INSIDE THIS ISSUE: DEPARTMENTS Dems still North Carolina 2 C A R O L I N A Education 8 pushing Local Government 10 From Page 1 14 Medicaid Higher Education 17 expansion in Books & the Arts 20 Opinion 24 N.C./2 A MONTHLY JOURNAL OF NEWS, ANALYSIS AND OPINION Parting Shot 28 JOURNALFROM THE JOHN LOCKE FOUNDATION June 2014 Vol. 23 No. 6 STATEWIDE EDITION Check us out online at carolinajournal.com and johnlocke.org Another Parton-Connected Project in Trouble By Don Carrington Executive Editor Corporate entities RALEIGH Burke County real estate and tax are County real estate develop- records, as well as corporation records er Ray Hollowell was counting in Virginia and North Carolina, show that Hollowell has used at least 14 on Dolly Parton and her family different entities to acquire land in Pine Dto help him transform the Pine Moun- Mountain. Nine companies were incor- tain development, located in southern porated in Virginia. They include: Burke County, into a more upscale community that he renamed “The New Highland, LLC South Mountain Preserve.” Hollowell Outerbanks Kinnakeet, Inc. also was counting on Gov. Bev Perdue Outer Banks/Kinnakeet Associates, to help promote LLC the project, and BGMC, LLC N.C. State Uni- Bon View Developers, LLC versity to help Tall Pines West, LLC establish vine- The entrance sign to the Pine Mountain development located south of Morganton, South Mountain Preserve, LLC yards and a which has hundreds of thousands of dollars in unpaid taxes, delinquent homeowner Spring Brook, LLC (with partner Rich- winery on the association assessments, and overdue loans. (CJ photo by Don Carrington) ard Watson) property. Burke Mountain Southeast, LLC performance facility. The project drew some lots in foreclosure proceedings My Mountain Hideaway, LLC Not long extensive coverage from news outlets and has other loans that are past due. Virginia Highland Properties, LLC before, officials across the state, led by reporting in His various companies owe almost South Mountain Real Estate, LLC in Roanoke Rap- Carolina Journal. $200,000 in back Antioch Ridge, LLC ids had count- But the saga property taxes to Ray Hollowell (as individual) Real estate devel- ed on Dolly’s of Pine Mountain Burke County. oper Ray Hollowell brother Randy — featuring hun- Developer has H o l l o w e l l and the Randy dreds of thousands met with CJ May velopment. I have been appreciative of Parton Theatre to anchor a music dis- employed 14 of dollars in un- 27 in Raleigh and the property owners association board trict that would transform the econo- paid taxes, delin- different entities said the Partons and the county with their patience and my of the region. Soon after the theater quent homeown- no longer are in- understanding,” he said. opened, however, it became a different ers assessments, to acquire over volved. “We had a “People need to understand what kind of anchor, saddling the town with and overdue loans list of things they millions in debt and an underused 900 parcels it has been like in the last eight years — has attracted were going to do, of the development world,” he added. little public atten- but the economy tion and no news killed the resort Neighbors concerned stories to date. And Hollowell, along development business,” he said. Pine Mountain residents David with homeowners in the development “I have millions invested in the and Edie Stitt, along with other neigh- and officials in Burke County, hope project. I can’t walk away. I believe bors who met with CJ, believe Hollow- PAID that Pine Mountain doesn’t suffer a that it is a good project and hope to ell either should pay his bills or sell his fate similar to that of the Randy Parton secure the financial resources to see RALEIGH, NC U.S. POSTAGE interests in Pine Mountain, where the PERMIT NO. 1766 it through. It is the best project that I NONPROFIT ORG. Theatre. Hollowell began purchasing va- have seen in over 30 years of resort de- Stitts have lived since 1995. Edie Stitt is cant lots at Pine Mountain in 2005, us- the current secretary to the board of di- ing 14 different entities to acquire more rectors of the Pine Mountain Property than 900 individual parcels. His activi- Owners Association. She told CJ that ties were concurrent with the develop- Hollowell still has several supporters ment of the Randy Parton Theatre, the in the community. “His supporters re- groundbreaking for which was in No- fer to him as a developer, but he has vember 2005. The building was com- not developed anything here. So far, pleted in March 2007. he has just been a land speculator that doesn’t pay his bills,” she said. Plans stalled She said Hollowell currently owes Pine Mountain Property Owners Hollowell’s plans for Pine Moun- Association $378,000 in back assess- tain have stalled, and public records ments and a note for $155,000 plus in- indicate he is experiencing financial terest. difficulties. He has been unwilling or Randy and Dolly Parton at the ground- unable to pay assessments to the prop- breaking of the Randy Parton Theatre in The John Locke Foundation 200 W. Morgan St., #200 Raleigh, NC 27601 erty owners association. He has lost Roanoke Rapids in 2005. (CJ file photo) Continued as “Another,” Page 14 PAGE 2 JUNE 2014 | CAROLINA JOURNAL North Carolina C a r o l i n a Democrats Still Pushing for Medicaid Expansion By Dan Way shire, Pennsylvania, Tennessee, Utah, and Virginia have Journal Associate Editor examined alternative Medicaid expansion plans with ele- RALEIGH ments such as private options, premium assistance, and ome of the House Democrats’ most vocal advocates work-search requirements. Rick Henderson Managing Editor for Medicaid expansion in North Carolina have filed And while the Obama administration has turned up House Bill 1083, committing the state to add more of the pressure on expansion-resistant states to reconsider, the Don Carrington itsS poorest residents to the government health insurance Republican Governors Association has aired ads this year in Executive Editor program. South Carolina, Arkansas, and Wisconsin opposing Medic- And state Sen. Floyd McKissick, D-Durham, believes aid expansion. a Medicaid program overhaul advanced by the McCrory McKissick, a member of the Senate Health Care and Mitch Kokai, Michael Lowrey administration eventually could open Medicaid eligibility Appropriations on Health and Human Services committees, Barry Smith, Dan Way to more than a half million low-income residents who lack said there have been “ongoing conversations for quite some Associate Editors health insurance. time” with the governor and Republican leadership, and While H.B. 1083 addresses a position popular among Medicaid expansion “needs to be revisited as a matter of Democrats, it appears to have no chance of passing the Gen- coherent public policy.” Chad Adams, Kristy Bailey eral Assembly’s short session, based on comments from Many hospitals and doctors favor Medicaid expan- David N. Bass, Lloyd Billingsley Republican leaders. Even so, several sion, he said, and many interest Kristen Blair, Roy Cordato Becki Gray, Sam A. Hieb top Republicans have not ruled out groups “are concerned about the Lindalyn Kakadelis, Troy Kickler some form of Medicaid expansion, availability of health care for low- George Leef, Elizabeth Lincicome so the issue remains alive. income individuals.” Karen McMahan, Donna Martinez Meantime, conservative health If North Carolina were to ex- Karen Palasek, Marc Rotterman care analysts warn that states opting pand the program, and the federal Jesse Saffron, Michael Sanera for Medicaid expansion may not be government failed to keep its prom- George Stephens, Terry Stoops able to pare back the enhanced ben- ise to maintain its matching share at Andy Taylor, Michael Walden efits if the federal government trims 90 percent, “There’s nothing to say Karen Welsh, Hal Young its share of the costs of higher cover- you have to continue providing it,” John Calvin Young age. One compares it to the Eagles’ McKissick said. “You can make com- Contributors song “Hotel California” — states mensurate reductions if you chose to entering the program cannot get out. do so.” H.B. 1083 would require the Jonathan Ingram, director of Joseph Chesser Interns state to cover all residents with in- research at the Florida-based Foun- comes of less than 133 percent of the federal poverty level. dation for Government Accountability, who has been study- That change could add more than 500,000 North Carolin- ing Medicaid issues for years, cautioned against that think- Published by ians to the Medicaid rolls. ing. The John Locke Foundation In a midterm election year with House Speaker Thom “Some states eager to implement this Obamacare 200 W. Morgan St., # 200 Tillis, R-Mecklenburg, trying to unseat incumbent Demo- Medicaid expansion were wary of the federal government Raleigh, N.C. 27601 cratic U.S. Sen. Kay Hagan, every major issue the General breaking its [funding] promise, and have tried to insert (919) 828-3876 • Fax: 821-5117 Assembly addresses this session is being viewed through what they consider triggers or circuit breakers into their ex- www.JohnLocke.org the prism of electoral politics. pansion plans, where the expansion would be rolled back Republicans are hitting hard at Hagan’s support for if the federal government ever actually broke its promise,” the Affordable Care Act, which is facing a consumer back- Ingram said. Jon Ham lash over rising premium costs and decreasing coverage op- “But there’s a large, looming question over whether Vice President & Publisher tions. Hagan, meanwhile, has attacked Tillis in interviews states … can legally exit the Obamacare Medicaid expan- John Hood and on her campaign Facebook page for refusing to back sion once they entered into it,” Ingram said. Chairman & President Medicaid expansion. Robert Alt, president of the Ohio-based Buckeye Insti- Medicaid expansion is an outgrowth of Obamacare. tute for Public Policy Solutions, called the opt-in scenario Herb Berkowitz, Charlie Carter The federal government offered to pay 100 percent of the the “Hotel California” effect — “You can opt in, but you Jim Fulghum, Chuck Fuller costs for the first three years of newly enrolled Medicaid pa- can’t opt out.” Bill Graham, Assad Meymandi tients in the states that expanded their eligibility. After that, Alt said there’s nothing in the law allowing states en- Baker A. Mitchell Jr., Carl Mumpower the federal share of the reimbursement rate would shrink tering the system to exit it, other than nonbinding promises David Stover, J.M Bryan Taylor gradually, reaching 90 percent in 2020. North Carolina opt- by former Secretary of Health and Human Services Kath- Andy Wells ed out of the expansion. leen Sebelius. “They’re making an assumption based upon Board of Directors “At this time, no, we will not expand Medicaid, but nothing more than naked statements made by an adminis- Carolina Journal is the governor will keep the door open for all options in the tration that [lied] time and time again” about the health care a monthly journal of news, future. The governor’s goal is to address the issues with the law, including the promise “that you could keep your plan analysis, and commentary on current system before expanding it,” said Ryan Tronovitch, if you liked it,” Alt added. state and local government deputy communications director for Gov. Pat McCrory. Ed Haislmaier, senior research fellow in health policy and public policy issues in “In terms of Medicaid expansion, in business you studies at the Washington, D.C.-based Heritage Foundation, North Carolina. would never put more money into a failing business until said despite the Supreme Court’s Obamacare ruling giving ©2014 by The John Locke Foundation you got the business on the right track,” Tillis said during a states the option of participating in Medicaid expansion, the Inc. All opinions expressed in bylined articles May 7 news conference on the opening day of the General section of the regulations under which the new population are those of the authors and do not necessarily Assembly’s short session. Tillis cited a report by Auditor gains coverage is mandatory and binding in all states that reflect the views of the editors of CJ or the Beth Wood showing hundreds of millions of dollars in Med- sign on. staff and board of the John Locke Foundation. Material published herein may be reprinted as icaid waste. “Once we figure out how to stabilize things so Even if the federal government allowed states to drop long as appropriate credit is given. Submis- that we make sure the maximum amount possible is going coverage of the expanded Medicaid population, Haislmaier sions and letters are welcome and should be to help people that really need help, then we can talk about said, the “affected individuals [could] have standing to go directed to the editor. expanding it.” to the court, and say clearly they have been harmed, and CJ readers wanting more information Amy Auth, spokeswoman for Senate leader Phil Berg- that the court should enforce the statute as written,” forbid- between monthly issues can call 919-828- er, R-Rockingham, said the senator typically doesn’t com- ding newly added participants from being dropped. 3876 and ask for Carolina Journal Weekly ment on House bills until they reach the Senate. But she said Alt said states trying to opt out once they have opted Report, delivered each weekend by e-mail, Berger has no plans to revisit Medicaid expansion or Mc- in face additional hurdles. If the federal government did not or visit CarolinaJournal.com for news, links, Crory’s reform proposal in the short session, and referred meet its funding promises, and a state rescinded its cover- and exclusive content updated each weekday. to the Senate’s rejection of expansion last year because it age of the newly added population, the state could lose its Those interested in education, higher educa- would have added $1 billion to state health care costs by entire federal funding share of Medicaid programs Alt said, tion, or local government should also ask to receive weekly e-letters covering these issues. 2019. “the feds have a big stick, and that big stick is the ability To varying degrees this year, Indiana, New Hamp- to withhold that first dollar of Medicaid funding.” CJ JUNE 2014 | CAROLINA JOURNAL PAGE 3 North Carolina SEANC Asks SEC to Investigate State Pension Fee ‘Violations’ By Dan Way ing benefits to retirees if the pension “All management fees paid for office was unaware those investments Associate Editor fund fails to deliver the returns that by the pension fund are disclosed on included real estate, credit, and infla- RALEIGH have been anticipated. the website as well,” Johnson said. tion partnerships, the report said. n organization representing Substantial sums of money might “The pension fund’s external fees have The pension money is invested 55,000 state employees has be invested in a vast array of offshore been examined by third-party experts, “in more than 300 external funds and asked the U.S. Securities and holdings, and foreign countries’ regu- and found to be reasonable and within indirectly in hundreds more through ExchangeA Commission to investigate latory laws may make it impossible industry standards. Last year, fees rep- funds of funds, with portfolios consist- “widespread potential violations of to recoup investments, as happened resented just 0.52 percent of the fund.” ing of substantial illiquid, hard-to-val- law” involving State Treasurer Janet recently to three Louisiana pension ue assets custodied all over the world,” Cowell’s handling of investments from funds with investments in the Cayman Detailed response according to the report. the $87 billion state retirement system. Islands, Siedle said. Johnson said the treasurer’s office The State Employees Association ‘Fund of funds’ Unaccounted investments would provide a detailed response to of North Carolina also recommends the charges in the report. The response Those “funds of funds” are simi- legislation to curtail pervasive secrecy “At the end of the day, you may was not available at press time. lar to mutual funds, but rather than surrounding billions of dollars in in- have to file a lawsuit in Patagonia” to Far from losing money, he said, catering to individual investors, they vestments; reviews by the state Attor- recover unaccounted, far-flung invest- the pension fund has grown more than require massive commitments that ney General’s Office, North Carolina ments, he said. “It’s far easier to lose 45 percent during Cowell’s term in of- are possible only by large institutional Secretary of State’s Securities Division, money than it ever is to get it back.” fice, and is the third strongest in the investors, such as corporate or public and U.S. Attorney’s Office; tougher Siedle’s blistering report alleges country. pension plans. auditing of the retirement system; and Cowell spent $1 billion on fees to Wall But Ardis Watkins, director of General Assembly oversight of IRS investigations. Street money managers and politi- legislative affairs at SEANC, which the retirement system is thwarted by Secret accounts cal insiders, c o m m i s - incoherent treasurer’s reports to the but disclosed sioned Sie- Joint Legislative Commission on Gov- “The bottom line is that $30 bil- only half that dle’s study, ernment Operations, the report says. lion has been swept into secret ac- amount. Fees said it is im- Senate leader Phil Berger, R-Rock- counts,” said Edward Siedle of Ocean “skyrocket- possible to ingham, and House Speaker Thom Til- Ridge, Fla. Siedle, founder of Bench- ed” 1,000 per- verify many lis, R-Mecklenburg, co-chairmen of the mark Financial Services, did a prelimi- cent on Cow- of the treasur- Joint Legislative Commission on Gov- nary forensic review of North Caro- ell’s watch, er’s defenses ernment Operations, did not respond lina’s Teachers and State Employees he said. because she to requests for comment. Retirement System. “This is uses a trade- Siedle recommends the Gov Ops “They’ve been put into the high- not beating secrets shield reports be reformatted because their est-price, highest-risk, least-transpar- up on Janet to reject re- “disorganization, misstatements, and ent investment products ever devised Cowell,” Siedle said. “This is a na- quests to view details of the public in- omissions” make it impossible for law- in the history of Wall Street,” said Sie- tional phenomenon that’s having dire vestments. makers “or anyone else for that mat- dle, a former SEC attorney. consequences” in Illinois, Kentucky, “We’re pursuing legislation … to ter” to monitor and evaluate invest- “State employees have taken Rhode Island, and South Carolina. “It’s say let’s end this secrecy policy,” Wat- ment performance. cuts, and will have to take more cuts” well-known that Puerto Rico is ready kins said. The Gov Ops reports “understate because, among other things, Cowell’s to collapse its pension fund. This is a State Reps. Mitchell Setzer, R-Ca- investment fees and expenses, as well investment strategy has lost $6.8 bil- national crisis,” he added. tawba, Tim Moore, R-Cleveland, and as alternative investment percentages, lion, Siedle said. “Taxpayers are going “The report is simply wrong. Ev- Linda Johnson, R-Cabarrus, did not re- and conceal significant investment un- to have to chip in more money. This is ery dollar of the pension fund is docu- spond to questions about the bill Wat- derperformance against relevant pas- not going to end well.” mented in the annual report, which is kins said the lawmakers were working sive indexes,” according to Siedle’s Because the pension system is publicly available on the treasurer’s on. report. known as a defined-benefit plan, tax- website,” said Schorr Johnson, com- Siedle’s report also took the state Watkins said the attorney gener- payers must cover the full cost of pay- munications manager for the treasurer. auditor’s office to task for failure to al’s office was asked to verify “whether give proper analysis of the retirement or not the treasurer was already in vio- system’s investments. lation of the law” for not complying “Our office already audits the re- with Senate Bill 558, a contentious 2013 tirement system. SEANC has request- law passed amid acrimonious debate, Keep Up With ed additional disclosures that would requiring the treasurer to report all not necessarily be a part of an audit,” fees the system pays, whether directly said Bill Holmes, spokesman for state to a manager or indirectly by one fund Auditor Beth Wood. State Government manager using other fund managers. “With that said, we are having conversations with the Treasurer’s Of- Trade secrets exception Be sure to visit CarolinaJournal. fice about the existing retirement sys- tem audit and possible ways to change SEANC wants Attorney General com often for the latest on what’s go- what is being done,” Holmes said. Roy Cooper to revisit an opinion he is- But Siedle determined only “cer- sued in 2006 that permits the trade se- ing on in state government. CJ writ- tain limited pension information” pro- crets exception for investment activity. vided by the treasurer for inclusion in “Attorneys with our office met ers are posting several news stories the state’s Comprehensive Annual Fi- with SEANC representatives at their nancial Report is audited. request, but no investigation was re- daily. And for real-time coverage of quested, nor is there authority to ini- ‘Alternative’ investments breaking events, be sure to follow us tiate one,” said Cooper spokeswoman Siedle’s report questions whether Noelle Tally. on Twitter (addresses below). the auditor’s office’s procedures have “The attorney general’s office evolved sufficiently to audit properly provides legal opinions at the request a retirement system with an asset al- of government officials, and if we re- CAROLINA JOURNAL: http://www.twitter.com/CarolinaJournal location that has risen from 5 percent ceive such a request to revisit the 2006 JOHN LOCKE FOUNDATION: http://www.twitter.com/JohnLockeNC to 20 percent in risky, multilayered “al- opinion, we will certainly review it,” ternative” investments. The auditor’s Talley said. CJ PAGE 4 JUNE 2014 | CAROLINA JOURNAL North Carolina Statewide Political Campaigns Not Getting More Expensive FEC officials. The gubernatorial re- State is growing and Spending By Candidate Committees, Statewide Races ports were available on the State Board Governor’s races of Elections Web page dating back to D+R $/reg 1992. Earlier, less-comprehensive re- inflation is taking Year Rep./Dem current $ 2014 $ voter ports are on microfilm at the state ar- 2012 Pat McCrory/Walter Dalton 15,463,211 16,015,313 2.41 chives. Voter registration figures came bite out of spending 2008 Pat McCrory/Bev Perdue 24,096,195 27,082,430 4.33 from the State Board of Elections and 2004 Patrick Ballantine/Mike Easley 12,602,681 15,966,833 3.13 the U.S. Census Bureau. By Barry Smith Associate Editor 2000 Richard Vinroot/Mike Easley 19,639,169 27,481,125 5.63 Bales noted that “much more 1996 Robin Hayes/Jim Hunt 10,665,085 16,313,661 3.79 money is truly needed in a presidential RALEIGH 1992 Jim Gardner/Jim Hunt 1,636,051 2,800,537 0.82 lection watchers suggest that, year than in a nonpresidential year.” including outlays from candi- The same holds true between more- competitive and less-competitive rac- dates, political parties, and in- U.S. Senate races es, he said. Edependent expenditure groups, more D+R $/reg than $75 million could be spent in this Year Rep./Dem current $ 2014 $ voter For example, Democrat Kay year’s U.S. Senate campaign featuring Hagan’s successful bid to unseat in- 2010 Richard Burr/Elaine Marshall 7,640,178 8,296,888 1.34 cumbent U.S. Sen. Elizabeth Dole in Democratic incumbent Kay Hagan and 2008 Elizabeth Dole/Kay Hagan 32,772,126 5.24 29,158,519 2008, a presidential election year, saw Republican House Speaker Thom Til- 2004 Richard Burr/Erskine Bowles 33,215,028 6.51 26,216,746 the two major party nominees spend lis. 2002 Elizabeth Dole/Erskine Bowles 27,041,537 35,594,789 7.12 a combined $32.8 million, adjusted for But that hardly would be the 1998 Lauch Faircloth/John Edwards 18,100,566 26,284,026 6.05 most expensive Senate campaign in re- 1996 Jesse Helms/Harvey Gantt 22,594,487 34,561,264 8.02 inflation. cent state history after accounting for 1992 Lauch Faircloth/Terry Sanford 7,673,371 13,135,016 3.85 Two years later, during the 2010 inflation and the growth in state popu- 1990 Jesse Helms/Harvey Gantt 25,988,505 48,876,620 16.11 midterm elections, U.S. Sen. Richard lation. Using the $75 million figure to 1986 Jim Broyhill/Terry Sanford 9,336,753 20,239,352 6.97 Burr and Democrat Elaine Marshall cover all spending, this year’s Senate 1984 Jesse Helms/Jim Hunt 25,961,311 60,780,152 20.41 spent a combined $8.3 million in in- race is not the most costly in state his- 1980 John East/Robert Morgan 2,264,717 7,281,957 3.09 flation-adjusted dollars. That race was 1978 Jesse Helms/John Ingram 28,642,254 14.69 tory. 7,442,129 never seen as competitive by most po- 1974 William Stevens/Robert Morgan 6,931,370 3.21 Despite claims that the costs of 1,318,913 litical observers. 1972 Jesse Helms/Nick Galifianakis 1,073,404 6,184,452 2.95 elections have grown beyond control, Bales also notes that name recog- nition can help candidates raise more candidates for governor and U.S. sena- Sources: State Board of Elections, Federal Election Commission, U.S. Census Bureau tor in North Carolina aren’t spending money, which they typically spend. more to promote their campaigns than For example, Republican Gov. Pat Mc- they were decades ago. In terms of This year, Bales thinks the Hagan ($3.8 million in inflation-adjusted 2014 Crory spent an inflation-adjusted $7.2 spending, no statewide campaign has and Tillis committees will spend dollars) and Galifianakis ($2.4 million million during his unsuccessful 2008 come close to the 1984 mega-race for much less in comparable dollars than in 2014 dollars) — about $2.95 for ev- bid for governor against Democrat Bev the U.S. Senate between Republican in- Helms/Hunt. “I would say probably ery registered voter, slightly less than Perdue. During his second campaign cumbent Sen. Jesse Helms and Demo- between $20 million and $25 million” the expected spending this year. The in 2012, he spent $11.6 in inflation- cratic Gov. Jim Hunt. In that campaign, in the Senate race, he said. That would actual figures for 1972 were $657,216 adjusted dollars to defeat then-Lt. Gov. Helms spent $16.5 million while Hunt drop the per-vote total even lower — for Helms and $416,188 for Galifiana- Walter Dalton, a Democrat. spent $9.5 million, totaling $26 million. between roughly $3.10 and $3.85 for kis, totaling nearly $1.1 million. “Once you’ve built some name Accounting for inflation, the every registered Races for ID, that is a huge growth factor in Helms and Hunt campaigns spent voter in the state. governor have fundraising,” Bales said. nearly $60.8 million in 2014 dollars. Oddly enough, proved to be much Chalmers Brumbaugh, who Dividing the campaign spending by that would make Observers say less expensive chairs the Political Science and Policy the 2.98 million registered voters at the the Hagan/Tillis than U.S. Senate Studies Department at Elon Universi- time, the two contenders spent $20.41 race one of the less candidates today campaigns. ty, said North Carolina’s U.S. senators for every registered voter in the state. expensive ones in don’t have the In inflation- have made a bigger splash on the na- In contrast, by November rough- recent memory. adjusted dollars, tional scene than the state’s governors ly 6.5 million voters will be registered The only control over their and dollars per have made. in North Carolina. If $75 million were other statewide voter, the most “There’s nobody like Helms, spent from all sources in this year’s race to be in the messages that expensive gov- there’s just nobody,” Brumbaugh said. Hagan/Tillis race — which is the same campaign candidates ernor’s race took Brumbaugh worries with the amount estimated by Matt Bales, re- spending ballpark place in 2000, shift from spending by candidates to search director at the N.C. FreeEnter- as Helms/Hunt used to have when Democrat spending from independent groups, prise Foundation — $11.54 per voter came in 1990 when Mike Easley and candidates are losing their ability to would be spent. Helms took on Republican Rich- deliver the messages they choose. The real growth in spending has Democrat Harvey ard Vinroot spent “Helms and Gantt, they con- come from independent expenditure Gantt, a former Charlotte mayor. Those a combined 27.5 million in inflation- trolled what they were doing,” Brum- groups, or super PACs, that have ex- two candidates spent nearly $48.9 mil- adjusted 2014 dollars. Easley’s share baugh said. “Now, the candidate panded their activities dramatically lion in inflation-adjusted 2014 dollars. of that was $15.6 million, with Vinroot simply doesn’t have control over the after the McCain-Feingold campaign Based on 1990 registration figures, the spending $11.9 million. Adjusted for message, or even most of the message law and state-based contribution lim- Helms/Gantt campaigns spent $16.14 voter registration, the campaigns spent any more.” its forced political candidates to raise for every registered voter — much $5.63 per eligible voter. Brumbaugh said that when he money in smaller amounts from more more than the anticipated spending In actual dollars that year, Easley teaches a campaign management class, donors. per voter in this year’s Hagan/Tillis spent $11.1 million and Vinroot $8.5 his students learn to keep a focus on Since super PACs can’t coordi- race. million. their candidate’s message. nate efforts or messages with candi- The first U.S. Senate race during While the U.S. Senate spending “You want to control everything; dates, campaign commitees, or po- the modern era of a competitive two- figures go back to 1972, the gubernato- you want to control the message; you litical parties, a valid way to look at party system in North Carolina was rial campaign totals are available only want to control everybody who speaks campaign spending from one election the 1972 clash for an open seat between from 1992 to the present. That’s be- for you,” Brumbaugh said. Mistakes cycle to another is to tally how much Helms and Democrat Nick Galifiana- cause the U.S. Senate campaign reports that occur outside the campaign’s the candidates spent through their kis, when nearly $6.2 million in 2014 were available either on the Federal control, he said, mean “you could campaign committees. dollars were spent between Helms Elections Commission website or from lose the race.” CJ JUNE 2014 | CAROLINA JOURNAL PAGE 5 North Carolina Tillis Vs. Hagan Showdown Headlines Races Set for November lated Tillis on election night, urging and two Republicans — Associate Jus- U.S. House District 7 unity against Hagan. Just after 10 p.m. tice Mark Martin and Superior Court • David Rouzer won the Repub- Runoffs due in 5th on his Facebook page, Sen. Rand Paul, Judge Ola Lewis — are running for the lican nomination with 53 percent of the R-Ky., who had endorsed Brannon and top spot on the court. ballots cast in the district that had been and 6th congressional made several appearances on his be- represented by nine-term Democrat half, also congratulated Tillis and said Congress Mike McIntyre, who did not seek re- he “look[s] forward to working with U.S. House District 1 election. Runner-up Woody White re- district races him” in the Senate. ceived 40 percent, and Chris Andrade By CJ Staff • Arthur Rich won the Repub- National political observers see lican primary with 51 percent of the got 7 percent. RALEIGH North Carolina’s results in November n a May 6 state primary race with ballots cast. Brent • Jonathan Barfield Jr. won the as a key to deter- Shypulefski had 49 Democratic nomination with 58 per- national implications, House Speak- mining the partisan er Thom Tillis, R-Mecklenburg, de- percent. cent against Walter Martin Jr., who re- balance in the Sen- • Incumbent ceived 42 percent. Ifeated seven other candidates and won ate. Democrats cur- Primary G.K. Butterfield, who U.S. House District 9 the Republican nomination for the U.S. rently hold a 55-45 Senate seat held by freshman Demo- has represented the • First-term incumbent U.S. Rep. advantage. Hagan, district since winning Robert Pittenger retained his seat for a crat Kay Hagan. In a contest that drew who won her party’s Wrap-Up more than $1 million in independent a special election in second term with 68 percent of the bal- nomination easily July 2004, won the lots cast in the Republican primary, de- expenditures in the weeks leading up over two opponents, Democratic primary feating challenger Michael Steinberg. to the primary, Supreme Court Justice may need to hold her Robin Hudson, a Democrat, was able with 81 percent of No Democrat filed to run. seat to prevent Re- the ballots cast against runner-up Dan U.S. House District 10 to survive a challenge from Republi- publicans from taking control of the Whittacre. • Five-term incumbent U.S. Rep. cans Eric Levinson and Jeanette Doran upper chamber. and will face Levinson in the general U.S. House District 2 Patrick McHenry defeated Richard In the Libertarian primary, Sean • Two-term incumbent U.S. Rep. election. Haugh defeated Tim D’Annunzio, 61 Lynch in the Republican primary, and And a close victory for the Demo- Renee Ellmers won the Republican will face Democrat Tate McQueen, who percent to 39 percent. nomination with 59 percent of the cratic nomination in the 2nd Congres- At a post-primary forum spon- had no primary opposition, in the Nov. sional District by “American Idol” ballots cast against challenger Frank 4 general election. McHenry received sored by the N.C. FreeEnterprise Foun- Roche. runner-up Clay Aiken was muted dation, President Joe Stewart predicted 78 percent of the ballots cast. • Aiken narrowly avoided a run- U.S. House District 11 when second-place finisher, former that outside groups may spend as state Commerce Secretary Keith Cris- off for the Democratic nomination, re- • Tom Hill won the Democratic much as $60 million to drive turnout ceiving just over 40 percent of the bal- co, died unexpectedly at his Asheboro for the Senate campaign. nomination with 54 percent of the bal- home the day before the primary votes lots cast. Crisco got 39.5 percent of the lots cast. Keith Ruehl got 46 percent. were canvassed. Supreme Court votes, and Democratic Party activist Hill will face first-term Republican in- Runoff elections will be held July Toni Morris received 20 percent. cumbent Mark Meadows in the Nov. 4 15 for the Democratic nomination in In an ostensibly nonpartisan con- U.S. House District 3 general election. Meadows had no pri- the 5th Congressional District and the test pitting a Democratic incumbent • Ten-term incumbent Walter mary opposition. Republican nomination in the 6th Dis- against two Republican challengers, Jones won the Republican primary and U.S. House District 12 (Unex- trict. Justice Robin Hudson won 43 percent will face Democrat Marshall Adame, pired term) of the vote. Former appeals court Judge Tillis won 46 percent of the vote, who had no primary opposition, in the • State Rep. Alma Adams of Guil- Eric Levinson got 37 percent and will surpassing the 40 percent threshold Nov. 4 general election. Jones received ford County won the Democratic spe- face Hudson in the Nov. 4 general elec- needed to avoid a July 15 runoff. Greg slightly less than 51 percent. Taylor cial election to fill the unexpired term tion. Raleigh attorney Jeanette Doran, Brannon, a Cary obstetrician, finished Griffin collected 45 percent of the bal- of former U.S. Rep. Mel Watt, who va- another Republican, won 21 percent. second with 27 percent. Charlotte pas- lots cast, and Al Novinec got 4 percent. cated his seat to take a position leading tor Mark Harris finished third with 18 Republicans currently hold a 4-3 ma- U.S. House District 5 jority on the state Supreme Court, and the Federal Housing Finance Agency. percent. The other five candidates split • Five-term incumbent U.S. Rep. Adams received 44 percent of the bal- the remaining 9 percent of the votes. are certain to add a seat as Democratic Virginia Foxx easily outdistanced Phil- Chief Justice Sarah Parker is retiring lots cast. Finishing behind her were Brannon and Harris congratu- ip Doyle for the Republican nomina- Malcolm Graham, 22 percent; George tion, getting 75 percent of the ballots Battle, 13 percent; Marcus Brandon, 9 cast. Doyle received 25 percent. percent; James “Smuggie” Mitchell, 6 • Democrats Joshua Brannon percent; and Curtis Osborne, 6 percent. and Gardenia Henley will be in a July U.S. House District 12 (full term 15 runoff for their party’s nomination, beginning 2015) since none of the four candidates re- • Vince Coakley won the Repub- ceived 40 percent of the vote. Brannon lican nomination with 78 percent of the received 33 percent, while Henley got ballots cast. Runner-up Leon Threatt 26 percent. Also running were Michael got 22 percent. Holleman with 23 percent, and Will • Adams is the Democratic nomi- Stinson with 17 percent. nee, finishing ahead of six other can- U.S. House District 6 didates — five of whom also filed for • Republicans Phil Berger Jr. and the unexpired term. She received 44 Mark Walker will be in a July 15 run- percent of the ballots cast. Finishing off since neither won 40 percent of the behind her were Graham, 24 percent; vote. They seek to succeed 15-term U.S. Battle, 13 percent; Brandon, 8 percent; Rep. Howard Coble, who is retiring at Mitchell, 5 percent; Osborne, 5 percent; the end of his present term. Berger re- and Rajive Patel, 1 percent. ceived 34 percent; Walker, 25 percent. U.S. House District 13 There were seven other candidates in • Brenda Cleary won a three- the race. Soon after the primary, Co- way Democratic primary and will ble endorsed Berger, the Rockingham face first-term Republican incumbent County district attorney, and Walker George Holding in the Nov. 4 general received endorsements from the sher- election. Holding had no primary op- iffs of Guilford and Alamance counties. position. Cleary received 70 percent of • Laura Fjeld won the Democrat- the ballots cast. Virginia Conlon got 18 ic nomination, defeating Bruce Davis, percent, and Arunava Sanyal received 56 percent to 44 percent. 12 percent. CJ PAGE 6 JUNE 2014 | CAROLINA JOURNAL North Carolina JLF’s Agenda 2014 Touts Policies That Promote Liberty, Growth

