toward payment of the 2008 potentially watching he N.C. School Boards Associ- nie Forte-Brown, president of NCS- ucation,” Forte-Brown said. “The court order. ation and school districts are BA, said. “I don’t think we want the use of current technology should H.B. 554 failed to move out of from the sidelines. suing several state agencies latter.” not be a choice. It’s a necessity.” the House K-12 education commit- to extend a 2008 court order. In 2008, Superior Court Judge Rod Malone, an attorney repre- tee. - Minnie Forte-Brown, TThe order requires the state to Howard Manning issued a court or- senting the plaintiffs, said his - cli President of NCSBA hand over nearly $730 million in civ- der requiring the state to trans- ents are willing to work with the Lindsay Marchello

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Lawsuit says laws that prevent him from buying an MRI scanner for the Forsyth Im- certificate-of-need aging Center he founded in 2017 in The lawsuit claims Winston-Salem. CON laws are regulations suppress The lawsuit claims CON laws economic liberty are unconstitutional and have been unconstitutional struck down once by the state Su- and have been and violate due preme Court. process as well as It contends CON laws suppress struck down economic liberty, violate Singh’s once by the state give special favors to constitutional due-process and equal-protection rights, and violate Supreme Court. incumbent medical the constitutional exclusive emol- uments clause. That clause bars providers granting special privileges or prof- its to some while prohibiting them CON regulations, and their health- CJ PHOTO BY DON CARRINGTON DON BY PHOTO CJ to others. care economies did not suffer. THE CHALLENGER. At a July 31 press conference, Dr. Gajendra Singh, a For- r. Gajendra Singh wants to Named in the suit are the state Even if the the original justifi- syth County surgeon, discusses the lawsuit he has filed challenging certifi- help patients get an MRI Department of Health and Human cation for CON laws was to control cate-of-need laws. At left is Raleigh attorney. Denton Worrell and at right is scan for a fraction of the Services, DHHS Secretary Man- health care costs and provide great- Institute for Justice Attorney Renee Flaherty. price hospitals and big health care dy Cohen, Gov. Roy Cooper, Senate er access, “that hasn’t been the re- Dnetworks charge. But state regula- Leader Phil Berger, R-Rockingham, ality since these laws have been in tors and powerful lobbying allies re- and House Speaker Tim Moore, effect,” said IJ attorney Josh Wind- al, abdominal, and cancer surgeon allow him to get a clearer view of or- strain him. R-Cleveland. ham. He said the federal govern- certified by the American Board of gans and tissues and diagnose prob- On July 30, Singh joined with At the press conference, Singh ment repealed its CON, acknowl- Surgery and a fellow with the Amer- lems more precisely when prepar- the Institute for Justice to file a law- and IJ attorneys rebutted hospitals’ edging the regulations were an- ican College of Surgeons, has a CT ing patients for surgery. suit in Wake County Superior Court claims, saying 16 states including ti-competitive and drove up costs. scanner, X-ray, and ultrasound ma- seeking to block certificate-of-need Texas and California repealed their Singh, an award-winning gener- chines. But the MRI scanner would Dan Way Company gets DHHS N.C. pension fund posts Medicaid contract gains, though earnings have slowed, treasurer says THE STATE PENSION fund post- ed overall gains of 7.3 percent for fiscal 2017-18, outpacing the as- sumed rate of return on invest- ments. But earnings have slowed to date for the 2018 calendar year, State Treasurer Dale Folwell report- ed. CJ PHOTO BY BY DAN WAY DAN BY BY PHOTO CJ The 20-year average of invest- State Health and Human Services Secretary Dr. Mandy Cohen ment gains now stands at 6.1 per- cent. That misses the 7 percent as- he state’s long-planned DHHS budget. The state is shift- sumed rate of return set in April, shift to Medicaid managed ing away from an expensive fee- Folwell said. care took a major step for- for-service model in which medi- The Teachers’ and State Em- ward Aug. 3. The N.C. Depart- cal providers were paid for every ployees’ Retirement System and Tment of Health and Human Ser- clinical visit and procedure. Local Government Employees’ Re- vices announced a contract with The transformation to man- tirement System boards of trust- a global company to help partic- aged care pays a set monthly ees unanimously approved lower- ipants in the government insur- amount and emphasizes quali- ing the rate, which was 7.2 percent. ance program choose health care ty of care and healthy outcomes The change is closer to the in- plans. instead of the number of proce- vestment portfolio’s actual perfor- CJ PHOTO BY DAN WAY DAN BY PHOTO CJ DHHS will pay an estimated dures and treatments given. It is mance. But Folwell’s push for more A LONG WAY TO GO. State Treasurer Dale Folwell wants to reduce unfunded $17 million to MAXIMUS, a gov- expected to launch in 2019 and accurate accountability meant the liabilities in the retirement and health plan systems. ernment services provider based would integrate physical and be- funded status of the affected sys- in Reston, Virginia. The cost will havioral health care. tems dropped by 2 to 3 percentage depend on how many Medicaid The state submitted a re- points. That’s because the plans confirmed North Carolina contin- ally, the state spends more than recipients are eligible for man- quired waiver from its previous were showing assumed gains on ues to have the second-lowest ad- $55.3 million less due to that $70 aged care and whether DHHS Medicaid program to the feder- paper that never materialized in ministrative costs among any U.S. difference. adds optional services under the al Centers for Medicare and Med- the market and weren’t corrected in public pension fund in its peer “We still have a long way to go” contract. icaid Services to create the man- the funded status. group. It also is among the five in reducing unfunded liabilities in About 2 million poor, aged, aged care system. DHHS spokes- Folwell hopes to continue ratch- best-funded state retirement sys- the retirement and health plan sys- and disabled state residents re- man Cobey Colton said the waiv- eting down the assumed rate of re- tems in the country. tems, Folwell told reporters during ceive Medicaid. The program er is in the final phases of review. turn to reflect real earnings more Pension administration costs his monthly Ask Me Anything tele- spends about $3.7 billion in state closely. for North Carolina are $23 per conference in July. funds, roughly 70 percent of the Dan Way The earnings report comes as member, while the peer average is a national benchmarking survey $93 per member. Compared annu- Dan Way CAROLINA JOURNAL // SEPTEMBER 2018 5 QUICK TAKES Thousands of N.C. teachers High school tests app in active shooter drill

HOKE COUNTY fail licensing exam math High School in Ra- eford caught a glimpse of what an ore than 2,000 N.C. elemen- Florida that at least 1,040 teachers active shooter situation might look tary teachers have failed lost their jobs because they failed to like during a drill Aug. 21. It was an the math portion of their li- pass the math section of the Florida opportunity for school officials and censing exam since the state start- Teacher Certification Exam. the local police department to test Med using a new test in 2013. The test Indiana saw high failure rates the Rave Panic Button app. itself may be the problem. for math, science, and reading. Rave Mobile Safety designed Before the 2013-14 school year, WTHR reported 18 percent of po- the app five years ago as a way to North Carolina required all ele- tential elementary science teachers bridge the gap between school staff mentary teachers to pass a test passed the science section for the and law enforcement. The app al- called Praxis 5015 to earn a license 2015-16 school year. lows a person to instantly alert to teach in the state. The state has Thomas Tomberlin, director of 911 dispatchers of an emergency, since adopted the Pearson Publish- district human resources at the De- whether it’s a medical issue or an ing Co.’s test, which includes sub- partment of Public Instruction, active shooter. An alert is also sent CJ PHOTO BY LINDSAY MARCHELLO LINDSAY BY PHOTO CJ sets of mathematics and reading. gave a presentation on the issue to everyone in the area with the PANIC BUTTON APP. A Hoke County deputy sheriff poses as an active After the switch, pass rates to the State Board of Education on app. Updates go out as the situa- shooter during a drill at Hoke County High School. plummeted for the math section of Aug. 1. tion changes. the test. With Praxis, the N.C. av- “Here in the 2018 school year “The Rave Panic Button is a re- erage pass rate from the 2011-12 we have a great number of teachers ally great technology that we can every faculty member will have ac- thinking about school safety. school year to 2013-14 was 85 per- who have not passed this test and put in the hands of faculty and cess to the app. “One thing we have to remem- cent. For the 2014-15 school year, now are seeking relief through pol- staff members here in Hoke County Hoke County Sheriff Hubert Pe- ber is that most times people who the pass rate dropped to 65 percent. icy,” Tomberlin said. and across the state,” Todd Miller terkin led the charge to get the Rave commit crimes do the research. The most recent pass rate is 54.5 DPI doesn’t know how ma- of Rave Mobile Safety said. “It is a app to the county’s 14 schools. Ev- They look at technology,” Peterkin percent. ny teachers failed one year but great communication tool that can eryone from teachers to custodians said. “They case out your schools In July, the State Board of Edu- passed the next. Tomberlin said he prevent active shooters.” has access to the app. and your neighborhoods. They are cation allowed school districts to re- can’t tell — by using existing da- Miller said several tests have “One of the biggest concerns in looking at new, innovative ways to tain teachers who failed the test for ta — how many teachers who hav- been done that show the app can every county right now is school commit crimes.” another year, giving them time to en’t passed the test would lose their cut response time by more than 50 safety.” Peterkin said. “Anything The cost of implementing the retake it. licenses. New reporting require- percent. we can do to minimize the threat, app was about $20,000. The Hoke The problem isn’t limited to ments should make that informa- Hoke County is one of two N.C. to minimize someone getting hurt County Sheriff’s Office split the North Carolina. Florida and Indiana tion easier to get. counties going digital to protect or killed, is important.” cost with the school system. also saw more teachers flunk the their schools. Henderson County Peterkin said it’s important not test. ABC Action News reported in Lindsay Marchello schools announced recently that to get stuck in traditional ways of Lindsay Marchello

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eamorrisfellows.org 6 CAROLINA JOURNAL // SEPTEMBER 2018 NORTH CAROLINA Regulations, provider shortages keep addicts from getting treatment

Rules and laws street is sold to people who are wor- tion, and we say, ‘Here’s our list of ried about going into withdrawal. resources. We’ve called around. No- limit number of They are not using it to get high,” body has beds. Here you go.’” Singer said. “Oxycodone is the drug “Usually they grow just as dis- patients doctors to get high on. Heroin is the drug to couraged and quickly relapse be- get high on. Buprenorphine is no cause it seems like the impossible can treat and big deal.” journey,” Koontz said. restrict treatment Current law restricts the number The restrictions are tightest on of patients doctors can treat with methadone, which carries a higher clinics, driving buprenorphine. If they apply for a risk of abuse. Patients have to travel waiver and complete eight hours of to a methadone clinic, where nurses some addicts to training, physicians can treat up to watch them take the dose each day 30 patients in the first year and 100 for the first 90 days. seek illicit fixes the next. Eventually they can apply “There are underserved areas, to treat up to 275. where you have to drive 100 miles to “The government is getting in the methadone clinic,” Singer said. BY JULIE HAVLAK the way of themselves if they want “And most people don’t have the to stem the tide of opioid addiction. means or the patience to drive back hen addicts show up at They have made it impossible, espe- and forth to the methadone clinic emergency rooms, there’s cially for the poor,” Gorrigan said. that’s not nearby every day.” a good chance they won’t “What has occured from this is an To operate a methadone clinic, find help. artificial shortage of treatment, and doctors must apply through three W“I see individuals walk into the against addiction are buprenorphine tions on the treatment after bu- what occurs from that is that most federal agencies, qualify for an Opi- emergency department, saying, ‘I’m and methadone, drugs that block prenorphine leaked out of doctors’ providers of buprenorphine charge oid Treatment Program license, and fed up, I’m done, I want to stop do- cravings and withdrawal symp- offices, spread on the streets, and in- cash … which most people can’t af- jump through other hoops meant to ing heroin. Can you help me?’” Dr. toms. But getting more addicts in- filtrated North Carolina’s prisons. ford.” choke drug abuse. Stanley Koontz of New Bern said. to medication-assisted treatment In the Brunswick County Deten- The inspections, regulations, “It’s very, very tightly regulat- “And usually … I’ll send the majori- programs is an uphill slog, slowed tion Center, inmates smuggle in bu- and fears of drug diversion have ed by the state and federal govern- ty of them home.” by skepticism within the industry, prenorphine strips behind mailing scared primary doctors away from ment,” Eric Morse, who operates Treatment programs are satu- shortages of providers, and lawmak- stamps and in the creases of books. prescribing medication-based treat- eight opioid treatment programs, rated, and patients are often left to ers’ regulations, experts say. “We do occasionally have some- ments, Singer said. said. “You’re inspected constant- battle addiction on their own. Doc- Buprenorphine and its cous- one going through heroin withdraw- “The volumes are incredible,” ly and randomly by the state and tors place part of the blame square- ins either are hailed as life-sav- al, and it is just horrific,” Brunswick WakeMed Vice President Rick Shrum DEA.” ly at Uncle Sam’s feet, many health ing drugs or suspected as the next County officer Emily Flax said. “But said. “Placing them in enough good About 12,000 providers active- professionals say. chimera in America’s search for a it is mostly for the high.” hands is the real challenge.” ly prescribe buprenorphine in the America’s war on drugs has mu- “magic bullet.” Some doctors disagree. While patient caps were meant United States, according to the Na- tated in the past decade almost as “You can have a woman who is A few go so far as to shrug at to stop the rise of illicit buprenor- tional Alliance of Advocates for Bu- radically as real warfare has during shooting up the night before, and drug diversion in the hopes that phine empires, the restrictions exac- prenorphine Treatment. the past century. Where President within 24 hours she can go to work somewhere the drugs are helping erbate the shortage of care, doctors “I can tell you from the front lines, Nixon once declared war, and Nan- and take care of her children,” said addicts detox rather than die in an say. it’s a narrow window when someone cy Reagan preached “Just Say No,” Dr. Francis Gorrigan, CEO of Solas overdose, said Dr. Jeffrey Singer, a “I don’t think [the cap] is high says they’ve finally had enough. ‘I politicians and doctors alike are re- Health in Pinehurst. “All signs of an surgeon and senior fellow at the Ca- enough at all,” Koontz said. “When want help,’” Koontz said. “You have branding addiction as a disease and addictive disorder pretty much van- to Institute. somebody finally says they need to try to get them into [treatment], replacing abstinence with medica- ish.” “There is a lot of data now sug- help, I’ll be honest with you, we take but the issue is that the psychiatric tion-assisted treatment. Buprenorphine also has a dark gesting that most of the suboxone their blood, we make sure they don’t and substance abuse systems for ma- On the front lines of the fight side. Lawmakers slapped regula- [buprenorphine] that is sold on the have an underlying medical condi- ny years have been broken.” Wilson among smaller cities considering microtransit BY JULIE HAVLAK crotransit company TransLoc. hostile transit agencies or compet- Wilson is flirting with replacing ing services. he public transportation sys- all of its buses with an agency-op- Even so, TransLoc, which sold tem in Wilson, as in many erated fleet of smaller vehicles to Ford Motor Co. earlier this year, places, needs taxpayer subsi- powered by TransLoc’s microtran- faces political and logistic chal- dies to keep the buses running. The sit technology, which — much like lenges. TransLoc may not take rid- Tdifference between the cost of op- Uber and Lyft — offers riders flex- ership from the bus system, but it erating the system and revenue, led ible routes rather than scheduled takes money. by passenger fares, is more than $1 rides to and from fixed stops. The shift to microtransit usual- million a year. TransLoc now sells its track- ly requires the politically fraught As is the case with other cities, ing technology to the campus tran- decision to jettison fixed bus routes too few people use public transpor- sit systems at N.C. State University, and replace traditional buses with tation. UNC-Chapel Hill, and Duke Univer- commuter vans or other smaller ve- “When we see a $200,000 ve- sity, and is in a pilot program with hicles, said Poole. hicle driving around that has got the GoTriangle transit agency. The city of Wilson paid Trans- three people on it … we’ve often TransLoc is gambling that it can Loc roughly $25,000 to run the sys- commented that we would be bet- solve that problem by selling its mi- tem and tests. ter off just paying their taxi fare crotransit technology to transpor- If it decides to go forward with than we would running empty tation agencies, which own and op- microtransit, it will pay a licensing buses around,” Wilson chief plan- erate the fleet of cars and vans. fee of up to $500 per vehicle each ning and development officer Rod- Other privately owned micro- month. ger Lentz said. “That tells me that transit companies have floundered In small cities, Lentz hopes, our fixed routes aren’t working.” under high operating costs and TransLoc will offer quicker, more Lentz believes the solution to flagging demand. They must main- practical transit, as well as opening SMALL-SCALE PUBLIC TRANSPORTATION. A microtransit system might use smaller commuter vans rather than large buses. his city’s transportation woes could tain a fleet of vehicles, their drivers up new, underserved areas to public come from the Durham-based mi- can unionize, and they often face transportation. CAROLINA JOURNAL // SEPTEMBER 2018 7 NORTH CAROLINA STOP and HOPE acts shut down pill mills while leaving chronic pain patients few options

