• Think ‘Outside Box,’ • Universities Neglect Education Expert Says C A R O L I N A General Education Beach Renourishment Spy Conference in Raleigh

Volume 12, Number 10 A Monthly Journal of News, October 2003 Analysis, and Opinion from JOURNAL the John Locke Foundation www.CarolinaJournal.com www.JohnLocke.org

Pillowtex Jobs May Have Been Saved If Union Stayed Out

UNITE leaders wouldn’t let UNITE President Bruce Springs buy because Raynor: master organizer of loss of Kannapolis jobs and corporate campaigner

By PAUL CHESSER By PAUL CHESSER Associate Editor Associate Editor RALEIGH RALEIGH he 6,450 layoffs at Pillowtex, Inc., here’s a scene in the movie Norma which included about 4,800 employ- Rae in which organizer Reuben T ees in North Carolina, may have T Warshawsky prods Sally Field’s title been mitigated had the union representing character to lead her fellow textile workers the workforce not blocked a deal to sell the to form a union. “If you were in the State company. Department,” he says, “we would be in a The largest manufacturer of home fash- war.” ions in the United States, Springs Indus- The 1979 film was a fictionalized ac- tries, offered as much as $300 million for count of the effort to unionize employees at Pillowtex’s operations and assets in the early the J.P. Stevens Mill in Roanoke Rapids. spring. However, the Union of Needle- One of the real-life leaders in that war was trades, Industrial and Textile Employees Bruce Raynor, who started his career with may have hampered the deal because the Textile Workers Union of America in

Springs’s plans didn’t include the retention Carolina Journal photo by Michael Lowrey 1973. of Pillowtex’s Kannapolis-area operations, The Pillowtex plant and offices in Kannapolis, where thousands of workers lost their jobs. After a couple of mergers with other which employed about 4,400 of its workers. unions and 2 1/2 decades of (mostly South- “The union didn’t help matters and the Southern Textile News in May. The union’s big buyer ern) organizing drives, Raynor was named didn’t provide any reason for Springs to be “If there is a single buyer out there who president of the Union of Needletrades, more enthusiastic about [the deal],” said thinks that they can come in and run this One bidder UNITE brought in was Industrial and Textile Employees in 2001. Sam McNeil, managing director of River company and take these labels and leave Cerberus Partners of New York, which Raynor is often referred to as part of the Capital Advisors, a Charlotte investment these workers in the street, they’re going to Harris Raynor insisted was interested in composite that formed the Reuben charac- company that specializes in working with have one hell of a fight on their hands,” said running Pillowtex. However, Cerberus op- ter in Norma Rae. His biography on the troubled companies. “They really shot their Harris Raynor, Bruce’s brother and vice erates as a “vulture fund,” in which inves- union’s website says he is “responsible for workers in the foot, in my opinion.” president of the Southern region of UNITE. tors pick over the remains of a near dead the national organizing program for UNITE, After Springs stepped back, the fight- company in order to turn a profit. in which capacity he is credited with inno- UNITE, we stand ing words caused the company to re-evalu- Raynor said that Cerberus was inter- vative and aggressive tactics that have led ate its offer in light of depressed first-half ested in parts of Pillowtex, but that the the way for the entire labor movement.” UNITE pressured Springs to allow other retail sales. Home textile sales declined at a company was reluctant to sell off pieces. The J.P. Stevens battle marked a his- offers for Pillowtex after the two companies double-digit rate during the first six months “[Pillowtex] was clearly something they toric turning point for labor unions, be- had signed an exclusive purchase agree- of 2003. wanted to look at,” Raynor said. cause it established a tough new strategy: ment for rights to brand names and some “There are very few players who didn’t Textile insiders said Cerberus’s inter- Corporate campaigning. The tactic has been manufacturing facilities. The deal was escape the crushing environment early this est, like Springs’s, primarily was in the value embraced by almost all unions in an effort amended to allow other buyers that the year,” said Don Hogsett, business editor of of Pillowtex’s widely recognized Charisma, to refortify their flagging memberships, and union said potentially were “willing to op- Home Textiles Today. Cannon, and Royal Velvet labels. one that Raynor employs effectively. erate Pillowtex as a viable company.” The business trend changed Springs’s According to industry experts, Cerberus “A corporate campaign is a form of “We are confident that one of these new perspective. If the company were to be asked never made a formal bid, but even if it did reputational warfare waged through broad- companies will be able to make a successful back into its deal for Pillowtex, the previous it likely wouldn’t have produced a better sides, half-truths, innuendo, and a staccato bid for the company and preserve Pillowtex offer that was approved by its financiers fate for the Pillowtex employees. McNeil, rhythm of castigation, litigation, legisla- jobs,” UNITE President Bruce Raynor said would have to be revisited. The most likely who said he knows Cerberus’s manage- tion, and regulation,” writes Jarol Manheim, in early May. “We compliment Springs’ top result would be a vastly scaled-down propo- ment style well, said they are “hardline” a George Washington University professor corporate leadership for allowing jobs to sition. As time passed, the value of and “a very bottom line-oriented invest- of media, public affairs, and political sci- come before their own financial interests.” Pillowtex’s assets diminished rapidly. ment company.” ence. He is the author of The Death of a Springs relented because UNITE threat- While Pillowtex flirted with other suit- “If Mr. Raynor thought they would keep Thousand Cuts: Corporate Campaigns and the ened to rally at its headquarters in Fort Mill, ors — some coaxed by the union — Springs people employed,” McNeil said, “he was Attack on the Corporation. S.C. withdrew its offer. very naïve.” “It is fought in the press and on televi- “We think the prospect of a national Whether Springs gave up because of “I think Springs would have been the sion, on the Internet, in the halls of govern- battle with the 250,000 members of UNITE union threats, or because of financial issues, best shot,” said Warren Shoulberg, editor- ment, in the marketplace, on the trading was something that Springs management or both, is unclear. Springs officials de- does not want to contemplate,” Raynor told clined to comment. Continued as “In Effort,” Page 3 Continued as “Raynor’s Campaigns,” Page 3

State Should Have Which Legislature? The John Locke Foundation NONPROFIT ORG. Contents 200 W. Morgan St., # 200 U.S. POSTAGE Part-Time, Session Limits 42% Raleigh, NC 27601 PAID Part-Time, No Limits 13% RALEIGH NC PERMIT NO. 1766 Full-Time Legislature 27% Calendar 2 Not Sure 18% State Government 3 Education 6 Higher Education 10 Local Government 14 Books & the Arts 18 Opinion 20

% of N.C. Respondents in Oct. 2002 “Agenda” Poll Parting Shot 24 C A R O L I N A Contents

ON THE COVER • Bucking the notion that schools with • While Cumberland County’s Crown Coli- JOURNAL needy populations can’t succeed, Kerners- seum is a state-of-the-art facility, one thing • The 6,450 layoffs at Pillowtex, Inc., which ville Elementary in Forsyth County met all has been lacking: Enough events drawing included about 4,800 in North Carolina, 27 of its federal achievement goals for 2002- enough people for the building to break may have been mitigated had the union 03. Page 9 even. Page 16 representing its employees not blocked a deal to sell the company. Page 1 HIGHER EDUCATION • An interview with Raleigh lawyer Gene Richard Wagner Boyce. Page 17 Editor NORTH CAROLINA • The idea of a general education within the University of North Carolina system has THE LEARNING CURVE Paul Chesser, Michael Lowrey • The secondary deal behind the purchase “atrophied into a grab bag of elective Donna Martinez of North Carolina Natural Gas by Piedmont courses,” says a new study by the Pope • A review of the Raleigh Spy Conference Associate Editors Natural Gas Co. could eventually cause cus- Center for Higher Education Policy. held in September. Page 18 tomers’ rates to rise and diminish already Page 10 faint hope that taxpayer-funded bond • George Leef reviews the book The Future Karen Palasek, Jon Sanders money will be repaid. Page 4 • A resounding affirmation of free-speech of Freedom by Fareed Zakaria, and a review Assistant Editors rights on college campuses was recently of the book Naked Economics: Undressing the • The North Carolina Center for Applied made by the Office for Civil Rights of the Dismal Science by Charles Wheelan. Page 19 Andrew Cline, Roy Cordato, Textile Technology, a state-owned higher- U.S. Department of Education. Page 11 Charles Davenport, Ian Drake, education institution that since 1996 has re- OPINION Tom Fetzer, Nat Fullwood, ceived more than $1.2 million annually in • Jon Sanders writes that a new study of John Gizzi, David Hartgen, aid from the state, was audited recently for general-education requirements should • An editorial on the mold problem at Summer Hood, Lindalyn Kakadelis, the first time. Page 5 concern educators, parents, students, leg- North Carolina Central University. Page 20 George Leef, Kathryn Parker, islators, and anyone else who cares about Marc Rotterman, R.E. Smith Jr., EDUCATION higher education in North Carolina. • Richard Wagner discusses the boozing Jack Sommer, John Staddon, Page 11 ways of the employees at the North Caro- George Stephens, Jeff Taylor, • North Carolina is importing teachers from lina Museum of Art. Page 20 Michael Walden, Karen Welsh Contributing Editors all over the United States, so teacher prepa- • Several North Carolina Central Univer- ration standards elsewhere may have an im- sity buildings have been infested by mold, • Editorials about the latest Golden LEAF pact on how our students perform. Page 6 and surprisingly mold was found in two of funding initiative, and the latest manifes- Jenna Ashley, Paul Messino, the school’s newest dormitories. Page 12 tation of the “Smart Growth” mentality. Andrew Symons • Public education needs a new definition, Page 21 Editorial Interns according to Lisa Graham Keegan, CEO of LOCAL GOVERNMENT the Education Leaders Council, who spoke • Michael Walden says that despite the at a North Carolina Education Alliance lun- • The next time you walk on a North Caro- Pillowtex layoffs, consumers shouldn’t for- cheon in September. Page 8 lina beach, take a close look at the sand get the benefits of free trade. Page 23 that’s sliding between your toes — it could • “Choice in North Carolina Education: be the artificial result of a controversial PARTING SHOT John Hood 2003,” published recently by the North beach renourishment project. Page 14 Publisher Carolina Education Alliance, takes a de- • A CJ parody: State Senate President Pro tailed look at the number and location of • Durham County Commissioners voted to Tem Marc Basnight will lead a new cheer Don Carrington children attending choice schools around increase tax revenues the county takes in when asked about the mold problems at Associate Publisher the state. Page 8 by about $5 million a year. Page 15 NCCU: “Who ya gonna call?” Page 24

Published by Calendar The John Locke Foundation 200 W. Morgan St., # 200 Raleigh, N.C. 27601 (919) 828-3876 • Fax: 821-5117 Veteran Political Commentator Barone to Speak at Luncheon www.JohnLocke.org

olitical commentator Michael Barone Barone lives in Washington, D.C. He Bruce Babcock, Ferrell Blount, will be the featured speaker at a John has traveled to all 50 states and all 435 John Carrington, Hap Chalmers, Sandra Fearrington, Jim Fulghum, P Locke Foundation luncheon at 11:30 congressional districts. He has also trav- William Graham, John Hood, a.m. Nov. 11 at the Brownstone Hotel in eled to 37 foreign countries and has re- Kevin Kennelly, Lee Kindberg, Raleigh. ported on the most recent elections in Robert Luddy, William Maready, Barone will headline a panel discussion Mexico, Italy, Russia, and Britain. J. Arthur Pope, Assad Meymandi, previewing the 2004 elections. He will be Wrenn has directed several political Tula Robbins, David Stover, joined by foundation President John Hood, campaigns in North Carolina, which in- Jess Ward, Andy Wells, who will handicap the North Carolina clude President Ronald Reagan’s state cam- Art Zeidman governor’s race, and political consultant paign in the 1976 Republican primary; U.S. Board of Directors Carter Wrenn, who will analyze the U.S. Sen. Jesse Helms’s 1978, 1984, and 1990 Senate races. Foundation Senior Fellow campaigns; John East’s U.S. Senate race in Marc Rotterman will moderate the event, 1980; Lauch Faircloth’s 1992 campaign for CAROLINA JOURNAL is a monthly journal and other surprise guests will participate. U.S. Senate; and Richard Vinroot’s 2000 of news, analysis, and commentary on state Barone is a senior writer for U.S. News gubernatorial campaign. and local government and public policy & World Report. Barone grew up in Detroit The cost of the luncheon is $20 per issues in North Carolina. and Birmingham, Mich. He graduated from person. For more information or to prereg- Harvard College (1966) and Yale Law School ister, contact Summer Hood at (919) 828- ©2003 by The John Locke Foundation (1969), and was editor of the Harvard Crim- 3876 or [email protected]. Inc. All opinions expressed in bylined ar- son and the Yale Law Journal. ticles are those of the authors and do not Michael Barone necessarily reflect the views of the editors of Barone served as law clerk to Judge Shaftesbury Society Carolina Journal or the staff and board of Wade H. McCree, Jr., of the U.S. Court of the Locke Foundation. Appeals for the 6th Circuit from 1969 to appeared in several other books, including Each Monday at noon, the John Locke 1971. From 1974 to 1981, he was a vice Our Harvard and Beyond the Godfather. Foundation sponsors the Shaftesbury Soci- Material published in Carolina Journal president of the polling firm of Peter D. Over the years he has written for many ety, a group of civic-minded individuals may be reprinted provided the Locke Foun- Hart Research Associates. publications, including the Economist, the who meet over lunch to discuss the issues of dation receives prior notice and appropri- From 1981 to 1988, he was a member of New York Times, the Detroit News, the Detroit the day. The meetings are conducted at the ate credit is given. Submissions and letters the editorial page staff of the Washington Free Press, the Weekly Standard, the New foundation’s offices at 200 W. Morgan St., to the editor are welcome and should be Post. From 1989 to 1996, and again from Republic, National Review, the American Spec- Suite 200, Raleigh. Parking is available in directed to the editor. 1998 to present, he has been a senior writer tator, American Enterprise, the Times Literary nearby lots and decks. Readers of Carolina Journal who wish with U.S. News & World Report. From 1996 Supplement, the Daily Telegraph of London, to receive daily and weekly updates from CJ to 1998, he was a senior staff editor at Reader’s and the Italian publication Libro Aperto. “Carolina Journal Radio” editors and reporters on issues of interest to Digest. Barone is a regular panelist for the North Carolinians should call 919-828- Barone is the principal coauthor of The “McLaughlin Group,” and has appeared The staff of Carolina Journal co-pro- 3876 and request a free subscription to Almanac of American Politics, published by on many other television programs and duce a weekly newsmagazine, “Carolina Carolina Journal Weekly Report, deliv- National Journal every two years. The first networks, including the Fox News Chan- Journal Radio,” which appears in syndica- ered each weekend by fax and e-mail, or edition appeared in 1971, and the 15th edi- nel, MSNBC, CNBC, CNN, “Meet the Press,” tion on 14 radio stations across North Caro- visit CarolinaJournal.com on the World tion, The Almanac of American Politics 2000, “This Week,” “Today,” “Good Morning lina. You can visit CarolinaJournal.com to Wide Web. Those interested in education, higher education, or local government appeared in July 1999. America,” “Hardball,” “Crossfire,” the Brit- locate an affiliate in your area. Also, sub- should also ask to receive new weekly e- He is also the author of Our Country: ish Broadcasting Company, ITN of Britain, scriptions to a monthly CD containing se- letters covering these issues. The Shaping of America from Roosevelt to the Canadian Broadcasting Company, and lected episodes of the program are avail- Reagan (Free Press, 1990). His essays have the Australian Broadcasting Company. able by calling (919) 828-3876. CJ C A R O L I N A October 2003 JOURNAL North Carolina 3 In Effort to Protect All Jobs, UNITE Lost Chance at Saving Few