By CJ Staff better educate our children,” Cordato versial Common Core State Standards, studies. “The idea is based on federal RALEIGH said. “Both in the United States and in- and education spending. legislation titled the Regulations from uilding on positive reforms from ternationally, it has been proven time “Elected leaders should acknowl- the Executive in Need of Scrutiny Act. the past few years, North Caro- and again that liberty and prosperity edge that empirical studies find a weak REINS would require a legislative vote lina’s elected leaders can take go hand in hand.” relationship between education spend- before the government could pursue Bmore steps to help boost economic Cordato recommends growth- ing and student performance,” said any rule that would have a major im- growth, improve education, and fight enhancing policies such as ending Terry Stoops, JLF director of research pact on the economy, cause significant overregulation. The John Locke Foun- state taxes on capital gains and elimi- and education studies. “They should cost or prices increases for consumers, dation’s new Agenda 2014 policy report nating double taxation of savings and embrace the idea of ‘educational pro- or do significant harm to competition, offers more than 110 recommendations investment returns. ductivity.’ It’s not employment, productivity, and other addressing these and other critical “Lawmakers should how much you healthy economic activities.” public policy goals. allow taxpayers spend, but how you Among the Agenda items address- “While in 2013 the legislature to deduct savings spend it. Research ing property rights is a recommenda- made some great strides, there is still and investment suggests that spend- tion to repeal “quick take,” which is a more to be done,” said Roy Cordato, from their taxable ing on classroom in- legal process that allows the govern- JLF vice president for research and income, similar to struction offers the ment to take title to property under the resident scholar. Cordato and his JLF the way individual most ‘bang for the power of eminent domain without first research staff developed the Agenda’s retirement accounts buck.’” allowing the affected landowner to recommendations in 36 different sub- are treated under Health care have a hearing in court. ject areas. the tax code.” proposals target is- “Quick take should be repealed “Lawmakers reformed the tax An Agenda sec- sues such as insur- so that all government takings go code and cut the overall tax burden for tion devoted to bud- ance exchanges, through the normal 120-day condem- families across the income spectrum, get, tax, and eco- certificate-of-need nation process,” said Tyler Younts, former JLF legal policy analyst. “That but the state’s tax system still penal- nomic issues also restrictions, Medic- includes the right to a hearing. This izes investment and entrepreneurship targets areas such aid reform, and the would satisfy the requirements of due in some ways,” Cordato said. “Med- as state government proposal to expand process. It would also give local gov- icaid and the health care system also spending. Specific North Carolina’s ernments some incentive to negotiate need reform. We’ve seen significant recommendations Medicaid program. in good faith with property owners in advancement in the possibilities of pa- include a constitu- Get a copy here: http://bit.ly/1hdiI33 “ E x p a n d i n g order to avoid costly court proceed- rental school choice, but a great deal tional amendment Medicaid would ings.” still needs to be accomplished, particu- to limit spending growth, such as a only add more individuals to North Agenda 2014 focuses attention on larly in the areas of curriculum, testing Taxpayer Bill of Rights. Carolina’s dysfunctional medical as- many critical issues elected officials policy, and student achievement.” “Lawmakers should set fiscal sistance program,” said Katherine Re- and candidates will face during the JLF has published an Agenda priorities each year,” said Sarah Cur- strepo, JLF health and human services rest of this year and in the new legisla- for statewide candidates every other ry, JLF director of fiscal policy stud- policy analyst. “The state has instead tive term that starts in 2015, said JLF year since 1996. Agenda 2014 offers a ies. “Search the base budget for items gone forth with reform. Reform should President John Hood. resource for elected officials and can- or programs to cut if new spending is focus on budget predictability, ac- “North Carolina adopted more didates interested in pursuing policies needed in other areas. Lawmakers also countability, and personal responsibil- free-market and conservative reforms that promote growth while advancing should provide a five-year fiscal note ity.” in 2013 than any other state ever has individual liberty, personal responsi- with each budget. It would show the After three straight years of state adopted in a single year, but that bility, and a free-market economy. long-term impact of state spending regulatory reforms, the latest JLF Agen- doesn’t mean the work is complete,” “We firmly believe that policies plans.” da offers suggestions for future legisla- Hood said. “Lawmakers looking for that advance these goals are policies Sixteen Agenda entries target edu- tion. additional ways to promote economic that will create employment opportu- cation issues, such as prekindergarten “Lawmakers should enact a growth and add North Carolina jobs nities, lower health care costs and im- programs, charter schools, testing and REINS approach in North Carolina,” will find plenty of good ideas in Agen- prove access, reduce energy costs, and accountability, virtual schools, contro- said Jon Sanders, director of regulatory da 2014.” CJ

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Finished reading all the great articles in this month’s Carolina Jour- nal? Don’t just throw it in the recycling bin, pass it along to a friend or neighbor, and ask them to do the same. Thanks. http://carolinajournal.com JUNE 2014 | CAROLINA JOURNAL PAGE 7 Washington Obamacare Lawsuit Challenges Legality of ‘Death Panel’