New laws and Substances Reporting System, and patients by putting them back on gave law enforcement restricted their medicine. tougher federal access to the NCCSRS. “Anybody who takes opioids is “Smarter, safer prescribing is likely to become an addict. That’s enforcement turn one tool among many that we’re an important myth,” Kline said. pain patients deploying to com- When Nan- bat the opioid cri- cy Henson’s pri- toward more sis,” said Gov. Roy mary care doctor Cooper in a 2017 saw the dosage of lethal, often illegal news release. “Set- Not treating a her medication for substitutes ting initial limits person in pain chronic pain, she on these powerful is negligence. “freaked,” Henson drugs can help re- said. duce the number of Abandoning “When you BY JULIE HAVLAK people who become people with have pain from addicted to opioids, painful disease back surgeries or Cathy, opioids are part of and it can ultimate- [two fusions] that the blend of medications that ly save lives.” to the streets, will never go away, keep her functioning. After Law enforce- with no doctor, pain from fibro- she caught polio as a baby — just ment doesn’t track is negligence. myalgia, and the Fthree years before the vaccine was the number or type weird pain from invented — she suffered from fibro- of patients a doc- - Thomas Kline neuropathy, it myalgia, she developed arthritis as ANOMALIES. Chronic pain patients are the anomalies in a system designed to tor treats, but the takes a combo of a teenager, and her nerves started target a nationwide epidemic. number of opioid pain meds to make to die as a 40-year-old. pills prescribed. For life bearable,” Hen- “I am a chronic pain patient, I doctors looking to cut down their son said by email. “If they do not have been on pain pills for 30 years. Chronic pain patients are the “These people are no longer pill counts or their paperwork, the make exceptions for severe pain It has allowed me to raise a child, be anomalies in a system designed with us due to the policy of ‘you are easiest option is not to treat chron- patients, we’ll be seeing more sui- a good wife, and to retire gracefully to target a nationwide epidemic. better off without pain medicines,’” ic pain patients, said Cato Institute cides. That’s a fact. Not me, but I with money of my own,” said Cathy, North Carolina exempted chronic Kline wrote at the end of the list. Senior Fellow Dr. Jeffrey Singer, a can understand the frustration that who didn’t want her last name used. pain patients from its chokehold on “Not treating a person in pain is surgeon. leads to it.” “Without them, I would be a ward of opioid prescriptions, but with legal negligence. Abandoning people “This crackdown on docs with Critics say that the crackdown the state. I have never, never upped crackdowns and controversy over with painful disease to the streets, the subscription monitoring pro- on legal prescriptions has driv- my dosage or abused the drug.” using opioids to treat long-term with no doctor, is negligence.” gram — everyone is under surveil- en patients to more deadly street A growing number of chronic chronic pain, more doctors are re- In 2016, enough prescriptions lance for how many prescriptions drugs. pain patients say they are caught in luctant to prescribe them. were written in North Carolina for they write — it’s really frightening “Lots of patients tell me [doc- the crosshairs of the war on drugs, Thomas Kline, a retired N.C. every person to hold more than 65 doctors,” Singer said. “This has had tors] stopped their pain meds,” For- in which legislators’ good inten- physician, has begun to keep a pills, according to the Centers for a chilling effect that has made all syth County Emergency Service tions to limit overprescribing have list of suicides he believes were Disease Control and Prevention. doctors afraid to prescribe opioids.” Captain Tara Tucker said. “We’ve made the lives of actual chronic caused by forced tapers of chron- The STOP Act and the HOPE Pain is so subjective that doc- actually seen older folks who have pain patients hellish. ic pain medication. The list has Act prioritized shutting down pill tors fear enabling addiction when been on chronic pain medications “It’s insane,” Cathy said. “We grown to 33 names, spanning mid- mills. The bills limited prescrip- they try to treat chronic pain. for years that their doctors stopped are an infinitely easy target in the dle-aged workers, young mothers, tions, mandated the use of the pre- This frustrates Kline, who says giving them switch to heroin and war on drugs.” and wounded veterans. scription database N.C. Controlled he restored the lives of some of his overdosing.”

NORTH CAROLINA

BUDGET IN PICTURES ONLINE NOW AT JOHNLOCKE.ORG www.johnlocke.org/research/north-carolina-budget-in-pictures-fy2017-18/

A visual exploration of the current N.C. budget: How does state government get its money? How does it use that money? How has that changed over time? And how might that change in the future? 8 CAROLINA JOURNAL // SEPTEMBER 2018 ALCOHOLIC BEVERAGES Forgetting our ABCs: North Carolina’s monopolistic system of controlling liquor is broken, but will lawmakers fix it? continued from PAGE 1 “The point here is poor over- sight,” she said. “Poor monitoring. At Westport Whiskey & Wine in Doesn’t matter if it’s done by state Louisville, Kentucky, customers can agency or if it’s privatized.” cut a path through the well-stocked On its face, the ABC board sys- store straight to a tasting room, tem makes little sense. adorned with hundreds of bottles The ABC commission staff, the of bourbon and other whiskey. The ABC told CJ, operates under the di- store often hosts special events fo- rect oversight of the chairman and cusing on bourbon, including, over the two commissioners, who are ap- the Thanksgiving holiday, a chance pointed by the governor. to grab a bag. The buyer won’t know The commission, says the ABC, the contents of the brown paper “is the chief regulatory agency for sack until he opens it, although the the state related to alcohol matters. bag will include a mystery bottle of “Alcohol laws are the purview of bourbon. the General Assembly. … ” There’s no such fun in North ABC referred CJ to Chapter 18B Carolina, which prohibits distillers of the N.C. General Statutes — Reg- from mixing drinks and limits tast- ulation of Alcoholic Beverages. ings to 1.5 ounces per customer. The state’s two largest ABC Liquor in N.C. distilleries is boards in terms of stores and pop- served warm and straight. Take it ulation served — Wake and Meck- or leave it. A move to allow tastings lenburg counties — each have five at N.C. liquor stores was summarily members plus staffs. The much dismissed from a bill last year. smaller Rockingham County sys- North Carolina roots tem has three separate boards, gov- erning the towns of Madison, Eden, and Reidsville. Before becoming head distiller The counties and towns are ac- at High Wire, Jude was the inventive customed to the revenue generated leader of Fair Game Beverage Co. in PHOTO FILE CJ by alcohol sales, somewhere around Pittsboro, where he oversaw and TOPO. Chapel Hill-based distillery, and others in North Carolina, can sell five bottles of liquor per year at the distill- $1 billion annually, the state ABC created spirits such as Flying Pepper ery. All other sales must go through ABC stores or bars. website says. Of that, $406,044,410 tobago-pepper infused vodka and a was distributed across North Caro- rhum agricole, a rum that originated lina, including $306,238,795 to the in the French Caribbean and is made General Fund and $74,503,732 to using juice from sugar cane. towns, cities, and counties, includ- “Not everyone drinks straight li- without limits on sales. Carolina area in their store, any na taxpayers at least $11.3 million ing, for the year ending June 30, quor,” Jude says. “We don’t make a The N.C. Alcoholic Beverage North Carolina products that they over 13 years, exceeding a contract 2016, more than $7 million in Wake. lot of money off [mixed drinks] be- Control Commission sets statewide choose to sell. But the law does not cap for 13 consecutive years, Wood Efforts to modernize, reform, cause we can serve you three ounc- policy and rules, but most of the de- require the ABC boards to buy any told CJ. or even abolish the N.C. ABC sys- es per day of liquor.” cision-making is left to 168 coun- specific products. Maryland-based LB&B, which, tem aren’t new, and the system has But, he concedes, the new law ty-based ABC boards, which have “In the past, the commission has its website says, specializes in fa- made some small steps toward prog- brings people in and introduces great autonomy and, encouraged distill- cilities management, logistics, and ress and consumerism. them to a product they would prob- as the argument ers who are con- training operations, since 2004 has But efforts to privatize the anti- ably never sample. goes in some cir- cerned about lo- contracted with the state to provide quated system have fallen flat, due The rules governing liquor in cles, immense polit- Liquor in N.C. cal boards’ interest warehouse and distribution ser- in part to strong religious interests South Carolina not only serve as a ical sway. That, say distilleries is in their products vices. and even stronger lobbying efforts salient contrast to N.C. laws but also critics, can very well to reach out direct- Unused warehouse space poten- by the ABC itself, including from the as an example of how far one state lead to favoritism, served warm ly to local restau- tially cost the state $2.1 million over politically connected local boards. — situated firmly in the so-called cronyism, and, ulti- and straight. rants to get a com- seven years, and a lack of monitor- “It is across the state,” one dis- Bible Belt — can transcend anti- mately, corruption. Take it or leave mitment in writing ing left the state underpaid by at tillery representative told CJ about quated ideas and embrace free mar- “They’re all indi- so that they can least $297,537 over two years. the discretionary power prevalent kets and entrepreneurial ideals. vidual businesses,” it. A move to show to the local Oversight effectively falls to the throughout the ABC system. ABC Kentucky, Virginia, and Tennes- one distiller told Car- allow tastings boards that order- General Assembly. board members have told the rep, see now allow distilleries to serve olina Journal. “They at N.C. liquor ing a case of the lo- The N.C. House has a standing “‘If an N.C. distiller has said he or mixed drinks, as well as champi- operate in different stores was cal product will re- committee, chaired by Rep. Chuck she wants privatization, then I’m oning other market-friendly initia- ways. That’s one of sult in quick sales.” McGrady, R-Henderson, and Rep. not carrying their products.’ Many tives. In North Carolina, customers the problems, right?” summarily The N.C. ABC, James Boles, R-Moore, to oversee ABC boards just aren’t interested in can buy five bottles of liquor from No North Caro- dismissed from in general, oper- the ABC. The Senate has no com- N.C. products,” the rep told CJ. the distiller every 365 days. lina law exists re- a bill last year. ates with little mittee specific to ABC oversight, al- Selling versus Neighboring states have limits, quiring local boards oversight, as State though that would probably fall to but they aren’t nearly as draconian to favor one product Auditor Beth Wood the Commerce Committee. controlling and are generally based on “daily” over another, says pointed out after a For his part, McGrady, a propo- purchases. Virginia, like North Car- Kat Haney, N.C. ABC recent audit found nent of loosening the state’s alcohol The disparities between ABC olina, is also one of 17 alcohol “con- public affairs director. the ABC erred in its responsibility to rules, calls the current system anti- boards in Virginia and North Caro- trol” states, but with some big dif- “Local ABC boards buy the in- follow state policies and practices. quated and prefers a licensure mod- lina are stark and telling. ferences. ventory for their stores based on Wood on Aug. 9 released the re- el allowing the private sector to sell The Virginia ABC is an inde- For one, Virginia alcohol sales what they believe will be good sell- port saying the ABC has over past and distribute liquor, as it already pendent political subdivision not are governed by a statewide author- ers in their markets,” she told Caro- years cost the state about $13.5 does for wine, beer, and hard cider. unlike the Virginia Lottery, Vir- ity, and distilleries are licensed to lina Journal. “State law requires ABC million. It found that poor contract The lack of contractual over- continued PAGE 9 operate their own quasi ABC stores, stores to promote, in a special North administration cost North Caroli- sight is a problem, Wood said. CAROLINA JOURNAL // SEPTEMBER 2018 9 ALCOHOLIC BEVERAGES

continued from PAGE 8 spite a large deal to sell it in a pop- ular venue. The same distiller said ginia Tourism Corporation, Virgin- as his product collected dust in the ia Port Authority, and MCV Au- state warehouse, cases of a less ex- thority. “The intent behind turn- pensive product — which received ing Virginia ABC into an authori- money through a state grant — ty is to allow it to operate more like were rushed into ABC stores. a business, outside of the require- Yet another distiller says sev- ments of the Virginia Public Pro- eral of its products were delisted curement Act, the Personnel Act, over a perceived problem that was and the Virginia Information Tech- more cosmetic than anything, and nology Act,” the Virginia ABC web- that a sales clerk could easily ex- site says. plain to customers. But the local Virginia ABC stores are open board wouldn’t budge, the distiller Sundays; North Carolina’s stores ar- said, even after extensive market en’t. research and sales analysis. The N.C. ABC falls under the De- “We did everything to prove partment of Public Safety, with, as his point wrong,” the distiller said stated on its website, an “overall of one ABC official. “He didn’t like objective to provide uniform control [the products].” over the sale, purchase, transpor- The product was not only del- tation, manufacture, consumption, isted, but the ABC failed to inform and possession of alcoholic bever- the affected distiller of the deci- ages in the state.” sion. The word “control” is key, often “No one had the balls to call us popping up in legislative committee and tell us we were delisted,” the hearings and church pulpits. distiller said. North Carolina has more than 50 Distillers cite disagreements distilleries with products in stores, with officials from local ABC more than double the number from boards that are often nonsensical just a few years ago. To be fair, some and many times based not on facts