Continued From Page 1 plants, which Hansen said “desperately needed modernizing.” Hogsett said the in-chief of Home Furnishings News. “These amount plowed into equipment upgrades Pillowtex’s North Carolina Facilities other guys were just going to cherry-pick was “not that much.” bits and pieces out of the company. Pillowtex had also contested a June 1999 “Textiles has a horrible track record of vote by its employees to unionize its six Company Employed About 4,800 of Its outside investors getting burned or getting Fieldcrest Cannon plants in Kannapolis and 7,650 Workers in North Carolina out as quickly as possible.” Rowan counties. After a 25-year effort by Bruce Raynor to organize the workers, he Location Principal Use Square Feet Employees Recognizing the problem won a 2,270-2,102 victory. In November 1999 financially weak Pillowtex dropped Kannapolis Corporate Offices Part of Plant 1 400 Some textile industry followers believe its objections and entered contract negotia- the union failed to recognize the severity of tions with the new UNITE members. Kannapolis Plant 1 5,863,041 2,650 Pillowtex’s financial predicament. Because A year later the company entered bank- Towel and Sheet Mfg. Springs’s deal probably would have meant ruptcy, and emerged from Chapter 11 in thousands of layoffs in Kannapolis, UNITE May 2002. McNeil believes Pillowtex was Concord Plant 6 696,963 640 leaders reacted in a knee-jerk manner, to allowed to come out of bankruptcy with Sheet Mfg. the detriment of all its members. “way too much debt.” “It was pretty clear [that Pillowtex] was “The problem is everyone was making Rockwell Plant 11 98,240 90 in an extreme amount of duress (in Decem- these consensual bankruptcy plans,” he said, Sheet Yarn Mfg. ber 2002),” McNeil said. “I was always ex- “instead of sitting down and doing what tremely skeptical, after reading the finan- needs to be done.” China Grove Plant 16 567,000 560 cials, that they would be able to come to a Harris Raynor said he likens banks to Sheet Mfg. & Cotton deal with anyone.” drug dealers. “They loaned [Chuck Hansen] Warehouse Pillowtex filed for its first Chapter 11 a lot of money irresponsibly,” he said. bankruptcy in November 2000, after it According to McNeil, by March 2003, Eden Decorative Bedding 529,273 450 bought Fieldcrest Cannon in 1997. Industry 31 entities expressed some degree of inter- Mfg. & Warehouse observers say Pillowtex took over its sub- est in buying Pillowtex, and 12 performed sidiary from a weak financial position, and some level of due diligence. Six proposals Various Fieldcrest Cannon Not Available Not Available some even peg the company’s financial were considered and on April 12 the offers Stores problems to when Fieldcrest Mills (based in were narrowed to one candidate — pre- Eden) bought Cannon Mills in 1986. For sumably Springs. In less than a month Mfg. Locations Outside N.C.: Alabama (2), South Carolina (2), Virginia, nearly two decades the company failed to UNITE was pressuring Springs to back off. Mississippi, Pennsylvania, Illinois, Texas, California, & Toronto, Canada keep its equipment modern and to promote its brands. “The capital money was never Can or can’t Kannapolis? Source: Pillowtex Fact Sheet there,” Hogsett said. “Pillowtex really hadn’t invested in its Either UNITE protested because it genu- business in 10 years,” Shoulberg said. inely thought it could save jobs in think any of these bids contemplate operat- “We had no assurance Springs would go “Plants were not state-of-the-art anymore.” Kannapolis, or because it had no choice ing [in Kannapolis].” Harris Raynor, who through with [the purchase].” Pillowtex took on a significant amount other than to put up a hopeless fight for said he hasn’t given up hope to save some Raynor’s claim left McNeil incredulous, of debt when it bought Fieldcrest Cannon. most of its members. Whatever the reason, jobs, said Kannapolis could still be viable. who said even saving 500 to 1,000 jobs CEO Chuck Hansen, in a newsletter in Oc- observers say, the move may have pre- “I don’t know if I agree with that total would have been an incremental benefit. tober 1999, admitted some missteps. vented at least some, perhaps three or four assessment,” he said, citing “other manu- “His effort failed. How can he say that?” “Some of the adversity we have at the plants’ worth jobs from being salvaged. facturers” he has spoken to. “The problem McNeil said. “I wonder what their home- moment is because of poor decision-mak- Independent observers said the enor- is Kannapolis is so big you have to run a work consisted of. Did they know how bad ing,” he wrote. “As a company, we tried to mous, old, inefficient Kannapolis plants had certain amount through there.” the situation was? do too much at once. Practically overnight, no chance of survival. “I’m sorry for all the Raynor blames U.S. trade policy for the “I’m not a union basher, but it’s really we tripled in size.” people down there,” Hogsett said, “but that Pillowtex and other textile closings, and difficult for me to come up with a different At the same time the Salisbury Post re- plant is a relic.” defended UNITE’s actions. conclusion,” McNeil said. “Any union in- ported that Pillowtex invested at least $68 A bankruptcy auction was scheduled “The union is confident we did the volved with textiles ought to be saving as million in its acquired Fieldcrest Cannon for September, but Shoulberg said, “I don’t right thing for the people there,” he said. many jobs as they can for their people.” CJ Raynor’s Campaigns Target Corporations’ Character and Legitimacy

Continued From Page 1 workers that they can do it.” and retail distribution industries because Leon Fink, a labor historian who was those jobs are least likely to move overseas. floor, and in the boardroom,” writes then at the University of North Carolina One example that Adams points to is Manheim. “Corporate campaigns… attack (and is now a professor at the University of Raynor’s current effort to unionize the laun- the essential corporate character of their Illinois at Chicago), said at the time, “It’s the dry industry, which mostly employs at low targets and challenge the legitimacy of the biggest breakthrough in a traditional South- wages. corporation as a social form.” ern industry for probably the past quarter The jobs are filled with a heavy concen- Raynor is recognized as one of the most century.” tration of immigrants and minorities, and effective organizers in the labor movement, But a year later Pillowtex was in Chap- Business Week reported that Raynor capital- and is considered a possible successor to ter 11 bankruptcy, and after briefly emerg- izes on their common bonds “by getting AFL-CIO President John Sweeney. ing in 2002 went out of business in July them to reach out to recruits with similar Throughout the 1990s unions saw their in- 2003. Raynor is blamed in many corners for backgrounds.” Since 1998 UNITE has added fluence diminish as overseas competition scuttling a deal Pillowtex had with Springs 40,000 laundry workers. sapped domestic manufacturing jobs. How- Industries in April 2003, which could have Raynor’s chief target is now Cintas ever, Raynor’s drive to replenish UNITE’s UNITE President Bruce Raynor salvaged some of UNITE’s Pillowtex jobs. Corp., the nation’s largest commercial laun- ranks kept the numbers steady. Instead, Raynor went for broke to try to dry and uniform supply company. Raynor Today the union boasts about 250,000 was conducted in 1974, the same year as the save most of the jobs, but came up empty- is waging a corporate campaign against members. successful J.P. Stevens election. The union handed. Cintas, accusing the company of racial dis- Raynor seems to relish fights in which lost. The union then lost three more votes to The fervency that won him his victo- crimination and harsh working conditions. he is the underdog. Besides the difficulty of organize by employees in 1985, 1991, and ries, some say, is also what costs the people He told left-wing magazine In These Times, representing industries that are rapidly los- 1997, in the face of vehement company op- he purports to represent their jobs. “I don’t know how long it will take to bring ing jobs, he has specialized in beating the position. “He’s a bombthrower — an absolute Cintas down, but mark my words: We will.” odds in right-to-work states and in the tra- Cannon, in its various incarnations, was radical,” said Bill Adams, CEO of Kentucky- Raynor has also pressured Starbucks ditionally antiunion South. As Southern cited several times by the National Labor based Adams, Nash, Haskell & Sheridan, a and United Parcel Service to stop using regional director of UNITE’s predecessor, Relations Board over the years for unlawful consulting firm that helps employers avoid Cintas’s services until it accepts unions. the Amalgamated Clothing and Textile labor practices and for intimidating em- unionization and counter union campaigns. Stan Greer, senior research associate Workers Union, he led a drive that union- ployees to not support the union. But “He’s effective from a rhetoric stand- with the National Institute for Labor Rela- ized more than 20,000 workers over a 10- Raynor’s persistence paid off in 1999 when point and from a values standpoint,” Adams tions Research, said Raynor pours millions year period. the union broke through with a 2,270-2,102 said of Raynor. “The problem he has is his of compulsive dues money into attacking Perhaps Raynor’s proudest achieve- victory. tactics are unrealistic and almost always businesses he doesn’t like. ment was the unionization of six Pillowtex- “It feels like we just organized GM,” damaging to the people he says he wants to “It’s not his future that’s on the line,” Fieldcrest-Cannon mills in the Kannapolis Raynor told the New York Times. “Suddenly, represent.” Greer said. “He’s putting someone else’s area. The first vote at then-Cannon Mills we’ve got a beacon to show other textile UNITE is targeting low-paying service money on the line.” CJ October 2003 C A R O L I N A 4 North Carolina JOURNAL

Around the State Deal for ENCNG could mean rate hikes

• North Carolina Democratic Gas Pains for Piedmont Customers and Taxpayers Party congressmen harshly criticized the Bush administration in late Au- By PAUL CHESSER gust. Reps. Bob Etheridge, Brad Associate Editor Miller, and David Price charged that RALEIGH the Department of Homeland Secu- he secondary deal behind the pur- rity has provided inadequate train- chase of North Carolina Natural Gas ing and resources for local emer- Tby Piedmont Natural Gas Co. could gency response agencies. The con- eventually cause customers’ rates to rise gressmen said the answers they re- and diminish already faint hope that tax- ceived to an informal survey con- payer-funded bond money will be repaid. ducted in 15 counties showed that Piedmont’s $417.5 million deal to buy local departments need more com- NCNG from Progress Energy Inc. was ac- munications and protective equip- companied by an agreement also to take on ment and more personnel. 50 percent of Eastern North Carolina Natu- “The first telephone call is not ral Gas. Progress Energy had teamed with going to Washington,” Etheridge the Albemarle Pamlico Economic Develop- said at a press conference in Garner. ment Corporation to create ENCNG, which Piedmont Natural Gas Company’s service area comprises three states in the Southeast. “The first telephone call is going to a was awarded $188 million of the $200 mil- first responder.” Reported by the As- lion public gas bond funds approved by cations Piedmont is a well-rounded com- its operations. However, that would seem sociated Press. North Carolina voters in 1998. As a partner pany. We think they’d do a better job than to render purposeless the utilities commis- with APEC, Progress added $7.5 million — CP&L would have done.” sion’s original requirement to keep a sepa- • One of President Bush’s the amount Piedmont is paying for its share Harrow acknowledged that Piedmont rate company. staunchest allies also criticized the of ENCNG — to the bond money to con- officials have discussed the future incorpo- Sam Ervin IV, one of the seven utilities administration’s trade policies for struct a gas pipeline in 14 counties that had ration of the ENCNG territory into its over- commissioners, said only the specific pipe- driving thousands of manufactur- no service in the northeast part of the state. all operations. line project’s costs and feasibility would ing jobs out of North Carolina. U.S. “I wouldn’t call it a goal,” he said. “I need to be monitored, and not ENCNG Rep. Sue Myrick accused the presi- Keep it separate think it’s probably a subject of the partner- overall. dent of ignoring the plight of unem- ship that’s logical to discuss. He said future studies could determine ployed factory workers. The North Carolina Utilities Commis- “APEC’s interest was to get a gas project. whether the project became economically “If he doesn’t care about us,” sion, as a condition for approval of bond I don’t think APEC is set up to be a long- feasible, and that ownership of the project Myrick told a Gaston Chamber of monies for APEC and Progress’s predeces- term gas company, whereas Piedmont is.” was irrelevant. Commerce audience at Belmont Ab- sor, CP&L, required that the partners form ENCNG so far has about 350 customers, However Jim Hoard, assistant director bey College, “we won’t care about a separate organization “to ensure that ad- and revenues aren’t expected to cover oper- of accounting for the utilities commission’s him come election time.” equate cost allocation and record keeping ating costs for the foreseeable future. Har- public staff, said a proposal for Piedmont to Meanwhile, GOP Rep. Howard procedures are implemented.” The statute row was hesitant to speculate, but he said if take in ENCNG would probably trigger an Coble and Democrat Rep. Mel Watt providing for the bond funds calls for the ENCNG was absorbed by Piedmont those examination of cost tracking and the bond spoke in High Point on trade diffi- money to be paid back to taxpayers if the losses would likely be passed on to custom- repayment question. culties facing the furniture industry. project becomes economically feasible. ers, as would repayment of bond funds if “There’s going to be a number of issues Both congressmen, who lead a spe- ENCNG is the vehicle collecting the bond the Utilities Commission determined they that arise,” Hoard said. “It’s going to be a lot cial furniture caucus, want the Bush funds, building the pipeline, and operating needed to be paid back. more complicated from a bond perspective administration to strongly enforce the system. “If it’s going to be a perpetual money- to roll-in [ENCNG]. trade agreements with China. Piedmont’s pending acquisition includes loser,” Harrow said, “from a long-term busi- “That (merger) would be the spurring a plan to merge ENCNG into the larger ness perspective it wouldn’t be prudent to event. We’d have to determine what all the • Two contenders for what will company, which means cost allocation and operate a (separate) system for very long.” tracking provisions would be.” be U.S. Rep. Richard Burr’s (who is record keeping could get murky. Without Besides repayment of bond money, con- Ervin said operating costs from the running for the Senate) former 5th separate tracking as the utilities commis- tinued operating losses could end up hit- ENCNG project are covered in the bond Congressional District seat heatedly sion required, determining whether the $188 ting Piedmont’s entire customer base. funds, and would not affect Piedmont’s debated each other at a Citizens for million in bond money should be repaid to Other observers don’t know how, with overall rate base. Any future rate changes a Sound Economy luncheon Aug. 20 taxpayers would likely be impossible. a “roll-in,” Piedmont would be able to sepa- would require approval from the utilities in Mocksville. Winston-Salem Al- “Once system ‘B’ is rolled into system rate what are ENCNG’s current revenues commission. derman Vernon Robinson has chal- ‘A,’ and ‘B’ was subsidized by bonds,” said and costs from the rest of Piedmont’s opera- But if, as expected, the ENCNG pipe- lenged state Sen. Virginia Foxx for Don Harrow, vice president of governmen- tions. line loses money for years to come, Pied- months about her anti-tax and so- tal relations for Piedmont, “I don’t know “I think it would be an uphill undertak- mont would need to recover the loss either cial-conservative credentials. how you track that roll-in.” ing,” said Gisele Rankin, a lawyer for the through customers or shareholders. Cur- Robinson says that Foxx has voted utilities commission’s public staff. “There rently there is a provision for Piedmont to to raise taxes more than 100 times How absorbent is Piedmont? might be a way to do it. maintain an account up to $15 million as an while she has been a legislator, and “You’d have to either not allow the asset, which could later be recovered by that she also has accepted contribu- Piedmont’s focus is to absorb NCNG “roll-in” or keep the accounting separate, ratepayers, Hoard said. tions from a gay-rights group. The into its operations within two years, while or order the (bond money) paid back in Some operating costs are covered in the candidates, two of the nine total Re- holding its interest in ENCNG separately. time.” bond funds, Hoard said, but in reality al- publicans who have declared they But a resolution approved by APEC’s board One possibility Rankin raised was that most all that money is paying for construc- are running for the seat, staked out of directors declares that once Piedmont once ENCNG was absorbed by Piedmont, it tion of the pipeline. Operating the system their positions. fulfills its contractual obligations to build could instantly be declared economically will require expenditures, which the cur- Foxx defended her voting record the gas pipeline, an APEC committee “is feasible. However, the North Carolina stat- rent and projected ENCNG customer base in the state Senate. further authorized to consider further agree- ute would seem to require that the bonds be isn’t likely to recover soon. “I can’t continue to let him lie ment between Piedmont and APEC that…at repaid if that happened. Without a merger, it’s unlikely ENCNG like he is and get away with it,” Foxx a mutually agreeable date, APEC would That proposition didn’t seem possible could survive for long. Piedmont, valued at told the audience of about 25 people. transfer all of its ownership interest in to Bill Gilmore, a gas industry analyst for $1.2 billion prior to the deal, will issue up to She said that she has voted for local [ENCNG] to Piedmont and Piedmont will the utilities commission. $500 million in short-term debt securities to tax bills in the past, but that she has merge [ENCNG] into Piedmont and oper- “A change of ownership in ENCNG fund the purchase. never voted for a statewide tax in- ate the [ENCNG] system as an integrated would not — of itself — make ENCNG into “To the extent [Piedmont] want(s) to crease. She said that voting in favor part of the overall Piedmont system….” a feasible project,” he said in an e-mail cover their operating expenses,” Hoard said, of other local bills is an unwritten Piedmont and APEC also signed an message. “that would have to be borne by the rule in Raleigh, if legislators want agreement that includes future consider- “If I sell you a car that is a clunker, you ratepayers.” their local bills passed. ations of a merger, after Piedmont fulfills its may think that you’ve bought a Mercedes. Hoard said if paying back the bonds Foxx also said she accepted con- contractual obligations to complete the gas But, just changing the title into your name (with interest) became possible, it would tributions from the N.C. Pride PAC pipeline. The agreement was reached as a does not change the fact that the car is still mean good things are happening with eco- for Lesbian and Gay Equality be- condition for the APEC board’s approval of a clunker. nomic development in the east. Still, when- cause she wouldn’t turn down do- the Progress-Piedmont deal for ENCNG. “The only way that it becomes eco- ever in the future that occurs, if ever, the nations while running for the state Jimmie Dixon, chairman of the board of nomically feasible is that it has enough cus- burden upon all Piedmont’s customers is Senate. directors for APEC, confirmed to Carolina tomers paying a high enough margin to unknown. Foxx criticized Robinson’s cam- Journal that the goal for ENCNG was to be make it feasible,” he said. “You’re going to need several hundred paigning style, calling him “a bomb absorbed into Piedmont and that the two million dollars of cash flow (for the project thrower.” Reported by the Winston- companies had discussed it. No separation anxiety to become economically feasible),” Hoard Salem Journal. CJ “Our main goal was to get natural gas to said. “We’re a long way away from that. the 14 counties in the Northeast through the Gilmore said that separate books would “I suspect it’s going to be quite some bond issue and working with CP&L,” Dixon need to be kept for the ENCNG project, but time before Eastern comes up with that said about APEC’s mission. “From all indi- that he thought Piedmont could do so within amount of money.” CJ C A R O L I N A October 2003 JOURNAL North Carolina 5