By Dan Way in Raleigh at the Civitas Institute’s the mechanism to shift the entire U.S. powers are triggered if and only if Associate Editor Conservative Leadership Conference. health care system toward single- spending goes above some certain tar- RALEIGH “It is a body that writes laws without payer delivery if Obamacare eventu- get,” Conover said. ne of the attorneys hoping to Congress’ consent, and it scares the ally crowds out private insurers and dissolve Obamacare through a hell out of me.” puts the government more directly in Trigger amounts lawsuit challenging the health In a recent Forbes article, Can- charge of medical services, an outcome The Centers for Medicare and Oreform act’s Independent Payment non noted that some critics of the law critics of the law fear and supporters Medicaid Services does not fore- Advisory Board said the deaths and have called IPAB Obamacare’s “death encourage. see Medicare spending rising above mismanagement recently reported at panel,” but in “ T h a t ’ s the trigger amounts anytime soon, Veterans Administration hospitals are his view, it also why it is so Conover said. “a great preview” of what lies in store could be con- important that Nor does he see any advantages if the health care law is not overturned. sidered a “life our lawsuit pro- to IPAB over the Medicare Payment Christina Sandefur, a staff attor- panel,” given its ceeds,” to pre- Commission, comprising the “best ney at the Scharf-Norton Center for powers to deter- vent the IPAB minds from academia,” Conover said. Constitutional Litigation at the Phoe- mine allowable model from “From the standpoint of democ- nix-based Goldwater Institute, said treatments and becoming the racy theory, if you want accountable oral arguments in Coons v. Geithner are payments. future standard government that is governed for the scheduled June 10 in San Francisco be- Sandefur for administra- people, by the people, this seems to be fore a three-member panel of the 9th said that IPAB’s tive agencies, a little bit off track from that,” Conover U.S. Circuit Court of Appeals. lack of account- Sandefur said. ability should “This is said of IPAB. On appeal be of concern exactly why we “There’s no law that can’t be re- amid the growing revelations that VA have the constitutional system that pealed” by a succeeding Congress, he The case is on appeal after Ari- said. zona U.S. District Court Judge Murray hospitals in Phoenix, Colorado, Chi- we do. This is exactly why we have cago, and elsewhere falsified records separation of powers. This is the very But Sandefur said repealing IPAB Snow dismissed the lawsuit. Coons is or limiting its powers is, by design, a the only legal challenge among many to make it appear that veterans’ wait- reason that the founders believed that ing times for service were days, when it was dangerous to put government complex and nearly insurmountable to the Affordable Care Act testing the hurdle. constitutionality of IPAB, whose 15 in some cases they were months. Doz- in charge of these decisions, and that ens of veterans’ deaths in Phoenix are it was dangerous to put one entity in According to the law, legislation members would be appointed by the repealing IPAB can be introduced only president. The panel would have virtu- linked to the delays. charge of decisions like these,” Sand- As the scandal grows and scru- efur said. between Jan. 1 and Feb. 1, 2017. It must ally unlimited power to design Medi- pass both houses of Congress, and be care policy and set health care pay- tiny escalates, two employees of the “If the court finds that IPAB is un- Durham VA Hospital recently were constitutional, we would ask them to signed by the president before Aug. ment rates. 15 of that year. And to pass Congress, Sandefur says congressional cre- suspended over records irregularities strike the entire law,” Sandefur said. To it must be approved by three-fifths of ation of IPAB violates the separation of reporting waiting times going back to do that, the court would have to deter- all members, not just three-fifths of the powers clause of the Constitution be- 2009, and calls are increasing for VA mine whether severing the unconstitu- members present on the date of the cause it transfers congressional author- Secretary Eric Shinseki to resign. tional portion of the law would allow vote. ity to an unelected executive branch “I think unfortunately what’s the rest of the law to stand and still “As far as we can tell, that is one agency. The language establishing the happening in the Veterans Administra- meet Congress’ intent. of the most severe supermajority re- panel insulates it from congressional tion is a preview of what we’re going Cutting costs quirements ever in the history of this and judicial oversight. to get with IPAB,” Sandefur said. country,” Sandefur said. “That is an Michael Cannon, director of Sandefur contends the president IPAB mechanism even more severe requirement than to health policy studies at the free-market and Senate Democrats who voted sign a treaty with a foreign nation.” Cato Institute, called IPAB “a superleg- The VA is a single-payer sys- unanimously for the law said during Sandefur isn’t convinced Obam- islature” during his March appearance tem, and she believes IPAB would be legislative debate the primary reason acare’s authors intended IPAB triggers to approve Obamacare was the law’s to be activated immediately. Instead, authority to reduce medical costs. the law is structured “to be implement- “The only mechanism that is re- ed little by little to avoid problems in ally designed to cut costs in health care elections” if voters were to see all of its is IPAB, and so without IPAB Obam- harmful effects at once, she said. acare can’t really achieve one of its overarching goals of near-universal ‘No defined scope’ health care coverage — cost-cutting,” Sandefur said. “So our argument is IPAB has no defined scope of that the whole thing has to fall because written powers, “and if you think that you can’t really have one without the what it’s doing is not related to Medi- other.” care, or is rationing care, you cannot Chris Conover, a professor at challenge its proposals that automati- Duke University’s Center for Health cally become law in court because it’s Policy and Inequalities Research, said not subject to judicial review,” Sand- IPAB was created because Medicare efur said. has been unable since its inception to None of IPAB’s 15 members has control costs. A major reason, he said, been nominated or confirmed. Sand- is because Congress routinely ignores efur speculated that President Obama recommendations for savings from the wants to avoid Senate confirmation current Medicare Payment Commis- battles over those nominations that sion. IPAB’s goal was to put experts, would draw more attention to Obam- instead of politicians, more in control acare so close to the midterm elections. of Medicare policy. But the lack of appointments is “It’s a very questionable sort of troubling, Sandefur said, because the constitutional legitimacy to create this secretary of Health and Human Servic- unaccountable set of people who have es would wield all IPAB’s powers if no pretty extraordinary powers, but those positions on the board are filled. CJ PAGE 8 JUNE 2014 | CAROLINA JOURNAL Education

COMMENTARY Justices Let Low-Income Market Should Set Teacher Salaries Voucher Lottery Proceed By Barry Smith N.C. Supreme Court has lifted a cloud Associate Editor over the program, and given hope to orth Carolina has a genuine number who graduated from the RALEIGH the thousands of families who have al- teacher recruitment and college’s drama/dance education he N.C. Supreme Court on May ready applied for a scholarship,” said retention crisis. But it has program. 14 lifted a lower court’s order Dick Komer, senior attorney for the in- Nnothing to do with tales of teacher I do not mean to single out discontent spun by the mainstream Appalachian. All of North Caroli- that had blocked implementa- stitute. “Although [the] decision isn’t tionT of the state’s new voucher law the final word on the program, it bodes media, special-interest groups, and na’s colleges and universities strug- teacher unions. Rather, the state’s gled to supply science teachers to helping children from lower-income well for full vindication at the state’s public schools continue to encoun- the state’s public schools. In 2013, families attend private schools. highest court. More importantly, it ter a critical shortage of qualified UNC-Chapel Hill, Elon University, The ruling means that the N.C. bodes well for the families whose only math, science, and special educa- and Wake Forest University eked Educational Assistance Authority can wish is to find the best education for tion teachers. out one certified physics teacher move ahead with a lottery to see which their children.” The U.S. Department of Edu- each, while Western Carolina Uni- children will be awarded the vouch- Reneé Flaherty, another Institute cation report, “Teacher Shortage versity produced two. One obvi- ers, called Opportunity Scholarships, for Justice attorney working on the Areas Nationwide Listing 1990- ous way to address this problem for the academic year beginning this case, added, “The N.C. Supreme Court 1991 through 2014-2015,” said the is for lawmakers to remove state- fall, according to attorneys involved has sent the Court of Appeals a strong relatively meager supply imposed barriers to entry in the case. The order will be in effect and unmistakable signal: This program and strong demand for and cultivate alternative until the appeals process concludes, should be allowed to go on.” math, science, and special pipelines to the teaching or until Judge Rob- Flaherty said education teachers has profession. ert Hobgood, who Hobgood misread been a persistent weak- Why haven’t elected issued the initial in- the text of the N.C. ness in North Carolina’s officials been more re- junction, issues a fi- Constitution when teacher labor market. sponsive to the needs of nal judgment on the he issued the injunc- Of course, North the state’s teacher labor merits of the case at tion. Flaherty said it Carolina’s public schools market? I believe that the trial level. “in no way prohibits occasionally confronted decades of negligence Last year, the the creation of in- teacher shortages in by Democratic leaders in General Assembly novative programs, other areas, including TERRY Raleigh had everything enacted a law allow- such as the Oppor- Spanish and theater. STOOPS to do with their fidelity ing vouchers pro- tunity Scholarship Nevertheless, these were to an idea that teacher viding up to $4,200 Program, that give short-term supply issues. unions hold dear — no in scholarships for our poorest families Lasting shortages of high school teacher deserves to make more children from lower- additional educa- teachers in core subjects are an- money than any other. income families to tional options.” other matter. The demand for these Pressure from teacher unions offset the cost of at- The school teachers continued to outpace the is a major reason initiatives de- tending private schools. The law limit- boards association disagreed with the supply, intensifying the competi- signed to differentiate teacher pay ed the scholarships to 2,400 students in justices’ reasoning. “We are disap- tion for math, science, and special do not last. In 2001, North Carolina its first year. Since about 4,500 students pointed by the Supreme Court’s deci- education teachers both within public schools began awarding an- applied, a lottery would be needed to sion,” said Edwin Dunlap Jr., executive North Carolina and between states. nual bonuses of $1,800 to certified determine which students would be director of the school boards associa- Part of the problem is that math, science, and special educa- awarded the scholarships. tion. “The prudent thing would have graduates from North Carolina’s tion teachers who chose to work in Hobgood issued his preliminary been to answer these important con- schools of education do not cor- a low-income or low-performing injunction in February blocking the stitutional questions before the state respond to the needs of our teacher school. Elected officials discontin- program. The N.C. Court of Appeals started spending public money on pri- work force. In 2013, the state’s ued the program in 2004. A study refused to overturn Hobgood’s order, vate schools.” colleges and universities produced later published by Duke University setting the stage for the recent Supreme Darrell Allison, president of Par- 6,155 credentialed teachers, but few researchers concluded that the Court action. ents for Educational Freedom in North graduated with a teaching degree short-lived bonus plan reduced During the February hearing, the Carolina, lauded the ruling, saying it in a high-demand area. Among mean turnover rates of the targeted plaintiffs argued that the scholarships “vindicates the over 4,500 parents who that year’s graduates, colleges and teachers by 17 percent. violate a provision of the state consti- applied for their child to receive an university teacher education pro- For years, the John Locke tution saying the state’s school fund Opportunity Scholarship and puts par- grams in North Carolina combined Foundation has urged lawmakers “shall be faithfully appropriated and ents back in the driver’s seat in their to produce five physics teachers to provide substantial pay supple- used exclusively for establishing and child’s education.” and 553 social studies teachers. ments to outstanding teachers in maintaining a uniform system of free Allison added, “This ruling pro- These disparities have done little to hard-to-staff subject areas. We be- public schools.” vides immediate relief to low-income change the way North Carolina’s lieve teacher compensation should Former state Supreme Court and working-class families who ap- schools of education operate. be based, at least in part, on actual Justice Bob Orr, representing the N.C. plied for this program from across the Appalachian State University, labor market conditions. School Boards Association, argued that state and also demonstrates parents which has one of the most-respect- To his credit, Gov. Pat McCro- the scholarships would help private [who joined the lawsuit] have a sub- ed schools of education in North ry’s newest teacher-compensation schools rather than parents. “The leg- stantial likelihood of prevailing on the Carolina, typifies the market-be- proposal includes salary supple- islation has to fail because the benefit merits.” damned trend in teacher educa- ments for teachers in hard-to-staff clearly goes to the private school,” Orr Senate President Pro Tem Phil tion. According to federal teacher subjects. Hopefully, the Republican education data, Appalachian’s leadership in the General Assem- said. “The parents are a pass-through Berger, R-Rockingham, added his sup- Reich College of Education in 2013 bly will embrace this sensible and vehicle.” port. failed to graduate any physics long-overdue education reform. CJ The Institute for Justice, the lib- “The Supreme Court made the education students and only one ertarian public-interest law firm repre- right decision today, and I am pleased earth science education student. It Dr. Terry Stoops is director of senting two parents who have pushed that thousands of low-income children managed to graduate three chem- research and education studies at the to overturn Hobgood’s order, reacted across North Carolina will have the istry teachers that year, the same John Locke Foundation. positively to the Supreme Court’s deci- opportunity to attend a school that sion. best meets their needs in the coming “In lifting the injunction, the year,” Berger said. CJ JUNE 2014 | CAROLINA JOURNAL PAGE 9 Education Berger Plan: Teachers Can Give Up Tenure For Large Pay Raise By Dan Way tem. the teacher pay plan and budget yet, so is usually about a 30-year term,” Ellis Associate Editor “Those who choose to retain ten- we don’t have a comment right now,” said. There would be no financial in- RALEIGH ure would remain on the current pay said Anna Roberts, a spokeswoman for centive for them to remain in the pro- f you like your teacher tenure plan, schedule,” Berger said. “That plan is House Speaker Thom Tillis, R-Meck- fession beyond 21 years, he said. you can keep your teacher tenure frozen, has been frozen, and will con- lenburg, immediately following the State Sen. Jerry Tillman, R-Ran- plan, Senate leader Phil Berger, R- tinue to be frozen. … If you choose to press conference. dolph, co-chairman of the Senate Ap- Rockingham,I told educators at a May stay on that plan, my understanding is Rodney Ellis, president of the propriations on Education/Higher 28 press conference. Just don’t expect there is not a raise, and you won’t get a North Carolina Association of Educa- Education Committee, disagreed. a pay raise. step [increase], either.” tors, said the 11-percent average salary “You can top out now after 20 Berger rolled out a $468 million The ambitious pay raise plan is hike “actually brings us to where we years at $50,000, but we’ve got longev- pay hike proposal that would raise the result of “the budgeting discipline belong in the year 2014. That would be ity that’s factored in here, and you will teacher salaries by an average of 11.2 that we’ve seen since Republicans took a very welcome investment in public see some small incremental changes” percent, or $5,809, the highest teacher over the Gen- education right in annual increases among long-term pay increase in state history. It would eral Assembly now.” teachers, Tillman said. allow teachers to reach maximum pay in 2011, because H o w - Rather than discourage teachers status in 21 years instead of 37, and of the improve- ever, he said, from remaining in the profession, the push North Carolina from 47th to 27th ment in our “it’s a trav- quick route to top pay will lure more nationally in teacher pay rankings, unemployment esty that they teachers into the profession, which Berger said. rate as a result would attach some say is not happening now be- “Under our plan, teachers who of decisions it to career sta- cause it takes too long to get maximum agree to work under an annual con- that were made tus rights, due pay, Tillman said. tract in the 2014-15 school year would to modify the process protec- “In poker terms, the Senate went move to the new pay scale and receive unemployment tions for educa- ‘all in,’” said Terry Stoops, director of a substantial salary increase,” Berger compensation tors.” The state research and education studies at the said. The plan would make it possible fund, because should grant John Locke Foundation. for the first time in state history for a we have priori- unencumbered “They are trying to call the left’s classroom teacher to earn more than an tized where we raises to dem- bluff. Those who will oppose this plan administrator. are going to do onstrate respect will do so based on politics alone, and The plan received mixed reviews, our spending,” Berger said. for teachers as professionals instead of not whether it is beneficial to the teach- however, including a tepid response Paying for the plan will not re- using them as “political pawns in an ing profession,” Stoops said. from Republican Gov. Pat McCrory. quire a tax increase, and the funding election year.” “I think most were surprised by At press time, the proposal was being will come from recurring sources, he The state lost the tenure battle in the size of the raise. Commentators debated as part of the Senate’s budget said. The state would move from ninth court and is trying “to circumvent the agreed that a teacher pay raise was in- package. place to third place in the Southeast re- judge’s order, and actually force teach- evitable, but few predicted that the av- Among the 37 current pay steps, gion for teacher pay. ers to accept contracts or to continue erage raise would reach double digits,” 18 would get boosts beyond the pro- Not everyone embraced the pro- to teach without due process rights. he said. posed 11.2 percent average — as high posal. That’s probably the biggest frustration For most teachers, surrender- as 20 percent for teachers in year eight, “We recognize and share the Sen- I have with it,” Ellis said. ing tenure in exchange for a huge pay 18.5 percent in year seven, and 18.1 per- ate’s goal to improve education and Reducing the number of steps increase is an acceptable trade-off, he cent in year nine. Average teacher pay help teachers. However, the McCrory to get to the maximum salary “is a said. would jump from the current $45,938 administration has a different and good approach,” and a longtime goal The proposal would extend sup- to $51,198 if the plan were adopted. broader approach that promotes stu- of NCAE, which submitted a proposal plemental pay for teachers with mas- Acknowledging “well-docu- dent achievement and rewards teach- several years ago to ratchet down the ter’s degrees to those who have com- mented resistance” to eliminating ten- ers,” said Josh Ellis, Gov. Pat McCro- steps — or years — on the pay sched- pleted at least one course in a graduate ure, Berger said the Senate plan repeals ry’s communications director. ule to 15, Ellis said. program as of July 1, 2013. legislation passed last year that would “The comprehensive Career But even moving teachers to the It expands opportunities for lo- end career status designation as of Pathways for Teachers plan, which is maximum pay step 16 years faster than cal school systems to recognize and 2018. That legislation currently is tied sustainable, fiscally responsible, and current law allows drew his displea- reward top performers by allocating up in litigation and was struck down provides local flexibility, was devel- sure. funds for up to 35 percent of teaching recently by a Superior Court judge. oped through a process working with “I think that’s going to deter a lot staff to receive pay-for-excellence bo- Instead, teachers would have “a and supported by superintendents, of people from coming into the profes- nus increases. A plan passed last year full choice” to retain tenure under the teachers, and business leaders across sion who may have teaching in their as part of the tenure reforms now in old plan, or opt for annualized con- the state,” Ellis said. heart and want to continue to teach for the courts allowed excellence bonus- tracts without it in the proposed sys- “We have not seen the details on the remainder of their career, which es for 25 percent of teachers. CJ FIRST IN FREEDOM Transforming Ideas into Consequences for North Carolina In First in Freedom the John Locke Foundation’s president and research staff apply the timeless ideas of 20th-century con- servative thinkers to such 21st-century challenges as economic stagnation, tax and regulatory burdens, and educational medi- ocrity. To get your copy, go to JohnLockeStore.com. Cost: $10.

The John Locke Foundation, 200 W. Morgan St. Suite 200, Raleigh, NC, 27601 919-828-3876 • JohnLocke.org • CarolinaJournal.com • [email protected] PAGE 10 JUNE 2014 | CAROLINA JOURNAL Local Government

Town and County Garden Parkway in doubt Three of Four Sales Tax Ballot Measures Fail The N.C. Department of sion of the General Assembly convened May 9. Transportation’s new data-based • Six-term Sen. Clark Jenkins, D-Edgecombe, lost to project rating system has assigned Four incumbent members Erica Smith-Ingraham, 49 percent to 40 percent in the Senate a mediocre score to Gaston Coun- District 3 primary. ty’s proposed Garden Parkway, of General Assembly defeated • Rep. Robert Brawley, R-Iredell, a frequent critic of but some local officials maintain By CJ Staff House Speaker Thom Tillis, R-Mecklenburg, lost to chal- hope that the highway eventually RALEIGH lenger, John Fraley by 106 votes in the House District 95 will be built, reports The Charlotte long with the May 6 primary elections for congres- race, 2,881 to 2,775. As a result of his public criticism of Til- Observer. sional, legislative, judicial, county, and municipal lis, Brawley was censured by the House Republican Cau- The Garden Parkway would offices, voters in more than a dozen North Carolina cus soon after the session opened. The vote barred Brawley loop around south of Gastonia countiesA decided measures involving taxes, debt, and alco- from attending private caucus meetings during which po- and include a new Catawba River hol sales. litical strategy and policy issues are discussed. crossing. The cost of the project is Three of the four ref- • In House District 80, estimated at between $751 million erendums increasing lo- Rep. Roger Younts, R-Da- and $843 million. The parkway has cal sales taxes by 0.25 per- vidson, lost to Sam Watford, generated considerable controver- cent failed. Voters in Bertie 55 percent to 45 percent. sy, with environmental groups op- County rejected their pro- • Rep. Annie Mobley, posing the project and some local posal by a margin of 69 per- D-Hertford, fell to Howard officials questioning whether it’s cent to 31 percent; in Bladen Hunter III in the Democratic worth the cost. County, the “no” vote was primary in House District 5. The proposed highway was 72 percent to 28 percent; Mobley originally was ap- ranked 175 out of 399 on the DOT’s Brunswick County’s pro- pointed to the House seat in new ranking system, which fo- posal failed, 40-60. Only Da- 2007 when Hunter’s father, cuses on economic development vidson County’s measure Rep. Howard Hunter Jr., impact, cost, and congestion relief. passed, by a vote of 56 per- died. A different Gaston County project cent to 44 percent. In the Jenkins, Braw- scored much higher. Meantime, by a 78 per- ley, and Younts races, no cent to 22 percent margin, candidate from an opposing Chapel Hill zoning Gaddy Township voters in party filed before the prima- Robeson County approved ry. Barring write-in or unaf- The town of Chapel Hill a 10-cent increase in the lo- filiated campaigns, each of approved a proposal to adopt a cal property tax rate to fi- the primary winners will “form-based” code in an attempt nance a separate fire district win the general election. to spur redevelopment in its aging with a volunteer fire depart- In other legislative Ephesus-Fordham business dis- ment. races: trict. The idea is to let developers Local bond measures fared better. Bald Head Island • In Republican Senate primaries where the winner understand what the code allows residents passed a beach improvement bond referendum by faces no Democratic opposition, Sen. Stan Bingham, R-Da- before they consider projects, re- a whopping 90-10 margin. Davie County enacted a school vidson, won District 33; Sen. Fletcher Hartsell, R-Cabarrus, ducing the need for separate ap- bond measure, 54 percent to 46 percent, and a parks-and- won District 36; Sen. Bob Rucho, R-Mecklenburg, won Dis- provals by the town, reports the recreation bond, 56-44. Mooresville voters approved a trict 39; and Sen. Ralph Hise, R-Mitchell, won District 47. Raleigh News & Observer. street-and-sidewalk bond proposal, 63-37, and a parks-and- • In other Democratic Senate primaries where the win- Under the proposal, build- rec measure, 55-45. Goldsboro residents approved a parks- ner faces no GOP opposition in November, Sen. Don Davis, ings of up to five stories would be and-rec measure by a similar 55-45 margin. D-Greene, won with 72 percent of the vote against two chal- allowed near the street and build- A handful of counties considered lengers in District 5. In District 21, Sen. ings of up to seven stories in the expanding alcoholic beverage sales. Res- Ben Clark, D-Hoke, handily defeated district’s core. Town officials proj- idents of the Cleveland County town of three challengers. Sen. Gladys Rob- ect that the move to a form-based Patterson backed the sale of malt bever- Several counties inson, D-Guilford, prevailed against code could bring a significant ages and fortified wine. Pender County Skip Alston in District 28. In District amount of development to the dis- voters approved a measure expanding expanded alcohol 40, Joyce Waddell defeated three other trict over the next 20 years. the sale of beer by the glass in Topsail candidates, avoiding a runoff with 42 “I can’t imagine really con- sales, while Bladen Beach. Rockingham County voters au- percent of the vote. templating applying this form- thorized the sale of mixed drinks in res- and Sampson • In other House Republican rac- based code to any other sector taurants and approved a county ABC of town,” Councilwoman Sally es where the primary winner faces no store. In contrast, Bladen and Sampson opposed expansion Greene said. Democratic opposition, Rep. George county voters rejected measures allow- “I really think that this is a Cleveland, R-Onslow, fought off a ing the sale of beer and wine in unincor- very good solution for a particular challenge in District 14. In District 15, porated sections of the county and in towns that had not problem, which is how to develop Rep. Phil Shepard, R-Onslow, easily won, as did Rep. Leo this particular part of town.” approved alcohol sales. Daughtry, R-Johnston, in District 26. Other GOP winners Not every town official Carteret and Northampton county voters expanded included Lee Zachery in the open District 73 seat and Rep. agreed with the change. “My is- the sale of mixed beverages. Carteret hotels, restaurants, and Harry Warren, R-Rowan, in District 77. Rep. Jeffrey Elmore, sue with this — pure and simple convention facilities countywide will be able to offer mixed R-Wilkes, handily won the primary for his District 94 seat, — is there is no evidence that it beverages. (Currently, only restaurants in some beach- as did Rep. Dana Bumgardner, R-Gaston, for his District 109 will achieve the original goals, front towns can sell cocktails.) Establishments throughout seat. including stormwater, including Northampton County also will be allowed to sell mixed • In other House Democratic primaries where the traffic mitigation, including in- beverages; currently, only licensed facilities located within winner faces no GOP opposition, Shelly Willingham creasing commercial tax revenue one mile of Interstate 95 can do so. led in District 23 with 35 percent of the vote and faces a runoff against Rusty Holderness. Rep. Jean Farmer- to the town,” said Councilman General Assembly Matt Czajkowski in voting against Butterfield, D-Wilson, was re-elected in District 24, Rep. the proposal. CJ Most incumbents in the General Assembly fared well Michael Wray, D-Northampton, won District 27, Rep. as they faced voters from their own party for the first time Pricey Harrison, D-Guilford, won District 57, Ralph John- — MICHAEL LOWREY since the historic 2013 session. But four incumbents lost son won the open seat in District 58, as did Cecil Brock- their primaries and became lame ducks when the short ses- man in the open seat in District 60. CJ JUNE 2014 | CAROLINA JOURNAL PAGE 11 Local Government Guilford, Alamance Suspend COMMENTARY Discussion on Border Dispute N.C. Taxation