North Carolina distillers are happy PHOTO FILE CJ but on bias and opinion. with the ABC system. Others toler- IN OTHER STATES. A view from the tasting room at High Wire Distilling in Charleston, South Carolina. The distillery’s An ABC official, says one distill- ate it. Still others loathe it. head distiller, Chris Jude, who is from Boone, had the same role, at Fair Game Beverage Co. in Pittsboro. er, told a representative from a dis- Some say the respective ABC tiller, “I’’m not carrying your prod- boards delist their products — re- uct unless a restaurant orders it.’ move them from further circula- “There shouldn’t be a man sit- tion — without telling them. Others ting behind the desk who has that say ABC boards refuse to carry their authority,” the distiller said. products, without reason or refer- itants, meaning that liquor sales ago?” asks one North Carolina dis- ounce — during events and gather- Someone who represents a ence. They say boards delay place- were banned in 68 counties. tiller. ings such as trade shows and festi- group of distilleries told CJ about a ment of some products yet show fa- Though the 18th Amendment, Gov. Roy Cooper last sum- vals, contingent on local approval, festival in which several of the dis- voritism toward others. Some dis- ratified in 1919, made producing, mer signed Senate Bill 155, which although this has been problemat- tillers were approved for booths. tillers say promises made aren’t selling, transporting, and import- cleared the way for N.C. craft dis- ic. A provision from S.B. 155 allow- A week or so before the event the always kept. Some distillers say ing liquor a crime, North Carolina tillers to sell five bottles to custom- ing tastings at ABC stores — simi- representative was told a distiller they’re treated as an enemy and not had jumped on the Prohibition wag- ers each year, instead of the current lar to Virginia and South Carolina who makes vodka — another vod- as a partner. on much sooner. A one, and — with lo- — was removed early in the pro- ka producer was a festival sponsor Several distillers in North Caro- referendum vote on cal approval — al- cess. — wouldn’t be allowed to pour that lina didn’t hesitate to discuss with May 26, 1908, made lows restaurants But, despite changes to the spirit. CJ their problems and concerns re- it the first state in It doesn’t make and retail outlets laws, and the relative baby steps “OK, I guess I can do that,” the garding the ABC. But because state the South to ban al- any sense. We to begin selling al- toward consumerism and open rep remembers thinking. and local ABC boards approve, list, cohol. Even when cohol on Sunday at markers, many distillers are frus- “But it bothered me.” distribute, place, and sell their prod- nationwide Prohi- can’t do any 10 a.m., as opposed trated and discouraged. Later that day the rep received ucts, the distillers who talked with bition ended with cocktails, we to noon. “I’ve just given up,” said a dis- an email saying none of the dis- us asked that we allow them to re- the 21st Amend- can’t go out An amendment tiller, who called out one county in tillers could pour, though many main anonymous. ment’s passage in and market. by Rep. Pat Hurley, particular. had already traveled to the festi- The fear of retribution was a 1933, North Car- R-Randolph, effec- “I thought it was incompetence. val from throughout the state. The common thread among distillers olina didn’t ratify Not to be able tively removed a Now, I think it’s something else.” booth fee was refunded, but the and their representatives. We will the amendment. It to do a tasting provision allowing A broken system travel expenses weren’t. The offi- use some of their quotes but won’t wasn’t until 1937, in ABC stores distilleries to sell cial response was the respective name them here. when the ABC sys- directly to consum- city failed to get the required per- Making liquor in North Carolina tem was set up to so at least ers, which means Distillers talked about their re- mits. isn’t a trend or a fad. This has been sell alcohol in North the managers distillers contract lationships with local ABC offi- “That should have never hap- going on awhile. Before Prohibition, Carolina counties, can taste and with online mer- cials, and how certain ABC deci- pened,” says another distillery rep. North Carolina had more distilleries that Prohibition of- chants in other sions lead to questions about fa- “[The N.C. ABC doesn’t] have the than just about any state in the ficially ended in the understand states to sell their voritism and downright bias. capacity to keep us all on the same country. But that changed quick- state. The state al- ... it’s almost products. The bill One ABC board a distiller says, playing field, and they’re not look- ly, and lawmakers, beginning in lowed breweries and debilitating. also allowed for the declined to list a new product, even ing at all the factors. the mid-to-late 1800s, began railing wineries to operate sale of antique or though it was approved for sale “All things that are hindering against the intoxicating beverage. shortly after Pro- rare spirits in spe- and available at the distillery and our industry could be making them - N.C. distillery In 1903, the growing influence hibition, but North cial auction, af- in several counties. “Not because money. All the time we’re trying to representative of the Anti-Saloon League led to Carolina lawmakers ter auctioneers ob- it’s a low-quality product,” the dis- be as creative as can be just to sell the passage of the Watts Act, which didn’t lift the ban on tain a $750 permit. tiller said, “because they feel like our products. It doesn’t make any banned production and sale of li- making liquor un- The bill provided our other stuff’s not selling fast sense. We can’t do any cocktails, quor outside incorporated towns, til 1979, and the first legal liquor distillers a means to obtain a spe- enough.” we can’t go out and market. Not effectively outlawing rural distill- produced in the state didn’t hit the cial event permit, which would cost Another distiller waited for to be able to do a tasting in ABC eries. In 1905, the Ward Law ex- market until 2005. $200 and allow distillers to offer three months after approval for his stores so at least the managers can tended Prohibition to incorporated “Why do we feel we are wed- tastings of their products — 0.25 product — which has won national taste and understand ... it’s almost towns of fewer than 1,000 inhab- ded to a system conceived 80 years ounce per product, not to exceed an awards — to make it into stores, de- debilitating.” 10 CAROLINA JOURNAL // SEPTEMBER 2018 ALCOHOLIC BEVERAGES ABC cost state about $13.5 million because it failed to properly oversee contract, audit finds BY KARI TRAVIS AND JOHN TRUMP state about fuel cost increases, ask- all of your review period, was before ing the ABC for money it didn’t real- my tenure as chair.” he N.C. Alcoholic Bever- ly need, she said. Guy, however, has a history with age Control Commission — “Whatever they asked for, they the state ABC dating to 2009, when the agency in charge of con- got. Without any question, without he was first appointed to the com- trolling state alcohol production, any verification, without any con- mission. He served on the commis- Tstorage, sales, and distribution — sultation or proof or justification.” sion until 2013, and he was chair- has over past years cost the state “And in some cases what they man from February 2012 to Febru- about $13.5 million, a state audit re- said was their reasoning was not ary 2013. vealed. true. In 2008 they asked for an Gov. Roy Cooper last year named The audit released Aug. 9 found increase the next year, and said Guy to replace Jim Gardner, who that poor contract administration it was due to price increases for was appointed by former Republi- cost N.C. taxpayers at least $11.3 their fuel,” Wood said. “When we can Gov. Pat McCrory. million over 13 years. Unused ware- examined their fuel cost, it actually Guy was most recently the house space potentially cost the went down. Same thing in 2016. mayor of Surf City, which strad- state $2.1 million over seven years, When we examined it, it had gone dles Pender and Onslow counties. and a lack of monitoring left the down. In 1990 he served three months in state underpaid by at least $297,537 “The power of this vendor and prison on charges of fraudulently over two years. this contractor was just amazing to billing clients of his insurance agen- The audit came just two weeks me that they had this much power, cy for nearly $16,000, the News & after ABC administrator Bob Hamil- and the commission didn’t validate Observer reported. Gov. Jim Martin ton left the agency. The reasons for or verify anything.” commuted his three-year sentence his leaving are unclear, and ABC of- A 200,000-square-foot ware- and later pardoned him. ficials are using personnel statutes house added in 2011 is largely un- Guy’s father, A.D. Guy, was a for- as the reason for not commenting PHOTO FILE used, auditors found. mer state senator, the Raleigh pa- AUDIT. N.C. Auditor Beth Wood on Aug. 9 released a scathing audit of the about why Hamilton is gone. ABC “failed to ensure prudent per reported. In 2009, Zander Guy N.C. Alcoholic Beverage Control Commission. The audit says poor contract Agnes Stevens, deputy director, administration, among other problems, has cost the state $13.5 million over use of public funds when it autho- told the N&O, “‘I’m ashamed of that is acting interim administrator. Ste- 13 years. rized the lease of a Clayton ware- [crime], and I can’t change it.’” vens began with the ABC as pub- house. A large amount of the ware- Guy makes $113,456 as commis- lic relations director in October 2009 house space was unused and poten- sion chair, the Star-News of Wilm- and became deputy director in No- tially resulted in $300,000 a year of ington reported. vember 2017, according to LinkedIn. lease. The ABC, the audit conclud- unnecessary cost over seven years. Guy accepted the finding and Hamilton began work with the ed, failed to administer the ware- The Commission did not verify its says he takes the audit seriously and ABC as a contractor in April 2010 house contract in the best interests $13.5 million need for a warehouse of this size, al- will implement changes according- and later became deputy adminis- of the state. Cost to state due to oversight though state policy and best prac- ly. In his response to the audit, Guy trator in September 2012, according The General Assembly, said failures by the N.C. Alcoholic tices required the Commission to said plans are under way to place to his LinkedIn profile. Wood, asked her for an audit of the Beverage Control Commission perform its responsibilities pru- the warehouse contract up for bid in He became administrator in No- state’s six largest agencies, includ- dently and economically,” the au- 2020 and become effective when the vember 2014 and, under his tenure, ing the Department of Public Safety, dit said. current contract expires in 2021. saw unprecedented growth in the where ABC resides. contract cost for warehousing and “Adding this warehouse to the “As Chair,” he writes, “I under- home-grown segment of the indus- “My staff said, ‘When we looked distributing spirituous liquor was Alcoholic Beverage Control Com- stand it is our duty as a Commis- try, particularly for craft distilleries. at the ABC commission, there’s $8.3 million. The total contract cost mission Warehouse contract dou- sion and staff to oversee and man- But the fallout from the audit something not right there,” Wood from July 2004 through June 2017 bled the amount of warehouse age this contract and all other con- continues. told Carolina Journal. “They’ve got a was $77.7 million.” Auditors found space available and has increased tracts. Although previous Chairs Michael Herring, one of three contract that’s not been put out for the commission failed to “procure, the cost of the contract by approx- and Commissions have executed members on the state ABC commis- bid since 2004. They can’t answer administer, and monitor the LB&B imately $2.54 million a year on av- this contract, we will take full re- sion, resigned Aug. 15, according questions about how the contract’s contract for the warehousing and erage.” sponsibility to ensure the terms are to a letter obtained by the Triangle being administered. This is not tied distribution of spirituous liquor in North Carolina now has more completely met and the state is get- Business Journal. to a financial statement audit, but accordance with state policies and than 50 distilleries with products ting the services in a timely and ef- In the poorly worded letter, Her- it’s info they’ve gleaned about that best practices.” in state ABC stores. North Carolina, ficient manner.” ring called findings by the Office of division of DPS.” The ABC, auditors say, “should though, still lags behind its neigh- He says the commission has al- State Auditor Beth Wood “fictitious” The state ABC, the audit report procure, monitor, and administer bors in terms of promoting its craft ready implemented additional con- and called out the administration of says, is responsible for overseeing contracts in accordance with state distilleries and taking positive steps trols, including random spot checks Gov. Roy Cooper for failing to defend and providing “a uniform system laws and regulations and the con- toward featuring their products. of warehouses, inspections of in- the state ABC, saying it’s “an injus- of control over the sale, purchase, tract terms and should review and Hamilton was recently deposed ventory and operation and ride- tice to all that served on the Com- transportation, manufacture, con- validate the reasons given for all re- in a lawsuit filed May 15 by Craft alongs with select deliveries to ABC mission over the past decade.” sumption, and possession of alco- quested contract amendments and Freedom LLC, The Olde Mecklen- boards across the state. “There was and is documenta- holic beverages in North Carolina.” price increases prior to authoriza- burg Brewery LLC, and NoDa Brew- In an email, Stevens said the tion and justification for each deci- Historically, the audit report tion.” ing Co. The lawsuit takes aim at ABC has “increased its focus on sion made in accordance with ABC says, the commission has contract- Further, the ABC “should obtain the state-imposed distribution tighter controls so that today a plan Laws.” ed with a vendor to warehouse and the Division of Purchase and Con- cap on craft breweries, along with is in place and the commission’s au- Herring was sworn in as an ABC distribute liquor, which has a much tract’s review and approval when franchise laws. The lawsuit states dit staff is conducting unannounced commission member in December higher proof — more than 20 per- the contract term, including ex- the rules are inflicting injury and random checks of the contractor’s 2015. He had retired a year earlier cent alcohol — than wine and beer. tensions and renewals, will exceed threaten to impose additional dam- operations.” after 33 years with the agency, in- Maryland-based LB&B, which, three years.” age to the brewers, who can pro- “The audit process began over cluding time as administrator, said its website says, specializes in fa- Lack of accountability for con- duce no more than 25,000 barrels of a year ago, so the discussion and a bio on the ABC website, which has cilities management, logistics, and tractors is highly concerning, Wood beer each year without contracting tighter controls have been under since been removed. He began with training operations, since 2004 has told CJ. with a distributor. way for some time,” she said. the ABC in 1981 as a field auditor. contracted with the state to provide LB&B was given pay increases In his response to the audit re- Despite the recent spate of prob- The ABC erred in its responsibil- warehouse and distribution ser- upon demand without documenta- port, ABC chairman A.D. Zander lems and scrutiny regarding the ity to follow state policies and state vices. tion or proof, Wood said. Guy says he was appointed only continued PAGE 11 practices, Wood said in a news re- “In state fiscal year 2017, the In some cases LB&B misled the last year and “the majority, if not CAROLINA JOURNAL // SEPTEMBER 2018 11 ALCOHOLIC BEVERAGES continued from PAGE 10 clusion is erroneous and stands in ships that the vendor has are not A state audit found losses at the Alcoholic Beverage Control direct contrast to the clear and un- matters that we would have any Commission in several areas totalling $13.5 Million ambiguous statutory and regulatory reason to know details about,” Ste- N.C. ABC, privatization isn’t the an- The audit released Aug. 9 found that poor contract administration cost language under North Carolina law.” vens said. swer, Wood said. N.C. taxpayers at least $11.3 million over 13 years. Unused warehouse In 2015 LB&B paid a civil settle- LB&B “expressly denies all al- “[I]t really doesn’t matter if it’s space potentially cost the state $2.1 million over seven years, and a lack of ment of $7.8 million under federal legations in the lawsuit that it, its a service that is privatized or if it’s monitoring left the state underpaid by at least $297,537 over two years. allegations of fraud. affiliates, or its officers or- employ something that North Carolina tries The U.S. Department of Jus- ees violated the False Claims Act or to run itself — and this is not just POOR CONTRACT tice alleged the company fraudu- otherwise acted improperly with re- the ABC and liquor, it’s anything we ADMINISTRATION lently obtained financial assistance spect to any government contracts,” do,” she told CJ. $11.3 MILLION through the Small Business Admin- the company stated in a July 6, “I’m trying to get people to un- istration. 2015, press release. derstand that the state of North UNUSED The Business Development Pro- Another reason for the settle- Carolina does not monitor it,” Wood WAREHOUSE SPACE gram for Small Disadvantaged Busi- ment was the poor health of the said. $2.1 MILLION nesses, housed under the federal company’s founders, said LB&B “Whether you privatize it with SBA, offers support to small compa- spokesman Edward Green. LACK OF a third party or if you try to run it nies in financial distress. Though the claims resolved by MONITORING yourself and contract some of it out, LB&B sought certification under the settlement were allegations on- $297,537 you’re never ever going to get what the program, falsely claiming hard- ly, and no determination of liabil- you expect on either side if you’re ship under one of its principal own- ity was made, LB&B’s actions un- not scrutinizing and making sure ers, Lily Brandon. Brandon qualified dermined legitimate small and dis- that what you’re paying for is what as a socially and economically dis- advantaged businesses, said acting you’re actually getting. claim Wood’s office made in the au- spirituous liquor by negotiated con- advantaged person — but allegedly U.S. Attorney Vincent Cohen in a Ju- “If you go to privatization, dit report. tract, or, if it chooses, through the didn’t, as the company claimed, con- ly 6, 2015, press release from the U.S. you’re still going to have to moni- LB&B, in a news release, said it use of the state’s purchases and con- trol operations of LB&B. Department of Justice. tor to be sure the state is getting its was “disappointed” by the auditor’s tracts procedure. … Despite the clear Brandon’s lack of involvement Two former LB&B employees, part of whatever might be coming report, which, it said, failed to recog- language of the statute and intent of disqualified the company from col- Steven Sansbury and James Buec- out of that. The point here is poor nize the correct statutory authority the General Assembly, the State Au- lecting contracts under the pro- hler, blew the whistle and in 2004 oversight. Poor monitoring. Doesn’t as mandated to the ABC by the Gen- ditor chose to ignore the statutory gram. filed a lawsuit on behalf of the gov- matter if it’s done by state agency eral Assembly “and improperly at- authority granted to the ABC Com- Carolina Journal phoned and ernment. or if it’s privatized.” tributed excessive costs and under- mission and incorrectly conclud- emailed ABC officials, asking if the “This $7.8 million settlement Herring, who had worked in the payments to the contract.” ed the Warehouse Contract was re- commission was aware of the 2015 demonstrates our commitment to agency since 1981, told the N&O LB&B says according to state quired to be procured through the Di- fraud allegations against LB&B — protecting the integrity of this im- the audit was “politically motivat- statute G.S. 18B-204(a) the Gener- vision of Purchase and Contract and or of the company’s $7.8 million set- portant program,” Cohen said. “We ed interference from Democrat- al Assembly expressly provides the is subject to the Division’s require- tlement. No one at ABC knew of the will do all that we can to act against ic Gov. Roy Cooper’s administra- ABC authority “to provide for the ments (including a three-year term situation, said Stevens. those who illegitimately bill the tion” and, in a letter, disputed every receipt, storage, and distribution of limit). The State Auditor’s legal con- “The other business relation- American taxpayers.” POLITICS • SCHOOLS • GROWTH • TAXES • HEALTH TRANSPORTATION • BUSINESS • THE ENVIRONMENT North Carolina’s longest running TV talk show SPINs again!