First audit of state-owned institution N.C. Textile Center Scrutinized Over Its Efficiency and Its Classes

By PAUL CHESSER ter by other organi- puter course any- ness and industry.” Associate Editor zations or busi- where.” The types of courses offered by the cen- RALEIGH nesses, but with no The Textile Cen- ter reflected the nature of the struggling he North Carolina Center for Ap- participation by the ter also included the industry. Only about 25 percent were tex- plied Textile Technology, a state- center’s staff other police academy on tile- or manufacturing-related. But 54 per- Towned higher-education institution than security and its list of courses. cent of the courses offered instruction on that since 1996 has received more than $1.2 janitorial support. Internal meet- basic computer use, which community col- million annually in aid from the state, re- On Jan. 22, for ex- ings of the Textile leges usually offer. They included classes cently underwent a program for the first ample, the City of Center’s own em- on Microsoft Word and Excel, using the time. Belmont used the fa- ployees also made Internet, and buying computers. Some were The Textile Center in Gaston County cility for an eight- its list of courses, in- as elementary as “Using Cut, Copy and operates and receives its “pass-through” hour training session cluding a 15-minute Paste in Microsoft Office” and “Mouse Ba- funding out of the community college sys- for 18 of its employ- “Using the Calendar sics.” tem budget. Considered the “59th” commu- ees on a new com- of Events” presenta- “So often we don’t question [recurring nity college, it is not funded by the General puter evaluation sys- tion. A two-hour ex- funds],” said Rep. Jean Preston, an Emer- Assembly like the state’s other schools, tem. The Textile Cen- planation of the ald Isle Republican who cochairs the House whose financial allocations are based on the ter credited itself for school’s emergency appropriations subcommittee on education. average number of full-time equivalent stu- 144 student hours. evacuation plan, “It’s just sort of there and we keep funding dents for each year. The center receives a A few private given to 23 employ- it again.” Preston was surprise at the large flat amount annually — most recently $1.57 businesses that used ees, also counted as percentage of classes with low enrollment. million in fiscal 2001 and $1.43 million in the facility were fod- Rep. Jean Preston, R-Carteret a class held at the “If [that’s] true,” she said, “then we have fiscal 2002. der for course cred- Textile Center. been misspending money.” A preliminary report by former com- its also. Melco, an embroidery equipment “An individual on the staff wanted to munity college system Audit Director Bill manufacturer, uses the center to train cus- be credited with that presentation,” Lem- Why an audit now? Cole had been completed but not released tomers who have bought the company’s ons said. by early September. The community college machines. Last year, Melco accounted for The Textile Center’s basis for funding system’s administration commissioned the at least 5,752 of the Textile Center’s student Classes don’t tell whole story isn’t expected to change, so what will come examination of the center because legisla- hours. Neither Melco nor its customers pay out of the audit is unclear. The community tive staff questioned whether it was effi- the Textile Center for the use of its facili- “No one is measuring the kind of as- college system, though, wants to continue cient. ties, but the school is allowed to use the sistance we provide,” Lemons said. “Some evaluating the center’s offerings annually. The center has no reporting require- company’s equipment for its own classes. of the things we’re doing right now aren’t “Even though the funding isn’t based ments to the community college system or Lemons said that the center has no being captured.” on FTE, you still have to feel like the to the legislature, but N.C. Community Col- equipment budget and that when he ar- He said his staff works with businesses money’s being put to a good purpose,” said lege System President Martin Lancaster rived in 1984 the school had only antiquated to tailor training programs to their needs. Audrey Bailey, a spokeswoman for the com- serves on the center’s board of directors. machinery that had been donated after its “We don’t claim to be a college,” Lem- munity college system. “The audit will ei- The governor appoints the remaining mem- usefulness was gone. ons said. “We’re a center to support busi- ther confirm or disprove that.” CJ bers of the board, which is comprised “Now we’ve got state-of-the-art equip- mostly of textile industry executives. ment because of [the Melco] partnership,” he said. “I think it’s saving the taxpayers a Few students lot of money.”

Carolina Journal obtained copies of the Every quarter-hour counts center’s class rosters for school year 2002- 03, which showed a large number of courses The Textile Center also included short and few students. presentations by staff — as brief as 15 min- The school reported that it conducted utes — on its list of “continuing education 412 courses for the school year, and 231, or classes.” Personnel held such sessions in at 56.5 percent, had five students or less. Forty- least three Gaston County schools, in which nine classes, or 12 percent, had two stu- teachers were informed about the center’s For more than 12 years, Carolina Journal has provided its dents; 73 courses, or 18 percent, recorded offerings and in one case, a special program only one student. About 25 percent of the was developed for a school. But on at least thousands of readers each month with in-depth reporting, classes had 10 or more students. two of these occasions the Textile Center informed analysis, and incisive commentary about the most “It’s not economically viable to offer a listed consecutive 15-minutes classes as pressing state and local issues in North Carolina. With a lot of courses with just one or two students” separate courses given by its instructors: particular emphasis on state government, politics, the General said Dr. Pat Skinner, president of Gaston “Overview of Computer Applications” and Assembly, education, and local government, Carolina Journal College, one of the state’s community col- “Overview of Web-based Training.” leges that she says is less than 15 miles from While they didn’t characterize those has offered unique insights and ideas to the policy debate. the Textile Center. brief sessions as instruction, two principals Dr. James Lemons, the at the schools said they Now Carolina Journal is taking its trademark blend of news, center’s president, said the appreciated the help analysis, and commentary to the airwaves with a new program data was an internal docu- they received from the — Carolina Journal Radio. ment compiled annually to “So often we don’t Textile Center. track staff’s public activi- question [recurring “We’ve been real ties. He said it wasn’t a for- pleased with their A weekly, one-hour newsmagazine, Carolina Journal Radio mal record of the Textile funds]. It’s just sort of workshops,” said is hosted by John Hood, publisher of Carolina Journal, and Center’s courses and stu- there and we keep Ronald Foulk, principal features a diverse mix of guests and topics. Education reform, dents. funding it again.” — of Rankin Elementary tax policy, the state legislature, affirmative action, air pollution, But the report is titled School in Mt. Holly. “Continuing Education Rep. Jean Preston “All the [classes] freedom of the press and the courts — these are just a few of Classes held at NC Center I’ve been to are real the subjects that Carolina Journal Radio has tackled since for Applied Textile Tech- good stuff,” said Lee the program began production in May. nology 2002-2003.” The document lists Dedmon, principal of Highland School of course titles, begin and end dates, course Technology in Gastonia. Currently broadcast each weekend on 14 commercial radio hours, number of students, and student The Textile Center also made two con- hours (course hours multiplied by the num- secutive 15-minute “Overview” presenta- stations Ð from the mountains to the coast Ð Carolina Journal ber of students). tions — claimed as “courses” — during a Radio is a one-of-a-kind program that seeks to inform and Some students contacted by Carolina free Citizens Police Academy at the school. elevate the discussion of North Carolina most critical issues, Journal said they weren’t in classes that the Attendees were invited by the Belmont Po- and to do so in a fair, entertaining, and thought-provoking way. center claimed they attended. Two people lice Department to take the 11-week session. listed for one class on Jan. 27 said they Five of the 17 citizens who took the acad- didn’t attend. One was an elderly woman emy, who were also listed as students of the from Belmont who said she was a patient “Overview” classes, said they never took in a hospital at the time. The other, a nun computer classes at the Textile Center. from Charlotte, said she canceled prior to “I’m going to have to plead innocent For more information or to find an affiliate of Carolina Journal the class. to that one,” said one man who attended Radio in your community, visit www.CarolinaJournal.com. “Continuing education classes” also the police academy. “I’m technologically included activities held at the Textile Cen- challenged and have never taken a com- October 2003 C A R O L I N A 6 Education JOURNAL