By Michael Lowrey Charlotte to a regional authority. The Without Representation Associate Editor city objected to the measure and went RALEIGH to court to retain control; the legal is- y most recent John Locke taken from tourists, business travel- fforts to clarify the location of sues remain undecided and the city re- Foundation Spotlight ers, school groups, or anyone else the border between Alamance mains in control for now. Negotiations report discusses Haywood who stayed in a hotel or rental MCounty’s plans to increase its oc- accommodation in North Carolina and Guilford counties may have continue between Gov. Pat McCrory Ehit an impasse after the affected prop- and the city with the hope of fashion- cupancy tax — a variety of taxation during that time. erty owners said they’d rather be in ing a compromise. For now, both the without representation that’s levied The funds collected from this Alamance County. Guilford County city and airport authority have agreed by local governments across North tax are used for specific purposes officials have suspended talks, possi- to have Brent Cagle act as interim avia- Carolina. If the General Assembly such as tourism, beach nourish- bly pushing the issue back to the Gen- tion director. allows it, the increase would leave ment, or the building or operation eral Assembly, reports the Greensboro Cagle’s budget ups spending in Haywood County with the highest of convention and performing arts rate in the region at 6 percent. centers. Tourism is the major focus News & Record. several areas, most notably on shuttle In 1983, the General Assembly of occupancy tax revenue. Modern technology allows buses the airport uses to move passen- passed the first legislation authoriz- When the tax is introduced boundaries to gers from remote be mapped with ing counties and municipalities to to a local government for the first parking lots to impose an occupancy tax. The tax time, a local Tourism Development great precision. the terminal. More accurate was authorized mostly in populous Authority is created to control the Cherokee “ A n y o n e counties like Buncombe, spending of occupancy tax mapping can who’s ridden our place property Mecklenburg, Forsyth, revenue. During 2011-12, buses lately has and New Hanover, but almost $90 million of the owners’ land in to probably seen a different ju- also included smaller collected tax went to TDAs a ripped seat or Haywood County. Since across the state. risdiction than two,” said Cagle. they originally that time, the General As- Local governments Currituck “There’s been thought. Or sembly has allowed more may think they can use some deferred worse, it can di- than 200 counties and occupancy tax revenues to maintenance. We vide the land among two jurisdictions. municipalities to levy an force visitors to pay for lo- That was the case in 2007 when the need to reinvest in the facility.” occupancy tax. cal amenities and impose border between Alamance and Guil- Cagle noted that 29 of the air- Even though the SARAH no costs on local residents ford was remeasured. port’s 59 shuttle buses were out of tax must be authorized at CURRY or businesses. That is not To reduce the confusion, last year service when he made his budget pre- the state level through a the case. the counties agreed on a plan to modi- sentation to the airport authority. His local act in the legislature, When a hotel or bed fy slightly the 2007 border. Rather than budget also would make 150 shuttle only local governments may levy and breakfast posts its nightly rate have a straight line splitting parcels, bus drivers and temporary workers at an occupancy tax. Once authorized on the Internet, travelers can com- property owners on the border could the airport full-time employees. by the General Assembly, the local pare prices with competing busi- choose which county they preferred government’s governing authority nesses. If an occupancy tax pushes and keep their parcels intact. Asheville anti-graffiti plan — a city council or board of county the room price higher than that Or that was the agreement until commissioners — must pass a reso- charged in a neighboring county or The Asheville City Council has lution formally levying the tax. city, then the traveler may choose every property owner along the border adopted a new plan to address graf- opted for Alamance. The property at Gener- to stay where fiti, opening with a city-funded three- ally this process the rate is lower. issue is worth $8.5 million. month campaign to remove graffiti, “It’s not the plan that we were includes only a The higher oc- reports the Asheville Citizen-Times. public hearing The legislature has cupancy tax also sold,” Guilford County Commissioner Much of the debate in Asheville Ray Trapp said, noting the proposal and not a refer- may push lodg- has focused on how much responsibil- was intended to have a minimal im- endum, as is the authorized more ing operators to ity should be placed on property own- pact, if any, on the tax base of either case with the eat the cost of ers to remove graffiti once their build- than 200 counties county. sales tax. Simi- the tax increase “We’re stewards of the taxpayers ings have been defaced. lar to most local to levy (and reduce of Guilford County, and for us to agree Under the new plan, the city taxes except their profits) to to vote to voluntarily give up that tax will pick up 90 percent of the cost of property tax, occupancy taxes keep room rates base would have been doing an injus- removing graffiti from private build- the occupancy competitive tice to our constituents.” ings from July 1 through Sept. 30, with tax remains in with businesses The selection of Alamance over building owners paying the remaining place until it is in neighboring Guilford shouldn’t have come as a sur- 10 percent. Thereafter, building own- repealed. The only changes that can jurisdictions. prise, as Guilford’s tax rate of 77 cents ers would be responsible for the entire be made to the tax must be done Accountability is another con- per $100 of assessed property value is cost of graffiti removal. The city could through either the local governing cern. TDAs are not accountable to much higher than Alamance’s 54-cent force owners to remove graffiti from authority or the General Assembly. voters. While any sales tax increase rate. their buildings, but owners would not Most of the occupancy taxes must be put on a ballot for a vote, be fined for failing to remove graffiti in North Carolina are between 3 an occupancy tax increase does Charlotte airport spending up in a timely manner, as was proposed percent and 6 percent. Brunswick not — leaving not only out-of-town earlier. County has the lowest rate at 1 per- visitors but also affected local busi- While it’s unclear what entity cent, while Mecklenburg County/ nesses with no voice. “We agree that we should do this will oversee Charlotte Douglas Inter- Charlotte has the highest rate at 8 If Haywood County raises its project, and we want to work with the national Airport over the long term, percent and the only one above 6 occupancy tax rate, it would show city,” said downtown property owner the airport is spending more money percent. The extra 2 percent was au- how taxation without representation now, reports The Charlotte Observer. Chris Peterson. Peterson had been an thorized in 2005 to help finance the is still alive and thriving in North The airport’s proposed $129 million outspoken critic of the proposal to fine NASCAR Hall of Fame museum. Carolina local governments. CJ budget for the fiscal year that begins those who didn’t remove graffiti from In the 2011-12 fiscal year, total July 1 is 8 percent higher than the cur- their buildings. county collections were more than rent year’s budget. The city’s plan also establishes civil $135 million and municipal collec- Sarah Curry is director of fiscal Last year, the General Assem- penalties for individuals who tag build- tions were more than $30 million. policy studies for the John Locke Foun- bly passed a bill that would transfer ings, and it asks the state to toughen crim- That’s a combined $165 million dation. control of the airport from the city of inal penalties related to graffiti. CJ PAGE 12 JUNE 2014 | CAROLINA JOURNAL Local Government Court: Trial Must Decide if D.A. Violated Free-Speech Rights

By Michael Lowrey July 9, 2010, Smith gave a televi- ing government officials from being D.A.’s office policy — he leveled his Associate Editor sion interview as part of his campaign sued as individuals when they are criticism at the nonprofit running the RALEIGH and criticized the defensive-driving performing jobs that are part of their driving course, the police officers, and ormer Mecklenburg County Dis- course, claiming, among other things, normal duties. In his ruling, Conrad the drivers. trict Attorney Peter Gilchrist must that some students weren’t paying at- determined that “a reasonable offi- “Calling attention to a signifi- convince a court that he didn’t tention, police officers were giving le- cial in Gilchrist’s position could have cant weakness in a course designed to Fviolate the First Amendment rights of gal advice by pushing students to take believed that the interest of the DA’s protect the public safety, alerting the an employee he fired who was run- the course rather than fight the tickets, office as employer in suppressing public to improper legal advice, and ning in a judicial election. The 4th U.S. and drivers were unwise to take the Smith’s speech outweighed Smith’s in- attempting to protect citizens from un- Circuit Court of Appeals ruled May 14 course without looking into other al- terest in speaking as a citizen on a mat- wittingly making legal decisions that that a trial was needed to determine if ternatives. ter of public concern.” are not in their best interests are criti- public comments criticizing a program After learning of Smith’s inter- Smith challenged Conrad’s rul- cal services that a D.A.’s office has no promoted by the D.A.’s office made by view, but without seeing it, Gilchrist ing before the 4th Circuit, which in- legitimate interest in opposing,” wrote cludes North Carolina. Sean Smith, who served as an assistant called Smith into his office. Smith told Chief Judge William Traxler for the ap- district attorney Gilchrist he had Competing interests peals court. under Gilchrist, problems with Traxler added that any reason- led to Smith’s ter- the defensive- Courts previously have ad- able official would have been aware mination. The North Carolina Courts driving course dressed the issue of the free speech of this. “The notion that programs that Smith start- and thought the rights of public employees. In the 1998 reduce a government agency’s work- ed working in the D.A. should stop case McVey v. Stacy, the 4th Circuit load are somehow off limits from criti- D.A.’s office in promoting it. Gil- established a three-part test to deter- cism by government employees even 2004 and in early christ then asked mine when terminating a government when there is no reason to expect that 2010 he filed for a Smith if he dis- employee violates free speech rights. the criticism will actually hamper the seat on the District agreed with other Smith’s appeal centered on the second government office’s efficiency finds no Court in Mecklen- policies in the of- prong, “whether the employee’s inter- basis whatsoever in the law.” burg County. State fice. Smith said he est in speaking upon the matter of pub- The appeals court remanded the case for a trial to determine whether law allowed Smith did but declined lic concern outweighed the govern- Smith’s constitutionally protected re- to keep his job in the DA’s office with- to say what they were. Gilchrist fired ment’s interest in providing effective marks played a substantial role in Gil- out resigning or taking a leave of ab- Smith the next day. and efficient services to the public.” christ’s decision to fire him. sence while running for judge, though Smith then filed suit against Gil- The appeals court concluded that The case is Smith v. Gilchrest (No. Gilchrist urged him to quit. christ in federal court, claiming that Smith’s televised remarks had nothing 12-2503). CJ Later that year, Smith took a he had been fired for exercising his to do with the Mecklenburg County defensive-driving class at his own ex- free-speech rights in violation of the pense and on his own time. The course, U.S. and North Carolina constitutions. operated by a nonprofit agency, allows Gilchrist countered that he dismissed Stay in the know with the JLF blogs drivers who have received traffic tick- Smith for insubordination because he Visit our family of weblogs for immediate analysis and commentary on issues great and small ets to complete the class and accept a would not identify policies he did not plea to a lesser charge, reducing their support. penalties and preventing their insur- The case never reached a trial. ance rates from going up. Arresting of- District Court Judge Robert Conrad ficers give ticketed drivers a pamphlet dismissed the lawsuit, determining notifying them of the option to take the that the legal doctrine of “qualified The Locker Room is the blog on the main JLF Web site. All JLF employees and many friends of the class. Having the class available reduc- immunity” gave Gilchrist an absolute foundation post on this site every day: http://www.johnlocke.org/lockerroom/ es substantially the number of cases defense against Smith’s suit. Qualified the D.A.’s office has to prosecute. immunity is the legal doctrine protect- Keep Up With the The Meck Deck is the JLF’s blog in Charlotte. Jeff Taylor blogs on this site and has made it a must-read General Assembly for anyone interested in issues in the Queen City: http://charlotte.johnlocke.org/blog/ Be sure to visit CarolinaJournal.com often for the latest on what’s going on dur- Piedmont Publius is the JLF’s blog in the Triad. Greensboro blogger and writer Sam A. Hieb mans the ing the historic 2013 session of the Gen- controls to keeps citizens updated on issues in the Triad: http://triad.johnlocke.org/blog/ eral Assembly. CJ writers are posting sev- eral news stories daily. And for real-time coverage of breaking events, be sure to

follow us on Twitter: The Wild West is the JLF’s blog in Western North Carolina. Asheville’s Leslee Kulba blogs in this site, designed to keep track of issues in the mountains of N.C.: http://western.johnlocke.org/blog/ CAROLINA JOURNAL: http://www.twitter.com/CarolinaJournal JOHN LOCKE FOUNDATION: http://www.twitter.com/JohnLockeNC The John Locke Foundation, 200 W. Morgan St., Raleigh, NC 27601 | 919-828-3876 JUNE 2014 | CAROLINA JOURNAL PAGE 13 Local Government JLF: Research Backs N.C. Choice-Based Education Reforms By CJ Staff insignificant results when examining rience mattered during the first few ticularly strong one,” Stoops said. “It’s RALEIGH the link between average teacher sala- years of her career. also a relatively expensive signal in survey of nearly 900 academic ries and student outcomes. “While teachers with seven years North Carolina, where board certifica- studies from the past quarter- • Just 41 percent of 132 studies of experience are often more effective tion leads to a 12 percent pay increase.” century shows North Carolina found a positive effect of additional than those with two years of experi- Hood and Stoops find research hasA been moving in the right direction years of teaching experience on effec- ence, the difference between teachers support for using both value-added on education reform in recent years. tiveness in the classroom. with seven years of experience and assessment data and principal evalua- That’s a key conclusion from a new • Only 16 percent those with 30 years of tions in decisions about teacher reten- John Locke Foundation Spotlight re- of 114 studies showed a experience is often negli- tion and compensation. port. positive relationship be- gible,” Hood said. “The More than three-quarters of aca- “Based on findings from 888 tween a teacher’s gradu- research suggests that demic studies found a positive rela- studies published in peer-reviewed ate degree and student a ‘frontloaded’ teacher tionship between centralized, indepen- journals or by the National Bureau of outcomes. pay system leads to bet- dent, and rigorous standardized tests Economic Research since 1990, North • In contrast, 61 ter student proficiency and higher student outcomes. While Carolina officials have enacted policies percent of the 34 stud- in reading and math centralization appears appropriate that will likely improve the efficiency ies on teacher incentives than systems that of- for testing and accountability, nearly and efficacy of our education system in for individual or school- fer greater rewards for two-thirds of studies supported decen- the coming years,” said JLF president wide performance, or years of experience.” tralized educational governance. “As John Hood, the report’s co-author. both, found statistically Hood and Stoops districts and particularly schools gain “Policymakers should resist attempts significant gains in stu- find that both very small more autonomy to make operational to backtrack from the significant ac- dent outcomes. and very large schools decisions, students appear to make complishments already achieved.” • Roughly two- tend to produce be- larger gains in test scores and other (The report can be found here: http:// thirds (66 percent) of 73 scholarly stud- low-average student outcomes. Once performance measures,” Hood said. bit.ly/1qYqh1A) ies associated public school choice and school districts grow “very large,” at The report offers four key conclu- Hood and co-author Terry competition with higher student out- more than 25,000 students, results also sions: Stoops, JLF director of research and comes. turn negative. • There are no automatic benefits education studies, scoured studies as- • A similar rate (65 percent) of Those findings suggest modera- from raising government spending on sessing the impact of school spending, 127 studies found positive, statistically tion in both district and school size, education. teacher quality, teacher pay, testing, significant benefits for students from Stoops said. “Unfortunately, our state • North Carolina’s teacher salary school choice, and other variables on private school choice and competition. isn’t moderate when it comes to the schedule should place greater empha- student achievement. “Examine those numbers, and structure of our public education sys- sis on effort and effectiveness, with less “It’s the responsibility of poli- you’ll see that the empirical research tem,” he said. “School sizes in North cymakers to make decisions based on does not offer solid support for the Carolina are 15 percent higher than emphasis on credentials and experi- the best available empirical evidence strategies of increasing education the national average for elementary ence. about how education systems really spending indiscriminately, raising grades and 20 percent higher for sec- • North Carolina needs to adopt work, not just folk wisdom, anecdotes, average teacher salaries, or paying ondary grades. Thirteen North Caro- the right mix of centralized and decen- or newspaper editorials,” Stoops said. teachers higher salaries based on ei- lina districts enroll more than 25,000 tralized authority. “This paper gives North Carolina poli- ther years of experience or graduate students. Wake and Charlotte-Meck- • North Carolina should con- cymakers a place to start.” degrees earned,” Stoops said. “On lenburg public schools enroll more tinue to encourage parental choice and Among the new report’s key the other hand, the data look good for than 140,000 students each.” school competition statewide. findings: merit pay and increased school choice A slight majority of 17 studies of “Above all, we demonstrate that • Higher spending was associ- — both public and private.” national board certification for teachers the very factors that produce high ated with higher student performance Overall results can “obscure found positive relationships between performance in other industries and just 32 percent of the time in 116 stud- some important subtleties,” Hood and certification and student outcomes. professions — factors such as entre- ies exploring that relationship. Stoops note on more than one occa- “The findings suggest using board cer- preneurship, choice, and competition • More than half (56 percent) of sion. For instance, a significant number tification as a signal for teacher quality — also produce high performance in 90 studies found mixed or statistically of studies found that a teacher’s expe- isn’t unreasonable, but it’s not a par- education,” Hood said. CJ Visit our Western regional page Visit our Triangle regional page http://western.johnlocke.org http://triangle.johnlocke.org The John Locke Foundation has five regional Web sites span- The John Locke Foundation ning the state from the mountains has five regional Web sites span- to the sea. ning the state from the mountains to the sea. The Western regional page in- cludes news, policy reports and The Triangle regional page in- research of interest to people in cludes news, policy reports and the N.C. mountains. research of interest to people in the Research Triangle area. It also features the blog The Wild West, featuring com- It also features the blog Right mentary on issues confronting Angles, featuring commentary Western N.C. residents. on issues confronting Triangle residents.