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House ABC The casualties are mounting. ABC administrator Bob Ham- Committee co- ilton left the agency a couple of weeks before the state released the chairman says lax audit. The reasons for Hamilton’s abrupt departure remain unclear, oversight by state and the ABC, citing state person- ABC Commission nel laws, refused to comment. Mi- chael Herring, one of three mem- and local boards bers on the state ABC commission, resigned from the commission Aug. may force 15. McGrady stands by Wood’s re- legislature to take port, but not that of LB&B. “My understanding is that ABC charge accepted the auditor’s findings, which says to me that the auditor’s claims were accurate and that ABC KARI TRAVIS AND JOHN TRUMP made mistakes,” McGrady said. “Recognizing that LB&B Associates he N.C. Alcoholic Beverage has a financial interest in their mul- Control Commission appears timillion-dollar government con- to operate with little, if any, tract, I’m not ready to simply accept oversight, aside from a board chair- their rebuttal. I hope to ask the au- Tman and two — now one — com- ditor about their claims.” missioners, who are appointed by The issue of oversight will lin- the governor. ger, and the problems will contin- It’s time to reform the state’s ue to fester until changes, legisla- antiquated state-run system, Rep. tive or otherwise, at least start to

Chuck McGrady, R-Henderson, told TRAVIS KARI BY PHOTO CJ address the idea of fixing a broken Carolina Journal. He intimated it N.C. GENERAL ASSEMBLY. Rep. Chuck McGrady, R-Henderson, has told Carolina Journal it may be time for lawmakers system. may be time for lawmakers to take to take an expanded role in overseeing ABC. “The world has changed since an expanded — if not primary — the bulk of our laws relating to al- role in overseeing ABC. coholic beverages were enacted. McGrady, a longtime proponent The laws are antiquated and don’t of loosening the state’s rules gov- distribution of spirituous liquor in to a $12,000 holiday party, WRAL Poor monitoring, Wood told CJ reflect the changes in the alcohol- erning alcohol, co-chairs the House North Carolina. reported. in reference to the audit. Poor over- ic beverage industry and in our so- Alcoholic Beverage Control and Ap- In reality, though, most of that It’s that elemental lack of central sight. ciety. While there are some that propriations committees and was a control is left to the 168 local boards control that led to a blistering audit, “Since ABC has its own board,” want alcoholic beverage regulation strong supporter of Senate Bill 155, that oversee ABC stores through- released Aug. 9 by the Office of State McGrady told CJ, “it is understand- to stay the way it is, I think mod- the so-called “brunch bill.” out North Carolina. ABC boards, the Auditor Beth Wood. The ABC erred able that DPS gives no oversight ernization of our alcoholic beverage North Carolina has made some ABC website says, are local political in its responsibility to follow state to the ABC Commission. The board law is needed, and I think the ABC progress since the ABC system was subdivisions of the state and oper- policies and state practices, Wood is supposed to review the work do- Commission is in need of regulato- implemented in 1938, yet any head- ate as separate entities establishing said in a news release. The ABC, the ne by its employees and executive. ry reform.” way toward modernization has been their own policies and procedures. audit concludes, failed to administer Each local ABC board is appoint- How soon is the legislature like- slow and grudging. The issue is in- Local boards are required to sub- the warehouse contract in the best ed, and theoretically overseen, by ly to act, and what changes might herently polarizing. Putting zeal- mit an annual independent audit of interest of the state. the local government that creates be on the way? ous progressives and prohibition- their operations. The audit found poor contract it. However, there is no statewide McGrady told CJ he doesn’t ists aside, the issue of alcohol is the According to N.C. statutes, city administration cost North Carolina oversight entity that makes sure the know of a succinct legislative plan, cleaver that rips through the heart ABC board members are appoint- taxpayers at least $11.3 million over boards act appropriately. but he has proposed a licensure of the state’s Republican lawmakers. ed by a respective city’s govern- 13 years. Unused warehouse space “In the light of the audit, my model allowing the private sector to But who is watching whom? ing body, unless a different method potentially cost the state $2.1 mil- view is that the legislature will need sell and distribute liquor. The ABC The commission, an ABC of appointment is provided in a lo- lion over seven years, and a lack of to provide oversight, since it doesn’t Commission and the new executive, spokeswoman said, “is the chief reg- cal act. County ABC board members monitoring left the state underpaid appear that the ABC board did its he said, should work to address the ulatory agency for the state related are appointed by a county’s board of by at least $297,537 over two years. job in overseeing the work of its issues raised by the audit before the to alcohol matters. commissioners. Maryland-based LB&B, which, staff. 2019 legislative session. “Alcohol laws are the purview of “The appointing authority shall its website says, specializes in fa- “The House ABC committee is “I think the audit findings along the General Assembly. ...” appoint members of a local board on cilities management, logistics, and not an oversight committee,” Mc- with the updated Program Evalua- ABC finished the sentence by re- the basis of the appointees’ inter- training operations, since 2004 has Grady added. “Either the Joint Leg- tion Division report issued in May ferring CJ to Chapter 18B of the N.C. est in public affairs, good judgment, contracted with the state to provide islative Committee on General Gov- and another PED report expected General Statutes — Regulation of knowledge, ability, and good moral warehouse and distribution ser- ernment or the Joint Legislative later this year will give me and oth- Alcoholic Beverages. ABC has been character,” the statute says. vices. Committee on Justice and Pub- er legislators the information need- quick to respond to questions from In January 2010, for exam- LB&B, in a news release, said it lic Safety would have oversight re- ed to craft legislation to modernize CJ, although its answers have been ple, the New Hanover County ABC was “disappointed” by the auditor’s sponsibilities, the latter committee our ABC system,” McGrady said. less than forthcoming. board got in trouble over an admin- report, which, it said, failed to rec- only because the ABC Commission “I don’t expect action by the leg- The ABC board is under the um- istrator’s exorbitant salary, about ognize the correct statutory author- is administratively under the De- islature before the long session. Of brella of the Department of Public $214,000 annually, WRAL reported. ity as mandated to the ABC by the partment of Public Safety. However, course, the governor could change Safety, primarily because the state Mecklenburg County ABC employ- General Assembly “and improperly I’m unaware of any legislative over- the members on the ABC Commis- aims to “control” every aspect re- ees were criticized after liquor com- attributed excessive costs and un- sight committee providing over- sion, and the commission will be lated to the production, sale, and pany representatives treated them derpayments to the contract.” sight in recent years.” naming a new executive.” CAROLINA JOURNAL // SEPTEMBER 2018 13 ALCOHOLIC BEVERAGES Virginia is a control state, but its model is friendly to that state’s distillers

BY JOHN TRUMP and how they’re sold. It’s a system we’re figuring it out. It’s all so new. Comparison: Distillery tasting room laws in that was designed to make it hard The state has a favorable listing pro- or North Carolina’s distill- for spirits to operate.” cess for Virginia distillers.” ers, getting their products in- Southern states For some people, too, drinking li- The ABC uses a checklist-type to ABC stores is arduous and quor conjured images of bartenders formula, with points based on vari- time-consuming. sliding full bottles of rotgut across ous factors, when listing and evalu- FDistillers must first check all the smooth bars toward rugged West- ating new products. The same peo- boxes pertinent to federal and state KENTUCKY VIRGINIA erners, who would grab the whis- ple use the same criteria to judge all laws. The state must then approve Three-tier or control state: Three-tier Three tier or control state: Control key with dirty hands, tilt back their products, though Virginia distillers their products before distillers send Cocktails: Yes Cocktails: Yes heads, and take long, sloppy gulps. are given a lower threshold when those products to Raleigh for distri- Sales limit: Three liters per person Sales limit: Licensed by state ABC; no Virginia got its first distillery in compared to large international bution to ABC stores across the state. per day limits 2006. North Carolina’s first distillery brands. Which stores is up to distill- began producing liquor in 2005. “To get delisted, it’s a specif- ers, but also largely up to the ABC Virginia, though, realized ear- ic dollar threshold,” Coleburn said. boards — North Carolina has 168 — ly on it would behoove the state to “We are expecting each item to con- and their members, whom distillers NORTH CAROLINA promote spirits, not only for tourism tribute X dollars per year to remain must persuade to carry their brands. Three-tier or control state: Control but to allow distillers to benefit from on the shelves. ... For Virginia prod- “It’s kinda up to you to convince Cocktails: No their efforts. ucts, that threshold is half what it each board administrator to put you Sales limit: 5 bottles per person per Now in Virginia distillers can is for non-Virginia products. They in their store,” Donald Walton of 365 days sell customers mixed drinks — up to are helping our people stay.” Walton’s Distillery in Jacksonville three ounces per person. “Our distilleries can have input, said in an interview for my book “With spirits, while a lot of peo- as far as if they want it to be region- Still & Barrel: Craft Spirits in the Old ple do drink it neat, most people al, where they have a great market- North State. who are consuming spirits, and es- ing presence, or if they want to focus Say, for the sake of argument, TENNESSEE SOUTH CAROLINA pecially people who are doing tours on major markets, etc.,” Ciarameta- North Carolina reforms its state- Three tier or control state: Three-tier Three-tier or control state: Three-tier and that type of thing, like a cock- ro says. “I think we’re very fortunate run ABC system in favor of a mod- Cocktails: yes Cocktails: Yes tail,” Coleburn said. here in Virginia, where the state has el friendlier to the free market, to in- Sales limit: 5 gallons, or one-sixth of Sales limit: 3 bottles per person per Distillers can also sell as much their listening ears on and they’re re- novation, and to entrepreneurship. a barrel per person per visit day bottled liquor out of their distilleries active to the industry.” But let’s also take total privatization, as they wish. Objections to liquor based on which many North Carolina craft “We’ve never had a limit on what religion are prominent in the N.C. distillers don’t want, off the table. you can sell,” Coleburn says. “The General Assembly, as became evi- The state would do well do mod- limit really is on how much of the dent as the so-called “brunch bill” el itself after Virginia, says Scott “Virginia ABC made a decision anywhere in the state, if they want money the distiller gets to keep.” wound its way toward approval last Maitland. proprietor of Top of the back in the late ’90s to operate like a to,” he says. “In North Carolina, you Virginia distillers operate their year. Any new moves to loosen the Hill Distillery in Chapel Hill and a business, as close to a private-sector not only have to sell it to the state, stores under the auspices of the North Carolina system will get simi- former president of the Distillers business as they could,” says Curtis you have to get each individual ABC ABC, which buys from distillers and lar resistance. Association of North Carolina. Coleburn, who heads government board to order it. It gives you a whole pays them a commission on sales, Not so in Virginia, Coleburn Virginia is, like North Carolina, relations for the Virginia Distillers lot more sales calls to make.” now about half the cost of the bot- says. an alcohol control state, of which Association. For more than 20 years, Control states came to be, he tle. The distillers association is “Ninety-five percent of members there are 17 in the United States. Coleburn served as chief operating says, in part because people see li- working with lawmakers to increase of the legislature don’t vote like that The Virginia ABC operates as an au- officer of Virginia ABC. quor as more intoxicating than beer what the distillers get back. at all,” Coleburn said. “I can only thority, though it still reports to the The Virginia ABC system, Cole- and wine. “It is much like plowing new think of maybe one or two senators secretary of public safety. The gov- burn says, has turned record profits “The state actually owns the ground here in Virginia,” says Amy and maybe three or four delegates ernor appoints members to its board. for the past 20 years. product at some point in distribu- Ciarametaro, VDA executive di- who ever voice any kind of religious The big difference, when compar- “As a distiller, if you get your tion, and when the state owns the rector. “It’s all happening so fast. deal with respect to alcohol.” ing Virginia’s system to North Caroli- product listed with the ABC, then ba- product it can control the outlets I don’t think there’s any ill will on “They’re all for building busi- na’s, is the absence of local boards. sically they can put it in all the stores and control what products are sold the state’s part. I think it’s just that ness enterprises,” Ciarametaro said.

N.C. distillers want to be treated the same way state treats breweries, wineries BY JOHN TRUMP ucts directly to consumers online. For beer, North Carolina levies want but to limit distilleries to tast- “We don’t have the wallets … to Many want their products displayed an excise tax amounting to 62 cents ings amounting to 1.5 ounces of al- pay for shelf space,” said Williams ward-winning craft distill- alongside the “big” brands, as op- per gallon, according to the Tax cohol. People who buy a bottle or of the Old Nick Williams Farm and ers in North Carolina are posed to relegation in an “N.C.” sec- Foundation. For spirits, it’s $14.63 two from a distiller must show an Distillery in Lewisville. making a plethora of prod- tion. They want to allow customers per gallons; $1 for wine. ID, and their purchase is catalogued. Williams takes issue with ucts. Rum with pecans and hon- to taste their products in the store — Why the disparity? After all, a “Furthermore,” George Smith the heavy policing around spir- Aey, for example, and organic wheat before they shell out $30 or more. 1.5-ounce glass of liquor equals a says, “distilleries should also be al- its. There’s the Alcoholic Bever- whiskey, and strawberry moon- They want to sell their products five-ounce glass of wine equals 12 lowed to serve mixed drinks, as op- age Control commission, Alcohol shine. on Sunday. ounces of beer. posed to being forced to serve their Law Enforcement, the individu- The distillers come from diverse Some, such as Scott Smith of “I fully support the ABC’s desire spirits unadulterated. While the al boards, and additional enforce- backgrounds and apply myriad Outer Banks Distilling in Manteo, to ensure people drink responsibly,” general public enjoys consuming ment officers who work for those methods and processes. say they appreciate the state’s sys- says George Smith, president and beer and wine straight from the bot- boards. Sixteen local ABC boards Yet a common theme runs tem of distribution and its central CEO of Copper Barrel Distillery in tle or can, a majority of people pre- employ a total of more than 50 throughout the state, regardless of warehouses. Wilkesboro. fer to dilute or mix their spirits into law enforcement officers, the ABC a distillery’s physical size or finan- “We don’t own an 18-wheeler,” “However, it is irresponsible of cocktails prior to consumption. Al- website says. cial portfolio. he said. “When it comes to distribu- the state to regulate beer, wine, and lowing distilleries to serve cocktails The ABC, Williams says, should What most, if not all, N.C. dis- tion, it makes it a little easier for us. spirits differently. The state’s -cur in their tasting rooms will also pro- be “pro-business,” and not “pro-po- tillers want is parity. Not a move to It’s not perfect, but it works.” rent laws prohibit distilleries from vide distilleries with additional jus- licing.” complete privatization, necessarily, Smith isn’t alone. The system reaching their full economic poten- tification to employ more people.” “The whole idea that you look but a level playing field, so to speak. isn’t perfect, other distillers will ad- tial.” Count Zeb Williams among at liquor differently … it’s asinine, Distillers want to offer custom- mit, but they’re starting to under- It’s hypocritical, the distillers of- those pushing hard for parity but it’s absurd, and, quite frankly, it’s a ers mixed drinks, to pay taxes more stand it and to work within its con- ten say, for the state to allow win- not total privatization, because, pre-1900 way of thinking.” comparable to those levied on brew- fines. eries and breweries to sell custom- Williams said, that would hurt “Let us run our businesses, and ers and vintners, to sell their prod- Taxes are another matter. ers as much beer and wine as they smaller distilleries. let us run it properly,” he says. 14 CAROLINA JOURNAL // SEPTEMBER 2018 COMMENTARY Municipalities getting into the education business

