• Possible Conflict • Auditor Reports Surrounds Auto Center On Slush Funds Charter School Bills Languish C A R O L I N A Smart Growth’s Costs Statewide Edition A Monthly Journal of News, Analysis, and Opinion from August 2005 • Vol. 14, No. 8 the John Locke Foundation www.CarolinaJournal.com JOURNAL www.JohnLocke.org Eminent Domain Concerns NC Lawmakers By PAUL CHESSER forbade any committees to meet that Associate Editor “We ought to make it weren’t working on the budget. RALEIGH That didn’t stop other lawmakers fficials in North Carolina hold as difficult as possible from investigating the state’s exist- differing opinions on the local ing eminent-domain laws, and asking implications of the U.S. Supreme to take people’s prop- whether the court’s decision could open OCourt ruling in the Kelo v. New London the doors to similar property takings in eminent-domain case in late June. erty.” North Carolina. But nearly all of the elected leaders — Rep. David Hoyle “We ought to make it as difficult surveyed by Carolina Journal were con- as possible to take people’s property,” cerned about the potential for infringe- Gaston County said Gaston County’s David Hoyle, one ment on individual property rights. of the state Senate’s Democratic leaders. The 5-4 court decision, which “That’s just wrong.” allows government agencies to seize expected to take action next year.” The Kelo decision addressed a private property from one owner and North Carolina’s General Assem- situation in Connecticut in which a lo- to give it to another private owner for bly may be one of those bodies that acts, cal economic development agency, with economic development purposes, led but it is not clear how important the powers of eminent domain, sought to to a grass-roots backlash across the na- Democratic House and Senate leader- condemn the properties of nine owners tion. The Washington Times reported July ship believe the issue to be. At CJ’s press of 15 homes in the city of New London. 11 that “several state legislatures are time both chambers were deadlocked in Institute of Justice’s anti-Kelo campaign expected to act on some kind of statu- their budget negotiations, and Senate produced this poster tory ban before year’s end and more are President Pro Tempore Marc Basnight Continued as “Lawmakers,” Page 2 Piedmont Wants Help Paying for Subsidized Pipeline By PAUL CHESSER age economic development in areas of Associate Editor ENCNG has been using the bond funds to construct the state that did not have natural-gas RALEIGH service. ENCNG received $188 million he N.C. Utilities Commission more than 600 miles of gas pipeline in northeastern of the $200 million in bonds that voters heard testimony in late June approved in 1998. about Piedmont Natural Gas North Carolina. According to Piedmont and the TCo.’s desire to merge a money-losing gas Utilities Commission Public Staff, a state operation into its overall rate base. The created by APEC and former co-owner only about 1,000 customers, and has agency that represents utility consum- proposal turned into a discussion over Carolina Power & Light in 2000 to receive no operating capital to sustain it for ers, ENCNG is losing about $8.3 million who should pay for the unsustainable taxpayer-funded gas bond revenues. long on its own. Dr. Mitch Renkow, a annually. In a separate but related case economic development project in the APEC was originally formed as a professor of agricultural economics at before the Utilities Commission, Pied- northeast part of the state. gas district by a coalition of northeast- N.C. StateUniversity, said in prior writ- mont is asking for permission to raise Piedmont wants to buy full control ern North Carolina local governments ten testimony on behalf of Piedmont, its rates to produce $36.7 million more of Eastern North Carolina Natural Gas in 1998. “there is a substantial probability that in revenue per year. from the Albemarle Pamlico Economic ENCNG has been using the bond (ENCNG) will never become economi- At the hearing June 23, a consul- Development Corporation for $1. Pied- funds to construct more than 600 miles cally viable.” mont and APEC are business partners of gas pipeline in northeastern North The bonds were promoted to North with equal stakes in ENCNG, which was Carolina. However the company has Carolina taxpayers as a way to encour- Continued as “Piedmont,” Page 3 Do You Support or Oppose 80 an Estate Tax in N.C.? The John Locke Foundation NONPROFIT ORG. 200 W. Morgan St., #200 U.S. POSTAGE 70 Contents Raleigh, NC 27601 PAID RALEIGH, NC 60 State Government 3 PERMIT NO. 1766 Oppose 72 % 50 Support 12 % Washington Watch 6 40 Not Sure 16% Education 8 Higher Education 12 30 Local Government 16 20 Books & the Arts 20 10 Opinion 24 Parting Shot 28 0 % Respondents in June Civitas Institute Poll CAROLINA C A R O L I N A North Carolina