The John Locke Foundation | 200 W. Morgan St., Raleigh, NC 27601 | 919-828-3876 The John Locke Foundation | 200 W. Morgan St., Raleigh, NC 27601 | 919-828-3876 PAGE 14 JUNE 2014 | CAROLINA JOURNAL From Page 1 Another Development With Parton Family Connections in Trouble

Continued from Page 1 2008 at what is now the PNC Arena in Raleigh, Hollowell organized a private Art Linkletter’s role meeting and photo session with her Originally named Pine Mountain for a group of potential lot buyers. He Lakes, the development is located 20 said Parton even mentioned the South miles south of Morganton and adjoins Mountain Preserve project between South Mountain State Park. It was songs. “We invited 160 people and had started in 1973 and contains 2,600 acres, 120 show up,” he said. “That was the 27 miles of roads, more than 1,000 indi- last event we had with the Partons.” vidual lots, and a significant amount (See related story at bottom of page 15.) of open space. In the early years, tele- Numerous companies vision and radio personality Art Lin- kletter promoted the development on Burke County real estate and tax his programs, and a 5,500-square-foot records, as well as corporation records home built in 1973 for him is still re- in Virginia and North Carolina, show ferred to as the Linkletter home. that Hollowell has used at least 14 dif- Most of the lots are approximate- ferent entities to acquire land in Pine ly one-half acre. The planned lakes Mountain. Nine companies were incor- proved to be unfeasible, and the name porated in Virginia (see chart on page was shortened to Pine Mountain. An 1). Hollowell told CJ that he used dif- 84-room hotel and restaurant on the ferent companies so people wouldn’t property are closed and for sale. Today, know that he was trying to acquire all there are approximately 70 homes and the vacant lots. 30 townhomes in the development, From left, Randy Parton, Rachel Parton Dennison, Dolly Parton, Ray Hollowell, and Hollowell has shifted property which is managed by the Pine Moun- Cassie Parton King depicted in a South Mountain Preserve promotional brochure. between the companies. For example, tain Property Owners Association. The with Parton in “bringing high-quality moved him as the theater’s manager. on March 4, 2013, Hollowell incor- association also operates a public golf musical entertainment and affiliated The situation quickly deterio- porated Burke Mountain Southeast, course that appears to be in good con- mixed-use entertainment district de- rated. In December 2007, then-Mayor LLC in Virginia. Two days later, South dition. velopments to northeastern North Car- Drewry Beale asked Parton, who ap- Mountain Real Estate transferred 557 properties to Burke Mountain South- Watson’s role olina.” The agreement stipulated that peared to be intoxicated, to leave the Hollowell pay $50,000 to a company theater just before his show was to be- east. The property taxes for 2013 have A document obtained by CJ titled controlled by Parton upon signing the gin. He exited the back of the building not been paid. Property taxes from “The South Mountain Preserve Strate- document. and never performed there again. City 2009-12 also are due on 589 properties gic Marketing Plan” outlined Hollow- Roanoke Rapids borrowed $21 officials quickly renamed the facility owned by South Mountain. ell’s plans. The document included a million to build the project. The 1,500- The Roanoke Rapids Theatre. It since Also on March 6, 2013, South Mountain Preserve, LLC transferred 29 photograph of Dolly Parton, her broth- seat theater was completed in March has been renamed the Royal Palace properties to Burke Mountain South- er Randy, and other members of their 2007 and was turned over to Parton to Theatre, where HSV Entertainment op- east. The property taxes for 2013 have family posing with Hollowell. manage. Parton’s first show with his erates 1,500 Internet sweepstakes ma- not been paid, nor were any taxes paid According to the marketing band took place July 26, to a sold-out chines and occasionally hosts country on those properties going back to 2010. plan, Hollowell’s partner in the South crowd, but attendance eventually de- music performances. Mountain Preserve project is Rick Wat- clined to audiences of 100 or less. Hollowell told CJ he was commit- Mountain Overlook, LLC son. Watson, who now lives in Garner, City officials became concerned ted to Pine Mountain prior to the de- was the former CEO of the Northeast that under Parton’s management the mise of the theater. He asked the Par- Records indicate that in 2008 Hol- Commission, a state-funded economic theater would not generate enough tons to join in on the project. lowell sold six half-acre Pine Mountain development organization based in lots to Dolly Parton’s sister, Cassie revenue to repay the $21.5 million debt. Special meeting with Partons Edenton, serving northeastern North The city scrapped the original contract King, and her husband, Scott King. Carolina. with Parton in November 2007 and re- When Dolly Parton performed in The indicated sales price was $115,000 Hollowell told CJ that Watson is for each, even though the average tax no longer involved in the project, even value of each lot was just $3,450. though he owns several lots in Pine In August 2008, Dean Scott King Mountain under the name of Spring and Cassie P. King of Sevierville, Tenn., Brook LLC. formed and registered Mountain Over- Watson was instrumental in look, LLC in Virginia. bringing the Randy Parton Theatre In September 2008, under Hol- to North Carolina. He traveled with lowell’s signature, Virginia Highland Randy Parton throughout northeast- Properties and Tall Pines West each ern North Carolina in 2004 and early deeded three lots to Mountain Over- 2005 looking for a community to host look, making the company the owner and finance a theater project. They set- of six lots in Pine Mountain. The excise tled on Roanoke Rapids. Dolly Parton tax indicates the sales price for each attended a groundbreaking ceremony lot was $115,000 for a total price of in November 2005. Watson’s Northeast $690,000. Commision board of directors forced Mountain Overlook has not paid him to step down in 2006 when they any property taxes or association fees learned he had acquired an ownership for any of the six lots. The Burke Coun- interest in Parton’s company, “Moon- ty Tax Office told CJ that Mountain light Bandit Productions.” Overlook owes $1,374 in taxes going back to 2008. ‘High-quality entertainment’ On April 25, CJ asked Scott King Hollowell was a board member about the property in Burke County. “I of the Northeast Commission when don’t recall any lots being in our name. he signed a “binding letter of intent to Burke County Commissioners Jack Carroll, left, and Johnnie Carswell are concerned I recall it being part of the conversa- serve as the key development partner” about Hollowell’s unpaid property taxes. (CJ photo by Don Carrington) Continued as “Another,” Page 15 JUNE 2014 | CAROLINA JOURNAL PAGE 15 From Page 1 Another Development With Parton Family Connections in Trouble

Continued from Page 14 Attorney Daniel Kuehnert, an attorney rep- resenting the county, filed a voluntary dismissal in tion, but I don’t remember the details,” he said. King May 2012. “We dropped it because Hollowell even- said he didn’t pay any money to Hollowell or any of tually paid the taxes and some of our legal fees,” his companies. Kuehnert told CJ. “This is the way they wanted it done,” Hol- Records show that Hollowell made several lowell said. ”Scott knew what was going on. They property transfers from one company to another wanted the lots identified at that price. The lots were without addressing past-due property taxes. part of the arrangement for their help.” Burke County Commission Chairman John- nie Carswell and Commissioner Jack Carroll told CJ Bankruptcy, foreclosures that Hollowell had taken advantage of county proce- dures allowing a deed to be recorded without the as- In 2007, Hollowell was purchasing land in surance that property taxes had been paid. In March Burke County while a company he owned filed bank- 2014, the Burke County Board of Commissioners ruptcy associated with a $7 million loan for a Dare closed that loophole. The board passed a resolution County project. The filing ultimately led to Eastern banning deeds from being recorded if taxes are delin- Savings Bank of Maryland foreclosing on some of his quent. This process affects all deeds recorded May 1, Dare County properties. 2014, and after. In 2009, Hollowell-owned companies secured Pine Mountain residents David and Edie Stitt are con- The Register of Deeds now will refuse to record a loan from First South Bank using 11 lots in Pine cerned about Hollowell’s ability to pay his bills and a deed that has not been certified and stamped by the continue development. (CJ photo by Don Carrington) Mountain as collateral. Hollowell did not repay Burke County tax office. the loan, and First South Bank directed the trustee Burke County taxes “Back taxes is our issue, but it was so convo- to foreclose the deed of trust and sell the property luted. This is hard to piece together because there were so many companies involved, but I also be- through auction. First South ended up owning the According to Burke County tax administrator came alarmed when I saw some of the same names 11 lots. Daniel Isenhour, Hollowell’s various companies cur- rently owe the county $191,172 going back to tax year involved in here that were involved in Roanoke Rap- Hollowell also is behind on final payments 2008. ids,” Carswell said. for at least four loans secured by Pine Mountain Seeking to collect past-due property taxes, “I don’t want the county to own his lots in Pine lots: $1,949,160 to Kennedy Funding Inc.; $350,000 Burke County officials had filed a complaint against Mountain, but foreclosure is the leveraging tool we to George Brown and Charles Miller of Maryland; South Mountain Land Company in December 2008. have,” Carswell said. “We have to treat everybody $117,000 to Elizabeth City resident Renee Brandt; and The complaint sought a total payment of $11,005 for equally. Hollowell got special treatment because we $620,000 to Gary Breen Smith of LaGrange, N.C. unpaid taxes on 145 parcels couldn’t pin down who owns what,” Carroll said. CJ Hollowell’s Plan Included Parton Reality Show, Museum, Winery By Don Carrington “The idea of promoting or an- The excise tax of $220 indicates the provide us with the best vineyard and Executive Editor nouncing our development has already Gordons paid $110,000 for the lot. The wine making program in the state.” RALEIGH been discussed with [then-Lt. Gov.] Gordons signed a deed of trust to Vir- “The university is excited about ay Hollowell told Carolina Jour- Perdue two years ago. … She pledged ginia Highland Properties for a loan of this relationship all the way up to the nal that he and Rick Watson her support of this unnamed North $105,000. Amy Gordon told CJ that her Chancellor’s Office. Rebecca Parton is signed a promotion agreement Carolina Mountain Project of 2,500 father lived in Avon, N.C., and his wife the family member assigned to the vi- Rin March 2008 with Dolly Parton’s sis- acres involving the Partons whenever had worked for Hollowell. “We have ticulture relationship on behalf of the ter, Cassie Parton King, and Cassie’s it was appropriate to divulge the loca- never seen the property. A huge selling Parton family. The family as a whole husband, Scott King. The marketing tion and the players.” point was the involvement of Dolly is truly ecstatic about these possibili- plan was developed in 2009 not long The plan went on to explain more Parton’s family,” she said. ties considering the credibility of the after Gov. Bev Perdue took office. about the project. It included the pro- She said Hollowell made a spe- parties involved. N.C. State University “The Parton family relationship, duction of a “Parton Family Reality cial deal with the first 10 purchasers professors and staff members have vis- headed up by Cassie Parton and her Show,” to be filmed at a newly con- to buy the property back at a certain ited The South Mountain Preserve nu- husband Scott, is quite meaningful in structed log cabin. There also would be percentage in two years. He did not merous times and have been all over the fact that no international iconic a “Parton Family Recording Studio” on honor that agreement. “We ended up the mountain and the surrounding name has this significance in terms of site, along with a “Parton Family Mu- paying a total of $10,000 to $15,000 for properties evaluating the most likely promoting a North Carolina Moun- seum.” “The Partons, Cassie, Rebecca, the property, but he didn’t require any locations for success in having produc- tain Community. This starts with the Richie, Randy, and Dolly literally have more payments,” she said. Hollowell tive vineyards.” little known fact that both sides of the tractor-trailer loads of memorabilia for has not recorded any document indi- “Like many high profile vine- Parton Family (Owens – the Mom) are use at the Museum.” cating the deed of trust has been satis- yards today, we plan to make Parton originally from North Carolina and “A major Parton family home de- fied. Family Vineyards at The South Moun- later migrated to Tennessee,” the mar- signed by Cassie Parton for the produc- tain Preserve a destination.” keting document says. tion and in-house family music events, NCSU ‘support’ In January 2009, Hollowell deed- is currently planned and financed.” ed two lots from South Mountain Real ‘Thumbs up’ The marketing plan also stated “The remaining significant com- that N.C. State University would play a Estate to the N.C. State University Stu- “At the appropriate time, with ponent of the South Mountain Preserve major role in developing vineyards and dent Aid Association (aka the Wolf- the final blessing of the Partons, we Business Model is the commercial de- a winery. According to the plan, “N.C. pack Club). The organization provides plan to make this an issue, or shall we velopment outside the gate. We are State University, the State University, private support for athletic scholar- say ‘news item.’ Mr. Rick Watson, part- going to develop a miniature version provides an extremely important and ships and facilities at N.C. State. The ner and I have discussed with the Par- of Pigeon Forge, Tennessee, and Bran- incredible strategic relationship there current tax values of the lots are $3,858 tons the idea of creating the same type son, Missouri. This will begin after we are many facets of this relationship that and $3,680. of give and take with Tennessee that sell the first 150 pre-development sales will benefit the marketing of The South Also that month, Hollowell deed- North Carolina and Ohio have over program home sites. We’ve talked to Mountain Preserve and the site itself. ed 12 lots to the North Carolina Agri- the Wright Brothers. At this point it’s the powers that be at the highest levels Approximately a year ago the univer- cultural Foundation, a public charity a thumbs up. of government and we have their sup- sity established a team comprised of at N.C. State that supports agricultural “We believe because of our politi- port.” its finest academic talent in the areas research extension and teaching activi- cal ties we can engage the Governor’s In February 2008, Amy and Brian of viticulture from the College of Hor- ties in the College of Agriculture and Office. Governor Perdue loves the Par- Gordon of Emerson, N.J., bought a lot ticulture, College of Agronomy, and Life Sciences. The current average tax tons. from Virginia Highland Properties. the College of Food Sciences. This will value of those lots is $3,557. CJ PAGE 16 JUNE 2014 | CAROLINA JOURNAL Interview Eggers: Social Entrepreneurs Helping Solve Our Thorniest Problems

By CJ Staff RALEIGH “We’re seeing the whole new class of hether you turn first toward the family, friends, govern- social entrepreneurs arising. They’re ment, nonprofit groups, coming out of business schools and orW business to solve society’s largest problems, you might find some inter- others, and they’re saying they want est in the latest work from William Eggars. Global research director for to both make a profit and solve prob- the public sector practice at Deloitte, Eggers has co-authored The Solution lems. There are millions of them now Revolution: How Business, Government, globally, and they didn’t exist before.” and Social Enterprises Are Teaming Up to Solve Society’s Toughest Problems. Eggers William Eggers discussed key themes from that book Global Research Director with Mitch Kokai for Carolina Journal Co-author of The Solution Revolution Radio. (Head to http://www.carolina- journal.com/cjradio/ to find a station near you or to learn about the weekly CJ Radio podcast.)