Council used its existing author- undertake the charter school appli- ity to thwart the expansion of a cation process and, if successful, popular public charter school in operate charter schools within the county. The board of Excelsi- their jurisdictions. It’s encouraging or Classical Academy asked the that some forward-thinking local Durham City Council to sign off on government officials are trying to DR. TERRY STOOPS its application for a revenue bond, increase the options available for VICE PRESIDENT FOR RESEARCH which would have been used to families. Nevertheless, there’s no JOHN LOCKE FOUNDATION purchase and upgrade its existing guarantee that one or more of these facility. While voting “yes” on municipalities will receive state education revenue bonds would approval to open a charter school. n North Carolina, state law have cost the city no money, the Their most significant challenge empowers county commissions Durham City Council voted 5-2 is a statutory provision that allows to oversee school facilities against the measure anyway. municipal charter schools to give and the collection and appropria- Mayor Pro Tem Jillian Johnson enrollment priority to residents of Ition of local tax dollars to school explained. “Rather than acting the city or town. Municipal appli- districts. Unlike other states, cities as labs for innovation and explo- cants will need to convince both and towns in North Carolina have ration, I believe that charters are the Charter School Advisory Board few direct responsibilities for the now becoming a mechanism by and the N.C. State Board of Edu- public schools in their jurisdiction. which public education in our cation that the schools will make Traditionally, municipalities have state and our community is being a sincere effort to reach out to undertaken infrastructure, zoning, tary and secondary public educa- new authority as a justification to threatened and being harmed.” underrepresented families. If they and other planning functions that tion that benefits the residents raise taxes. Unless legislative lead- Actually, the vote was a desperate are unable to do so, the application have a bearing on school buildings of the city.” This means that city ers decide to repeal the law next and cynical ploy to defend the will be denied, and the applicants and student transportation. They councils will be allowed to allocate year, taxpayers should be alert to underperforming Durham Public will be forced to reapply. also have assisted schools with property tax and other unrestrict- the possibility that their elected Schools by publicly sticking it City and town leaders who are policing, traffic management, and ed revenues to district, laboratory, officials will propose a for-the-chil- to an exemplary charter school. eager to get their municipality other school safety matters. Three charter, regional, and Innovative dren tax increase in their annual I worry that other fanatical city in the education business should recent developments, however, School District schools both with- budget next year. After all, one of councils and town boards will fol- exercise caution. Although it’s too may lead some cities and towns to in and outside their city limits. the most effective ways to sell a low Durham’s disgraceful lead. early to say whether municipal play a much greater role in school While I applaud lawmakers for tax increase to voters is to claim Fortunately, not all municipali- involvement will be harmful or governance and funding — for giving cities additional latitude in that it will improve public schools. ties are brazenly hostile to charter helpful, I suspect that even the better or worse. how they may allocate their exist- Municipalities are also getting schools. Session Law 2018-3 allows most well-intentioned city and The 2018 state budget included ing pool of taxpayer money, I fear into the business of making and four Mecklenburg County munici- town leaders will eventually con- a provision that allows cities to that some opportunistic city and breaking charter schools. palities — Cornelius, Huntersville, clude that they should have stayed “supplement funding for elemen- town governments will use their In August, the Durham City Matthews, and Mint Hill — to out of the mess in the first place.

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www.carolinajournal.com Breaking news, top stories and analysis delivered each morning to your inbox. CAROLINA JOURNAL // SEPTEMBER 2018 15 COMMENTARY Message to flat-tax critics: Higher-income earners already pay more

at $6,000. Under our scenario, percent. The $1 million household Flat tax’s impact on effective tax rates then, the $25,000 household owed has seen its tax bill decrease by $1,223 in state income tax. The almost 30 percent. Its effective tax $120,000 household owed $8,353. rate has dropped from 7.6 percent 8% 7.6% The $1 million household owed to 5.4 percent. 7.0% $76,553. (All other exemptions and What’s especially interesting 7% MITCH KOKAI deductions have been removed is the degree to which the combi- SENIOR POLITICAL ANALYST to help simplify the comparison nation of a lower flat tax rate and 6% 5.4% JOHN LOCKE FOUNDATION 5.1% between tax systems.) higher standard deduction has 4.9% 5% 4.7% The $25,000 household paid helped the different households. 4.4% an effective tax rate of almost 4.9 The “bank president” household t’s wrong to suggest a pro- 4% percent. The $120,000 household earns 4.8 times as much income as posed state constitutional paid just under 7 percent. The $1 the “bank teller” household. Under amendment would block North 3% million household paid an effec- the old system, the president paid Carolina from adopting a system tive rate of more than 7.6 percent. seven times as much tax. Now? 2% 1.6% Iof graduated tax rates. RATE TAX EFFECTIVE Earning 4.8 times as much income More than 13 times as much tax. What’s worse? Ignoring the fact 1.0% as the bank teller, the bank presi- The “millionaire” household that the state’s current tax system 1% dent’s income tax bill was nearly earns 40 times as much income as already forces people with higher seven times as large. Earning 40 the “bank teller” household. Under 0% incomes to pay higher effective $25,000 $120,000 $1 MILLION times as much income as the teller the old system, the millionaire tax rates. and more than eight times as paid 62 times as much tax. Now? Yes, North Carolina instituted HOUSEHOLD INCOME much as the bank president, the More than 131 times as much. a flat income tax rate in 2014. At $1 million household paid a tax In other words, the new system 2013 2018 2019 the same time, lawmakers started bill 62 times as large as the teller’s forces higher earners to pay an a series of substantial increases bill and nine times as large as the even larger share of the income SOURCE: John Locke Foundation research in the standard deduction from president’s. tax burden. The higher standard income taxes. The second change No one could argue against the deduction offers such a benefit to counteracts that flattening effect proposition that the old system lower- and middle-income earners of the first — to the benefit of low- forced higher earners to pay a that it significantly offsets the and middle-income taxpayers. current income tax system forces If so, perhaps lawmakers should higher tax bill. single tax rate’s flattening effect. The current debate surrounds a people with higher incomes to pay reassess those exemptions and Fast forward to today. Each The gap in tax burdens widens constitutional amendment sched- significantly larger tax bills. deductions. That’s an argument for household now faces the same flat even more next year. The flat tax uled for the November ballot. It An example illustrates the another day. tax rate: 5.499 percent. But each rate drops to 5.25 percent, while would lower an existing cap on point. Let’s compare three house- The households in our example also benefits from a higher stan- the married couple’s standard state income tax rates from 10 holds. Each features a married have no children. The current state dard deduction. When the flat tax deduction jumps to $20,000. percent to 7 percent. The current couple. They file taxes jointly. tax system skews child tax credits took effect in 2014, the standard The $25,000 household’s tax personal tax rate is 5.499 percent. A longtime N.C. political colum- to favor lower-earning taxpayers. deduction more than doubled. By bill will drop to $262 (1 percent). It will drop to 5.25 percent next nist has opined that this state’s Legislators in recent years have now, the deduction has nearly tri- The $120,000 household will year. So lowering the cap will tax policy ought to ensure that a made changes shifting even more pled to $17,500 for married couples pay $5,250 (4.4 percent). The $1 have no impact on current tax bank president pays higher rates of the benefits of these credits filing jointly. million household will pay $51,450 rates. than a bank teller. So our first to those with lower incomes. Applying the current rate and (5.1 percent). The “bank presi- Nor would the lower cap have household has $25,000 in income, Adding children to the mix would the current standard deduction to dent” household will pay 20 times any impact on lawmakers restor- roughly matching a bank teller’s strengthen my argument. The our three households, we find that as much income tax as the “bank ing a system of graduated or tiered annual salary. The second house- argument doesn’t need the help. the $25,000 household owes $412 teller” household. The “million- tax rates. Years of peer-reviewed hold has $120,000 in income. This Groups including the state in state income tax. The $120,000 aire” household will pay 196 times academic research suggest that represents a bank president. We NAACP advocate a “graduated household owes $5,636. The $1 as much. would be a bad idea. But the state throw in a third household with $1 tax rate on people with higher in- million household owes $54,027. Advocates for a graduated constitution would not stand in million of income. If our current comes.” North Carolina had such a Each household has seen a dras- income tax system want to ensure the way if lawmakers wanted to system offers excessive benefits to system as recently as 2013. Under tic reduction in state income taxes. higher earners pay a larger tax bill make that dubious choice. With or the wealthy, the evidence should that system, households paid a 6 The $25,000 household faces a than those with lower incomes. It without the amendment. emerge with this third taxpaying percent rate on all income earned tax bill today roughly two-thirds would be nice for them to recog- Facts, then, fly in the face of a unit. after exemptions and deductions. lower than the bill from 2013. Its nize that our current system aligns key argument the state NAACP We’re limiting our example to At an income level of just $10,625, effective tax rate has dropped from well with that goal. has made against the proposed changes in tax rates and standard the rate jumped to 7 percent. At 4.9 percent to 1.6 percent. The One could say the alignment is constitutional amendment. deductions. I concede that other $50,000, the rate climbed again to $120,000 household has seen its even stronger with the current flat That’s disturbing. More disturb- exemptions and deductions could 7.75 percent. state tax bill decrease by about tax than with the old, graduated, ing? Amendment critics refuse change the relative balance in tax Meanwhile, the standard de- one-third. Its effective tax rate three-tiered tax system lawmakers to acknowledge that the state’s burdens for the three households. duction for married couples stood has dropped from 7 percent to 4.7 dumped in 2014.

THIS IS WHAT OPPORTUNITY LOOKS LIKE. Learn more online at: #SchoolChoice www.carolinajournal.com/series/opportunity-scholarships 16 CAROLINA JOURNAL // SEPTEMBER 2018 EDUCATION UNC teaching loads report is insufficient for making public policy

That sounds like a cause for My results were conclusive: My celebration, as if the system as a figures for the average number of whole was increasing its faculty courses taught for tenured and ten- productivity. ure-track faculty were consistently Unfortunately, that claim made lower than those computed by the in the system report above is UNC system. The difference was a JAY SCHALIN highly misleading in a number of slight 0.1 sections per semester at COLUMNIST ways. The first is the definition of UNC-Charlotte and 1.7 courses per the word “consistent” and its use semester at UNC-Greensboro. Even with “increased,” suggesting both at UNC-Asheville and Elizabeth eliable information is a pre- are positive outcomes. But “con- City, which have no graduate pro- requisite for good manage- sistent” for the number of sections grams and the computations are ment. How can you make taught is defined as “going up or particularly easy, the differences intelligent decisions if you are down no more than .2 sections.” were 0.6 and 0.3, respectively. Rbasing them on shaky informa- The way this was presented, it So when I see wording that tion? appears as if the average teaching converts so-so findings into pos- This has been an ongoing prob- load can drop by as much as 0.2 itive gains, time periods that are lem for the University of North sections per professor and still be possibly cherry-picked to show Carolina system, in which many considered a positive outcome. the situation in its best light, and high-level decisions are made by a The same dynamic is used for definitions that obfuscate the real governing board composed of part- student credit hours, which are results, I’m not inclined to accept time members. The main problem defined as the number of students this new report’s findings as objec- is that they must rely on informa- in a class multiplied by the number tive facts. tion that is often self-interested of course credits. “Consistent” is For instance, I really have a hard or one-sided. Much of it may not defined as “going up or down no time believing that the average stand up to closer analysis from more than 3 hours.” Again, the re- professor at UNC-Chapel Hill knowledgeable, disinterested ed- port is worded so that a slight drop teaches 3.1 course sections per ucation professionals but can get in average SCH taught is treated semester, as this year’s UNC report past nonexperts. positively. the last year when money flowed I computed faculty teaching loads states. This is more than 50 percent One glaring example is a recent Redefining both measures freely for the UNC system. for 14 total departments (selected more than is required by the state system administration report on so that “consistent” equals no When 2009 is used as the base from seven UNC schools) for the system. faculty teaching loads presented change, “increased” means any year in the comparison, the claim spring semesters of 2011 and 2013. This new Faculty Teaching in the Education Planning Com- positive change, and “decreased” that everything is rosy is revealed One thing I was not able to du- Workload report is just one more mittee at the July 25-27 Board of is any negative change reveals a as completely false. Instead, faculty plicate was the ability of professors example of how urgently the Governors meeting. different picture. Using these more teaching loads are shown to have to buy their way out of teaching by UNC Board of Governors needs an The report begins with a claim precise definitions, the average overwhelmingly dropped. Only four getting research grants. This may independent source of information. that: course sections taught at seven of the 15 campuses increased the have reduced my estimates slightly Without being able to conduct its “From 2008 to 2015, 11 of 15 schools increased and also de- average number of course sections for science and technical faculty, own research — or at least closely UNC system [campuses] remained creased at seven schools, with one taught, with nine decreasing and but the practice is relatively rare for examine the information given to consistent or increased the aver- showing no change. two remaining the same. For SCH, humanities and social science pro- it — it cannot do its job, which is age number of sections taught by For SCH, nine schools increased, four campuses increased, but the fessors. Overall, it would account to lead. all faculty, and 10 remained con- and six decreased. other 11 all decreased. for only slight differences even at sistent or increased the average But it gets worse. The year There is another reason to doubt the major research universities Jay Schalin is director of policy number of student credit hours chosen as the “before” in the com- the veracity of this report. For in and almost none at all at the other analysis for the James G. Martin taught by all faculty.” parison, 2008, is notable for being 2014, I conducted a report in which campuses. Center for Academic Renewal.

The James G. Martin Center for The Decline of the Academic Renewal explores the General Education program at English Department Throughout much of the 20th century, English departments were the crown jewels of the humanities. Today, English departments have lost their position at the center of the American university. Read Jay Schalin’s newest report, Why? “General Education at NC State” to discover the findings. Read “The Decline of the English Department” by Download the FREE pdf online! Jay Schalin FREE at: www.jamesgmartin.center

www.jamesgmartin.center Or call 919.828.1400 to receive your free copy. CAROLINA JOURNAL // SEPTEMBER 2018 17 EDUCATION Out go the classics in English classrooms