High, Medioum and Low-Stakes Filters Used in Teacher Education and Development: U.S. and International Co NC News: SAT scores Filters Used in the TeachEntry into Te Evaluation Exit from Te Certificati Hiring Evaluation Evaluation of Evaluation Education and Developm education Practical Exp Educaton Pr Induction Pe Professiona Probation Pe Pipeline Requireme Developmen (for Tenur • While the primary focus of the past few months has been on Australia schools failing to meet standards M M H M L L L M established by the No Child Left England Behind Act, this fall the North L H L H L L L M Carolina Department of Public In- Hong Kong M struction announced new statis- M M L L L L H tics on the state’s SAT and ACT Japan H H L L M M H H scores. The College Board reported Korea H M H L H L H L Aug. 26 that the average total SAT score for North Carolina had in- Netherlands H H M L L L L M creased three points and finally Singapore surpassed the 1,000-point thresh- H M H L M M L L old. The state’s mathematics score United States increased by one point, and the M L M H L L L L verbal score increased by two points. Nationally, average SAT scores increased by six points — three points each in the mathemat- ics and verbal sections. High-Stakes Tests Needed For Teachers? The three-point increase means that North Carolina ranked highest among Southeast states, Student success is highest where teachers pass tough professional ‘filters’ which include Florida, Georgia, North Carolina, and South Caro- lina. The state has been optimistic By KAREN PALASEK Just two school districts in the state, Hyde Japan, Korea, the Netherlands, and about its SAT scores for the past Assistant Editor and Ashe, met district-level adequate yearly Singapore. decade because of its relatively RALEIGH progress requirements under No Child Left The report focused on “top performers” constant point performance over ne of the most daunting tasks Behind for 2002-03. to see what differences and similarities they the past 10 years amid an increased school administrators face is find- A recently released Education Week have to U.S. practices. The ETS study claims participation rate by students. Sta- O ing the highly qualified teachers study, “Quality Counts 2003,” rated states to be unique in that it looks at the entire tistics demonstrate that scores de- they need to staff schools under the No according to their efforts to improve teacher teacher preparation pipeline, and not exclu- cline as participation increases, and Child Left Behind education act. The em- quality. Overall, North Carolina made a sively at a single point along the way. at 68 percent, North Carolina has phasis on teacher preparedness is under- fifth-place showing, and received a score of the 13th largest participation rate standable, given the high-stakes tests that 84 — a B — for a combination of points U.S. practices in the nation. now measure students and schools under earned for required teacher training classes, Although the state has con- the law. state licencing and financial incentives, and The “Preparing Teachers” study offers tinually improved, the score gap According to the Department of Public for several state accountability require- some revealing comparisons. Authors for white and minority students Instruction, North Carolina needs nearly ments. Wang, Coley, Coleman, and Phelps found has not closed. According to the 12,000 new teachers annually. Swelling Although North Carolina scored above that all of the countries studied used more College Board and Educational school enrollments and attrition by retire- most states in the Education Week study, it filters for teacher training and development Testing Service, the average total ment, plus class-size reductions, add to the is typical of all U.S. teacher education in one than did the United States. Technically, we score for black students has re- demand. In North Carolina we are now significant respect. The main filter, or point have the same stages in the process as ev- mained the same, both statewide importing teachers from states all over the in the teacher preparation pipeline that ery other country, but we don’t use most of and nationally. The average score United States, so teacher preparation stan- would force an individual to exit the teach- the stages to filter out low-quality teachers for blacks in North Carolina is 839, dards in other states may have an impact ing profession, occurs at the certification and candidates. “In the United States, lagging by 211 points behind the on how our students perform. stage. Before and after this point, most steps nearly all of the high-stakes filtering is ap- 1050 average score for whites. In In a new international study, “Prepar- can be considered low-stakes, according to plied before or during initial certification. 2002-03, the gap between the ing Teachers Around the World” published the 2003 Educational Testing Service report After that, the filters in place might be con- groups widened by four points. by the Educational Testing Service, re- “Preparing Teachers Around the World.” sidered ‘proforma.’” Other minorities in the state searchers compared the United States to Eight pressure points, or “filters” show have made great strides to improve countries that require high-stakes mile- The teacher preparation pipeline where in the process countries exert restric- scores relative to their national stones as part of the teacher preparation and tions. Some countries “front-load” the pro- minority counterparts. Hispanics, development process. The countries stud- “Preparing Teachers Around the cess, as in Japan, Korea, the Netherlands, Native Americans, and Asian stu- ied all outperformed the United States on World” used an eight-stage teacher train- and Singapore. The screening process for dents have either reduced or elimi- eighth-grade science tests in the “Repeat of ing and development model. The sequence education school entry is significant in these nated the gap between their scores the Third International Mathematics and of stages form a “pipeline,” and teacher can- places. Japan also “back-loads” the pipeline, and the national average for their Science Study of 1999.” Although the au- didates can progress to later stages only by with high-stakes consequences attached to respective minority group. thors stop short of recommending policy, completing earlier ones. professional development and tenuring. While SAT scores for North the study raises provocative questions. Are At each stage, policies present pressure Japan uses more high-and medium-stakes Carolina’s high school students better teachers the product of more rigor- points, or “filters” for the developing filters than any other country studied — have improved, ACT scores have ous, high-stakes teacher preparation pro- teacher. The rigor of the required step de- four and two, respectively — and only two remained the same, according to cesses? termines how difficult it is to pass through low-stakes criteria. Following Japan in or- results released this August from that stage. This study assumes that high- der of the combined number of high-and- the ACT college admissions and Is certification enough? quality teachers will go through most or all medium-stakes filters are Korea, Singapore, placement exams. The SAT has filters. Australia, the Netherlands, Hong Kong, En- been the standard test for students Certification may not be enough to pro- The high-stakes pressure points could gland, and, last, the United States. in North Carolina in college ad- duce a highly qualified teacher. In the cause a person to exit the profession, while Teacher preparation in the United missions, but the ACT is some- United States, schools rely heavily on the medium-stakes points can only be passed States involves just one high-stakes barrier: times used as an alternative in the certification stage in the teacher-prepara- with some effort. Low-or-no-stakes filters teacher certification. Most U.S. teacher de- admissions process. tion process. That is especially true in North are not real barriers. Instead, they present velopment stages are no-or-low-stakes fil- Nationally, a growing num- Carolina. To date, North Carolina has the mainly “pro-forma” requirements. ters — five out of eight requirements in the ber of students are opting to take largest percentage of nationally certified The pipeline begins with acceptance U.S. are low-stakes, proforma measures. the ACT instead of the SAT. In teachers in the country. According to a into a teacher training program, and pro- If high-stakes tests improve student North Carolina, the number of stu- North Carolina Education Alliance study, ceeds through practical experience, exit achievement, can high-stakes filters raise dents choosing the ACT have in- more than 20 percent of the 16,000 National from teacher training, certification, hiring, teacher quality? “Preparing Teachers creased each year. Board for Professional Teaching Standards evaluation during an initial teaching pe- Around the World” doesn’t tackle this di- The black-white disparity is certified teachers are located in our state. riod, evaluation of professional develop- rectly, but the study is suggestive. Even so, smaller for the ACT than the SAT, North Carolina student scores on na- ment, and evaluation for tenure. the authors offer “some words of caution, but blacks in the state still tional tests like the Scholastic Aptitude Test Fourteen of the 38 countries that par- along with a few caveats.” We are fairly underperform relative to their na- and the National Assessment of Educa- ticipated in the “Repeat of the Third Inter- warned that correlation and causation are tional group, with a statewide com- tional Progress have shown improvement national Mathematics and Science Study of not the same thing. posite average on the ACT of 17.4 over time, but state education officials ac- 1999” were candidates for the international Rather than suggest that another compared to a national average of knowledge that the state needs to continue “Preparing Teachers” study. Of these, seven county’s model will work in the United 17.6. Other minorities in the state its efforts. “We are making progress, but we also had an integrated eighth-grade science States, the authors point out that the num- scored higher than their national need to keep going if we want to be num- curriculum, needed for the comparison. ber and placement of high-stakes filters can counterparts. CJ ber one in the nation,” Gov. Mike Easley The seven nations that ETS finally be a valuable policy tool in the quest for said at a recent education press conference. chose were Australia, England, Hong Kong, teacher quality. CJ October 2003 C A R O L I N A JOURNAL Education 7

Law revamps program with new emphasis on literacy Head Start Gets Mandate For Academics Bureaucrats Avoid Simplistic Statistics By TERESA NICHOLS if already existing resources were used more effectively.” Contributing Writer But changes in Head Start are inciting fears about the RALEIGH direction of the program. The reauthorization act creates hy do bureaucrats make a simple statistic ead Start, the government’s signature early-child- the possibility of a pilot program that would allow eight extremely difficult? Do they just want to hood program, has been a high-profile issue this states to take control of their Head Start programs and keep everyone guessing? Keep the pub- summer for both President Bush and Congress. funds. This idea has drawn criticism from congressional W H lic in the dark? Do I sound cynical? Maybe, but even The School Readiness Act of 2003, the Head Start reautho- Democrats and some local Head Start operators, who have the State Board of Education chairman, Howard rization bill, calls for an increased focus on academics. expressed concern that the bill is a roundabout method to Lee, agrees with me. He, too, questioned the Depart- A bill summary issued by Rep. John Boehner, chair- dismantle the existing Head Start program entirely. Demo- ment of Public instruction on why this is so confus- man of the House Education and the Workforce Commit- crats acknowledge that Head Start needs improvement in ing. tee, said, “Head Start children its academic services, but Sen- Discussing the percentage of dropouts should lag behind their more affluent ate Democrats will be crafting be simple. It is a data-driven peers in the crucial early-learn- a version that will leave out number, right? As a former ing knowledge areas that have the pilot provision. school board member, I re- been shown to be an excellent member each year seeing the predictor of later school suc- Parents and teachers percentage of high school cess.” dropouts being around 3 to 5 According to the North The School Readiness Act percent. This didn’t seem ac- Carolina Head Start Survey, would require all new Head curate. Then, I figured out 17,269 children in the state Start teachers to hold appro- the puzzle. The report de- were enrolled in a Head Start priate associate degrees by scribed a one-year percent- program in 2001-02. And 1,397 2005. In addition, at least half age of students in 7th to 12th were enrolled in Early Head of all Head Start teachers will grades who had dropped out. Start. Head Start supported be required to hold bachelor’s Lindalyn In 2000-01, Mecklenburg had Kakadelis 1,152 classrooms in 431 cen- degrees by 2008. a 4.1 percentage rate, and ters in 2001-02, making a sub- The act also provides North Carolina had 3.9 per- stantial involvement in the guidelines that allow states to cent. But legally, a student cannot drop out at such program for North Carolina coordinate early Head Start young ages. Both figures would have looked better families. with existing childhood edu- if the base number included the number of kinder- Head Start was created in cation programs in the state. gartners. Statistics can hide in a multitude of defini- 1965, and was designed to These changes to Head Start tions. To add to the confusion, the state and federal “break the cycle of poverty by would directly affect the more definitions of a dropout differ. Got a headache yet? providing preschool children than 18,000 children who par- The state labels “dropouts” as students who of low-income families with a ticipate in the program in withdraw from high school to attend community comprehensive program that North Carolina. colleges. The federal guidelines allow certain in- would meet their emotional, Parents in North Carolina stances when students pursuing other programs are social, health, nutritional, and psychological needs,” ac- are also debating the merits of the plan adopted by the not counted as dropouts. The state does not include cording to the statute. House. Recent reports reveal that they are apprehensive “expelled students” in the dropout count (per state The reauthorizing legislation is causing concern, how- about the proposed changes in store for Head Start. The statue), but these same students are included in the ever. With a specific emphasis on academics, some fear that program holds particular importance in high-participation federal dropout count. The federal guidelines count the traditional aims of Head Start may fall by the wayside. areas of North Carolina. In Knightdale, a town that houses the same student twice, if they drop out twice in a These services have been geared to the distinct needs of 11 Head Start programs that serve more than 1,000 chil- year, but the state counts the student once. low-income families. dren, no one seems to know what a “more academic” Head The public just wants to know how many stu- The National Center For Children in Poverty notes that Start means. Parents want specific information on what dents drop out. Is this so hard? What might give us North Carolina families have universal access to Head program changes to expect. a clue is another measure: the “graduation rate.” The Start, regardless of income. The proposed shift in services Teachers and parents have additional concerns about No Child Left Behind law requires systems to report may simply reflect a shift in Head Start clientele: serving a the impact of degree requirements on teacher availability in this fashion, but will dropout information be smaller base of low-income households seeking family and quality. The School Readiness Act requires new levels hidden or confusing? The state ABC’s accountabil- services, and a growing constituency of families seeking of credentials for both teachers and teacher assistants. The ity program would improve if graduation rate were preschool or other services. Act puts them on a deadline for completion of those cre- considered rather than the state’s dropout defini- dentials. tion. Looking at a graduation rate could be used to The old vs. the new Head Start One worry that faces program administrators is the present more accurate reporting of dropouts. possibility that centers will be unable both to staff Head Knowing that poorer families are held hostage After its creation, Head Start was transferred from the Start programs and comply with the teacher qualification in this “one size fits all” system, I tend to look at how Office of Economic Opportunity to the Office of Child part of the law. New Head Start teachers are paid about these students fare. Looking at the graduation rate Development. It has since grown to a full program within $25,000 a year, considerably less than teachers in public in Mecklenburg County, poorer students failed to the Administration on Children, Youth and Families of the schools. The low pay and high certification requirements complete high school within four years at rates of 40 Department of Health and Human Ser- raise questions about attracting Head Start percent in 2001-02 and 44 percent in 2000-01. Who vices. The Head Start program has been personnel in an education environment should stand for this? Where is the outrage? very popular with its customers, and Children coming out of struggling to find teachers for regular The report summarized graduates as graduated serves children from birth to age 5, preg- Head Start… should schools. seniors and students who completed a community nant women, and their families. Head Critics have also expressed concern college program. Students repeating a grade were Start in its current state really attempts have the basic infor- about formal education for children in the classified as “active,” and those who “left the sys- to be a comprehensive program. One of mation necessary to birth-to-age-5 group, the range served by tem” were reported. The 40 percent included stu- its most important goals is to assist low- Head Start. Teachers agree that children compete in the class- dents from the official state dropout report as well as income families with mental, medical, need basic social skills before entering students who did not return to school after a disci- and dental health care. room. their formal education, but the idea of pline problem. This reporting method accurately In assisting families, Head Start has Head Start becoming a more formal envi- shows the intensity of the problem. always embraced the idea that school ronment has teachers and parents ner- While the State Board tries to determine how to readiness is enhanced if basic health and nutrition needs vous. Advocates of change argue that the program will collect and report data, these kids repeat the cycle of are met. The explicit shift to preparing children for aca- teach basic skills such as standing in line and being quiet, poverty. Oh yes, the Bill and Melinda Gates Founda- demic success stems in part from the apparent failure of the and ensure that children learn their ABC’s as well. tion recently gave the state $11 million as part of a program to make a difference in the academic lives of Bush summarized the debate by saying, “We’ve got a larger $30 million grant to reform high schools in children served by the plan. million kids anxious to learn, showing up on a daily basis North Carolina. The grant will be administered by Statistics show a persistent “readiness gap” between at Head Start programs all across the country. We’ve got the Public School Forum and be overseen by the children from low-income families and their affluent coun- teachers who want to teach. We’re writing checks for local Education Cabinet. The grant aims to reduce drop- terparts. Head Start does not seem to be closing that gap. A governments and the local Head Start programs. Let’s outs, but by letting the same folks who created the report issued by the Department of Health and Human combine it all into a comprehensive strategy that will allow situation, fix the problem! The $30 million will assist Services also revealed that Head Start children continue to us all to say we have done our duty for future generation of “innovative” solutions within the same system, never lag in areas such as math and reading once they reach children by laying the most important foundation of all, for solutions outside the monopoly. The status quo kindergarten. and that is the ability for each child to learn to read.” “blob” continues and simple statistics are hidden. Early-childhood education advocates now say that the Simply correcting past mistakes and increasing the Wonder why I am cynical? CJ program needs to accomplish a great deal more academi- program’s academic component is insufficient. Children cally. The Department of Health and Human Services coming out of the Head Start program should know not agrees, stating that “skills for specific areas known to only basic social skills, but also have the basic information Kakadelis is director of the NC Education Alliance. improve school readiness could be taught better, especially necessary to successfully compete in a classroom. CJ October 2003 C A R O L I N A 8 Education JOURNAL