Kokai: In what way are we actu- ally seeing a revolution in coming up with solutions to problems? roads or build more public transit or a little bit different? Is it just that there government, and they’re saying, “How have more public buses or so forth. are more people thinking about things do we create a market to actually serve Eggers: We’re seeing, essentially, Those all cost a lot of taxpayer money. that in the past nonprofits and govern- these individuals?” a major paradigm shift in how we go And what would happen? Well, the ments have mainly focused on? about solving society’s toughest prob- roads would just fill up with more peo- Kokai: This sounds like it is all to lems. You know, for quite a long time ple. There wouldn’t be enough people Eggers: Certainly, you know, the good. How do we ensure that more it was basically the job of business to on public transit and so forth. other entities still have a role. But, I of this happens? serve shareholders and make a profit, Well, what’s happening now is a mean, the big difference is essentially and the job of government was to solve lot of entrepreneurs are going in and for many of these areas that we’re see- Eggers: First of all, government problems and nonprofits in there, too. saying, “You know what? We’re going ing markets developing are where it’s has a role to play in this. You know, Yet, what we’re seeing is a big change to use mobile apps, and we’ve got oth- essentially people had said previously government needs to set standards. in that respect. We’re seeing the whole er ways of trying to solve those prob- there was either a market failure or Government can overregulate and new class of social entrepreneurs aris- lems. We’re going to offer ridesharing government failure. Right? drive a lot of these out of the market- ing. They’re coming out of business services because the biggest waste in So let’s take an issue of serving place, as we’ve seen with some cities schools and others, and they’re saying the transportation system is 85 percent what’s called the base of the pyramid. around ridesharing services or even, they want to both make a profit and of people driving to work by them- Those are essentially the poorest bil- like, Airbnb and HomeAway and oth- solve problems. selves. And that’s wasted resource in lion people in the world, or 2 billion ers, which are providing sharing econ- There are millions of them now those things.” people. And essentially most compa- omy elements. So, first of all, govern- globally, and they didn’t exist before. So how do you connect people nies did not view them as actual mar- ment needs to make sure that they help We’re seeing businesses that are say- who need a ride with those who need kets, right, because they didn’t make these movements, not try to overregu- ing, “You know what? We can serve a car? Well, you can use GPS and your enough money. So there was actually late them or compete against them. a double and triple bottom line where mobile device. And now there are com- no one trying to sell them goods, so The other thing you can do is we can basically help to solve a prob- panies like Lyft and Sidecar and Relay- they weren’t being served as consum- governments can offer prizes and chal- lem like reducing diarrhea in India” Rides and Uber, which are basically ers. lenges around “Here are some big problems, and we’re going to open this — and diarrhea is one of the second- providing ridesharing services. Now companies are saying, “You up to the world to try to solve.” NASA biggest killers of children — “and at You’ve got other companies that know what? If we can get the cost right now has done over 75 challenges the same time, make a profit by doing are providing services — mobile park- down enough, they can actually be for their toughest scientific problems. so by selling soap and shampoo and ing helping you understand where is consumers right now. And they will Instead of just saying, “We’re going figuring out how to employ 45,000 there a parking spot in a place like this. actually pay for good education and to do them in-house,” they’ve opened women,” and so forth. And so you add all of these up and health care if we get the cost down them up, and some of them have been And so this is a big shift because traffic information services, and you enough.” won by people halfway across the it used to be really solely government could potentially reduce traffic conges- So there’s a company that we talk world. incented to this, and now what we’re tion as much as you could essentially about: Bridge International Academy And at the same time, I think looking at is this whole new growth of from a lot of traditional means. And is a social enterprise. They’re provid- when you look at business schools other problem solvers, which is good what does it cost government? Almost ing education to the poorest of the right now, well, every business school because, you know, governments need nothing, right? Because they’re basical- poor in Kenya, private schools that now has classes on social enterprise. a lot of help to do this. Let’s face it. ly increasing throughput. And so for they’ve scaled up from one in 2009 to They have classes on impact invest- every major problem we’re seeing this over 200 today, serving 53,000 kids, ing and a variety of other things, so Kokai: Some people might hear whole group of kind of social entrepre- and they’re doing it for about $5 a what we’re doing is starting to create this and say, “OK, that sounds good. neurs and other companies coming in month. You know, about the price of that kind of education for this to hap- What sort of difference does it make and saying, “Other people see that as a a Happy Meal. How? They’re doing a pen. And when you have the best and having these different types of entre- problem. We see that as an opportunity franchise model. They’re taking a page brightest talent moving into this area, I preneurs and business people involved to fix.” from McDonald’s and FedEx and UPS, think that’s something that you say it’s and not just government?” and they’re franchising the develop- only going to get better over time and Kokai: I was listening to what ment of these schools. just starting to create capital infrastruc- Eggers: Let’s look at an issue you were just saying and thinking to So what we’re seeing is people ture around it. Right now, there are lit- like traffic congestion. OK. So how did myself, “Well, in some respects this are taking business models and then erally billions of dollars of investment we try to solve traffic congestion be- sounds like the private sector doing they are looking at these areas that tra- every year that are going into trying to fore? Well, we would either build more what it has always done.” How is this ditionally have been in the province of create social impact. CJ JUNE 2014 | CAROLINA JOURNAL PAGE 17 Higher Education Changes at Peace Rankle COMMENTARY STEM Degree School’s Traditionalists ‘Shortage’ Imaginary By Harry Painter pus, spending one-third of its endow- Contributor ment to do so. any Americans are con- choice theory works in the realm RALEIGH The News & Observer of Raleigh re- vinced that the country of education. Influential business n 2010, when tiny Peace College ported last July that Peace had refused faces a STEM crisis. That and educational groups lobby for in downtown Raleigh hired a new to provide the names of its trustees, Mis, we don’t have enough teachers good-sounding policies that benefit president, a cascade of changes be- who unanimously approved purchase in science, technology, engineer- them, frequently employing dubi- Igan, all designed to protect the future of Seaboard. This lack of disclosure ing, and mathematics; don’t have ous arguments and misleading of the institution. took place despite a requirement that enough students taking degrees claims. But the transformation also colleges file these names publicly with in those fields; and don’t have The costs of those pro-STEM started a torrent of criticism. A group the IRS each year. enough STEM workers to maintain policies are dispersed among the of three students unhappy with the When the Pope Center asked the country’s leadership. public, and fall particularly hard school’s use of resources and its al- about the college’s decision not to dis- Influential studies have come on the unfortunate individuals leged lack of transparency organized close its 2012-13 trustees, Townsley to that conclusion, and it’s been who invest many years of their a student petition in April demand- said, “Nobody asked us the names.” repeated by many politicians, lives pursuing credentials that may ing, among other That said, the Pope including President Obama. The become almost worthless. reforms, the presi- Center obtained e- groundwork for those beliefs was That is the essence of public dent’s immediate mails between The set in place by research choice: Narrow interests resignation. News & Observer done years earlier. seek government poli- “Change is and a public rela- Those findings, cies for their own benefit, really hard,” said tions firm working however, are starting while the costs are spread Debra Townsley, the on behalf of Peace to come under critical out and mostly hidden. president of William at the time show- scrutiny. Not only do we Peace University, in ing a formal request In his book Falling have many people with a Pope Center inter- from the newspa- Behind: Boom, Bust & the STEM credentials work- view. Working with per. In a follow- Global Race for Scientific ing in jobs that do not the board of trust- up interview with Talent, Michael Teitel- require that training, but ees, she has ushered the Pope Center, baum, a senior research also a fairly large number in the new era for Townsley said the associate at Harvard GEORGE of people are working Peace. But that new request was so long Law School, shows that LEEF in STEM jobs who don’t era has brought ago that she could the United States has have the “right” degrees. alumnae criticism, not remember be- been through at least Teitelbaum doesn’t the loss of donor support, and nega- ing asked for the list. five STEM-related cycles make that point, but tive press. The school now lists its trustees, since World War II. electrical engineer Robert Charette The changes were big. To start, a move board member Rick Martinez In each instance, alarms about does. In the trade publication IEEE in 2011 the college’s name changed said was uncontroversial. a perceived shortage of STEM Spectrum Charette writes, “Of the to William Peace University, placing Yet the We Want Peace petition workers led to federal action to 7.6 million STEM workers counted a stronger emphasis on the name of indicates that distrust of Townsley lin- stimulate STEM research and edu- by the Commerce Department, founder William Peace. And, just two gers in the Peace community. Kennedy, cation. But after the government’s only 3.3 million possess STEM de- years after the formerly all-female a student in the theater program, said stimulus ended, we were left with grees.” At the same time, “about 15 college began allowing men to take that students pay $30,000 or more in a surfeit of people with STEM million U.S. residents hold at least courses in its night program, Peace an- tuition and should know what they are degrees who could not find work a bachelor’s degree in a STEM dis- nounced that it would enroll men on a getting. “The university is a business, commensurate with their training. cipline, but three-fourths of them full-time basis. The school also cut fac- and the students are paying custom- Far from “falling behind,” … work outside of STEM.” ulty and programs. ers,” Kennedy said. Teitelbaum finds a glut of people Charette’s point suggests that However, the petitioning group’s We Want Peace gathered more with STEM education. After sur- the American labor force is more website claims that of the 37 percent of than 300 signatures for its petition op- veying the best research, he states flexible than the alarmists would Peace’s traditional day student body posing “radical cuts” and “excessive that America “produces far more have us believe. who signed the petition, 52 percent secrecy,” among other things. On April science and engineering graduates The next time we hear some- were from the class of 2017. Those 24, The News & Observer reported a annually than there are S&E job one declare that the country faces signers aren’t likely to be motivated by protest against the Peace administra- openings — the only disagreement a crisis, or a “Sputnik moment,” or anger over those changes. tion at which students, alumnae, and is whether it is 100 percent or 200 something similar that demands Maigan Kennedy, a 25-year- faculty participated. percent more.” government action to prevent a old senior and spokeswoman for the The school acted aggressively Nevertheless, many Ameri- shortage of STEM workers, we group — called We Want Peace — said to deal with a declining enrollment, cans instinctively believe there is should be skeptical. Think about that one problem driving the group’s but in doing so, it antagonized a de- something special about science, the large number of people now petition is faculty and staff turnover. voted community of alumnae — and engineering, and technology. They holding STEM degrees who could Today, there are 31 full-time fac- now, students and teachers — who, drive progress. We might have be induced to leave their non- ulty members, with five more soon to it seems, are dedicated to preserv- too many lawyers or baristas or STEM jobs, not to mention the fact be hired, according to Townsley. ing forever the special qualities that interior designers, but we just can’t that many people who don’t have Under Townsley’s leadership, attracted them to Peace initially. have too many STEM workers. STEM credentials can perform Peace cut tuition, expanded enroll- Townsley and the board, how- Also, the interest groups that STEM jobs. ment, and boosted online and evening ever, view their role as remaking want more STEM education, re- We don’t need educational programs. Those feats are similar in na- the 150-year-old college for the 21st search funding, and workers know central planning to get the “right” ture to the turnaround Townsley was century. Townsley says she hopes how to capitalize on that belief to number of STEM grads. CJ credited for when she headed Nichols Peace will last another 150 years. CJ get politicians to enact the policies College in suburban Massachusetts. they want. An audacious and controversial Apparently without know- George Leef is director of re- move, however, came last year when Harry Painter is a reporter for the ing it, Teitelbaum (who isn’t an search at the John W. Pope Center for Peace purchased the Seaboard Station John W. Pope Center for Higher Education economist) has grasped how public Higher Education Policy. shopping center adjacent to the cam- Policy. PAGE 18 JUNE 2014 | CAROLINA JOURNAL Higher Education Campus Briefs BOG’s Lax Enforcement of Rules Benefits N.C. A&T our North Carolina com- munity college presidents By Jesse Saffron ernors can ask the legislature to grant the possibility of exempting select uni- took the rest of the commu- Contributor “hold harmless” status to a school, pro- versities — mostly schools that system Fnity college system by surprise RALEIGH tecting the school’s base budget during officials call “HMIs,” or historically in April. Three of them — Tony road discretionary authority periods when enrollment declines. minority institutions. Zeiss of Central Piedmont Com- given to the University of North N.C. A&T overestimated its en- Martin has argued that his uni- munity College, Stephen Scott of Carolina Board of Governors rollment for the 2006-07 year. It was versity has difficulty attracting enough Wake Tech, and Kandi Deitemeyer mayB explain why, in three different granted the “hold harmless” status and talented students from North Carolina. of the College of the Albemarle — cases, N.C. A&T State University, one was able to keep $2.1 million for “unre- The school has a focus on engineering appeared before the General As- of the state’s five public historically alized growth.” That amount was not — a highly competitive field — and sembly’s House Study Committee black universities, has obtained advan- just a one-year gift, but was built into North Carolina’s top minority stu- on Education Innovation to ask tages not enjoyed by other schools in future enrollment funding. dents are recruited vigorously around for a legislative study about add- the UNC system. From academic years 2006-07 the country. ing four-year bachelor’s degrees to through 2010- E a r l i e r their mission. The nursing program 11, the univer- this year, after The degrees proposed were N.C. A&T’s nursing program has sity contin- debating the is- “applied baccalaureate degrees,” struggled for years. In 2005 and 2006, ued to receive sue and receiv- which the presidents said are program graduates had a 69 percent “hold harm- ing a letter from based on employers’ needs. They first-time passing rate on the state’s less” status, Martin promis- include degrees in paralegal stud- nurse licensing exam — the lowest which means ing to maintain ies, fire science, and digital media, rate of the system’s 10 programs at the that it was able a commitment among others. time (13 nursing programs exist in the to keep more to in-state stu- A fourth president, John system today). The passing rates im- than $10 mil- dents, the Board Dempsey of Sandhills Community proved over the next three years, but lion during of Governors College, did not attend the presen- dropped significantly in 2010 and 2011. that span. (At decided to run a tation, but he was involved in the After 2006, and again after 2011, press time, nei- “pilot program” plan, according to a spokeswoman the nursing program should have been ther General in which N.C. for the North Carolina Communi- eliminated according to system policy. Administra- A&T will, for one ty College System. year, be able to The president is supposed to ask the tion nor N.C. The proposal rocked the increase its out- board to initiate program termination A&T officials community college establish- of-state student procedures for any program having a had responded ment. The North Carolina As- population to 25 first-time passing rate of less than 75 to a question sociation of Community College percent. After the first-year trial, the percent for two consecutive years. asking whether the “hold harmless” Presidents expressed disapproval UNC system president can renew the The program was given a pass status continued after 2010-11.) at its April state board meeting. program. each time. Linwood Powell, chairman of the As justification for its actions and As a condition of the second In-state vs. out-of-state board, condemned the decision to to give future “pilot programs” legiti- waiver in 2012, N.C. A&T officials go before the committee because UNC system policy places an macy, in February the Board of Gover- promised to raise standards and in- the presidents had short-circuited 18 percent cap on the number of out- nors added a clause to its out-of-state crease licensing exam success. Despite the usual process for proposing of-state students that universities can enrollment policy stating that the board that promise, graduates’ passing rates changes. enroll. In part, the rule is designed to “may, on the president’s recommenda- fell below the board’s minimum in “It is not about what is right ensure that North Carolinians — who tion, authorize enrollment pilot pro- 2012 and 2013. or wrong in offering a four-year pay state taxes or come from house- grams that are exempt from the require- At the April 10, 2014, meeting of degree — it is all about the pro- holds that do — take precedence in ments of [the preceding rules].” CJ the UNC Board of Governors, the is- cess,” Powell said. admissions. sue came up again. Chancellor Harold The legislative committee did After N.C. A&T exceeded the en- Jesse Saffron is a writer and Web Martin lobbied for another extension, not adopt the proposal. Still, the rollment cap by 72 percent in 2012, the editor with the John W. Pope Center for move signals that North Carolina promising to make improvements. Board of Governors began considering Higher Education Policy. could join a controversial national This time, N.C. A&T did not get trend. Twenty-two states now al- its way. Several members of the Edu- low community colleges to offer cational Planning Committee, who bachelor’s degrees, but this is the weren’t Board of Governors mem- first sign that such a proposal has bers when the previous waivers were been gestating in North Carolina. granted, expressed frustration with the The Pope Center interviewed program and the fact that it hadn’t re- Lawrence Rouse, the head of the ceived closer scrutiny in the past. presidents’ association, who said The board voted to suspend the the association spoke with the four program after 2014 and convene a pan- presidents at a May 16 meeting. “I el that would consider eliminating the think they had a sense of urgency,” program. The panel will make its deci- Rouse said, to “get the issue out sion regarding program elimination by there.” the middle of June. The number of states allow- ing community colleges to offer Enrollment funding bachelor’s degrees has almost doubled in less than a decade. The UNC system’s enrollment North Carolina’s adoption would funding formula is intended to help add the nation’s third-largest finance instruction costs as they fluc- system — at 58 colleges — to the tuate with enrollment changes. But growing list. CJ campuses that overestimate their en- rollment figures suffer only “minimal Compiled by Harry Painter, a consequences,” according to a 2010 reporter for the John W. Pope Center report by the General Assembly’s Pro- for Higher Education Policy. gram Evaluation Division. That is because the Board of Gov- JUNE 2014 | CAROLINA JOURNAL PAGE 19 Higher Education Opinion It May Surprise Some That the UNC System Is Ripe For Budget Cuts udget cuts are coming. Between tion. The UNC and clerical staff Eliminate program duplication. a revenue shortfall, a raise for General Adminis- employees out- The UNC system has three marine sci- K-12 teachers, and the increas- tration eliminated Issues number faculty ence programs — only one of which Bing cost of Medicaid, the state of only one filled at UNC-Chapel is at the coast. It has programs for art North Carolina needs to find savings. position. Many re- in Hill by nearly 5-1! history, criticism, and conservation It may surprise some, but the Uni- dundant programs Higher Education That’s one admin- at five campuses. And even though versity of North Carolina system is a and administrative istrator for every only 83 students systemwide gradu- smart place to look. positions still exist four students. ated with music degrees in 2012-13, Higher education, including at UNC. Expect fac- students can major in music at 10 UNC and the community college Even after ulty to teach more, different schools. Consolidating small system, takes up the administra- especially in the programs would save the state mil- 18 percent of the tion of Gov. Pat McCrory told all state humanities. In some departments lions. state’s $21 billion departments to ask for no more than at UNC’s large research campuses, End remedial courses at all operating budget. a 2 percent increase in funding for the average faculty member teaches UNC schools. With the increase in The UNC system the 2014-15 fiscal year, UNC officials fewer than two courses per semester. minimum admission standards across alone receives $2.5 responded by asking for nearly 12 If tenure-track faculty teach more the UNC system, remediation is un- billion annually. percent more money. State Budget courses, the university could rely less necessary. All students entering UNC Including tuition, Director Art Pope on adjunct pro- schools after 2013 must have a mini- federal money, responded with fessors. That’s a mum grade point average of 2.5 and private grants, a memo calling win-win: more a minimum SAT score of 800. (The and donations, the JENNA the request “not There are a number faculty attention maximum score is 1600.) Their high UNC system’s an- ASHLEY realistic.” The of ways to for undergraduate school courses must include four Eng- nual budget totals ROBINSON governor’s budget students and con- lish courses, two algebra courses, and $9 billion. In short, proposal cut streamline the UNC siderable savings at least three science courses. If UNC the UNC system spending for UNC for the university. upholds these standards, remedial has room for cuts. by about 1.9 per- system to make Stop using courses and summer bridge programs Despite loud complaints from cent, though the state funding will not be necessary. activists and university lobbyists, General Assembly it more efficient for nonacademic As a percentage of its budget, last year’s reductions of roughly $65 is not expected to or politicized North Carolina spends more than the million produced positive results, and finalize the state “centers.” UNC’s national average on higher education. in-state tuition was not increased. Ac- budget until late June or early July. 16 campuses host hundreds of cen- And in real dollar terms, North Caro- cording to a 2013 report by the UNC There are a number of ways to ters and institutes — many of which lina spends more of its General Fund General Administration, nearly 70 streamline the UNC system and its have no academic mission and offer on higher education than any other full-time equivalent positions previ- campuses in the years to come so that no courses. The Institute for Civic state in the Southeast. ously funded by the state were shifted they operate more efficiently and bet- Engagement and Social Change at Cuts will compel chancellors to to other sources of funding following ter serve the people of North Carolina. N.C. Central University, the Institute find waste and identify efficiencies on last year’s cuts, and 537 vacant posi- Here’s where cuts can be made: for Community and Economic En- campus, focusing UNC’s spending on tions were eliminated. Universities fo- Eliminate unnecessary admin- gagement at UNC-Greensboro, the its core mission: undergraduate edu- cused a larger percentage of their total istrators. Administrators outnumber Institute for Social Capital at UNC- cation. CJ funding toward instructional costs. faculty at every UNC campus. Ten Charlotte, the Hunt Institute at UNC- More can be done. Seven UNC percent of administrative staff mem- Chapel Hill, and the N.C. Institute for Jenna Ashley Robinson is director of campuses eliminated zero filled posi- bers earn more than $100,000 per Sustainable Tourism at East Carolina outreach for the John W. Pope Center for tions after the 2013-14 budget reduc- year. Professional, paraprofessional, University are just a few examples. Higher Education Policy. PAGE 20 JUNE 2014 | CAROLINA JOURNAL Books & the Arts

From the Liberty Library Book review

• Why is it that so many ef- forts by liberals to lift the black Fontova Documents Media’s Crush on Fidel Castro underclass not only fail but of- • Humberto Fontova, The Longest Romance: The Mainstream author notes that Cuba established the eight-hour workday ten harm the intended beneficia- Media and Fidel Castro, Encounter Books, 2014, 259 pages, in 1933, and before Castro, Cuba had double Spain’s per- ries? In Please Stop Helping Us, $25.99 capita income, the eighth-highest wages in world. Now, Jason Riley examines how well- intentioned welfare programs are in Fontova’s account, Cuba has a lower credit rating than By Lloyd Billingsley Somalia, fewer phones per capita than Papua New Guinea, in fact holding black Americans Contributor back. Minimum-wage laws may and fewer Internet connections than Uganda. The author lift earnings for people who are al- RALEIGH makes a case that slaves ate better under Spanish imperial- ready employed, but they price a idel Castro freed Cuba from the greedy clutches of ism. And if everybody is so happy with the health care and disproportionate number of blacks U.S. robber barons and mobsters and rewarded his education, why do so many Cubans flee? out of the labor force. Affirmative downtrodden countrymen with free health care and By the author’s count, in 27 years, between 200 and action in higher education is in- Feducation. A scornful Uncle Sam retaliated with a vindictive 300 people died trying to breach the Berlin Wall. In twice tended to address past discrimina- embargo, but half a century later, according to Newsweek, that period, about 30 times that number, between 65,000 and tion, but the result is fewer black Castro’s Cuba ranks among “the best countries in the world 80,000 people, died trying to escape from Castro’s Cuba. It college graduates than would oth- to live.” This is the narrative Humberto Fontova perceives remains a Stalinist regime, but, for Fontova, calling Castro erwise exist. Please Stop Helping Us in the mainstream media in the United States, and in The a Stalinist “slightly lowballs his repression” because Castro lays bare these counterproductive Longest Romance the Cuban jailed and tortured Cubans results. People of good will want author provides considerable at a higher rate than Stalin. to see more black socio-economic documentation. Cuba’s current prison popu- advancement, but in too many in- “It would be a great lation is 90 percent black, stances the current methods and mistake even to intimate that including Eusebio Penlaver, approaches aren’t working. Visit Castro’s Cuba has any real the “world’s longest suffer- www.encounterbooks.com. prospect of becoming a Soviet ing black political prisoner.” satellite,” wrote Pulitzer Prize Fontova introduces readers to • In this highly anticipated winner Walter Lippman. Ac- many victims, and he could follow-up to his blockbuster New cording to Herbert Matthews have included more material York Times bestseller The Amateur, of The New York Times, Fidel about the regime’s repres- former New York Times Maga- Castro was “one of the most sions. zine editor-in-chief Edward Klein extraordinary men of our As Paul Hollander ob- delves into the rocky relationship age,” and under his care Cuba served in Political Pilgrims, between the Obamas and the Clin- was “now a happy island.” early supporters of the regime tons. An old-school reporter with CNN founder Ted Turn- such as Jean-Paul Sartre de- incredible insider contacts, Klein er is an admirer of Castro and nounced Castro’s persecution reveals just how deep the rivalry has said on record that “he’s of homosexuals, which Cu- between the Obamas and the Clin- trained a lot of doctors.” For ban cinematographer Nestor tons runs, detailing closed-door Dan Rather, “Castro could Almendros documented in meetings buttressed by hundreds have easily been Cuba’s El- Improper Conduct. In Orlando of interviews. Blood Feud is a stun- vis” and “the adulation for Jimenez-Leal’s “8A” viewers ning exposé of the animosity, jeal- him seems genuine.” For can see Castro’s show trial of ousy, and competition between Peter Jennings, “health and General Arnaldo Ochoa, with America’s two most powerful po- education are the revolution’s his state-appointed attorneys litical couples. For more informa- tion, visit www.regnery.com. great success stories,” and demanding that he be exe- Barbara Walters says Castro cuted. Add the many reports • The little-known (and ficti- “brought great health care from human rights groups, tious) USDA Agency of Invasive to his country.” For Morgan and there is no excuse for Species — founded by President Neill of CNN, “Cuba could giving this loathsome regime Jimmy Carter — confidently claims serve as a model for health- and its Sado-Stalinist dictator it is among the most effective and care reform in the United a free pass, much less holding cost-efficient offices within the States.” it up as a model. That non- sprawling federal bureaucracy. Ray Suarez of PBS ex- sense continues because, as For decades, under Administrative plains that “One of Cuba’s Fontova shows, some hailed Director Adam Humphrey and greatest prides is its health as objective experts hold close his “strategic disengagement” ap- care system,” and “the country has much to boast about.” ties to the Cuban regime. proach, the agency has epitomized For Eleanor Clift, “to be a poor child in Cuba may in many Fontova cites Gail Reed, a veteran of the Venceremos vigilance against the clear and instances be better than being a poor child in Miami.” And Brigade, who served as a correspondent for Business Week present danger of noxious weeds. so on, echoed by politicians like Jimmy Carter, who said, and a Havana-based producer for NBC news. She now Humphrey’s record of triumphant “Cuba has superb systems of health care and universal edu- writes for Huffington Post, which is not exactly up-front inertia faces only two obstacles. cation.” about her marriage to Julian Torres Rizo, an officer of Cu- The first is reality; the second is the That sort of ad copy avoids the harsh realities that ba’s DGI, its version of the KGB. In her book Inside the Cuban loud critic who dares to question Fontova charts. Revolution, Julia Sweig of the Council on Foreign Relations the magic behind the agency’s suc- Fidel Castro “jailed political prisoners at a higher rate thanks five Cuban DGI agents, including one, Josefina Vi- cess: Nicholas Bader, who is on an obsessive quest to trim the fat from than Stalin during the Great Terror. He murdered more Cu- dal, who was expelled from the United States in 2003 for the federal budget. Jim Geraghty’s bans in his first three years in power than Hitler murdered espionage. Margarita Alarcon, who writes for the Huffing- The Weed Agency showcases a world Germans during his first six. He came closer than anyone in ton Post, is also an official of Cuba’s Casa de las Americas, in which federal budgets balloon history to starting a world-wide nuclear war.” Castro also which Fontova says the DGI controls. Margarita Alarcon is every year, where a career can be “converted a nation with a higher per-capita income than also the daughter of Ricardo Alarcon, who served as Cuba’s built upon the skill of rationalizing half of Europe and a huge influx of immigrants into one that foreign minister and ambassador to the UN. astronomical expenses, and where repels the poorest people in the region and boasts the high- By unmasking such agents of influence, The Longest the word “accountability” sends est suicide rate in the Western Hemisphere.” Romance provides a valuable service, though one doubts roars of laughter through D.C. of- Chris Matthews of MSNBC says “everybody who saw that anyone in the current administration is paying atten- fice buildings. More at www.ran- Godfather II knows what it was like when Castro took over.” tion. As for the mainstream media, if they are so wrong domhouse.com. CJ Fontova likes the movie, but The Longest Romance is a better about the totalitarian regime of Fidel Castro, why should source for pre-Castro Cuba, which had a lot going for it. The anybody listen to them on anything else? CJ JUNE 2014 | CAROLINA JOURNAL PAGE 21 Books & the Arts N.C.’s Nathaniel Macon Was More Jeffersonian Than Jefferson f it has “Macon” in its name, the been compiling Macon’s correspon- sider the evils of war great[er] than every act they do not approve. The Southeastern county, town, or col- dence and speeches. Below are a few they are, but to my mind nothing answer to this is very easy. There is lege, more than likely, is named for quotes helping us better understand except famine, carries so many evils another part of the House that never NathanielI Macon. The North Carolin- some of Macon’s concerns. with it. questions the constitutionality of ian’s name was synonymous with In 1802, he ad- Macon also be- anything; one side believes it has the Old North State during America’s dressed the precarious lieved that war led to limits, the other believes it has no early years. When situation involving perpetual public debt limits. people thought of Spain and France, the while increasing and In 1828, losing optimism with North Carolina, possession of New entrenching taxation. In each passing year, a jaded and aging they also remem- Orleans, control of one letter, he writes: Macon believed that republicanism — bered the Warren Louisiana, the possible Modern wars a government in which virtuous and Countian. conflict with European are never ended by a autonomous citizens exercise self- Macon, a powers, and the need nation, though treaties control for the common good rather member of the U.S. for America to control are made by which than personal gain — was also in its House of Repre- the ports in the Gulf of nations agree not to waning years: sentatives from Mexico: kill each other, the war The old-fashioned republi- cans are very scarce in the Senate, 1791-1815, served As long as a for- of killing, prepared the TROY the number would depend on who as speaker of the eign power possess[es] way for a war of taxes, KICKLER counted, varying from 4 to 8 — House from 1801- the mouth of rivers, so which never end, long will that power and the collectors are their principles are gone, never to 07 during Thomas Nathaniel Macon return I fear; their number in the possess the means of almost if not quite as Jefferson’s presidency. Macon champi- [House], I do not know, but scarce disturbing our quiet destructive to the hu- oned limited government and defend- enough I am sure. at home with a single dash of a pen. man race as so many Alexanders. ed the Constitution so consistently Whether right or wrong, the But in our situation we ought to try When debating the constitution- that some historians have remarked often colloquial and idiomatic Macon that he was more Jeffersonian than every peaceable means of obtaining ality of the Alien and Sedition Acts — I have learned — remained consis- Jefferson. In 1815, Macon was elected [the ports]. War ought to be avoided — passed in 1798 as a war measure tent and predictable throughout his to the U.S. Senate, serving until 1828. as the rock of destruction, for if ever to silence criticism of the government political career. There is a lot to be said At the time, state legislatures elected the U.S. engage in wars with Euro- — Macon answered critics by citing for at least knowing what you are get- U.S. senators. pean powers, from that day we may strict adherence to the Constitution as ting. CJ Macon never was known for calculate that our fate is involved a reason to oppose the laws: publicizing his opinions, but he of- with the miserable destiny of the It has been said, that a part of Dr. Troy Kickler is director of the fered them when asked and without wretched people of that quarter of this House [is] always crying out North Carolina History Project (northcar- solicitation among his friends. I’ve the globe, perhaps my friend I con- against the unconstitutionality of olinahistory.org). BOOKS BY JOHN LOCKE FOUNDATION AUTHORS