“not because they’re classical Carolina “to improve the standards but because of the quality of the and make them more compre- prose.” hensible,” but the standards still Another casualty? “Cultur- aren’t well-written. Many are al knowledge is obvious,” says “convoluted.” Another concern: Stotsky. “How do you even under- Revised standards stipulate that KRISTEN BLAIR stand what writers are referring instructional time in English lan- COLUMNIST to if you have no understanding of guage-arts classrooms should be literary allusions?” The Sisyphean divided evenly between literature task, the Siren song, Orwellian and informational text. “I was an lassic literature has fallen doublespeak — these presuppose English teacher and taught the from favor in English class. shared knowledge. classics,” Oxendine says. “The The movement away from It’s easy and right to blame Com- deepest kind of higher-order think- the literary canon, begun decades mon Core. The standards’ over- ing comes from literature.” Cago, has accelerated rapidly fol- emphasis on informational text, In the end, when classic liter- lowing adoption of Common Core ostensibly to prepare students for ature is left unread, some losses standards by most states eight college and career, is shortsighted are intangible. English professor years ago. Some states, including and harmful. But literature was Anthony Esolen writes about North Carolina, have revised these undervalued before Common Core. the lovely children’s classic The standards. But the devaluation of A national teacher survey and Wind in the Willows: “The aim of classic literature is widespread, report by Stotsky and colleagues, reading the work is simply the joy shortchanging students’ writing published in 2010, already revealed and wonder of it; it is a good book competencies, cultural knowledge, a “sharp decrease” in instructional because it tells us good and true and analytical thinking. That’s a time devoted to literary study, things in an artful way.” lot to lose. compared to decades earlier. Experiencing joy and wonder. A new report from the Fordham Can what’s done be undone? Learning good and true things. Institute sheds light on how much Among the bad: Fewer texts A major casualty of the de-em- Perhaps, but hurdles lie ahead. Those who limit literature in the has changed. Featuring a nation- are classics. Seven in 10 teachers phasis on literature is students’ This year North Carolina im- name of workforce readiness miss ally representative survey of 1,237 overall and five in 10 high school writing, says Sandra Stotsky, an plements revised English lan- this, the larger purpose. They also, English and reading teachers in teachers limit classics “because English standards expert and pro- guage-arts standards, passed by ironically, deny students oppor- public elementary, middle, and there is no longer room for them fessor of education reform emerita the State Board of Education in tunities to develop some of the high schools, the report reveals in the curriculum.” No room in at the University of Arkansas. “If 2017. Four state board members very competencies they’ll need in numerous instructional shifts — the curriculum? That boggles the we know anything in the field of voted against those standards, college and career. some good, some bad. Among the well-trained mind. Unpacking composition,” she says, it’s that including Olivia Oxendine, who Theirs is a Pyrrhic victory. Time good: Teachers are increasingly Puritan piety in The Scarlet Letter “repeated, regular exposure to served on the state’s Academic will reveal it. emphasizing “close reading” of or making sense of Shakespear- high-quality prose helps them to Standards Review Commission. texts and teaching vocabulary in ean prose and verse is hard, but develop writing skills.” Oxendine, a professor, says much Kristen Blair is a Chapel Hill-based context. important, work. Classic works have been studied hard work has been done in North education writer. The future for industry credentials

a third party with the relevant Between 2002 and 2016, the icates. According to NC Tower, about their value to employers or JOSEPH WARTA authority to issue such creden- number of students graduating the mean starting salary for workers.” COLUMNIST tials. … The term credential from community colleges with 2016 community college gradu- The path from earning a certif- encompasses educational certifi- certificates grew from 6,188 ates with associate degrees was icate to getting a job may be less JENNA A. ROBINSON cates, degrees, certifications, and graduates in the 2002-03 aca- $23,322. Students who obtained simple than some proponents of COLUMNIST government-issued licenses.” demic year to 9,601 graduates in certificates in the same year had credentials have claimed. Credentials are mostly offered 2015-16, a more than 50 percent a starting salary of $21,437. But Another source of uncertainty by community colleges as an al- increase. some students who obtained is financial aid. To qualify for “INDUSTRY CREDENTIALS” ternative to more expensive and Student confidence seems certificates earned much more federal financial aid, students are a popular trend in modern time-consuming bachelor’s or warranted. Outcomes measures than that average. Students who must be enrolled in credit-grant- education. But the term is rarely associate degree programs. They from NC Tower — an education obtained certificates in engi- ing courses. But continuing defined. Industry credentials are tailored to fit a specific skill, database — show that students neering technologies from Wake education courses — including offer the promise of short-term industry, or even company. who graduate with certificates Technical Community College, many certificates and credentials training or retraining for an agile, In general, community colleges have high rates of employment in for example, earned starting — don’t qualify. 21st-century workforce. Commu- work closely with companies and the state and competitive start- salaries of $34,947. And program lengths vary nity colleges offer the training industries to ensure the viabili- ing salaries. But there are some Despite this encouraging evi- widely. There’s no “typical” cer- programs to would-be skill-seek- ty and relevance of credentials. limitations to the available data. dence, challenges remain. Confu- tificate length. ers, and students have flocked to Ian Gibbons, employer relations Certificates of various lengths, sion is paramount among them, Even with so many hurdles these programs. But data about coordinator at Wake Technical costs, and difficulty are aggregat- for students and for policymakers for students and policymakers, what these credentials are and Community College, explained ed in broad categories, and data trying to assess the success of growth in credential programs is how they work is hard to find. the partnership using IBM as do not extend past the state’s such programs without complete a welcome change for individuals This is perhaps because the an example in a Martin Center borders. Students’ experience data. and the market. As the economy term is both broad and vague. interview. Last year, a joint effort prior to pursuing credentials also There’s little broad research on continues to change, credentials The federal government provides between IBM and Wake Tech varies considerably. credential programs. Practical promise to be an important part this definition: made headlines for its focus on Student employment out- Strategy, LLC, a policy analysis of meeting workforce needs. “An industry-issued or recog- “new collar jobs” — in this case, comes compare favorably to firm, conducted a study on cre- nized credential (or an education- IT jobs in cloud software, data many associate degree programs. dentials and found that “many Jenna A. Robinson is president of the or work-related credential) is a science, and cybersecurity. This is especially true given the employers use industry-specific James G. Martin Center for Academic verification of a person’s qualifi- Across sectors, certificate and low — albeit variable — costs credentials, but research is not Renewal. Joseph Warta is an intern cations or competence, issued by credential programs are growing. of most credentials and certif- available to support broad claims for the center. 18 CAROLINA JOURNAL // SEPTEMBER 2018 STATE GOVERNMENT N.C Agriculture Commissioner addresses tariffs, state of farming

DW: You oversee a large, 1 export customer in North on the farms they’re out of INTERVIEW diverse government Carolina. Mexico is No. 3, business. Some people are agency. What are the main Canada No. 2. So at one time saying, ‘Oh, but Smithfield functions and scope of here in North Carolina we’ve could put these hogs back the N.C. Department of had not good trade relations on the farm.’ Well, no, they Agriculture and Consumer with our one, two, and three can’t. Once this jury and Services? export customers, so that judge rules that these farms makes it tough. ... I think are a nuisance, if they ST: ... I think most people farmers have been very did that they would be in understand the ag part patient with this. … contempt of court. So that’s of it. The part that they how serious this thing has DW: probably don’t understand The hog farm law- gotten. is the consumer protection suits have generated a lot Steve Troxler DW: Agriculture Commissioner services that we have in of media coverage. How Some critics and the department that touch real is the threat of those even some supporters of At last count, there were their lives every day, all lawsuits on the industry, solar utility-scale gener- 48,000 farms tilling crops day. We are the agency in WAY DAN BY PHOTO CJ and tell me one thing ating plants have raised N.C. Agriculture Commissioner Steve Troxler discusses the and tending poultry and government responsible for regarding the homeowner concerns about taking the food safety of the pop- importance of good international trade deals to North Carolina versus farmer disputes viable farmland out of livestock on 8.2 million farmers during the 13th Annual Ag Development Forum. acres of North Carolina soil. ulation in North Carolina, that you think was under- production to build these Agriculture and agribusiness whether it be produce [or] played or missing from megasites. Some fear the meat through the Meat and news coverage. land might not be easily are the state’s No. 1 industry, ST: Poultry Inspection Division. a state of North Carolina I think in principle returned to farm use after contributing $87 billion to the ST: state’s economy. Agriculture We inspect gas pumps. We agriculture today, what farmers do understand free This is about as the facilities shut down, Commissioner Steve Troxler, inspect scales. In fact, any- would it be? trade and would love to have un-American as anything and that farmers might thing that is sold by weight access to markets all over you could ever ask to see. get stuck with decom- the man overseeing the N.C. ST: Department of Agriculture or measure we’re there to I don’t think it would the world. We know we’re The thing that has not been missioning and cleanup and Consumer Services since inspect, even down to the be very good, and there are as efficient or more efficient said enough is that this costs. Do you believe this 2005, sat down with Carolina scanners in grocery stores. a lot of reasons. We’ve had than any other producer in is about the hog farmers is a concern that should be Journal Associate Editor Dan And any retail business that low commodity prices now the world, and if we have themselves. What’s been addressed more aggres- Way to discuss his agency’s has a scanner, we inspect for a couple [or] three years. free access to the markets portrayed has been, ‘Oh, sively? them. And we find quite a In fact, net farm income at we’re going to do well. But we’re suing this Chinese scope and role, and current ST: events affecting agriculture. few errors, quite frankly. the national level is down to that short-term pain for multinational company, We had the Agricultural A Guilford County native, the Most of the time not fraud, half of what it was in 2013, long-term gain: How long is Smithfield Foods.’ The truth Development and Farmland plain-spoken Troxler is founder, but just people not paying so we’re struggling right long? I think there’s plenty of the matter is Smithfield Preservation Trust Fund owner, and operator of Troxler attention to sales prices and now. We’ve got, of course, of evidence the tariffs have is still an independent here in the department, Farms. His farm has yielded that kind of stuff. … And the some problems out there depressed commodity prices company that is part of the and our goal is to protect tobacco, wheat, vegetables, gas pumps, we’re making that are not helping right even further than they were. WH Group that is actually valuable farmland in North and soybeans. A 1974 graduate sure that you get a gallon now. We hope long-term They’ve started to rebound chartered in Hong Kong. Carolina and give people of N.C. State University, he of gas when it says you’re there will be relief to them. a little bit now, and we have The farmers that are raising another option — instead of is a past president of the getting a gallon of gas, and Weather is another factor. known all along that after the hogs for Smithfield un- selling the land selling the National Association of State the price is correct, and Hurricane Matthew de- we harvest these crops, der contract, the ones that development rights off of it. Departments of Agriculture even down to the quality of stroyed a lot of agriculture that’s when the proof’s have been declared a nui- We were making progress, and has received a multitude of fuels that you’re getting, the in North Carolina. Previous going to be in the pudding. sance, are not going to get but then the solar industry honors and awards for his work. octane level, cetane level in to that [we] had a couple of What is the price going to hogs back on those farms. came to North Carolina in Agriculture commissioner is an diesel fuel. wet years, and this one has be for the crops? What’s the If those folks don’t get hogs a big way, and we lost a lot elected position and is part of [If] you go to the ag been a tale of two seasons demand going to be for the back on these farms then of farmland, no question, to the Council of State. site we have a Marketing — the very dry season that crops? they’re out of business. these solar panels. It hurts Division that is involved in was June, and up to the There’s some things in And if they’ve got any debt, my feelings every time I see marketing not only local latter part of July, and now North Carolina that we do they’re probably going to good farmland covered up products, but products na- we’ve had the wet season. very well that certainly are lose the land, the hog farm, with solar panels. But I’ve tionally and internationally. … The way you get through going to be very adversely the whole nine yards. So thought this thing through One of the big things that low commodity prices is affected by these tariffs this is a very serious situ- and through and through, we do is work with inter- high yields. That makes you if they don’t let up soon, ation for the farmers that and I am a very strong national markets, which very efficient. But when the tobacco probably being the are being sued as nuisance. private property-rights has been a hot topic here weather won’t let you have most affected because of But it’s even deeper than person. The solar energy lately with the tariffs ... but the high yields, then that our dependence on trade that. If this sets precedents, comes and offers the farmer I have led trade missions all drives the cost of produc- with China in the tobacco [then] there is no farm in opportunity to make money over the world, and we take tion up and expenses up, so world. We in the department this country that’s going to off of this land that he or potential sellers for North I’m afraid this is going to be spent a lot of time in China be safe. she owns, and it’s got to be Carolina products and hook a year where we struggle developing relationships What’s a nuisance? My their decision. I hate that them up with potential buy- when the harvest comes in. and getting China tobacco definition is it’s something the government subsidized ers in other countries, and [interests] over here to that somebody else doesn’t the solar industry in the be- DW: it’s been quite successful. There’s considerable buy this tobacco. And they like. In agriculture there ginning. … But at the same We probably have increased debate about President became our No. 1 export are all kinds of things we time I can’t look a farmer in our export sales by $1 billion Trump’s tariff policies. market. So when the tariff have to do to make a crop the eye and scold him for to $2 billion on a yearly ba- The president says thing started closing in, it’s that some people don’t what he did. We have seen sis by the marketing efforts farmers back the tariffs very iffy what they’re going like, even heavy equip- cases where a farmer takes we’ve put forth. We do a lot. because they are willing to do, if anything. So that ment on the road. Is that 30, 40 acres of a farm, puts I’ve got 21 divisions. There to exchange some short- could drive us into next year a nuisance? Some people it in solar, and it becomes a are about 3,000 people that term pain for long-term with estimates of 50 million might think so, but it’s reliable source of income — work for this agency. gain through better trade to 60 million pounds of to- necessary. We’ve got to get at least right now — so that deals. What are you hear- bacco that we’ve grown that from farm to farm. So this he can keep the rest of the DW: We often hear that ing from North Carolina has no home, which will is a very serious situation farm in production. So it’s a This interview was edited for agriculture is the leading farmers, and what is your further depress prices and that we are seeing here in very complicated issue, but clarity and space. industry in North Caro- position on the tariffs? production next year. We North Carolina, and if these private property rights have lina. If you were issuing know that China is our No. farmers can’t get hogs back got to come first. CAROLINA JOURNAL // SEPTEMBER 2018 19 POLITICS & GOVERNMENT New leader of college system talks opportunities, collaboration KT: What’s your vision for year because there’s a lot of because … we’ve got such INTERVIEW the system over the next moving pieces, but Presi- a broad mission. At one couple years? dent Spellings and I have level we have basic skills talked about how we align programs that go all the way PH: The focus of the legis- more closely. from the GED to basic devel- lature has been on short- Right now we’re working opmental remediation. [We term workforce training. on a financial aid study provide imprisoned] folks This sounds like a dry issue, together. We’ve begun with literacy training and but it really is important some conversations about skills that hopefully they for the [funding] between online learning and what will use productively when our traditional academic changes ... at UNC could they are released. [We pro- programs and the vocational benefit community colleges. vide] workforce training and Peter Hans education or continuing [Student transfers] between the college transfer path. President of the N.C. education programs. If we UNC and the community And while there may be a Community College System want to close the skills gap colleges need improvement. stigma on the part of some, for employers, if we want to On our side, we need to be I think that’s an outdated upgrade job skills for North able to help our students attitude. The N.C. Community College Carolinians, if we want to HANS: “I think our apprenticeship program must be led by better identify what goals It can be a very smart System, following the abrupt address the urban/rural businesses — as opposed to the public sector telling the private they’re trying to pursue and decision to go to community departure of fledgling former sector what it needs to do. “ divide. … it’s through short- advise them very carefully college, gain your associate President Jimmie Williamson, term workforce training. on classes that they take degree, and then transfer is under new leadership that I think this is going to be community college sys- what you need to do [to be as they pursue an associate into a four-year institution. could better partnerships more important as time goes tems. That’s historical. I’m successful].” I think that degree. You will certainly do so at a between community colleges by and the economy, tech- obviously a product of UNC, holds a lot of potential be- much more affordable cost. and the University of North KT: nology, and society change. a supporter of UNC, and I cause we’ve got a number of Do you anticipate The difference is literally Carolina System. Education is going to be think the state’s investment people who aren’t quite sure competition between tens of thousands of dollars. Peter Hans, who in May shorter in duration, and it’s in that university system is what they want to do. community colleges and The quality of a number became president of the N.C. going to be focused on ca- a very good one. I would also UNC for money to expand of community college cours- KT: Community College System, reer-building skills that only argue the investment in the Do you think it will be nontraditional and techni- es and programs are also un- is a former member of both the community colleges can community college system difficult to get buy-in from cal education? derrated. I’d put Wake Tech’s the NCCCS and UNC governing meet. The legislature recog- has been a wise one. But if American companies not program up against just PH: boards. That experience nized this and appropriated the state really is interested used to offering appren- Actually, no. I think the about anybody’s in terms of presents an opportunity for approximately $15 million in increasing educational ticeships? relationship is going to be undergraduate … facilities Hans not only to lead the towards that goal. Part of it attainment — if they want better than ever because and instructors. PH: state’s 58 colleges, but also was recurring and part non- to address the skills gap, Possibly. There is some President Spellings and I think we’ve done a to become an ambassador recurring. We’ll be working the rural/urban divide, the debate about that. That’s the UNC board have a very disservice to students to between the two systems. with them during the long socioeconomic mobility why I think our apprentice- pro-community college suggest that everyone needs Hans served on the State session to make sure that question — it’s going to hap- ship program must be led by mindset. I certainly have a a liberal arts education, Board of Community Colleges [money] is seen through to pen through the community businesses — as opposed to very pro-UNC mindset, as [especially considering] the from 1997 to 2003 and was success. college in terms of reaching the public sector telling the well. I think the more we debt. People are talented in as many people as quickly private sector what it needs can collaborate and cooper- different ways, and some- elected to the UNC Board of KT: Governors in 2003. He sat on Given your long his- as possible. to do. I’ve actually started ate, the better off we will be. times their skills aren’t com- tory working in the UNC to engage some high-profile … You can have lots of dedi- pletely obvious [without] that board for 11 years and KT: served as chairman from 2012 system, did you anticipate What roles do ap- CEOs on this very issue to cation at the leadership lev- encouragement or without to 2014. A former U.S. Senate moving to community prenticeships play in the help us look at where we are el, but it’s got to filter all the someone taking interest in policy adviser and political colleges? system, and how do you and where we need to be. … way through the [communi- them. I think we’ll look back plan to expand them? I think there’s a lot of poten- ty colleges]. So, there will be decades from now and say, consultant, Hans counseled PH: No. [Laughs] I started tial apprenticeships based bumps along the road. Like “Why did we organize [high- UNC System President Margaret PH: Spellings from 2016 to 2018 on on the State Board of Com- The N.C. Apprenticeship on everything that I know, I said, it’s not easy for UNC er education] that way?” I’m issues including technology, munity Colleges in 1997, Program used to be at the but I’d rather have that con- to transfer all credits within not speaking against liberal strategic planning, and K-12 [where I spent six years]. N.C. Department of Labor firmed by a business itself. its own system, much less arts, because it gives you That was probably too but moved here November [transfer credits] coming in lots of analytical reasoning education. KT: young to be on the board, 2017. ... I want to see if we How would you from outside schools. Let’s and critical thinking skills if On July 31 Hans sat down with but it was a useful perspec- can grow that program. describe the relationship play to our strengths. properly taught. But it’s not Carolina Journal Associate tive. Then, after 12 years on There are about 6,300 between UNC and NCCCS? the only way to gain those KT. Editor Kari Travis to talk about the University of North Car- people in it right now, but I What will collaboration Historically, there just skills. It’s not always the apprenticeships, nontraditional olina’s Board of Governors think there’s an opportunity look like? doesn’t seem to be a lot right path for everyone or education, transparency, and and two years working with to look at it a little different- of engagement between for everyone at that point in PH: opportunities to improve UNC President Margaret ly and make it an industry- I think the relationship the community college their life. relationships and collaboration Spellings, this opportuni- and business-led effort that is good. President Spellings, system and the press, at I’m blessed to have this between UNC and NCCCS. ty arose. There are about could increase the number the UNC Board of Gover- least as compared to the leadership opportunity — 750,000 students enrolled of North Carolinians who nors, and the State Board of UNC system. There also the chance to help 750,000 in [our 58] community col- take advantage of that Community Colleges and I tends to be a stigma com- North Carolinians advance leges. That’s a huge number, opportunity. want to take that [relation- munity colleges are for their goals and achieve their and [I have] the opportunity There’s also [an oppor- ship] from good to great. people who can’t get into dreams, start a career, start to help them. Who could ask tunity called] work-based Traditionally there have better schools. What goals a small business, provide for more than that? learning. ... It involves youth been partnerships — but do you have for transpar- for their families. That’s a apprenticeships for [high also a little bit of friction ency, for changing that wonderful thing to be a very KT: How is the role and schoolers] who want that because in some ways we narrative? small part of, and I’m going atmosphere different than combination of classroom compete for the same pot of to be a strong advocate for PH: UNC? instruction and on-the-job state appropriations, which First of all, you abso- them. I’ll also certainly be training. It basically exposes is unfortunate. One year, lutely have my commitment a strong supporter of those PH: There are certain students to potential career when I was chair of the UNC to be transparent. Exposure increased partnerships similarities between both paths, then advises them board, [the systems] made for us would be helpful. with universities, with local This interview was edited for system offices, but there once they decide “I’m a joint budget request. The One of my goals is to raise public schools, private and clarity and space. is a big gap in resources interested in pursuing this.” legislature loved that. That awareness of the opportuni- public universities, and with between the UNC and It tells them, “OK, this is may not be possible every ties at community colleges, the business community. 20 CAROLINA JOURNAL // SEPTEMBER 2018 COMMENTARY Lingering lessons from a short but ongoing session