School News: Nation Public education needs a new definition Education Expert Urges Widespread Reform • The Associated Press reports that Microsoft Corporation is ex- tending its education activities into Of Public Schools and ‘Inside the Box’ Thinking the design of high-tech high schools. According to the report, administrators are anticipating a By KAREN PALASEK “paperless building,” in which Assistant Editor online and electronic media replace RALEIGH physical texts and pages. ublic education needs a new defini- The new school is planned for tion, the CEO of the Education Lead- an opening in Philadelphia in 2006. P ers Council said recently at a lun- According to reports, Microsoft cheon at North Carolina State University. and other potential suppliers will Lisa Graham Keegan, head of an orga- bid for product and technology nization committed to improving the sales. The main contribution they nation’s public schools, spoke Sept. 8 at the will make is in expertise, said event, sponsored by the North Carolina Wanda Miles, Microsoft’s executive Education Alliance. She is also a former su- director of learning technologies. perintendent of the Arizona public school The school district’s chief ex- system. ecutive, Paul Vallas, said he hoped Keegan has been a vocal advocate of that adoption of the Microsoft performance-based change for public model for high schools would of- schools for many years, and offered her fer students in the Philadelphia dis- thoughts in a talk titled “The Abyss Gazes trict greater school choice. Also: Staring Down the Face of the Oppo- sition in Education Reform.” “When you take on the monster, it is • Officials in Detroit metro- important not to become the monster… politan school districts are having what it is that you oppose,” said Keegan in Lisa Graham Keegan, CEO of the Education Leaders Council, speaks at N.C. State University. second thoughts about their school her opening remarks. choice program, the Detroit News revamp public education, she said, we must them. reports. The metro districts have ‘Inside the box’ thinking first ensure that schools work for the ben- Keegan is promoting charter schools, had a competitive school environ- efit of every child. magnet schools, and vouchers as ways to ment for seven years, in a program Lack of improvement in public schools Public support for the education pro- bring innovative methods and fresh skills called Schools of Choice. is the result of “inside the box” thinking cess, and a policy that allows dollars to fol- into education. Traditional public schools Poor districts are losing chil- about how to produce better public schools, low children into schools that work best for hinder these efforts, but charters, magnets, dren, while other districts are Keegan said. That kind of narrow approach them, are the other essential components and private schools could ”allow great breaking even in “a bidding war to possibilities won’t work, she said. “They she identified. teachers to bring in their own staff… and among Metro Detroit districts with are trying to repair a system. They don’t eliminate people who don’t fit,” Keegan students as the prize,” the newspa- realize that they are working inside a box, Choice for students and teachers said. per reported. and there are all kinds of ways to get out.” In addition to choice for parents, the Districts that are trying to at- Because public education largely as- Keegan is confident about the benefit changes Keegan envisions will bring in tract or maintain enrollments signs children to schools, it cannot attract of increased choices for children, asserting, master teachers to evaluate teachers against spend thousands of dollars on mar- “the best and the brightest,” to the profes- “Kids won’t lose if dollars follow the child” a school’s own high standards. As for keting. sion, she said. That means that the school in a voucher plan. She concedes that schools American Board certification, Keegan said Steve Johnson, superintendent system cannot keep improve itself, and pre- might lose, ”if they are lousy schools.” that “the eye ought to be on who’s getting of Madison Public Schools, relies dictably, it poorly serves certain children. On the other hand, she said that failing results,” not on credentials. Likewise for on Schools of Choice students for Calling the public-school system a “So- schools should be treated like failing prac- teacher training. “It is not worth it right now one-third of his district’s operating viet-like monopoly,” because of its centrally titioners in other professional fields. to pretend that we can reform the colleges budget. “It’s a dog-eat-dog world, governed, inflexible character, Keegan said, “Would we continue to patronize a doctor of education,” she said. and I don’t like it,” he said. “There is no other system where we expect who hasn’t been able to cure us for 27 years, The Education Leaders Council was Parents whose children gain that to work except in public education.” on the fear that if we take our business founded in 1995 by Keegan and a group of admission to choice schools said As an alternative, Keegan proposed a away, he’ll only get worse,” she asks? other education chiefs. The leaders hope to they were pleased with the pro- new definition for public education. The The voucher plan that Keegan envi- address the problems of a system that they gram. Because of shootings and changes she proposed encompass aims as sions would reward schools that succeed believe will not, or cannot, reform itself violence in some schools, parents well as methods for reforming schools. To by allowing education funds to flow to without fundamental change. CJ such as George Jenkins said they were grateful for the opportunity the program offers. Lotteries Education Alliance Report Shows Limited School Choice in North Carolina handle the overflow when applica- tions exceed the number of vacan- cies in a school. By RICHARD WAGNER eighth-grade students are enrolled in roll slightly more than half of that total. Editor schools in those seven districts . RALEIGH Magnet schools and charter schools are Top counties for choice • The National Education As- hat are the school choices avail- also public schools of choice in the state. sociation adopted a number of able to parents of third- to Magnets offer special programs not typi- The NCEA study ranked all 117 dis- antichoice resolutions at its conven- eighth-grade children in North cally found in traditional schools. Charter tricts in the state by percentage of third- to tion in 2003, as reported by the Edu- W Carolina? A recently released study, schools are semiautonomous public eighth-grade students attending some cation Reporter. “Choice in North Carolina Education: schools. They exist under a private-public schools chosen by their parents. The Once again, the NEA resolved 2003,” published by the North Carolina association between the charter operators rankings included public, private, and to prevent any education provided Education Alliance, takes a detailed look at and the state. Charter schools aren’t guar- home-school percentages. Tops in the state by nonpublic school organizations the number and location of children attend- anteed students, so they have to attract and were Forsyth, Asheville City, and Avery, all from taking place in public school ing choice schools around the state. retain students to continue operating. Char- tied for first with 100 percent of students buildings. Use would be allowed, Because far more public elementary ters have more leeway in choosing curricu- attending choice schools. Mecklenburg was under the NEA resolution, as long and middle schools than high schools are lum and staff than do regular schools. next, with nearly 80 percent choice, fol- as it is not “in direct competition available for choice, the study concentrates Nine of the 117 school districts in the lowed by Wake at 52 percent, Durham at with the public schools.” on grades three to eight, but considers state offer magnet schools, and 44 districts 30 percent, and Pamlico at nearly 30 per- The 2003 resolutions also in- trends through high school as well. Private have at least one of the 100 charter schools cent. Lexington City, Guilford, and clude universal mandatory kinder- and home school enrollments are included authorized by the State Board of Education. Transylvania round out the top 10. garten, with compulsory atten- to round out the choice picture. Magnet schools served about 3.5 percent of There were 69 districts in 2002-03 that dance, and early-childhood educa- Among public schools, districts that third- to eighth-grade students last year, had no public school choice. tion programs in the public schools offer open enrollment — a chance to choose and charters enrolled 1.6 percent. Lindalyn Kakadelis, director of the “from birth through age eight.” a school before assignments take place — Home and private schools are much North Carolina Education Alliance, toured As for federal or state-man- or very liberal transfers, were included in more widely distributed around the state the state in September, made presentations dated parental choice options, the school choice numbers. Only seven dis- than are the public schools of choice. Every of the NCEA’s “Choice: 2003” report, and “these compromise free, equitable, tricts offered this option in 2002-03: Avery county except Graham reports some home talked about student achievement. The universal, and quality public edu- County, Asheville City, Kannapolis City, and private school enrollment. Together, “Choice: 2003” report was written by edu- cation” according to the NEA, Cumberland County, Lexington City, these nonpublic schools of choice account cation policy analyst Karen Palasek. It is which opposes them. CJ Forsyth County, and Mecklenburg County. for about 12 percent of the state’s third- to available on the web at www.nceducation About 9 percent of the state’s third- to eighth-grade students. Private schools en- alliance.org. CJ October 2003 C A R O L I N A JOURNAL Education 9

School Spotlight: Flexibility and choice work for Forsyth County school Kernersville Elementary Serves As a Model for No Child Left Behind

By BRIAN GWYN getting to literacy. It’s an investment in Contributing Editor reading.” RALEIGH The school has hired extra teachers to he 2002 No Child Left Behind edu- work with students exclusively on reading. cation act has placed added aca- Many of the extra teachers came out of T demic pressure on North Carolina retirement, and Fitzpatrick notes that their schools. Under the new law, each school experience added to Kernersville’s success. must meet all of its adequate yearly progress About 15 faculty members are designated targets to get a “pass” at the federal level. as primary reading teachers. They spend Some North Carolina schools had as few as that precious 100-minute block of time with one achievement target, or as many as 35 students every day. targets, to meet this year. More than half of Within the school day, this means a the schools in the state missed one or more staggered reading schedule for the teach- achievement goals in 2002-03. ers, with an A block and B block. Teachers Bucking the notion that schools with work with one group of students for the needy populations can’t succeed, Kerners- first 100-minute block, then break and work ville Elementary in Forsyth County hit all with a different group of students for the 27 of its federal achievement goals for 2002- next 100 minutes. During the reading blocks, 03. students are divided into what the princi- Kernersville serves a student popula- pal calls “flexible groups.” tion in which 58 percent of its pupils qualify Kernersville regroups students regu- for the federal free or reduced-lunch pro- larly. “We try after each quarter to revisit gram, a ratio that would cause some school groups,” Fitzpatrick said, noting that this administrators to despair. Instead, Kerners- flexibility allows for teaching to better meet ville is a model for No Child Left Behind. the needs of the students. At the fifth-grade Kernersville administrators Phyllis Tate, David Fitzpatrick, and Deborah Grace level, more than 89 percent of Kernersville Emphasis on literacy students are now proficient in reading. due to Forsyth County school district poli- for students who attend schools within their cies, Fitzpatrick said. The district is unusual zone. Every school, regardless of magnet How does a school with a large number Connections to the home and others in its willingness to embrace choice for par- theme, teaches the basic curriculum man- of at-risk children manage to be so success- ents of public school students. dated by the state. ful? Principal David Fitzpatrick believes In addition to the reading blocks, Ker- Buddy Collins, a member of the Win- there are plenty of commendations to go nersville has another way it follows through ston-Salem/Forsyth County School Board, Diversity around. “First, I have to credit the unselfish with its students. The school employs a said the district’s open approach to school educators who truly share love and com- “home-school coordinator” who tries to see assignments allows parents to have more Critics of magnet programs have often passion,” Fitzpatrick said. He credits the that the children’s basic needs are met. She say in their children’s education. said choice decreases student diversity in faculty and staff at Kernersville Elementary is affectionately known around campus as The school system places a strong em- schools by allowing more- affluent students as “vital to the school’s success.” In the the Mother Theresa of the school. “She’s phasis on magnet programs, and each school to avoid the inner city. Collins acknowl- midst of all the attention on test scores, he always on the go,” Fitzpatrick said. “She has its own theme. There is a wide range of edges that some schools are not as diverse said, “they haven’t lost focus on taking care constantly meets with parents and gets sup- school themes, such as math and science, as they could be, but that the benefits out- of children.” plies for the children.” communications, writing and publishing, weigh the disadvantages because “the re- In addition to caring faculty and staff, This assistance ranges from getting a and even aeronautics. Besides subject sult has been to have inner-city schools the school enjoys strong community sup- child to the dentist to personally delivering themes, magnet schools may focus on learn- with small enrollment.” This provides at- port. A school has existed on the grounds packages of loose-leaf paper. Fitzpatrick ing strategies, such as multiple intelligences, risk students with greater professional at- where Kernersville Elementary stands since estimates that at least 80 families received to attract students. tention. 1926. That creates a tradition and commu- gifts and assistance from the coordinator At the elementary school level, the dis- In some situations, the choice plan has nity ties at Kernersville, Fitzpatrick said. last Christmas. trict is divided into eight choice zones. Each created more diversity, Collins said. Business partnerships and a strong PTA Many students from low-income fami- zone has either four or five schools. Parents Kernersville, for example, has a 47 percent presence have helped the school to thrive lies could not come to school ready to focus can choose a neighborhood school or one of minority population. Fitzpatrick counts this under tough economic conditions. on the top priority —learning — if there the themed magnet schools. While enroll- as a benefit, particularly since Kernersville Fitzpatrick characterizes faculty and were no coordinator to help them, ment in a particular school is subject to was the school of choice for all of the fami- staff support for students as “uncondi- Fitzpatrick said. availability, Collins said that each school in lies of students enrolled there. tional.” Together, they have developed The diverse student body at the zone offers an exciting program and Kernersville’s success has helped to simple, yet effective ways to boost student Kernersville provides an enriching atmo- plenty of attractive choices for parents. Ac- maintain support from the entire commu- achievement. One method was initiated five sphere for education, Fitzpatrick said. In cording to Collins, this choice program has nity, Collins said. Businesses have donated years ago by Fitzpatrick: an uninterrupted addition to diversity along ethnic lines, a helped to create a positive response from technology and technical support to the period of 100 minutes per day, in which great deal of socioeconomic diversity exists parents. school. “Education in Forsyth County is students spend time practicing their read- among students. Diversity has positive ef- “Every parent we talk to says their heading in the right direction, and Ker- ing skills. “It’s not rocket science,” he said, fects for everyone, he said. school is the best in the district,” Collins nersville…is just one example of the “but we said for 100 minutes a day, we are Part of Kernersville’s success is also said. The district provides transportation district’s success,” Collins said. CJ

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Your Home on the Web for North Carolina Public Policy ¥ Reports and columns on the legislature, politics, culture, and local government from Carolina Journal editors and reporters. The John Locke Foundation’s brand new, completely redesigned home page is your best source of research, analysis, and information on the critical public ¥ Carolina Journal Publisher John Hood’s exclusive “Daily Journal.” policy issues facing North Carolina state and local governments. ¥ Timely links to important stories and editorials from the state’s major A fully searchable, comprehensive database of reports, studies, briefing newspapers, magazines, and other media organizations. papers, datasets, press releases, events notifications, and articles can provide an excellent starting place for those drafting legislation, researching policy ¥ Instant access to state & national columnists, wire reports, and the issues, preparing news stories, planning political or lobbying campaigns, or John Locke Foundation’s other public policy web sites. seeking information with which to be an informed voter and citizen. See what one Raleigh paper called “Matt Drudge with Class” October 2003 C A R O L I N A 10 Higher Education JOURNAL