JOURNAL JOURNAL Lawmakers Want to Prevent Seizures in NC Continued from page 1 Richard Wagner Editor The agency planned to obtain the land and turn it over to a private developer, Don Carrington who would build offices, a hotel, and a Executive Editor health club. The project was expected to provide as much as $680,000 annu- Paul Chesser, Michael Lowrey ally in tax revenues for New London’s Donna Martinez, Jon Sanders coffers. Associate Editors While many homeowners in the Chad Adams, Shannon Blosser, waterfront area voluntarily sold their Andrew Cline, Roy Cordato, homes to the agency, the Kelo plaintiffs Bob Fliss, David Hartgen, refused. That’s when New London Summer Hood, Lindalyn Kakadelis, invoked eminent domain, and the hold- George Leef, Marc Rotterman, outs sought legal protection under the Karen Palasek, R.E. Smith Jr., “takings clause” of the Fifth Amendment Jack Sommer, John Staddon, to the Constitution. George Stephens, Jeff Taylor, The Fifth Amendment reads that Michael Walden, Karen Welsh ...”(N)or shall private property be taken Contributing Editors for public use without just compensa- tion.” State Sen. Tom Apodaca, R-Henderson State Rep. Bruce Goforth, D-Buncombe Jenna Ashley Robinson, But the Supreme Court determined Paul Messino, Brian McGraw that the city’s taking of the property eminent domain for “urban redevelop- tutional amendment before the current Editorial Interns was justified. ment,” most often invoked in areas that session ends. “Those who govern the City are blighted. “I think you need a constitutional were not confronted with the need to “But it includes areas that substan- amendment to make sure that some remove blight…,” wrote Justice John tially impair the economic growth of the liberal judges don’t interpret the law Published by Paul Stevens for the majority opinion, community, have seriously adverse ef- the way they want, instead of the way The John Locke Foundation “but their determination that the area fects on surrounding development, and it’s written,” Forrester said. 200 W. Morgan St., # 200 was sufficiently distressed to justify a are detrimental to…the public health, In recent years North Carolina Raleigh, N.C. 27601 program of economic rejuvenation is safety, morals or welfare,” the memo legislators have shown a propensity (919) 828-3876 • Fax: 821-5117 entitled to our deference.” said. “Furthermore, it permits urban for passing special laws that offer large www.JohnLocke.org New London, like many north- redevelopment by a city where there is financial incentives to corporations in eastern towns, has suffered population a clear and present exchange for bring- Jon Ham losses in recent years with the increasing danger that these ing new jobs to the Vice President & Publisher unemployment and the closing of a Navy conditions will “It may give some state. facility. The projected shutdown of the come to be in the The highest- John Hood nearby Groton Naval Base is expected reasonably fore- municipality an idea, profile example Chairman & President to exacerbate the problem. seeable future.” was legislation in Despite similar pushes for eco- Researchers and we need to pro- November that cre- Bruce Babcock, Herb Berkowitz, John Carrington, Sandra Fearrington, nomic development by public officials said the statutes tect private property ated $242 million in Jim Fulghum, William Graham, in North Carolina, seizing private prop- authorize work- tax breaks for Dell Lee Kindberg, Robert Luddy, erty appears to be overstepping proper ing with private rights.” Corp. to build an William Maready, J. Arthur Pope, boundaries, sources say. developers in such assembly plant in Assad Meymandi, Tula Robbins, “I’m as much for economic devel- cases. — Sen. Tom Apodaca Winston-Salem. In David Stover, Jess Ward, opment in Forsyth County as anybody,” “That’s what Henderson County addition, local gov- Andy Wells said State Rep. Larry Brown, a Kerners- worries me,” said ernment provided Board of Directors ville Republican, “but I would never State Sen. Tom about $37 million in support what they did in Connecticut Apodaca, a Hen- land and tax breaks for any reason.” dersonville Republican. “Especially for Dell. “I have major concerns with [the when you get into urban planning, Public officials interviewed for this Carolina Journal is a monthly journal decision]” said Gloria Whisenhunt, because they change their planning article, who voted for the Dell incentives, of news, analysis, and commentary on state chairwoman of the Forsyth County every 20 years.” said that if an eminent-domain taking and local government and public policy issues Board of Commissioners and a Republi- He said that he and a number of was part of the deal, they would not in North Carolina. can. “I think there are boards that could his colleagues are seeking to address the have supported it.