production, thanks to lucrative Another bill to address the opioid boards and commissions. structuring election laws to their state subsidies. There are 249 solar crisis would give law enforcement A constitutional amendment advantage, any changes from Re- companies operating in the state access to a tracking system of would cap the personal income tax publicans would in fact be for their with hundreds of thousands of so- people’s pharmacy records, if part rate at 7 percent, down from the benefit. Republicans would be lar panels on farm land, on big box of a drug investigation, without current cap of 10 percent. The rate wise to remember the pendulum stores, and on houses. There are a warrant. Small steps to erode is now 5.25 percent. Again, I think will swing back, and they would BECKI GRAY concerns about pollution leach- privacy rights, no matter how they missed the point. If the goal be wise to structure any changes SENIOR VICE PRESIDENT ing into the ground, long-term well-intended, are a large step in is to restrain government over- to make elections fair, accessible, JOHN LOCKE FOUNDATION effects on productive farmland, the wrong direction. reach, the better place to do that is and equitable, and not to garner and threats to public health. With An earlier version of a pro- a cap on spending. advantage for the party in charge. a lifespan of 15 to 20 years, what posed constitutional amendment Without restraint on govern- Budgets passed as conference happens as panels wear out? How would have given the legislature ment growth, a cap on one taxing reports, hastily called special ENVIRONMENTAL CONCERNS are they disposed of, and who’s re- appointment powers over state mechanism puts pressure on other sessions and behind-closed-doors are real and warranted, particular- sponsible? What are the long-term boards and commissions, shift- taxing options. Cap the personal decisions aren’t good government. ly when it comes to public health. health and environmental prob- ing that power away from the income rate, and, when the big Transparency, fair process, and The GenX chemical produced by lems? Are they polluting now? governor. North Carolina has spenders are back in charge, they’ll open government matter. More de- Chemours has been found in water Are our privacy rights in dan- close to 400 boards overseeing raise the sales tax or corporate tax bate and thoughtful consideration supplies, and the impact on hu- ger? We saw a bill this session that a variety of state government or property tax. Or they’ll invent of a wide array of views result in man health is still being explored. would regulate digital communi- functions. Legitimate arguments new ways to tax. Cap spending, better outcomes. This is true in The company has installed carbon cations in elections with broad and even lawsuits have resulted and there’s no need to scramble for legislative committees, on the absorption units and promises a disclosure requirements. It didn’t from these separation-of-powers additional revenue. Houseand Senate floor, through- $100 million pollution reduction pass, but it raised important ques- questions, and rightfully so. But The General Assembly has made out the governor’s administra- project. In the end, overall fluo- tions about regulating political the bigger question is why do we many changes to election laws — tion, and within city and county rochemical pollution will drop by engagement and free speech on have so many boards of unelected, placed partisan labels on judicial meetings. Everyone deserves to be 99 percent when compared to 2017 the internet. unaccountable individuals making candidates, expanded early voting heard, and we are all better for it. levels, company officials report. Whether it’s mining personal decisions, passing rules, and im- hours, rearranged the Boards of People want to work, so let But now there are concerns data to use in electioneering, posing criminal penalties? Instead Elections, and made new judicial them. Just because you can GenX is found in solar panels. microtargeting voters, or requiring of worrying about who makes the districts. Democrats accused doesn’t mean you should. Leave it Carolina Journal reported in July public disclosure for engaging in appointments, we should be ask- Republicans of making changes alone. Ideas matter. that GenX and its family of unreg- political speech, privacy and free- ing whether we even need these for their benefit. After 140 years of They’ll be back, probably a few ulated emerging contaminants are speech rights must be protected. Democrats having the power and times, between now and Nov 27, present in some of the solar panels the next scheduled date for the increasingly dotting the 2017-18 regular legislative ses- landscape. North sion. Let’s keep talking. Carolina ranks Before you know it, it second to Cal- will be Jan. 9 and ifornia in time to start solar over.

www.carolinajournal.com CAROLINA JOURNAL // SEPTEMBER 2018 21 COMMENTARY BY JOHN HOOD It’s not all Charlotte Ending the ABC monopoly n the aftermath of a scathing A notorious 1910 murder and Raleigh report from State Auditor Beth trial in Charlotte helped elevate Wood about mismanagement Clarkson’s statewide profile. A in North Carolina’s Alcoholic Bev- business dispute between two NORTH CAROLINA’S two most Ierage Control warehouse, some hard-drinking toughs, Will Hartis populous counties, Mecklenburg state lawmakers are renewing and “Big Bill” Simpson, escalated and Wake, are home to about 21 calls to end the government liquor into threats of violence. percent of the state’s popula- monopoly in our state. Good. After what appears to have tion and 28 percent of its jobs. In a free society, adults must been heavy drinking on both Over the past four years, about have the right to decide what sides, Hartis and Simpson each 45 percent of the state’s net beverages they will consume and picked up a gun and went hunting new jobs were created in either from whom they will buy them. It for the other. Hartis ended up Mecklenburg or Wake. isn’t properly the business of gov- killing Simpson’s brother Rob and These two counties are ernment to, well, run a business. standing trial for murder. obviously growing much faster Not surprisingly, government Despite the best efforts of than the state average. But do doesn’t run this business well. Clarkson — who was also presi- you find it surprising that most As you can tell, I don’t think dent of the Anti-Saloon League at job creation in North Carolina much of North Carolina’s archaic, the time — and the other prosecu- is still occurring outside of inefficient, and intrusive liquor tors, the jury acquitted Hartis. Mecklenburg and Wake? Growth monopoly. But I do understand A horrified Clarkson spent the rates vary widely across North why some North Carolinians dis- next several years citing such cas- Carolina. From 2013 to 2017, agree with me. I believe they are es to defend prohibition and call employment as measured by motivated by heartfelt concerns for stricter enforcement. He went the Census Bureau’s survey of about the damage that alcohol too permissive. Movement leaders ballot. Voters overwhelmingly on to manage Cameron Morrison’s employers went up statewide by abuse can do to families and such as Heriot Clarkson, a Char- approved a complete ban on the gubernatorial campaign in 1920, some 343,000 jobs, a rate of 8.5 communities. lotte lawyer, formed a new group manufacture and sale of alcoholic become a justice on the N.C. Su- percent. The national average These motivations were clearly called the Anti-Saloon League to beverages — the first state in the preme Court two years later, and for the period was 7.2 percent. evident a century ago, when lobby for more restrictions. nation to do so. help lead the state’s anti-alcohol Of North Carolina’s 100 North Carolina helped to lead In 1903, the General Assembly That was the law. But evasion movement into the 1940s. counties, just 20 matched or ex- the country toward Prohibition. passed a law to prohibit making was rampant (and, of course, Alcohol abuse is destructive. ceeded the statewide rate of job In the late 19th century, North or selling liquor outside of incor- many bootleggers had lobbied for We should combat it. But in a free growth. Mecklenburg (14.3 per- Carolina had already established porated towns. A few years later, prohibition so they would face society, it is unjust to restrict the cent) and Wake (14.1 percent) a system of county liquor monop- lawmakers expanded the prohibi- less competition). So Clarkson, freedom of so many because of were certainly standouts. olies. tion to all but the largest cities. who had become Mecklenburg the irresponsible decisions of a But the highest rates were But the state’s prohibition Then, in 1908, they placed a County’s prosecutor, made en- few individuals such as “Big Bill” actually in Davie (23 percent), movement thought that was still prohibition referendum on the forcement a high priority. Simpson, my great-grandfather. Cabarrus (22.2 percent), and Pender (15.2 percent). TAX REFORM Moreover, among the counties adding jobs at a faster-than-av- erage rate were places that suffered mightily during the Federal reform boosts state economy Great Recession, such as Swain, I’D HAVE Jackson, and Catawba counties structured it a bit about $1,054 this year, with Carolinians deserve com- in the west and Nash County in differently and combined it larger average savings for mendation. They represent the east. with budget cuts. But even married North Carolinians increases in both economic www.carolinajournal.com On the other end of the scale, as is, the federal tax reform with two children ($1,913 well-being and personal 30 N.C. counties have lost rather enacted by Congress and per couple). freedom. To sustain them, than gained employment over signed by President Trump If the tax savings are however, Congress and the the past four years. For the most will enhance economic added up over the com- Trump administration must part, they can be found where growth for the nation as a ing decade, the Heritage turn their attention to the you’d expect, in rural parts to whole, and for North Caroli- model projects an average other side of the ledger, to the west and east of the Inter- na in particular. increase in North Caro- spending. state 85 corridor. Slashing America’s rela- linians’ take-home pay of Federal deficits are But that doesn’t necessarily tively high taxes on corpo- $18,287 across all tax-filing soaring. And even if the mean they are disconnected rate income will encourage households and $31,608 for current budget were bal- places. That leaves 50 counties more domestic investment, married couples with two anced, the long-term cost somewhere in the middle, with business starts, business kids. of the federal welfare state positive but not necessarily expansions, and employ- Conservatives who prop- vastly exceeds the reve- sizzling rates of job growth. ment. Reforming and reduc- erly view private action nues produced by either the They include other populous ing the personal income tax as the primary driver of previous tax rates or the N.C. counties such as Durham (8 will also boost job creation growth and progress should current ones. In my view, percent), Forsyth (4.8 percent), and take-home pay. the evidence shows. 1.4 million more jobs over recognize but not exag- we will need to control Guilford (3.9 percent), and Cum- Naturally, opponents of How much direct and the next decade than gerate the extent to which spending in virtually every berland (2.2 percent). tax reform disagree about indirect benefit can North would have occurred under government affects private department and agency of Our two most populous the net effects. They be- Carolinians expect from the old federal tax rates. action. Even shackled to an the federal government — counties are responsible for a lieve federal expenditures federal tax reform? Two About 37,000 of those net overly large public sector, eliminating some programs disproportionate share of North are, on balance, more help- Washington-based think new jobs will be in North private enterprise delivers and applying strict income Carolina’s recent economic ful to the economy than tanks, the Tax Foundation Carolina. the goods (and services). tests to others. gains. But other counties, small private expenditures and and the Heritage Founda- The Heritage Founda- Removing those shackles is North Carolinians are and large, are also experiencing would rather keep taxes tion, recently crunched tion’s model examines a dif- wise. Expecting miraculous unwilling to pay for all the robust growth. If politicians higher to finance the former some numbers. ferent issue: how tax reform consequences is not. federal, state, and local gov- start out with bad assumptions, at the expense of the latter. On employment, the will affect take-home pay. It Still, tens of thousands ernment that progressives they’ll produce bad answers They are mistaken in their Tax Foundation projects estimates that the average of new jobs and major gains want to “give” them. Time even to very good questions. assumptions and in what America will create about North Carolinian saved in take-home pay for North to reconcile the balances. 22 CAROLINA JOURNAL // SEPTEMBER 2018 COMMENTARY How does N.C. compare on incentives? centage of the state economy de- jobs and those paying high wages. they were front-loaded. The good Types of Incentives as voted to business incentives, North Interestingly, for several of our news for North Carolina — and Percent of Value-Added Carolina’s rate was a mere 0.01 neighbors the goal for using in- North Carolina taxpayers — is that percent, compared to 0.5 percent centives has been different. South among the 33 states in the Upjohn NEW MEXICO NEW YORK for the average of the 33 states. Carolina has focused on wages but study, North Carolina’s incentives LOUISIANA MICHAEL WALDEN But over the next three decades, also on the tax base. Florida has packages were the eighth least TENNESSEE our state’s use of incentives grew, gone after the tax base, and Georgia front-loaded. NEW JERSEY COLUMNIST INDIANA so that by 2015 they accounted for has targeted employment and tech Now what about the multibil- IOWA 1 percent of the state economy. Yet firms. lion-dollar question: Do incentives NEBRASKA SOUTH CAROLINA he use of financial incentives this was still less than the 33-state The Upjohn study also addressed work? Unfortunately, the Upjohn KENTUCKY to attract new businesses is average of 1.4 percent. a question often overlooked in study did not give a definitive MICHIGAN a controversial topic in most What does North Carolina’s other analyses of incentives. Al- answer. The study did not find a ALABAMA PENNSYLVANIA states, including North Carolina. incentives picture look like com- though the benefits to companies strong correlation between a state’s WISCONSIN TThe debates might get more heated pared to our neighboring states of from incentives are usually spread use of incentives and a state’s eco- ILLINOIS with the prospects of Apple and/or Virginia, Tennessee, Georgia, South over several years, the level of nomic growth rate. But the Upjohn TEXAS FLORIDA Amazon coming to our state. Carolina, and Florida? In 1990, benefits can vary from year to year. folks said this result should be con- MINNESOTA The majority of states use only Florida had a lower incentives So-called “front-loaded” incen- sidered only preliminary because ARIZONA business incentives. In this column rate than North Carolina. By 2015, tives packages are those in which they weren’t able to include in the OHIO NORTH CAROLINA I won’t address the pros and cons all of our neighboring states had the size of the benefits are largest analysis all the other factors affect- MISSOURI of incentives. Instead, I’ll compare upped their incentives rate. North in the early years. Firms prefer ing a state’s economic growth. OREGON COLORADO North Carolina’s use of incentives Carolina was now in the middle of front-loaded packages because Financial incentives to attract CONNECTICUT to other states. I do this by making the pack, with Florida, South Caro- they get more benefits earlier. businesses to a state are a big deal. MASSACHUSETTS use of a newly released data set lina, and Tennessee having higher The downside to front-loaded Their use has tripled since 1990, GEORGIA CALIFORNIA compiled by the Upjohn Institute incentives rates and Georgia and incentives packages is the fear and their value is now between MARYLAND for Employment Research. Up- Virginia having lower rates. companies will “take the money and $40 billion and $50 billion annually VIRGINIA john was able to collect extensive One of the great things the run.” If a company receiving incen- nationwide. North Carolina was rel- NEVADA WASHINGTON information on business incentives Upjohn study did was identify tives leaves, downsizes, or goes out atively late to the incentives game, for 33 states over three decades, the objectives most important to of business in the early years of the and our state still doesn’t play the 0% 1.0% 2.0% 3.0% 4.0% spanning the 1990s to 2010s. each state in using incentives. For incentives contract, there’s the pos- game as much as most other states. ◼ JOB CREATION TAX CREDIT The first question is whether North Carolina, the focus is clear. sibility the state would have paid a But is this good or bad? ◼ PROPERTY TAX ABATEMENT North Carolina uses incentives Compared to other states, our state lot and received little in return. ◼ INVESTMENT TAX CREDIT ◼ R&D TAX CREDIT more or less than other states. In has most often used incentives to Upjohn was able to analyze Michael Walden is a William Neal ◼ CUSTOMIZED JOB TRAINING 1990, North Carolina had virtually attract two kinds of companies: the incentives packages of the 33 Reynolds Distinguished Professor at SOURCE: W.E. Upjohn Institute no incentives. Measured by the per- those bringing high numbers of states and evaluate to what degree N.C. State University. WFU’s Jury Sunshine Project a valuable resource for informing voters