Course of the Month Students choose from a “grab bag of elective courses” instead Intolerance, with ‘Honors’ Most UNC Institutions Fail to Provide This month’s selection comes cour- tesy of a tip in NoIndoctrination.org, a web site devoted to the passé idea of A Sound General Education, Report Says open inquiry in academe. It is an in- troductory sociology course offered at By JON SANDERS Elon University: Assistant Editor Report conclusions about UNC schools’ general education requirements SOC 111 INTRODUCTORY SOCIOLOGY RALEIGH This course provides an introduction he idea of a general education Appalachian State University ture [or] taken a course specifically on Ameri- to basic theoretical principles and research within the University of North The “core curriculum” at Appalachian State can history or our political institutions [or] methods of modern sociology, including Carolina system has “atrophied has only a small core of required courses sur- learned anything about logic or economics… such issues as the relationship between T rounded by numerous electives. No Ameri- into a grab bag of elective courses,” says a culture, personality and society; the fun- new study by the Pope Center for Higher can history [or] foreign language study [or] UNC-Chapel Hill damental forms of social structure; social Education Policy. courses in logic, economics, or government are The general education requirements at UNC institutions such as religion and the fam- “General Education Requirements at required… offer the student such an array of course ily; and social processes such as deviance North Carolina’s Public Institutions: What choices, many of them quite specialized, ideo- and social change. Do Students Get in the Core Curriculum?” East Carolina University logical, or of questionable academic value, that The particular section of SOC 111 (Inquiry No. 16), written by Pope Center East Carolina’s general education require- they fail to ensure that students will gradu- discussed on NoIndoctrination.org is Director George C. Leef, looks at the gen- ments do little to ensure that the student par- ate with any knowledge in fields such as the “Honors” section taught by Profes- eral-education requirements of all UNC takes of a broad and well-rounded liberal arts American history, western civilization, the sor Angela Lewellyn Jones. The stu- schools except N.C. School of the Arts. education. No history [or] literature [or] any classics of literature in English, economics, dent reporting on the class said Jones Although all UNC institutions hail “the logic, economics or political science [courses or our political institutions… was intolerant of dissent within the importance of a well-rounded education,” are required]. The loose distribution require- class from her strident feminism. Jones Leef writes, “only a few insist that their stu- ments allow students to fulfill their general UNC-Charlotte “declared her status as a feminist nu- dents take courses that would be regarded education requirements with an assortment The UNCC general education program has merous times in class,” spoke of “her as crucial components of a sound educa- of narrow and sometimes academically dubi- more unity to it than many, [but it] leaves disdain for male success,” and stated tion.” Instead, most UNC universities lack ous courses. some significant gaps in the student’s educa- that prohibiting abortion is a sexist act a true core curriculum and allow students tion. No American history is required. Nor is since it takes away a woman’s right to a vast assortment of choices to satisfy their Elizabeth City State University there any assurance that students will gradu- correct a ‘mistake’ and forces the fe- “distribution requirements.” ECSU has a very commendable general edu- ate with any knowledge of logic, economics, male to be confined to the shackles of This situation leaves it possible for cation program. Important topics that edu- or our political institutions. Nor are students motherhood.” UNC students to purposefully piece to- cated Americans should be familiar with are guaranteed any exposure to the great litera- The course reading material was gether a liberal-arts education, but it also covered, including literature and the history ture of our civilization… as unbalanced as the lectures. It in- makes it easy for them to select an educa- of civilization. Where options are offered to cluded “readings on Marx and com- tion based on leisure and entertainment. students, they extend only to fundamental UNC-Greensboro munism,” and “all reading held pro- Many students, Leef said, will sign up for courses, and not to narrow and abstruse ones. The UNCG general education program places feminism, anti-government, pro-choice easy courses after they recognize that they a very extensive smorgasbord of courses be- diatribes,” the student wrote. “Not a will be awarded the same number of credit Fayetteville State University fore the student, [many that are] narrow and single reading was balanced by a dif- hours for easy courses as they would for FSU’s core curriculum accomplishes part of specialized. More importantly, the UNCG ferent perspective.” difficult ones. its objective with some sound, if repetitive, program fails to ensure that students will have In her lectures, the student wrote, “Many of the courses that earn general mandatory courses. The weakness in the pro- studied American history, any of the great lit- she never mentioned “non-feminists” education credits are too specialized, too gram is in not requiring more courses that erature of the English language, or learned except to “dehumanize” them or call politicized, or too academically trivial to be are essential to a well-rounded education — anything about our political institutions… them “Philistines.” She would curtail appropriate,” Leef writes. “Because of the American history, literature, and government, class discussion “contrary to her own lack of a true core curriculum, students at for example… UNC-Pembroke views,” and if students pressed for- most UNC schools can graduate without The UNCP general education requirements ward regardless, “she would snap at ever studying American history, the pin- N.C. A&T University do not ensure that students will have much them in very unprofessional manner.” nacles of our literature, our economic and [T]he core requirements at A&T don’t guar- of a uniform learning experience … Nor does Students who voiced opinions social institutions, and other important sub- antee that students learn anything in particu- the program ensure that students will be re- contrary to Jones’s were “ridiculed for jects.” He said it’s “education in name only.” lar. Students may learn something about U.S. quired to study American history, the clas- their opinions and later ignored or si- Leef’s approach is based upon elements history, about our political institutions, about sics of literature, a foreign language, or prin- lenced.” In one incident, the student of general education that “have stood the the great works of literature in English, about ciples of economics, political science, or wrote, “a friend of mine dropped the test of time at some of America’s most fa- logic and reasoning and other attributes of the logic… course around midterm because of mous institutions of higher education.” well-educated person, but the “greater flex- Jones’s unfair treatment of him. When Those include helping “students to develop ibility” of the core allows them to avoid those UNC-Wilmington someone in the class asked about him crucial habits of the mind,” developing “lit- subjects. … The Basic Studies requirements at UNCW a few weeks later, Dr. Jones told the eracy among the students,” “familiariz[ing] give students the possibility of obtaining a class that he just wasn’t smart enough them with mathematics and numerical N.C. Central University strong educational foundation, [but] in each to handle the demands of the course.” data,” providing them “with a sense of his- NCCU’s core curriculum has the virtue of area, the range of choice is so wide that stu- According to the student, dissent tory,” teaching them “an understanding of being a real core. All students have to take the dents can avoid courses that would give them in Jones’s class was met by more than science,” and “introduc[ing] them to the same courses and that provides unity to their educational backbone … UNCW students ridicule: world of art and aesthetics.” educational experience. Unfortunately, the can graduate without having studied Ameri- Any student who voiced contrary Leef also argues in favor of limiting the core leaves many important gaps in the can history, the classics of our literature, logic, opinion was not only subjected to having range of choices under distributional re- student’s knowledge. There is no required ex- or our economic and political foundations… everything they said in class dissected un- quirements so students have more educa- posure to American history, Shakespeare, der a microscope and negated, but having tion experiences in common. The quick ex- logic, or the foundations of our political sys- Western Carolina University their grade lowered significantly. On nu- pansion of course available to meet distri- tem. In their place [are] overly broad WCU’s general education program is not well merous occasions, dissident students bution requirements hurts the commonal- multicultural studies [and] personal develop- designed… The mandatory courses only deal would meet outside of class and discuss ity in students’ educational experiences, ment [and] health and fitness classes… with writing and math skills that should have how their grades drastically changed on as- and the new courses tend to be narrower been learned prior to college. Students are signments the week after expressing opin- or trendier rather than suited for general- N.C. State University required to take some basic science, but in ions. Since the grading in the class was all education purposes. NCSU’s apparent commitment to a strong other areas, particularly history, social sci- subjective (no objective tests), such grade In the face of those problems, Leef of- general education program is undermined by ence, and the humanities, the school’s array drops alarmed these “Honors” students fers a range of solutions. The universities its liberality in the range of student choice … of choices is much too broad… A student can whose status in the honors program de- could and should reform themselves, he Students can graduate without ever having graduate from WCU without a course in pended on success in the class. As a result writes, but barring that, the UNC Board of taken a course in American history [or] American history, great works of literature, numerous students quelled their opinions Governors should establish general-educa- Shakespeare or other literary staples [or] west- logic, economics, or our political system. for grades sake, including myself. tion guidelines to replace the weak ones set ern civilization [or] our economic or political In short, “what I learned in the up by the schools themselves. Or the trust- systems. Winston-Salem State University class,” the student wrote, “was that ees should press for the change themselves. The WSSU general education program, un- men are all oppressors, African-Ameri- Or the General Assembly should “tie state UNC-Asheville like most others, gives its students a widely cans cannot stand on their own feet funding to each universities’ adherence to UNCA has a commitment to general educa- shared educational experience in, for the most and need government handouts to sur- general education requirements.” tion that is more serious than at most other part, important academic fields. There are, vive, and such problems were not Finally, if none of the preceding takes UNC system campuses. There are, however, however, some significant omissions. No meant to be discussed by different par- place, Leef urges parents to act. He tells some notable gaps. Students need not ever American history is required, nor any course ties because dissenters aren’t thinking them to be involved in the course selection have read any of the classics of western litera- in logic or economics… in a ‘sociologically mindful’ manner process to help steer their children to the and are ill-informed.” CJ Source: George C. Leef, Inquiry No. 16, avaliable at www.johnlocke.org. better choices among the classes offered. CJ October 2003 C A R O L I N A JOURNAL Higher Education 11 Merely taking offense doesn’t count as harassment Almost Anything Office for Civil Rights Affirms Speech Rights, Goes at UNC Rejects Campus Anti-Harassment Codes y colleague George Leef’s study of general- education requirements should concern By JON SANDERS poring over the educators, parents, students, legislators, Assistant Editor rest of his e-mail M and anyone else who cares about higher education in RALEIGH messages for North Carolina. But will it? Welcome to a front line in he Office for Civil Rights of the U.S. Department of corroborating the culture war. Education recently issued a resounding affirmation evidence of the After all, who’s to say what constitutes a “sound T of free-speech rights on college campuses. alleged harass- general education” nowa- In a “Dear Colleague” letter July 28, OCR Assistant ment, Adams days? Critics like Leef put Secretary Gerald Reynolds addressed concerns that OCR’s said, “The Con- forth instruction in history, antidiscrimination policies required restricting speech. As stitution pro- literature, science and sci- Reynolds noted in his letter, “Some colleges and universi- tects your entific methods of inquiry, ties have interpreted OCR’s prohibition of ‘harassment’ as speech just as it logic, mathematics, and art encompassing all offensive speech regarding sex, disabil- has protected — things that, in Leef’s ity, race or other classifications,” Reynolds said. “Harass- bigoted, unintel- words, “have stood the test ment, however, to be prohibited by the statutes within ligent, and im- of time at some of OCR’s jurisdiction, must include something beyond the mature speech America’s most famous in- mere expression of views, words, symbols or thoughts that for many years.” stitutions of higher educa- some person finds offensive.” In fact, Adams’ tion.” Note the past tense. Such interpretation have given rise to Byzantine speech “harassing” e- Now, in terms of a gen- codes at colleges and universities nationwide. Campuses mail was solidly eral education, the govern- have also instituted such things as “Free Speech Zones,” in keeping with ing assumption at most in- Jon Sanders with the understanding being that the rest of the campus OCR’s under- Gerald Reynolds, U.S. Dept. of Education stitutions appears to be one is a restricted-speech zone. Civil libertarians and First standing of the step removed from “anything goes.” What structure Amendment champions have been harshly critical of those, primacy of the First Amendment. “No OCR regulation,” there is to general education, universities often pro- saying that at public universities (which fall under the First Reynolds writes, “should be interpreted to impinge upon vide in the form of politically tinged groupings. Amendment), the entire campus is a free speech zone. rights protected under the First Amendment to the U.S. Universities’ vision of education has been per- Reynolds’ letter bolsters their position. Constitution or to require recipients to enact or enforce verted. Education has always been seen as a way of “OCR has recognized that the offensiveness of a par- codes that punish the exercise of such rights.” freeing one’s mind from one’s prejudices and super- ticular expression, standing alone, is not a legally sufficient stitions, whatever they may be. In this view, ignorance basis to establish a hostile environment under the statues Jokes, annoyance, and a “free speech gazebo” (that is, a lack of education) is considered that which enforced by OCR,” Reynolds writes. “OCR’s regulations insulates those prejudices and superstitions, and edu- and policies do not require or prescribe speech, conduct or Earlier this year, Foundation for Individual Rights in cation removes that insulation. That having been re- harassment codes that impair the exercise of rights pro- Education launched a campaign against campus speech moved, the goal of education is unfettered inquiry tected under the First Amendment.” codes, which FIRE CEO Thor Halvorssen declared “a moral (why academic freedom — the freedom to pursue Recent actions concerning offensive speech at Univer- and legal outrage.” FIRE was one of the organizations that ideas — is so crucial). To reach that ideal, educators sity of North Carolina institutions show that they are had pressed OCR for a clarification of its regulations, since needed to ensure students were fully prepared, so they among those laboring under the misinterpretation recti- “[c]ollege and university administrators have defended re- turned to those elements of instruction cited above. fied by Reynolds’ letter. A few examples: strictions on free speech on the grounds that OCR and other Now, however, only a certain set of prejudices and • UNC-Chapel Hill threatened to federal regulations require them to ban superstitions are presumed to be operative among revoke its recognition of several student ‘offensive’ speech as a form of discrimi- individual students. Educators work to ensure stu- groups, most of them Christian organi- “[T]he offensiveness of nation.” dents are armed against only those things with the zations, on the basis that the groups “ex- FIRE’s campaign has already wit- goal being to lead to inquiry only against them. Aca- cluded persons from membership and a particular expres- nessed success. In June, in the face of a demic freedom is still invoked, but mostly in this con- full participation based on race, gender sion… is not a legally FIRE lawsuit, Citrus College in Califor- text. Anyone on campus knows what those things are: or religious belief.” nia dropped its code. According to FIRE, mainly racism, sexism, and homophobia. Public outcry, in part brought by sufficient basis to es- Citrus College’s code “quarantined free Under this new framework, it isn’t enough to teach FIRE, forced UNC-CH to back down. tablish a hostile envi- speech to three small and remote parts history. History incorporates things outside the aegis. Even so, Chancellor James Moeser said ronment.” of campus. Speakers outside of these ar- But “Third World History” and “African American that the issue “is not a simple matter. eas could be suspended, expelled, or History” (which address racism), “History of Women While the University continues to seek even arrested. Students were required to in America” (which addresses sexism), and “Lesbians to ensure that our facilities and resources notify the college not only of their intent in History” (which addresses homophobia) will do. are not used in any way that fosters illegal discrimination, to use the ‘free speech areas’ but also of their intended mes- Literature? Too broad. “African American Writ- we also wish to uphold the principles of freedom of ex- sage. No sound amplification whatsoever was allowed. ers,” “Gay Literature,” “Southern Gay and Lesbian pression.” Lastly, the areas could be used only on weekdays from 8 Writers,” and “Gender and Literature: Women Writ- • N.C. State investigated — and exonerated — Profes- a.m. to 6 p.m. — even though more than a third of stu- ing South Asia” (a two-fer) will do. The same goes for sor Philip Muñoz after a black student charged him in 2002 dents take classes between 4 p.m. and 10 p.m.” art. Just narrow the focus, such as with “Queer Strate- with discrimination for not being sufficiently critical of a At present, FIRE has speech-code lawsuits pending gies in Studio Practice” or “Women in Visual Arts.” white student who said “go back to Africa” to the black against Shippensburg University in Pennsylvania and Science and scientific methods of inquiry? Math- student before the beginning of the class. Muñoz had en- Texas Tech University. ematics? Logic? Too… conducive to causing one to tered the class while the students were arguing over the Shippensburg’s code prohibits “conduct which annoys, stray from the allowable fields of inquiry. You can have black student’s comments that America and its founders threatens, or alarms a person or group.” Prohibited con- “Women & Gender in Science and Technology” and were racist and corrupt, and upon the “go back to Africa” duct includes “verbal” and other expressions such as “Feminist Science Theory,” of course, but it’s better to remark stopped their argument and said discourse in his “sexual innuendo, suggestive comments, insults, sexual teach other methods of inquiry and the reasoning be- class would be civilized and academic. propositions, humor/jokes about sex or gender-specific hind them. Give them anthropology and sociology Even though Muñoz was exonerated, the incident was traits” and also such “non-verbal” expressions as “sugges- courses steeped in Marxism. Teach sexuality from the cited this summer in The News & Observer of Raleigh as tive or insulting sounds, leering, whistling, [and] obscene view of saving students from society’s oppressive ta- one of two proofs of N.C. State’s poor climate for racial gestures.” boos. Offer “Methods of Queer Cultural Analysis.” Ex- diversity. The other incident was racially offensive graffiti Save for expressions made within its “free speech ga- plain how all viewpoints are equally valid and equally written in the “Free Expression Tunnel,” the appearance zebo,” Texas Tech prohibits any “communications that are moral, and tolerate no dissent from this view. of which prompted Chancellor Marye Anne Fox to pro- intended to… humiliate any person.” These communica- Or give them pop culture, such as courses on the claim, “It’s good to have a place to have free expression. tions include “sexual teasing jokes and gestures,” “refer- history of rock music, “history through film” classes, First Amendment speech is valued on campus. But when ring to an adult as ‘girl,’ ‘boy,’ or ‘honey,’” “sexual innuen- “Black Popular Culture,” “New Queer Cinema,”etc. it goes beyond the boundaries and advocates violence or dos or stories,” “unwelcome pressure for dates,” “letters, These approaches produce a vast array of courses, is just inappropriate behavior among civilized people, phone calls, and materials of a sexual nature,” “sexually making some form of rationing necessary. Offering that’s just too much.” suggestive looks,” “sexually explicit visual materials (cal- courses in clusters and requiring students to pick is • UNC-Wilmington investigated, and exonerated, Pro- endars, posters, cars, software),” or “catcalls or whistling most institutions’ solution. It’s an incomplete one, but fessor Mike Adams for harassment in 2001-02 for his re- in a demeaning manner with sexual overtones.” it’s complete enough that, in Leef’s words, “students sponse to a student’s e-mail. The student, Rosa Fuller, sent The OCR announcement was welcome news to FIRE. at most UNC schools can graduate without ever study- a campuswide e-mail blaming the United States for the “For too long, colleges and universities have used OCR’s ing American history, the pinnacles of our literature, terrorist attacks on its soil, since America is the world’s anti-harassment regulations as an excuse for passing re- our economic and social institutions, and other im- “main source of oppression.” strictive speech codes and punishing students and faculty portant subjects.” Adams responded to all recipients by saying Fuller’s for ‘offensive’ speech,” said FIRE co-director and Boston Well, who’s to say what constitutes a “sound gen- opinions were “undeserving of serious consideration” and lawyer Harvey A. Silverglate. “By issuing this letter, OCR eral education” nowadays? As far as UNC goes, we “an intentionally divisive diatribe.” Ironically, given has clarified once and for all that OCR regulations cannot all are. CJ UNCW’s subsequent investigation of him, which included and do not trump the First Amendment.” CJ October 2003 C A R O L I N A 12 Higher Education JOURNAL