If you don’t know about Edenton, North Carolina, your knowledge of U.S. history is incomplete and your knowledge of North Carolina insufficient. Organized women’s political activity in America was born in Eden- ton. The concept of judicial review—that courts can declare legislative acts unconstitutional—was champi- oned here. Ideas for a national navy and defense were implemented here. Many passages of the N.C. Con- stitution (1776) and the U.S. Constitution originated here. Leading proponents of the U.S. Constitution (a.k.a. Federalists) lived in this small place, and so did nationally known jurists and politicians. Dr. Troy Kickler, founding director of the North Carolina History Project, brings Edenton, its people, and its actions into proper and full focus in his book, The King’s Trouble Makers. Go to northcarolinahistory.org for more information. PAGE 22 JUNE 2014 | CAROLINA JOURNAL Books & the Arts Book review Haunted Empire Attempts to Lift the Veil from Apple in Post-Jobs Era • Yukari Iwatani Kane, Haunted Em- not just Apple employees, mourned frugal workaholic, Cook’s questions comfortable doing these presentations. pire: Apple After Steve Jobs, Harper Col- the passing of one of the greatest vi- and deadly stare are as intimidating Kane’s detailed information lins, 2014, 371 pages, $27.99. sionaries of the 20th century. The prod- as were Jobs’ tyrannical screaming fits. about the pending lawsuits between ucts invented under his leadership Little is known about Cook personally. Apple and Samsung and Apple and By Melissa Mitchell changed millions of people’s lives. “Over the years, colleagues had tried Motorola is fascinating. The Samsung Contributor Kane then returns to the time to engage him in personal conversa- trial reveals how Apple controls the RALEIGH when Jobs’ “disruptive behavior and tions with little success,” says Kane. design process of new products. hen Steve Jobs died, the pursuit of perfection at all costs had She further reveals, “He worked out at Apple also has had to deal with world was abuzz with ques- wreaked havoc on the company, and a different gym than the one on cam- the revelations about working condi- tions about Apple Inc.’s the executive team pus and didn’t frater- tions in the Chinese factories that pro- Wsurvival. Could it continue as an in- wanted him out.” Jobs nize outside of work.” duce Apple products. Although I had novative giant without its founder was sent into exile. Kane chroni- heard about the worker suicides and and visionary leader? Yukari Iwatani The company flour- cles in great detail a horrific working conditions, nothing Kane’s book, Haunted Empire: Apple ished until Microsoft’s host of problems that prepared me for the detailed informa- After Steve Jobs, focuses on the corpora- Windows software al- have occurred during tion that Kane presents about the Chi- tion, not Jobs, but no book about Apple lowed PCs to invade Cook’s time as CEO. nese factory workers’ lives, including would be complete without him. As and crush Apple’s Some he inherited, their living conditions, low wages, a book reviewer, I have never recom- hold on the market and while others were the long hours, abusive managers and mended that the reader be sure to read Gil Amelio became result of failed prod- guards, and the constant push to pro- the “Author’s Notes” before reading chief executive officer. uct launches. duce more product. Apple was not the the book, but in this case the notes are Kane offers plenty of The introduc- only company using Foxconn factories essential. These notes outline the au- evidence that Amelio tion of Siri was disas- to produce products, but it was the thor’s credentials, her scholarship, and was in over his head. trous. As was the Ap- largest and an easy target. the obstacles she faced in writing about Under Amelio, Apple ple map application Can Apple survive without its this very secret corporation. lost billions and was for the iPhone. The founder and visionary leader? Kane Kane provides detailed informa- “so undesirable that reader is left wonder- devotes an entire chapter to inter- tion about the Apple vice presidents no one even wanted ing if these problems views with Clayton Christenson, who who are now leading Apple since Jobs’ to buy it,” says Kane. would have happened has researched and written about cor- death. She also reveals previously un- When Jobs returned, while Steve Jobs was porate giants who have reached their reported information about Apple dur- Apple once again flourished. in charge. “Some are now questioning epitome of success before fading and ing Jobs’ final illness. Ironically, Jobs’ handpicked suc- Cook’s leadership because these prod- failing. Will Apple become one of Haunted Empire opens with the cessor, Tim Cook, is a mysterious fig- uct problems happened on his watch,” these companies? Unfortunately, Kane death of Steve Jobs. “Jobs had been ure. A Southerner employed by IBM says Kane. leaves this question unanswered. For battling cancer for years, so his passing who earned an M.B.A. from Duke Uni- Kane also points out that Apple’s Apple watchers and product lovers, in early October 2011 had not been sur- versity while working at Research Tri- product announcements, featuring this is a must-read book. For others, it prising, but it was no less devastating,” angle Park, Cook is no less overbear- great drama while Jobs was alive, now is a book that is well worth the read- says Kane. People around the world, ing than Jobs, say colleagues. A quiet, seem flat. Unlike Jobs, Cook seems un- ing time. CJ Book review Brown Explains Migration of Wealth From High- to Low-Tax States • Travis H. Brown, How Money Walks: data showing how some states lost bil- gainers and losers. The top gainers are: year. Living in Florida allows the Mill- How $2 Trillion Moved Between the States lions of dollars in AGI, while others Florida, Arizona, Texas, North Caro- ers get to keep $17,772.68 more of their and Why It Matters, Travis H. Brown, gained billions. Looking at the data, it lina, Nevada, South Carolina, Georgia, personal income than the Smiths, who 2013, pages 260, $14.99. becomes clear that the states with high Colorado, Washington, and Tennessee. would pay that amount in taxes to the personal income taxes were in the los- The biggest losers are: New York, Cali- state of California. By Melissa Mitchell ing group, while the states fornia, Illinois, New Jersey, For years, wealthy taxpayers Contributor with no personal income Ohio, Michigan, Massachu- have been able to take advantage of RALEIGH tax were winners. setts, Pennsylvania, Mary- moving to states with low taxes, but sing IRS data of adjusted gross Brown also compares land, and Connecticut. He average or low-income workers were income for the years 1995-2010, the overall state and lo- then presents this data in unable to move. With advances in Travis Brown has created the cal tax burdens. Again, the a chart form that is easy to communications led by the Internet, Uunique book, How Money Walks, an at- states with the highest tax understand and compare. jobs are less tied to physical locations, tempt to explain why more and more burdens lost billions in AGI, Readers from the states not and more people can work anywhere. Americans have migrated from high- while the states with the selected can use the interac- Brown notes that Wall Street, the bas- tax states to low-tax states. I call the lowest tax burden gained tive data base to glean the tion of finance, now has financial-ser- book unique because throughout it, billions. Brown shows how Brown provides links to his website, this loss of AGI harms same information about vices workers living in low-tax states, which includes interactive maps illus- states, communities, and their, state, county, and city. rather than the New York metro area. trating his information. At the end of cities. Brown is clear that How Money Walks is a short each chapter is a QR (Quick Response Although North Caro- people move for a variety book and is well worth reading. The code) that you can scan for more infor- lina has a personal income tax, the state of reasons, not just because of taxes. data is well-presented and easy to mation using a smart phone or tablet gained $21.6 billion from 1995–2010 He uses a bulleted list of nine items understand, but I do have two major computer. because of its low overall tax burden. showing limitations in the IRS data. criticisms. First, the book contains too Adjusted gross income is the Brown uses IRS taxpayer and However, by the end, it is clear that much repetition. Second, there is no money taxpayers actually keep after Census Bureau data to build a geo- money does walk. One of the best il- index. As easy as it is to access infor- paying their federal income taxes; it database that can be analyzed easily. lustrations compares the imaginary mation on Brown’s website, it was ir- is their worth — their wealth. Over To keep the book from becoming too Smiths of California and the Millers of ritating to have trouble finding similar the 1995-2010 period, Brown presents unwieldy, he focuses on the 10 biggest Miami. Both couples make $250,000 a information in the book itself. CJ JUNE 2014 | CAROLINA JOURNAL PAGE 23 Books & the Arts Book Review Rubin: ‘Third Left,’ Rising from ‘New Left,’ Has Taken Over America • Barry Rubin, Silent Revolution: How vince Americans the exact opposite hiding the failures of Communism, had systematically spread to his gen- the Left Rose to Political Power and Cul- of what their experience proved: that which “produced far more waste and eration and its successors.” By radicals tural Dominance, Broadside Books, 331 the country had fundamentally failed unhappiness and far less wealth than he means people like Bill Ayers, Van pages, $25.99. and the old leftist solutions were the the American system, not to mention Jones, and Bernardine Dohrn, who answer.” For Rubin, the timing is sig- totalitarian oppression.” said that young Americans should By Lloyd Billingsley nificant. For the Third Left, wealth was not “use their strategic position behind en- Contributor At the very moment in human created by individual enterprise and emy lines to join forces in the destruc- RALEIGH history when it became obvious that workers, but instead stolen from poor tion of empire.” istorian and political scientist the far left’s ideas had failed and that foreigners and oppressed nonwhites. In Silent Revolution, the president Barry Rubin, who passed away statist, big-government, ever-higher- The Third Left declares America evil, emerges as the Third Left’s self-hypno- in February, titled his last book regulation policies did not work, it be- “and the people are broken up into tized Manchurian candidate, shrink- HSilent Revolution, a perceptive and came possible for the first time ever to warring groups,” a “country of castes” wrapped in statist superstition like his powerful work that would have been convince Americans that these things in which the reward of individual mer- “progressive” political mentors, hos- more accurately billed as Silent Coun- were precisely what the it is “overthrown in favor tile to America like his spiritual men- terrevolution. country needed. And at the of special privileges.” tor Jeremiah Wright, and certainly not The United States began with a very time in human history The Third Left a liberal. If Obama was a liberal, asks successful revolution, but now, Rubin when Western civilization shunned the workers and Rubin, “why did he repeatedly de- explains, we are experiencing a “break and liberal capitalism were the factories, but — as Ru- nounce the greatest accomplishments from all American history” and “a dif- so obviously the most suc- bin shows — they found of liberals and call for a completely dif- ferent system from the one through cessful in history — recog- reliable allies in govern- ferent approach?” which America achieved success and nized as such in the Third ment employee unions. For Obama, “A free market only prosperity.” The altered approach World and most of all in Most taxes and regulations thrives when there are rules to ensure “was one of an unprecedented degree formerly Communist Chi- directly benefit govern- competition and fair play.” As Rubin of statism, an imperial presidency na — a camouflaged radi- ment workers, therefore notes, “But it had always thrived un- that went far beyond Richard Nixon’s cal movement convinced shrinking government, der fewer rules than Obama wanted, dreams: record high levels of govern- many of those benefiting boosting efficiency, cutting while it had plummeted with the lev- ment regulation, taxation, and debt.” from the system that their taxes, and maintaining a el of rules and definition of fair play All that, plus indoctrination, political own societies were in fact powerful private sector is Obama had imposed during his first correctness, and the alteration of real- evil and failed. all “against their interests.” As Rubin term.” ity. How had all that come about? It became possible to convince notes: And, of course, he won a second Rubin ties it to the “Third Left,” Americans their society had failed be- The economy would decline, con- term, a huge victory for the Third Left, the heir to both the Old Left of the cause the Third Left “put its emphasis stantly adding to unemployment pay- which does not “expose and correct 1920s-’50s and the New Left of the on infiltrating the means of idea and ments, food stamps, and other government its own failures.” The result “may be 1960s and 1970s. The Third Left took opinion production.” In journalism, programs, which in turn gave the Third a very long-term and even permanent over liberalism, portrayed its only reporters “routinely used politically Left more reasons to blame capitalism and change of the United States into some- opponent as reactionary right-wing charged language that would have the greedy rich for not having met soci- thing else, a nation far less affluent and conservatism, and claimed that their gotten them fired in earlier times,” ety’s needs: to demand even higher taxes; far less free.” radicalism represents all that is good comparing the Tea Party to Nazi to raise taxes, and to increase government Says Rubin, “The idea that tens in America and a correction to all that Brownshirts for example, and the mass spending. of millions of Americans could be, is evil. The new radicalism also claims media were out to “protect the image Barack Obama, Rubin writes, in effect, turned into anti-Americans a monopoly on truth and a right to of anyone on the left side.” “came to symbolize the silent revolu- seemed insane. But it happened, didn’t transform America fundamentally, The Third Left took to education tion,” but readers will find no conspir- it?” Yes, it did happen, and by any stan- which President Obama claims as his for the possibilities of indoctrination acy theories. Obama is “just another dard that is a counterrevolution. Read- mandate. and enjoyed great success by exclud- product of the ideology and indoctri- ers will be left wondering with the The Third Left goal was “to con- ing materials celebrating America and nation that grown-up 1960s radicals author: “Will there be a U-turn?” CJ

Books authored By JLF staFFers Free Choice for Workers: Selling the Dream A History of the Right to Work Movement Why Advertising is Good Business

By John Hood President of the John Locke Foundation By George C. Leef ViceDirector President of Research for Research at the at John the W. JohnPope William Center Pope for HigherCenter for Education Higher “[Selling the Dream] provides a EducationPolicy Policy fascinating look into the world of advertising and beyond ... “He writes like a buccaneer... Highly recommended.” recording episodes of bravery, Choice treachery, commitment and April 2006 vacillation.” Robert Huberty www.praeger.com (Call Jameson Books, 1-800-426-1357, to order) Capital Research Center PAGE 24 JUNE 2014 | CAROLINA JOURNAL Opinion

COMMENTARY Bad Tax Policy Chasing Good

he price of sound tax policy is it is not the role of government to eternal vigilance, and a year influence personal decision-making. after the N.C. General As- Since the e-cigarette tax is pro- Tsembly implemented a tax reform jected to generate a trivial $5 million plan based on sound principles of in new revenues, it is unlikely that taxation and economics, it is threat- this proposal is primarily about the ening to begin unraveling these money. This suggests that its pri- reforms with a new excise tax on mary purpose is to discourage the e-cigarettes. use of e-cigarettes. It is a deliberate The proposal, if passed, would attempt to use the state’s taxing place a 5-cent tax on each milliliter authority to thwart free decision- of liquid nicotine solution, which is making. used in e-cigarette cartridges. The This should make most proposal is being consid- Republicans uncomfort- EDITORIAL ered under the shroud of able. The party’s platform an omnibus tax bill under states, “Government consideration during the should tax only to raise short session. money for its essential Betting No matter how you functions. Government slice it, this is bad tax should not use the tax policy. It runs counter to system to control our be- On Teachers basic principles of eco- havior, steer our choices, nomic efficiency, indi- or change the way we live hoice and competition work. General Assembly to add new incen- vidual liberty, and social ROY our lives.” It is unfor- It’s not the first time you’ve tives for teachers who pursue certifi- heard us say it, and it won’t be cation in difficult-to-teach fields such equity. Furthermore, the CORDATO tunate that many in the Cthe last. as physics, math, or special educa- legislative process being Republican majority who A plan offered by state Senate tion, as McCrory proposed in Career used to push it through is ran on this platform are leader Phil Berger of Rockingham Pathways, the governor could accept anything but transparent. now ignoring it. County has taken the principles this as a first step toward his vision of All excise taxes, by definition, Then there’s the issue of of choice and applied them in an education reform. distort economic and personal de- equity. Even though the amount inventive way to the prickly (and Moreover, it would introduce cision-making by penalizing some is small, most of the $5 million in now litigious) disputes over teacher a tangible component of the market consumer choices relative to others. revenue is likely to come from those compensation and tenure. Berger’s process into teacher compensation, For economists, the first principle who can afford it least. While demo- proposal, which was part of budget offering meaningful financial benefits of taxation is called neutrality: graphic information on e-cigarette negotiations as this issue went to for performance rather than time on The government should extract smokers is not available, the vast press, would let public-school teach- the job. the money it needs from taxpay- majority of them also smoke tra- ers choose between the current system Berger’s proposal is a response ers without distorting their freely ditional tobacco cigarettes. And, that provides job security in the form to — you guessed it — a lawsuit filed made decisions. As a matter of pure according to the Centers for Dis- of tenure — but maintains a compen- by the N.C. Association of Educators sation system valuing seniority over challenging a 2013 law ending ten- economics, it is not appropriate for ease Control and Prevention, while classroom performance — and a more ure. The teachers union claimed that the government to tax some goods about 18 percent of the total adult dynamic structure offering higher the General Assembly entered into a and services more heavily than oth- population smokes, 28 percent of pay to teachers in the early stage of binding contract with teachers when it ers. This distorts relative prices and those living below the poverty line their careers and affording the top created tenure and it could not break therefore efficient resource alloca- smoke. performers meaningful opportunities that contract unilaterally. Some legal tion. If this income distribution for to earn more than their run-of-the-mill experts find that argument persuasive, Current tax policy respecting smokers carries over for e-cigarette colleagues. as did Superior Court Judge Robert the sale of e-cigarettes gets it right. users, it would mean that North Teachers choosing to abandon Hobgood in an order declaring the They are taxed at the same state and Carolina’s proposed e-cigarette tax tenure would collect, on average, 11.2 law unconstitutional. local sales tax rates that apply to is not only economically inefficient percent raises immediately and have Other experts note that tenure other consumer goods throughout and damaging to individual liberty, to prove their continuing value to was granted by legislative action and the economy. What is particularly but also regressive. Oddly, left-wing students by working on renewable could be taken away with subsequent hypocritical is that many members advocates for the poor are deafen- contracts. Those opting to stick with legislation. Moreover, under the law, of the General Assembly, Democrats ingly silent on the possible distribu- “career status,” aka tenure, would tenure would end in 2018, and in the keep their jobs but never see another meantime, school districts would and Republicans, clearly under- tional effects of this tax increase. pay increase outside the existing begin offering $500 annual increases stand this principle and, in invok- Finally, this tax has been rolled “step” system. The plan mirrors in base pay and four-year renewable ing it, have argued correctly in into an omnibus bill, where it will aspects of Gov. Pat McCrory’s Career contracts to the 25 percent of teachers favor of extending the state sales face no separate, public debate on Pathways proposal, which would give deemed top performers by superin- tax to services like haircuts and its merits. The citizens of North financial incentives to teachers who tendents. lawyers. However, there seems to Carolina deserve transparency in excel in the classroom. Berger could have fought this be no movement to block the new the law-making process, and, so far, Again, it’s unclear as we go to battle in the courts and hoped for an e-cigarette excise tax on these same they are not getting it. CJ press whether the Senate leader’s plan eventual victory. Instead, the veteran grounds. will survive negotiations with the Republican lawmaker has offered The neutrality principle also Dr. Roy Cordato is vice president leaders in the House and the gover- teachers an immediate opportunity to flows directly from a concern for for research and resident scholar at the nor’s office, and how officials will find bet on their own drive, competence, individual liberty. In a free society, John Locke Foundation. the money to fund it. But because it and eagerness to improve — and win would allow future sessions of the a reward for taking that initiative. CJ JUNE 2014 | CAROLINA JOURNAL PAGE 25 Opinion