get that information. fate of, yes, another person. It’s an The project beginning with data more likely to convict any de- Take, for instance, a study by immense responsibility. from 2011 examined 1,400 trials fendant, but the effect increases Wake Forest University law profes- In a podcast interview with and 30,000 jurors. significantly if the defendant is a sors Ron Wright, Kami Chavis, and “Criminal Injustice,” Wright said, Race, despite the negative con- black male. Gregory Parks. “I am interested in prosecutors, and stitutional implications, plays no Conversely, more black males on They, with the help of some 100 I am interested in who looks over small role in our system of justice, the jury mean they’re less likely to JOHN TRUMP others, collected statistics about their shoulders.” the researchers found. convict. MANAGING EDITOR felony trial jury selection across all The jury. “Race is relevant as the parties “They’re more likely to acquit, of North Carolina’s counties as part “It struck me as weird that are deciding who’s going to stay on and that’s true against all types of of research regarding jury selec- prosecutors get to choose their own the jury and who’s not. It turns out defendants. … More black males RESIDENTS SOON will get voting tion. It’s called the “Jury Sunshine bosses.” prosecutors remove black jurors on the jury mean far more de- guides. They may see sample bal- Project.” Wright said North Carolina at about twice the rate that they fense-friendly verdicts.” lots or newspaper profiles. They’ll Voter turnout for midterm already had similar research regard- remove white jurors. More black women on a jury get fliers and postcards to recycle. elections is rarely comparable to ing death-penalty cases, but the “Vice versa, defense attorneys means it will lean toward acquittal. Yard signs will become ubiquitous. voting numbers during presidential Wake Forest researchers expanded remove white jurors at about twice With more white women, though, These will help, maybe. But they elections and high-profile races for that effort to include all criminal the rate they remove black or other the researchers found little racial won’t be enough for voters to make members of Congress or governors. felony cases in the state. minority jurors. Interestingly to effect. an informed decision, unless, of Because of the divisive political “What we realized was this was me, judges remove black jurors at a “Intuitively,” he said, “lawyers course, they’re glued to a party. environment, this year may be dif- the business of the public, this somewhat higher rate than they re- know race has an impact on the ju- Aside from that, it’s nice to know ferent. Still, I think it’s safe to say, was the public courts, and we’re move white jurors, about 20 percent ry’s ability to hear the case the way things, and that’s not so easy in a in general voters spend little time recording what happens, but we’re higher.” I want them to hear it, and they are media environment, which can be focusing on races for judgeships recording it on pieces of paper that Why? selecting juries accordingly.” good — because of myriad sourc- and district attorneys. live in the files of each of the coun- “I think both the defense attor- Wright wants to further ex- es and outlets — or bad, because That’s a bit unsettling, as the ty clerks in all 100 counties across ney and the prosecutors are picking plore intrastate disparities. Why, separating fact from opinion can be courts are a vital tenet of a func- the state. While you could … see jurors they think are going to be for example, do some cities look time-consuming and tedious. tioning republic, to protect our civil what’s happening in one case, you friendlier to their view of the case. different than others with similar The General Assembly and gov- liberties and preserve our respec- can’t tell about the pattern of cases. “Their view, I think it’s probably populations? ernor aren’t exactly helping voters tive constitutions. You can’t tell what’s happening in correct, is that race has formed the “If a particular office is knocking clear their minds. Trying to follow Judges oversee cases, which all cases.” views of the jurors about how they certain parts of the community out the daily machinations is like keep- always involve people. Lawyers, Wright and his colleagues began feel about police officers and about of the jury on a systematic basis, ing score at a baseball game that including those chosen by district building a database. the state assembling a criminal we’d like them to explain why, has gone 20 innings. After a while, attorneys, select juries, composed Granted, the researchers could case, so … it’s going to affect the much in the way we collect infor- the scorecard is tough to decipher. of people. They choose jurors to see only what the clerk recorded, way they act as jurors.” mation about traffic stops. But voters have to try. The keep or to dismiss, and, again, the but in that they could learn why The more white males that go “We need this to be a system information is out there, and it’s judge ultimately decides. jurors were removed, who removed on your jury, Wright told “Criminal by and for the people … a system incumbent on local newspaper re- But, particularly in criminal which juror, and in what order. Injustice,” the more likely the jury everybody participates in. I’m porters and editors, as well as radio cases, much of the power is left “We had to work pretty hard to is to reach a verdict of conviction. big fan of juries, but I’d like to see and online outlets, to help people to the jury, which will decide the even know which files to ask for.” A jury with all white males is everybody participate.” CAROLINA JOURNAL // SEPTEMBER 2018 23 COMMENTARY Will constitutional amendments affect turnout at polls?

ed to a period of increased crime. groups will feel pressured to invest The income-tax cap and voter in candidates, not ballot ques- identification look promising. Poll- tions. Money will be set aside only ing by the Civitas Institute shows for referendums with uncertain North Carolinians support both outcomes, suggesting a proposal is propositions by healthy margins. of interest to potential Democratic ANDY TAYLOR But referendums on these ques- and Republican voters alike. COLUMNIST tions elsewhere don’t suggest Re- And the six referendums will publicans will necessarily benefit. compete with another, North Coloradans passed the Taxpayers Carolinians’ verdict on President his November, lawsuits per- Bill of Rights amendment in 1992, Trump at the halfway point of mitting, North Carolinians but turnout didn’t increase more his term. Midterm elections are will vote in referendums on than the national rate, and George inevitably assessments of presi- six constitutional amendments. H.W. Bush lost the state after dential performance, even at the TThe issues they will address are having won it four years previous- level of state legislature, and given crime victims’ rights, a right to ly. Minnesota rejected voter ID in the polarized views of the current hunt and fish, the method for November 2012. Polls taken only occupant of the White House, 2018 filling vacancies on the state’s weeks earlier had it passing hand- will be no exception. Providing courts, the establishment of a somely, but Democrats and other Trump a vote of confidence is like- bipartisan elections commission, opponents campaigned energeti- ly to motivate many Republicans a cap on the income tax rate, and cally to ensure its defeat. — particularly blue-collar whites voter identification. Republicans Voter ID and the tax cap are who do not customarily vote in argue they constitute meaning- therefore perhaps as likely to the off year — more than any state ful and much-needed changes. motivate North Carolinians to get constitutional amendment will. Democrats counter the proposed to the polls and vote Democrat as The hunting and fishing mea- amendments are political stunts, particularly useful for the North to get people to the polls. Republican. Voter ID, particularly, sure might be the most effective constructed to increase Repub- Carolina GOP in 2018 — partic- Are these the best issues to has become a “red-meat” issue at pushing Republican turnout. It lican turnout in a midterm year ularly since the state has no gu- motivate the Republican base for many on the left, cast as it is should appeal disproportionately to with an unpopular GOP president. bernatorial or U.S. Senate contest, and help Republican legislative in racial terms. The court cases conservative rural voters. But they The party is afraid it might lose either. That’s the argument. candidates in an otherwise sleepy and Gov. Roy Cooper’s vetoes live in districts where incumbent its supermajorities in the General I’m not so sure. The evidence election? Even contentious mat- might help Democrats more GOP legislators enjoy electoral Assembly, perhaps even control of that referendums increase turn- ters with presumed asymmetric than expected. These spats over security. I think the Democrats are one or both chambers. out is hardly compelling. North partisan effects on turnout, like procedure have fostered indigna- wrong about Republican motives. Democrats build much of their Carolina had its own referendum same-sex marriage in 2004, some- tion and could bring to the polls Perhaps Republicans have the claim around popular analyses on same-sex marriage in May times have unpredictable results. angry voters accusing Republicans wrong motives. Either way, these of the 2004 presidential election. 2012. Titled “Amendment One,” Compared to his national perfor- of manipulating the democratic proposals look like some of the last Many believe same-sex marriage it was placed on the primary bal- mance, Bush’s proportion of the process. items on a GOP wish list to me. The referendums in 11 states ginned lot, launched with ballyhoo, and vote in two key battlegrounds that What’s more, people need to party is anticipating a period of up the Republican vote enough subject to an intense campaign. held referendums — Michigan and know about the referendums. greater competition when it will be to secure George W. Bush’s Ultimately, 35 percent of voters Ohio — dropped from 2000. Will there be enough money to playing a little more defense. narrow victory. A ban passed in showed up, about par for recent Although politicians and activ- advertise effectively? The parties all of them, and in most turnout presidential primaries and below ists are agitated over the issues of will concentrate on the General Andy Taylor is a professor of political increased markedly from 2000. If midterm general elections. The the election commission and judi- Assembly and Congress. With science at the School of International referendums on certain issues can authors’ goal was clearly passage, cial vacancies, voters are not and many close races, including two in- and Public Affairs at N.C. State get Republicans to the polls in a and they relied on a competitive surely never will be. The victims’ creasingly competitive U.S. House University. He does not speak for the presidential year, they should be Republican presidential primary rights question seems better-suit- contests in our state, outside university. Beltway consultants will cost GOP the House

loses congressional seats in mid- confirmed one conservative jurist the mainstream media. But at the want it to be part of the 2018 terms — in this case, the Republi- to the Supreme Court — Justice heart of it, in my view, is that es- message. The Republican donors cans led by Trump. Neil Gorsuch. Judge Brett Kava- tablishment Beltway consultants and the leadership in the party Political prognosticators put the naugh is likely to be confirmed are ignoring Trump’s signature will give lip service to securing the odds on the Democrats winning by mid-October, reshaping the issue: illegal immigration. Yet, border, but that’s it. back the majority in the House, Supreme Court for a generation. illegal immigration is on the minds And let’s be clear: The GOP MARC ROTTERMAN but Republicans holding the Sen- Senate Majority Leader Mitch of the American electorate. establishment completely missed COLUMNIST ate, albeit with fewer gains than McConnell’s rapid confirmation of According to a July Gallup the backlash over illegal immi- projected months ago. federal district and appeals-court survey, 35 percent of Republicans gration in the 2016 presidential The Republicans in D.C. are judges has ensured a conservative say illegal immigration is the No. election. AS WE HEAD into the final months trying to make the election about imprint on the courts for decades. 1 issue facing the country. And It appears the establishment of the midterms, there’s a plethora results. And they have some good All things being equal, Repub- the percentage of Americans who will deliberately ignore the issue of chatter on the cable news chan- points to make. licans should be in pretty good say illegal immigration is the most again in the midterms. nels about the possibility of either The economy is humming along, shape. important problem in the country The result of this strategy will a blue or a red wave. Gross domestic product for the But, in fact, they are not. Con- grew to 22 percent in July from be a depressed Republican base Much is at stake in November, past two quarters has grown by sider this: Currently, Democrats 14 percent in the previous poll. turnout, the loss of the GOP major- including control of the U.S. House more than 3 percent, and unem- have the upper hand when it That’s the highest percentage an ity in the House, and a halt to the and Senate, and the chances that ployment is at record lows. comes to “voter intensity and the issue has received in the history of Trump agenda. articles of impeachment could be The stock market has been on a generic ballot.” Gallup’s “most important problem” approved by a Democratic House bull run since Trump was elect- Simply stated, this means the questions. Marc Rotterman is host of “Front against President Trump in the ed, regulations were rolled back, Democrats’ base is much more So why do the Republican Na- Row with Marc Rotterman,” a next session of Congress. taxes were cut, and jobs are being motivated this fall. tional Committee and the estab- weekly public affairs program on To be frank, Republicans have created. Clearly, Republican “messag- lishment consultants continue to UNC Public Television and the NC an uphill battle. Historically, the The president has nominated ing” is not cutting through. Sure, ignore the issue? Pure and simple. Channel. Contact him via Twitter party controlling the White House and the Republican Senate has Republicans can blame the bias of The majority of their donors don’t address @FrontRowMarc. 24 CAROLINA JOURNAL // SEPTEMBER 2018 POLLS Civitas August 2018 poll of unaffiliated voters

CIVITAS POLL CIVITAS POLL CIVITAS POLL If the 2018 election for N.C. If the 2018 election for the If the election for Congress state legislature were held state Supreme Court and were held today, would you today, would you be voting the state Court of Appeals be voting for the: for the: were held today, would you be voting for the:

● 27% REPUBLICAN CANDIDATE ● 26% REPUBLICAN CANDIDATE ● 32% REPUBLICAN CANDIDATE ● 34% DEMOCRATIC CANDIDATE ● 30% DEMOCRATIC CANDIDATE ● 35% DEMOCRATIC CANDIDATE ● 9% SOMEONE ELSE ● 10% SOMEONE ELSE ● 9% SOMEONE ELSE ● 29% UNDECIDED ● 34% UNDECIDED ● 25% UNDECIDED

The August 2018 Civitas Poll, conducted by Harper Polling, surveyed 500 likely unaffiliated voters between Aug. 8 to Aug. 21. The margin of error is plus or minus 4.4 percent. Percentages were rounded up and don’t necessarily amount to 100 percent.

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