Bats in the Belltower Mold at N.C. Central University Character on ‘The Simpsons’ Raves: Infests Two New Dormitories It’s Library’s ‘Best Collection Ever’ By JON SANDERS allowing them to leak as well. In addition, Assistant Editor contractors appear to have used regular RALEIGH drywall panels — which are not moisture n the summer of 2003, libraries at CH over the school’s selection of her old has infested several build- resistant — in some bathrooms.” two highly reputed research institu- book Nickel and Dimed: On (Not) Getting ings on the campus of North The partner-in-charge of Gantt Huber- I tions received significant “rare by in America for its summer reading M Carolina Central University. Ad- man Architects, Harvey B. Gantt, wrote in books” donations. Comic books, role- program. The Charlotte Observer carried ministrators blame an aging steam system the Herald-Sun Aug. 26 that the mold prob- playing games (including “Dungeons & her article on the matter, “Poverty, not and a backlog in state repair and renova- lem is likely “systemic.” Gantt, the former Dragons” and Traveller), and board a book, threatens North Carolina,” on tion money for the problem affecting older mayor of Charlotte and twice a Senate can- games, to be exact. Aug. 8. buildings. Surprisingly, however, the mold didate, said that all 14 buildings affected by In June, brothers Edwin and Terry It will come as no surprise to those infests two of N.C. Central’s newest dor- mold are served by the campus steam sys- Murray donated 55,000 comic books and who have read any of Nickel and Dimed mitories. tem, which N.C. Central had acknowledged 500 role-playing games and board games that Ehrenreich quickly ascertained the The two dormitories were completed was in need of repair. to Duke University’s “Rare Book, Manu- heart of the matter: “I saw that this con- in 1999. They were designed by Gantt Gantt has hired his own company to script and Special Collections Library.” troversy was less about the book than Huberman Architects in Charlotte, the gen- assess the mold damage. The Edwin and Terry Murray Collection it was about me.” eral contractor was RK Stewart & Son Inc. Former N.C. Central Chancellor Julius of Pop Culture, as the collection will be Nor will it surprise her descriptions of High Point, and the plumbing was done Chambers blamed the state for the prob- called, takes up 918 archival boxes, the of the radio stations that invited her to by CamFul Industrites Inc. of Pineville. lems, telling The News & Observer of Aug. Duke Chronicle reported July 23. discuss her book in light of the contro- With the new dormitories shut down 21, “We pleaded for money for repairs, and Reaction among the university com- versy: “I suppose I should be grateful for mold removal, N.C. Central has had to we didn’t get it.” The current chancellor, munity, at least judging by the Chronicle for the chance to parse the finer points relocate about 500 students into nearby James H. Ammons Jr., and Sen. Jeanne article, has been enthusiastic. The imme- of Marxism vs. feminism on the kind hotels. Those are in addition to the nearly Lucas, D-Durham, echoed that sentiment. diate focus has been on how the collec- of radio stations that update the traffic 400 students N.C. Central has placed in lo- In 2000, voters approved the higher tion might be used academically. and weather every 15 minutes.” cal hotels while other residence halls are education bond referendum worth $3.1 bil- “It’s a funny field because it goes She was quite taken aback by criti- undergoing repairs and renovation. lion, which they were told would go to re- beyond all the departments,” Duke An- cism of her statement in the book about According to the Durham Herald-Sun pair and renovate campus buildings. A to- thropology chair Anne Allison said. Jesus being a “wine-guzzling vagrant edition of Aug. 15, experts said the mold in tal of $3.1 million was slated for replace- “Anyone interested in storytelling, im- and precocious socialist.” She brooked the new buildings is likely caused by bath- ment of some of N.C. Central’s steam lines, ages or pop culture might be able to use no debate over “vagrant,” admitted room moisture. but Ammons told the N&O June 12 that it it. You can even make the argument that “‘guzzling’ may be a bit overstated,” Chris Murray, vice president of E.I. Inc. would take an additional $5 million to re- comic books are a form of literature.” but added that “Jesus was sufficiently of Morrisville, who is working for N.C. Cen- place the remaining two-thirds of the lines. Such an argument would be old hat for associated with wine (‘I am the true tral to assess the damage, told the Herald- The University of North Carolina Board of Duke’s English Department, which was vine,’ etc.) to be confused with the Sun that “toilets were not properly sealed, Governors approved letting N.C. Central recently featured in “Course of the Greek wine god Dionysus in the Helle- supply lines for some toilets leak, and divert $10.4 million in bond funding for Month” because a professor was using nistic world — a subject I have yearned shower drains were not properly installed, mold-related repairs. CJ 1930s-era Soviet propaganda as a form to expound upon for years.” of literature in discussing the “hope” “As for Jesus being a socialist, I take awakened by the Soviets’ collectivization it back. He was actually a little to the of agriculture. left of that, judging from his instruction Indeed, a professor of literature and to the rich man to sell all that he had CAROLINA JOURNAL Publisher English who is also director of Duke’s and give to the poor. If that’s what it film and video program, Jane Gaines, takes to be a true Christian, believe me, wrote that the comics collection “carved it’s a hell of a lot easier to be a socialist: John Hood Garners Praise out a very distinctive niche (for Duke) You have to dedicate yourself to work- and made an investment in the future ing for the poor, just as a Christian where the distinctions between high and should, but at least you get to keep your for His Most Recent Book: low culture will be less marked.” stuff,” she said. Allison also told the Chronicle that Someone might point out to “[c]omics can offer a window on topics Ehrenreich that beyond that one anec- such as notions of masculinity and where dote, there’s a whole book available on our fantasies come from.” “what it takes to be a true Christian.” “Women’s Studies would have a Although granted, it probably is easier Investor Politics field day” with the collection, Senior Li- to be a socialist. You get to laud your- brary Assistant Megan Lewis said. self as “working for the poor,” which The New Force That Will Transform American Business, Duke’s niche sustained a blow the includes keeping all your stuff and forc- Government, and Politics in the 21st Century following month when UNC-Chapel Hill ing everyone else to give up theirs. received its own large comics donation. There will be more poor to care for that Dan Breen, a lifelong comic book collec- way, too — your virtue can only in- “John Hood has produced a timely and informative account of the most tor in his 50s, gave the UNC Rare Book crease. significant demographic shift of this century — the rise of a shareholder Collection about 26,000 comics. Breen’s Plus, socialists aren’t encumbered democracy in America.” — Jack Kemp collection filled 90 boxes. Curator by the search for truth. As Lenin taught, Charles McNamara told The News & Ob- “there is no such thing as abstract “Investor Politics is chock-full of interesting historical anecdotes, clever server Aug. 18 that he had, for the past truth.” Truth is fashioned by political several years, begun “to wonder how we expediency. That is why Lenin could policy analysis, and surprising musings.” — National Review could get comic books” in the library. also state, “The Marxist doctrine is om- “The library had some science fiction nipotent because it is true.” “John Hood offers many astute observations about the reasons govern- and pulp fiction from its popular cul- Jesus taught “I am the way, the ment social programs are imperiled.” ture,” the N&O said, “but it was woefully truth, and the life.” Surely it is harder — Greensboro News & Record short on comics.” for a camel to go through the eye of a needle than for a socialist to accept the Speaking of cartoons concept of objective truth, although as “I highly recommend Investor Politics to any reader interested in under- Ehrenreich, they will gladly portray standing how our government turned into an entitlement trough.” Barbara Ehrenreich finally decided Jesus as a socialist for the political ex- — Kevin Hassett, AEI to weigh in on the controversy at UNC- pediency. CJ “Hood has delivered a thoughtful and very engaging text that will help

Why hasn’t Wonder Woman move the debate from last century’s entitlement-dependent view of used her magic lasso against society to the country’s Jeffersonian roots of self-reliance” her heteronormative — Chris Edwards, Cato Institute oppressor?

Look for Investor Politics in bookstores or at www.TempletonPress.org. October 2003 C A R O L I N A JOURNAL Higher Education 13

Campus conservatives find success in activism How a Book Became the Catalyst for Discussing Bigotry at UNC

By JON SANDERS appear to have cussed, this discus- of the new material includes items first Assistant Editor found a way around sion should not be suggested by the CBC on their site, such as: RALEIGH the usual conun- completely one- • Bartlett, Bruce. “How Poor are the he row over the Summer Reading drum conservatives Issues in sided, the CBC rec- Poor?” The American Enterprise 7, no. 1 (Janu- Program at the University of North face when contem- ommended “that the ary 1, 1996). TCarolina at Chapel Hill continues to plating activism. Higher University make • Wilson, D. Mark. “Who is Paid the fascinate. It isn’t diminished by the fact that Berkeley Breathed’s materials and alter- Minimum Wage and Who Would be Af- other universities have assigned Barbara comic strip “Bloom native sources of in- fected by a $1.50 per Hour Increase.” The Ehrenreich’s Nickel and Dimed to a far milder County” once illus- Education formation on the is- Heritage Foundation. June 28, 2001. reception. If anything, it adds to the interest trated that problem sues discussed by • Rector, Robert, and Patrick F. Fagan. here. by depicting law- Ehrenreich in the “The Continuing Good News About Wel- What turned this one instance of per- and-order-loving book available to all fare Reform.” The Heritage Foundation. ceived leftist bias on campus among many conservatives taking new students who Feb. 6, 2003. into a rallying moment for conservatives? over an administrative building and then are expected to participate in this program… • Rector, Robert E., Kirk A. Johnson, Several possibilities present themselves, and ordering the campus police to “Bash our [which] will allow students to think for Patrick F. Fagan, and Lauren R. Noyes. the answer is likely a combination. heads! Bash our heads!” themselves and make up their own minds “Increasing Marriage Would Dramatically The final straw. Choosing Nickel and “Republicans, moderates, evangelicals, about whether Ehrenreich’s perspective of Reduce Child Poverty.” The Heritage Foun- Dimed to introduce new students to the assimilationist blacks or Hispanics, and the American economic system is accurate dation. May 20, 2003. intellectual life at UNC-CH could simply devout Catholics don’t occupy buildings or or not, instead of basing an opinion on • “Privatize Social Security to Help have been the last straw for conservatives. cause disruptions that will bring the media Ehrenreich’s perspective alone.” Working Poor.” Cato Institute. Dec. 9, 1999. The advertisement by the Committee for a to campus,” wrote Alan Charles Kors and According to an August article in CARO- Those are not nearly all of the new Better Carolina was addressed to those new Harvey A. Silverglate in The Shadow Univer- LINA JOURNAL on the Nickel and Dimed contro- resources UNC-CH has added, of course. students, and their opening criticisms of the sity: The Betrayal of Liberty on America’s Cam- versy: But with its submissions being among them, book were on the basis that the book fails to puses. “The improbable cry ‘The Lutherans As of press time, the CBC’c site was not the CBC succeeded in getting its conserva- deliver the expected intellectual treatment are really mad’ will not send administrators acknowledged by UNC-CH site under its “Re- tive approach to the issue included as part of its subject, poverty in America: the book into panic.” lated Events” section link to “Websites.” The of the debate. “is devoid of intellectual honesty or diver- Incidentally, in making that observa- only options it gave were Ehrenreich’s website, Following through. The CBC has pur- sity of thought.” Furthermore, the ad states, tion Kors and Silverglate were suggesting NickelandDimed.net, an audio report on Nickel sued their concerns with the administra- it’s a typical choice by UNC-CH: The past that the animating factor behind decisions and Dimed that aired on KPLU, National tion, which to the administration’s credit four selections each have been of “a decid- by college administrators was careerism Public Radio, Sept. 27, 2002, and an NPR has openly addressed them. edly left-wing bent.” rather than ideological bias. Fear for their report by Noah Adams entitled “One Town, The chancellor’s meetings with the con- Taking diversity seriously, and hold- jobs leads them to be overly attentive to One Job: A Profile of Low-Wage America.” servatives appear to have been frank and ing the university accountable. UNC-CH, leftist groups, which tend to be militant, Those links now appear in the new productive. like its peers across the nation, likes to pat because militant activism is sensational and “Supplementary Resources” section, and All things considered, is it possible that itself on the back for caring about “diver- brings negative publicity to campus, and they are joined by many other data re- the fire of UNC’s controversy has left fertile sity,” but that has always seemed a thin negative publicity is the administrator’s sources, research, and policy studies. Some ground for growth? Let’s hope so. CJ euphemism for a race-based outlook. The bane. diversity focus promises only to expand in the wake of Grutter v. Michigan, which places Joining the debate universities’ desire to diversify their stu- dent bodies, even if it involves decisions Making a case as opposed to simply based on race, outside the Supreme Court’s making a fuss. Behind all this, the conser- We Want Less! strict-scrutiny test. vatives had a point. But the justices didn’t limit diversity to For example, the CBC ad used U.S. Concerned About Issues Such As race. Universities should be held account- Census data to show what creature com- Taxes, Regulations, Property Rights able for lacking ideological diversity. As forts the poor in America do have, and its & Patient Choice in Health Care? the conservatives point out, UNC-CH’s web site, www.CarolinaBlueprint.com, pro- value for diversity means it shouldn’t play vided links to many studies that weren’t Thousands of your fellow North favorites in ideology. originally provided as part of the “Supple- Carolinians are, too — that’s why Good organization and avoiding a co- mentary Resources” for the reading they have joined North Carolina nundrum. The CBC chose its spots for the program’s web site, www.unc.edu/srp — Citizens for a Sound Economy to debate well. By placing the ads, the CBC got but are now. fight for less government, lower the attention of all the key players — UNC- On its site, the CBC said the solution to taxes, and more freedom. They are CH students and their families, the media, the problem is “relatively simple.” Arguing making their voices heard. and the legislature — through which they that the “campus should be a place where also got the administration’s attention. They controversial issues and subjects are dis- North Carolina CSE members protest state Fighting for the People’s Agenda tax increases at an August rally in Raleigh.