EDITORIALS COMMENTARY Higher Standards Reality Is Not Common Core is not the way to go hink the quality of political costs for exams of uncertain value. So Discouraging debate is low and declining? • Abolish Common Core and re- f all you know about North drop of 0.8. We agree. For a recent, telling vert to having the Department of Pub- Carolina’s recent economic per- Now, U-3 doesn’t tell the Texample of the problem, consider the lic Instruction devise the standards, formance is what you get from whole story. If a worker gets debate about North Carolina’s partici- fashion the curriculum to implement TwitterI feeds, partisan press releas- discouraged and stops looking for pation in Common Core. them, and write the tests to evaluate es, or brief mentions on television a job, he’s no longer in U-3. If he Some years ago, the National student learning of that curriculum. newscasts, then much of what you stops looking for a job to move to Governors Association and the This option is worse than the first one. “know” is flat wrong. another place, move home to take Council of Chief State School Officers The standards were a mess. The tests We all know that there are care of elderly parents, or go back to combined forces to release national were too easy to pass. robust differences of opinion about school, he’s no longer in U-3. And standards for elementary and second- • Preserve the intent of Common the best way governors, legislators, if he takes a part-time job making ary education. Washington gave states Core while ensuring that North Caro- and other officials can encourage 50 percent of what he used to make, strong financial incentives to sign onto lina gets the details right and spends job creation. But these are debates but would still like a full-time job, the emerging standards and to join tax dollars economically. That’s what about the future, what he’s no longer in U-3. one of two testing consortia. our colleague Terry Stoops proposed may happen. When it I just described the The result was Common Core to state legislators earlier this year, comes to what has hap- three broader measures of State Standards in language arts and and what the General Assembly is pened, we need not specu- labor utilization. U-4 takes mathematics. For many states, includ- considering. late. We can look at the in discouraged workers. ing North Carolina, the language-arts Practitioners and experts would data. U-5 takes in all other mar- Is North Carolina’s ginally attached workers standards were clearer and more review the Common Core standards dramatic decline in un- (those not currently in job rigorous than the state-developed alongside rigorous alternatives, in- employment a mirage? Is search). U-6 takes in the standards they would replace. Regard- cluding those already used by high- it a statistical quirk that involuntary part-timers. ing math, however, the verdict isn’t performing states. The panel would reflects a growing number In each case, North so clear. Some of the math standards recommend a revised set of standards of discouraged workers JOHN Carolina’s labor-market are questionable, even bizarre. And for the State Board of Education to dropping out of the labor HOOD improvement was still there’s another problem: Common adopt in 2016. The panel also would force? either the best or second- Core tests are going to be far more ex- recommend national tests aligned to No, it is not. Let’s best in the nation over the pensive than previous tests have been. the new curriculum, less expensive look at the latest data from the U.S. past year. For the April 2013-March As assessment tools, they are largely than the Common Core exams, and Bureau of Labor Statistics. 2014 period, North Carolina’s U-5 unknown and unproven. yet outside the control of DPI. The household survey that rate — including all workers who There are three options for pro- There may be good reasons not BLS uses in its monthly releases of have dropped out of the labor ceeding from this point: to choose the third option. But it does state and local unemployment rates force for some reason — averaged • Stick with Common Core, not abandon academic rigor or the has a fairly small sample size. While 8.6 percent. During the previous chaining the state to some flawed need for good performance data. We BLS reports 12 months, it standards, particularly in math, and hope you’ll find this option to your the “standard” averaged 10.8 obligating taxpayers to shoulder high liking. CJ unemployment percent. That’s rate, called N.C.’s falling a drop of 2.2 U-3, monthly, it points, the does not delve unemployment largest in the more deeply for country. The monthly data rate not result of national aver- Voter Suppression? explaining what age drop in U-5 is happening to people dropping unemployment It’s all an act, and not a good one those no longer from labor force was 0.9 points. considered in Subtract- y any objective standard, the First, the story broke that hundreds the labor force. ing U-3 from election law reform enacted last of votes may have been cast in North Instead, U-5 provides year known as the Voter Identi- Carolina by people who shared the BLS uses 12 months of survey data the share of each state’s labor force Bfication and Verification Act was com- same name, birth date, and last four to construct six unemployment comprising discouraged and other monsensical in structure and modest digits of their Social Security number measures. These six rates are then marginally attached workers. For in potential effects. with people who voted in other states updated every quarter. The most North Carolina, that share was 1.4 Most North Carolinians believe during the same election cycle. The recent data, in other words, cover percent for the period ending in that requiring voter identification possibility that many cases were, in the period from April 2013 to March March. The national average was 2014. These annual averages are the also 1.4 percent. During the previ- at the polls is a reasonable, low-cost fact, fraudulent votes got a great deal most reliable evidence available of ous period (2012-13), 1.6 percent precaution against a low-probability, of attention. the disposition of the labor force in of North Carolina workers were high-cost event: voter fraud determin- Then, The Associated Press re- ing the outcome of an election. Most North Carolina and all other states. discouraged or otherwise margin- ported that in the 2014 primary, more North Carolinians also favor early The familiar U-3 rate com- ally attached. The rate of worker early votes were cast than the number voting as a convenience but aren’t prises workers who lack jobs and disengagement in our state is down, cast during the last midterm primary wedded to any particular calendar of are actively looking for work. For not up. voting hours and days. Most North in 2010 — even though the early-vot- the April 2013-March 2014 period, If you persist in believing Carolinians don’t want government ing period had been shortened from North Carolina’s U-3 average was North Carolina’s tumbling unem- funding political campaigns, either. 17 days to 10 days — and that overall 7.2 percent, slightly above the na- ployment rate is simply a quirk The goal of equating these primary turnout in 2014 was higher tional average of 7.1 percent. That caused by discouraged workers changes with “voter suppression” is than in 2010. gap used to be much wider. In fact, dropping out of the labor force, you theatrical. Its goal is to convince the This was neither voter suppres- North Carolina had the second- no longer are describing reality. CJ Democratic base that Republicans are sion nor an injustice deserving of largest drop in U-3 unemployment out to get them, so that the Demo- statewide fulmination and national in the nation from 2012-13 to 2013- cratic base will turn out to vote in the news coverage. The play actors push- 14 — two full percentage points, John Hood is president of the John 2014 midterms. ing this stinker on North Carolinians compared to a national average Locke Foundation. So far, the play isn’t going well. need a new and better script. CJ PAGE 26 JUNE 2014 | CAROLINA JOURNAL Opinion MEDIA MANGLE Expunging Ethics From Journalism any have pointed to the lack of ethics in journalism these days. Many times I have bemoaned the fact that ethics has Mbeen replaced by bias, leftist agenda pushing, and the active hiding of any story that might be harmful to Democrats, the left, and the govern- ment. Most members of the mainstream media will argue to the death that their profes- sion has not become a tool of the left, but the evidence to the contrary is overwhelming. I urge anyone with any doubt to read the website News- Busters.org for a week. Yes, it’s a conservative site, but what it reports are real-world JON actual journalistic sins. HAM When I was in J-school, we talked about “journalistic ethics” a lot. I know, I know, many say that’s a contradiction in terms, but we Dynamic Times, Now and Then took the issue seriously. like looking back. I love to read and talk about farm. The family ate sausage for breakfast, ham for Imagine my surprise a few weeks ago when I learned that ethics literally had been expunged history. I initially wanted to become a history lunch, and pork for dinner. My father — who as the from journalism. Below are two graphics depict- teacher before being smitten by economics. oldest son was given the task of “processing” the ing the “Pyramid of Journalism.” The top one WhileI my wife might take a crime novel to the hogs using a World War I revolver — once told me was reconstructed by me from a description in a beach, I’ll carry a history book. how excited he was to see beef as part of the menu recent story on the website of the Poynter Insti- One cherished memory from my youth is when he joined the Navy during World War II. tute for Media talking to my paternal grandmother about her life. But big changes came to the American family Studies, sort of Raised in the city, she moved to a farm when she in the 1920s and ’30s. Perhaps the most significant a liberal think married my grandfather. There she did it all, raising was electricity, which began in the cities and then tank on the me- four children (one of them my spread to the rural areas. Household appliances, like dia based in St. father), baking bread, canning mixers, refrigerators (replacing “ice boxes”), and Petersburg, Fla. vegetables, washing clothes by washers quickly developed and were sold to eager It depicts the hand, and using every conceiv- families. Although my grandmother gradually lost pyramid as en- able part of the hogs my grand- her memory late in life, she always remembered her visioned in 1997 father kept. She worked from first washing machine. Electricity also was used to by the Poynter dawn to dark. Life was tough. illuminate homes, allowing families to replace dirty, faculty. This was in the 1920s and dimly lit kerosene lamps. Below it 1930s. Recently I discovered Four other innovations transformed every- is Poynter’s a wonderful book discussing day life. In 1920, only a third of households owned updated version designed for the much-changed the period called Daily Life in an automobile; by 1930, 80 percent did. The scope landscape of journalism. Notice what’s missing? MICHAEL the United States, 1920-1940 by WALDEN and range of personal contacts and possibilities Ethics, which used to be at the apex, is no longer exploded. The tractor made farming less physi- one of the building blocks in the “Pyramid of David Kyvig. Kyvig recounts the everyday life of people — what cally demanding and much more productive. The Journalism.” work of children on the farm declined, and so did I’m not sur- they ate, how they washed their clothes, how they kept warm, where they worked — in short, the un- the birth rate. With farm output up, fewer farmers prised. At least were needed, so many farm families moved to the give them credit glamorous, common routines that consume most of city. The nation changed from being rural to being for honesty. people’s days. But it was also a time that may have urban. Finally, the development and spread of the I don’t been more interesting and transformative than the telephone and radio lowered the cost and increased know what one we’re living in today. the speed of communication and gave families an prompted the Consider how my grandmother washed her in-home source of news and entertainment. excision of family’s clothes in the 1920s. She had no washer or I was born in 1951, and most of my current ethics from the dryer; in fact, on the farm there was no electricity! pyramid, but students were born after 1990. We certainly have She’d first have to haul pails of water to a stove for seen our lives altered by new inventions and in- I know it can’t be a good thing for journalism. heating. Then she’d carry the hot water to a large Ethics are the moral code by which a person or a novations, especially in information technology trough or bucket, fill it, and scrub the clothes by profession operates. It involves standards, ide- and communications. But some say that — while hand. Drying the clothes was the natural way — als, values, and behavior. these changes have been significant — their impacts That’s a lot of baggage to toss overboard. outside when the weather was good or inside by the have not transformed daily lives as much as those Without those things to live up to, what, exactly, fire when it wasn’t. brought about by electricity, the automobile and is it that will keep journalism and journalists Life wasn’t a picnic for my grandfather, either. tractor, the telephone, and the radio in the ’20s and honest? Absent those things, to what will they He was responsible for making sure his family ’30s. aspire? CJ didn’t starve! They ate what he planted and raised. Sure, we live in dynamic times. But the most Plowing was done the old-fashioned way — behind dynamic may have occurred 80 years ago. CJ Jon Ham is a vice president of the John Locke a mule — and this was some of the most exhaust- Foundation and publisher of Carolina Journal. ing, backbreaking work anyone could imagine. The Michael Walden is a Reynolds Distinguished major protein sources were the hogs raised on the Professor at North Carolina State University. JUNE 2014 | CAROLINA JOURNAL PAGE 27 Opinion Film Credits and Tax Reform

ow serious are our state lead- improving; everything from consumer teachers? Hmmm.) covering only dramatic productions ers about economic growth confidence to housing construction is The film industry got $62.3 mil- and not reality shows. Meantime, and long-term recovery? Are on the rise. Over 200,000 net new jobs lion in credits in 2012 and more than one proposal would authorize local Hthey committed to broadening the have been created since 2011 in North $30 million in 2011. That “investment” governments to exempt film compa- base of taxpayers so that everyone Carolina. was a loser for the state, returning nies (that house their crews in hotels pays something and almost everyone Things clearly are moving in only 19 cents for every dollar given and dine out all the time) from paying pays less? Will they stand strong to the right direction, tough decisions away in tax credits to the film indus- local occupancy taxes. This is the continue the reforms that are turning are paying off, and there’s a growing try. Jobs? A 2011 report by the Gen- worst of special treatment for special the state around? momentum in our economic recov- eral Assembly’s staff says only 55 to interests. Tax reform ery. State leaders need to continue to 70 jobs were created that year; had During the short session, if the began in 2011 eliminate the hodgepodge of special the money been used instead for an General Assembly does nothing, the when Gov. Bev tax breaks going to politically favored across-the-board tax cut, five times Perdue’s sales select groups at the expense of all that many jobs would have been North Carolina film credit will go tax hike expired, other taxpayers. Now is not the time created. The federal Bureau of Labor away — simply fading to black. All reducing the rate to backslide. Statistics reports that in 2012, film taxpayers would benefit, and our state by a full penny. Take the film incentive. Please. production created 792 jobs in North leaders have the opportunity to show This was followed North Carolina offers cash payouts to Carolina. that they are serious about tax reform, in 2013 with a law the film industry equaling 25 percent North Carolina started its film about economic growth, and about flattening and re- of the amount production companies giveaway program in 2005, expand- keeping promises. ducing the person- spend on projects filmed in the state. ing it in 2009. The following year, Other tax credits due to expire al income tax rate BECKI They’re called tax credits, but in most Perdue signed into law an additional on Jan 1, 2015, are for rehabilitat- for every taxpayer GRAY cases the state Department of Revenue giveaway, exempting film companies ing historic buildings and old mills. in North Carolina merely cuts a check for doing business from the 6.9 percent corporate income In 2011 alone, almost $10 million in and reducing the in North Carolina. tax, guaranteeing Hollywood moguls credits were given out for rehabilitat- corporate income The film credit will expire Jan. got the full 25 percent refund. In 2012, ing historic structures. This special tax to attract and maintain business 1, 2015, unless the General Assembly new leadership in the General Assem- treatment needs to be eliminated. investments. In addition, dozens of caves to this special interest. bly scheduled the film credit to sunset As this short legislative session carve-outs and special exemptions More than one-fourth of U.S. on Jan. 1, 2015. moves forward, are North Carolina have been eliminated. Tax reform has states give no tax breaks to the film in- The film industry has launched leaders committed to tax reform that been serious business for three years dustry. Many with incentive programs a full-scale campaign to hang on to is working: eliminating carve-outs, now. Hundreds of academic studies are doing the math and are reducing, the credits. It paid for a report touting over decades show that a lower tax repealing, or rejecting giveaways to the economic benefits of the give- maintaining fairness and consistency, burden leads to economic growth. the film industry. away. The General Assembly’s Fis- preserving lower rates and a broader And it seems to be working. Hollywood movie moguls cal Research economists thoroughly base, boosting long-term growth? North Carolina’s unemployment cashed in $86 million in credits here debunked it. North Carolina is on the right rate is no longer one of the highest in 2013. (To put things in perspective, Several “compromises” film- track. Let’s stay there. CJ in the country, but is now lower than $108 million would cover the much- industry backers have suggested in- the national rate. Economic forecasts deserved raise Gov. Pat McCrory clude a nonrefundable credit, a credit Becki Gray is vice president for out- indicate all sectors of our economy are wants to give teachers. Movie stars or tied to capital investments, and credits reach at the John Locke Foundation. Unleash Competitive Health Insurance hose keeping up with Obam- passed the Small Employer Group essentially keeps intact Obamacare’s costs and profit). If that same young acare are well aware that one of Health Coverage Reform Act. protection clause for those wanting to person has a 1 percent likelihood at its most popular provisions pro- This law required all insur- purchase coverage on the individual some point of developing a condition Thibits insurers from denying health ance companies offering small-group market. that will cost $10,000 a year to cover, coverage to those with pre-existing health insurance to extend policies to The CARE Act proposes that he could purchase a separate “health conditions. People no longer can be all businesses hiring up to 50 em- within a one-year enrollment period, status” policy that would amortize priced out of the insurance market ployees in their network area (so long after a policyholder maintains con- those potential costs over decades. based on health as the employees resided within the tinuous coverage for 18 months, he or That 25-year-old would pay less than status. In fact, insurer’s defined territory). she can move to any type of plan (in- $300 a month for both policies, and be insurers no longer The act evolved to prohibit dividual or group) and not be denied can inquire about those insurers from denying cover- for a pre-existing condition. protected from backbreaking medical a policyholder’s age to self-employed people who had But there’s an even better rem- costs. medical history on pre-existing conditions. The act also edy for this chronic problem. And it For those who already suffer health insurance limited how much premiums could does not incorporate regulations. It chronic health conditions, the gov- applications. vary between each small employer. is known as health-status insurance, ernment initially could contribute Prior to And then came the Health Insur- and University of Chicago economist a defined amount of money into all Obamacare’s ance Portability and Accountability John Cochrane has written extensively high-risk individuals’ health-status passage, the pre- Act. Under this law, any employee about it. insurance accounts and then step existing condition KATHERINE could switch from his previous em- Basically, combining health-sta- aside to allow for private insurers to problem generally RESTREPO ployer plan to a new employer health tus insurance with medical insurance compete for those consumers. occurred when an plan or an individual plan without creates a secure and portable health Health-status insurance repre- individual with a facing penalties, regardless of health insurance policy. Medical insurance sents a legitimate market-oriented medical condition status. covers your medical expenses, while solution that caters to those with pre- that was costly to treat lost coverage While these and similar laws health-status insurance insures you existing conditions and helps them under an employer-sponsored plan have helped some individuals, they from being denied coverage in the afford coverage for any unfortunate and was unable to purchase insurance also have raised prices for all consum- event your health status deteriorates health conditions that may occur in in the individual market. ers. drastically. Before Obamacare, North Caro- Conservative “repeal and As Cochrane explains in an the future. CJ lina did enforce a few mandates and replace” proposals address the issue example, a healthy 25-year-old who laws that protected high-risk individ- as well. Sen. Richard Burr’s Patient incurs about $2,000 in medical expens- Katherine Restrepo is health and uals from being excluded by small- CARE (Choice, Affordability, Re- es a year could purchase an insurance human services policy analyst for the John group plans. In 1992, the legislature sponsibility, and Empowerment) Act policy for $2,000 (plus administrative Locke Foundation. PAGE 28 JUNE 2014 | CAROLINA JOURNAL Parting Shot John Edwards to Be Moral Monday’s Legal Advocate (a CJ parody)

By E.M.S. Chaser centennial Plaza at the legislative complex. Protest Correspondent • A public-address system for the stage, includ- RALEIGH ing a live feed so that Barber’s stentorian sermon-like he Rev. William Barber has hired former U.S. speeches can be heard inside the Legislative Build- Sen. John Edwards to work with the state’s ing, particularly in the House and Senate chambers NAACP chapter on its Moral Monday activi- during legislative sessions. Tties, especially on what Barber sees as the “draco- • Free, handheld, battery-operated fans to keep nian” new rules for demonstrations in the legislative protesters cool during hot days, and umbrellas to building. protect them from sun and rain. “It’s welcome home, Johnny time — forward • Folding chairs. together, not one step back,” Barber told Carolina • Chilled, bottled water on demand. Journal. “John Edwards is a national leader in issues • Food service during dinner hours, provided of morality, and we are happy to have him be part of at no cost to protesters either by food trucks or pizza delivery outlets. our team.” Edwards told CJ he was excited to be involved Barber said Edwards is a good fit for the Moral with the Moral Monday movement. Monday protest movement because of his experi- “We didn’t make much of a difference when I ence with the Center on Poverty, Work & Opportu- was involved with the Poverty Center,” he said. “I’m nity, which he founded in 2005 and which is located The Rev. William Barber introduces former Sen. John sure it was the lack of media coverage. We needed to at UNC-Chapel Hill’s School of Law. Edwards as the Moral Monday liaison with the General link up with a grass-roots organization to get more The center’s current director, former law school Assembly in an effort to change the rules of access to attention. Rev. Barber knows how to get coverage.” dean and former William & Mary president Gene the legislative building. (CJ spoof photo) Edwards also said Barber let the former U.S. Nichol, has been active in the Moral Monday pro- senator bring his own videographer, who will be al- tests, and will serve as special liaison to the General tive Building and on surrounding property. The new lowed to film all the protests, accompanied by her Assembly for the NAACP and other left-wing groups rules banned visitors from disturbing General As- entourage. that participate in the demonstrations. Nichol will sembly floor sessions, committee meetings, or activi- “As part of my agreement with Rev. Barber, I not, however, represent UNC and does not speak for ties by elected members or their staffs. also will be the sole legal counsel for Moral Mon- the university. Visitors engaged in loud singing, shouting, day protesters who have any personal injury is- Barber said one of Edwards’ first jobs would be clapping, or playing musical instruments in public sues that may come up. I understand several of to meet with Republican leaders of the two legisla- areas of the Legislative Building or the Legislative them have medical issues related to the duct tape tive chambers — Sen. Phil Berger and House Speaker Office Building could be removed from the premises. they placed over their mouths during a recent pro- Thom Tillis — to negotiate a new set of rules for Mor- Most handheld signs also were banned. test,” he said. “We are considering litigation against al Monday protesters. Barber said he wants to scrap those rules and the tape manufacturers, with Berger and Tillis as At the start of the legislative session in early demands the following: co-defendants, since they are indirectly respon- May, a joint legislative committee on building rules • A permanent protest area, complete with sible for injuries associated with removing the tape tightened restrictions on protests inside the Legisla- stage, risers, and portable toilets situated in the Bi- from the mouths of protesters.” CJ

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