North Carolina Citizens for a Sound Economy holds politicians accountable for their votes on taxes, regulations, and other issues. Its aggressive, real-time campaigns activate a grassroots army to show up and demand policy change.

And it gets results. CSE has helped to defeat three large tax increases in North Carolina and defended property rights, parental choice, and individual freedom before the state legislature, county commissions, city councils, and elsewhere.

Here’s what some are saying about Citizens for a Sound Economy:

• “They have been doing a great job all over the country educating people.” — President George W. Bush

• “CSE is a great organization . . . The hundreds of thousands of volunteer activists that are members of CSE are vital to this country’s economic prosperity.” — U.S. Rep. Richard Burr of Winston-Salem

• “You guys are everywhere! CSE is a great organization. CSE, thanks.” — Sen. John McCain

Get Involved! NORTH CAROLINA Join North Carolina CSE and Make a Difference!

115 1/2 West. Morgan St. Raleigh, NC 27601 www.cse.org 1-888-446-5273 October 2003 C A R O L I N A 14 Local Government JOURNAL

Town and Country Ebb and Flow of N.C. Beach Renourishment Environmentalists criticize costly program, mayors say it boosts the economy City pays hockey salaries

Greensboro is paying the By DONNA MARTINEZ $61,464 annual salary of Greensboro Associate Editor Generals coach Rick Adduono and RALEIGH other front-office employees for the he next time you walk on a North Greensboro Coliseum’s anchor ten- Carolina beach, take a close look at ant. Tthe sand that’s sliding between your City payroll records obtained by toes. You may think it’s a product of Mother the News & Record of Greensboro Nature’s natural beauty, but it could be the show that Adduono was hired by artificial result of a controversial beach the Greensboro Coliseum, a depart- renourishment project. Since the mid-1960s, ment of city government, with the the state and coastal-area local governments title “Hockey Coach” on July 1. Rick have spent more than $27 million to coun- Francis and Dana Bridges, listed on teract natural and storm-related land ero- the Generals’ website as sales and sion, primarily by dredging sand from chan- marketing representatives for the nels and depositing it onto beaches. The team, were hired Aug. 1 by the city federal government has contributed more as well. than $40 million to North Carolina projects, The hires are the result of an putting the total price tag at about $67 mil- agreement between coliseum Direc- lion. tor Matt Brown and Generals man- Beach renourishment has been under- agers for the city-owned arena to as- way in North Carolina for nearly 40 years, sume day-to-day management of beginning with a 2.7-mile Wrightsville the team’s operations. Beach project in 1964, and a 2.7-mile effort Mayor Keith Holliday con- at Carolina Beach in 1965. Yet while the firmed that the city was paying the concept is far from new, the debate remains salaries “in part to save the Gener- heated between detractors who argue the A dredge scoops sand from the sea bottom and redeposits it on the shore at Wrightsville Beach. als.” projects are expensive and fight a losing He said the city will receive a battle that’s damaging to the environment, turn, spend money and stimulate the local economy) because the beach is worth percentage of ticket, concession, and and proponents who insist renourishment economy. That puts cash into the pockets of a damn,” he said. “People who say it’s not parking sales from the privately is critical to the economic vitality of beach many businesses, as well as local govern- worth it are absolutely wrong.” owned team, but he did not know communities. ment, not just people with beachfront But money shouldn’t be the only factor the specific amount. North Carolinians aren’t getting enough homes. It’s simple to understand, he said. considered when assessing whether Earlier this year, city officials bang for their buck with beach “A wide, sandy beach is nicer and better. renourishment should take place, accord- said Brown would be in charge of renourishment, according to the North It’s been great for us,” Simmons said. ing to Michelle Duval, a scientist with Envi- the team’s day-to-day operations, Carolina Coastal Federation, a nonprofit When Caswell Beach’s neighbor, the ronmental Defense, a private nonprofit including advertising, marketing, group whose goal is to protect the state’s Town of Oak Island, un- group that looks for solu- and ticket sales. The issue of who coastline. Executive Director Todd Miller dertook two beach tions to environmental paid salaries was not addressed. contends that private property owners are projects, the experience “There are millions problems. She’s con- Later, Holliday said it went without the major benefactors of the spending, not turned Mayor Pro Tem cerned about detrimental saying that the city would be assum- the general public, making the use of public Dick Marshall into a contributed (to the lo- effects on animal life of ing payroll for some Generals’ em- funds questionable. renourishment sup- cal economy) because replenishing with sand ployees. “I would hope some (citi- Miller thinks property owners should porter. The 2001/2002 Sea the beach is worth a that’s a different compo- zens) understood that,” he said. pay for the projects themselves. After all, he Turtle Habitat Restora- sition than sand that’s al- “Nobody’s trying to hide the fact said, if property owners reap the benefits of tion Project put 2.6 mil- damn.” ready on the beach. that the city of Greensboro is in the building in nature’s path, they should bare lion cubic yards of sand — Dick Marshall “Most critters are hockey business.” the responsibility of the problems that go on 1.8 miles of beach in highly dependent on along with it. Oak Island. Months later, compatibility of the Schools distant, planners say “Beaches are always going to be there. during the usually busy summer season, sand,” said Duval, who holds a doctorate in This is really about protecting private prop- another 2.6 million cubic yards of sand was marine ecology from Duke University. New schools are being built too erty,” Miller said. “Beach erosion is natural. deposited onto the beach on both sides of “There are some examples recently which far from neighborhoods, creating It becomes a problem when structures are the turtle restoration area. indicate that North Carolina has a need for more urban sprawl, two planning placed near them. These houses command Bulldozers and the ensuing commo- sand compatibility criteria.” experts say. good rentals in the summer. It’s a cost of tion hurt business while things were under For example, Duval said, projects at Though most schools used to be their doing business,” he said. way, and property and business owners Bogue Banks over the past several years the cornerstones of their communi- complained, Marshall said. He could relate. have placed material on the beach that is ties, schools have become more The view at Caswell Beach As the owner and operator of Oak Island much courser than what was already there. spread out, said David Salvesen, di- Accommodations, a firm that manages 500 She said potential problems are more than rector of the Smart Growth and the That ship has already sailed, said Harry resort rentals on the ocean, he experienced cosmetic; the new environment can be New Economy Program at the Cen- Simmons, mayor of Caswell Beach, a three- the frustration firsthand. Marshall and the deadly to sand-dwelling creatures. ter for Urban and Regional Studies mile stretch of prime tourist area in Town Council determined how Oak Island Miller agrees, and said that in some in Chapel Hill. Brunswick County. “It’s way too late to would come up with its share of the cost. cases, incompatible sand acts like concrete, The Winston-Salem Journal re- avoid the shoreline. There’s no way to to- smothering and killing organisms. Com- ported that Salvesen and Erica tally avoid it. It’s less expensive to nourish Property owners shared the cost pounding the problem, he said, is a short- McArthur, a planning consultant, than to move property,” he said. Besides, age of sand in the southeast and predictions spoke recently at the N.C. Planning said the mayor who also is executive direc- To fund the two projects, the federal by geologists that it will be difficult to find Conference, a three-day conference tor of the North Carolina Shore and Beach government kicked in $15 million and the enough sand in the future. of 325 planning officials from Preservation Association, there is a renewed state provided $7.5 million. Oak Island was Unlike Simmons and Marshall, Duval throughout the state. respect for trying to work with nature, rather required to contribute $3 million. The coun- isn’t ready to declare the Sea Turtle project Both worked on “Good Schools than against it. “I don’t see people building cil decided to assess the town’s 12,000 prop- a success. She said material placed in the — Good Neighborhoods,” a report irresponsibly like we used to,” he said. erty owners a fee based on the size of their area was larger than the existing sand. Some that detailed why more neighbor- At the very least, Miller said, the public property and its proximity to the new sand. was covered up or washed away by the hood schools are needed. should have more access to renourished Beachfront owners paid an average of $700 time the turtles nested in the summer, but Salvesen said that as people beaches in exchange for helping to fund each. The cost to those with second-row some is still there. Duval gave the beach moved to the suburbs and school them. He cites a Pine Knoll Shores project as homes averaged $350. Those further back only a 50-50 chance of creating an optimal districts consolidated — only 19 city an example of how the public’s interest can from the ocean paid less. The town funded nesting place for turtles in the first two systems are left in the state, he said be accommodated. the balance with revenues from a local ac- years after renourishment. — school systems have spread out “It had almost no access before nour- commodations tax and private contribu- Duval wants to be more precise with and caused more sprawl. ishment. They took private lots and opened tions. her conclusions, but said she can only esti- A barrier to building schools in them up,” he said. The shortcoming he wants When completed, memories of the mate the effects because of the lack of scien- neighborhoods is money, Salvesen resolved is a lack of signage letting people hassle and lost business faded as tourists tific research. She sees that as a serious said. It is cheaper to buy land that is know the beach is publicly accessible. returned to the beach and spent money on deficiency facing North Carolina planners farther away from neighborhoods, Simmons also dismissed Miller’s con- hotels, beach rentals, groceries, restaurants, of beach renourishment projects. and schools increasingly rely on cern about the return on investment for the and more. “The cumulative and long-term impacts economies of scale to save money, taxpaying public. He said renourishment is “I don’t think I had one person com- aren’t well assessed and are overlooked. he said CJ productive for everyone because a well- plain after the renourishment,” Marshall Some may not show up until five years or so nourished beach attracts tourists who, in said. “There are millions contributed (to the after it’s complete,” she said. CJ October 2003 C A R O L I N A JOURNAL Local Government 15

Local Innovation Bulletin Board

Car Alarm Regulation?

any cities and towns in North Discouraging families with kids Carolina and the nation are M struggling to deal with the Because the cost of educating chil- problem of false burglar alarms. Char- dren exceeds what their parents’ houses lotte, for example, requires that home yield in taxes, many local governments burglar alarms be registered and fines across the country are relying on zoning homeowners if police respond to too ordinances to limit unwanted growth. many false alarms. They aren’t providing land for housing, New York City is considering taking especially apartment buildings, and they this concept a step further and banning a attempt to zone only for commercial source of false alerts, car alarms. Noise buildings. In California, auto malls are Phil Cousin Becky Heron complaints constitute 85 percent of the king, and in New Jersey, commercial calls made to the New York Police office parks are the most valuable things, Department’s “Quality of Life Hotline.” observers say. Legality of fee for schools uncertain And lots of the calls, police say, concern Ventnor, N.J., a shore town that sends car alarms, which shriek and whoop at its high school students to Atlantic City noise levels up to 125 decibels, as loud as at a cost of $12,000 a year each, recently Durham Imposes Impact Fee a jet taking off. started offering owners of apartment The alarms frazzle New Yorkers’ buildings $22,000 to convert year-round nerves and, when the alarms go off late rentals to seasonal. In the development Despite Warnings of Harm at night, rob them of sleep. The alarms’ corridors of central and northwestern screeching also creates what criminolo- New Jersey, many towns have adopted By MICHAEL LOWREY Commissioners were defiant gists call a “broken window” effect, en- minimum lot sizes of five or 10 acres. Associate Editor couraging lawlessness by sending the The federal Fair Housing Act pro- DURHAM Several commissioners were openly de- message that no one is in charge of main- hibits discrimination against people with he Durham County Commission fiant of the threatened lawsuit and con- taining public order, said Brian Ander- children. But restrictions that have that voted 4-1 on Sept. 8 to increase the temptuous of those who would bring it up son of the Manhattan Institute. effect but are meant to accomplish some- amount of tax revenue the county during the commission meeting in which Car alarms would be hard to justify thing else are usually lawful. Conse- T even if they did prevent auto theft, as quently, some communities are embrac- takes in by about $5 million a year. While a the fee was approved. county raising taxes is itself not unusual, “I’d hope you’d forget this idea of suing their makers claim. But they don’t, ing the elderly. That is socially accept- how the county chose to do so was: It opted the county. You won’t be hurting us up Anderson said. Because of their 95 per- able, and because the federal Fair Hous- to impose an impact fee for school construc- here, it’s our children you will be hurting,” cent false-alarm rate, nobody hears a car ing Act allows senior-citizen develop- tion. said Commissioner Becky Heron during alarm blaring and rushes to call the po- ments to prohibit younger residents, it is Durham County does not, however, the meeting Sept. 8. “If you pursue the lice. Audio alarms also pose no obstacle legally acceptable. have legislative approval to impose such a threats that I’ve heard up there, shame on to the professional car thieves respon- The fast-growing western suburbs fee, setting the stage for a challenge to the you.” sible for most car thefts. of Boston, for example, are scrambling county’s action. “This is not about home builders, this is Making noise alarms even more for developments with age restrictions For several years, a majority of Durham not about home buyers,” Commissioner pointless, new auto-security alternatives and otherwise engaging in what one leg- County commissioners and key county staff Phil Cousin said. “This is about children… are both effective and silent, like the islator calls “vasectomy zoning.” have thought that recent rapid population This is about providing for the growth we factory-installed immobilizers that dis- Naperville, Ill., outside Chicago, is growth, and the resulting need for addi- already have in the county.” able a car’s ignition system if someone imposing restrictive covenants on some tional schools, was placing a heavy burden Opponents were not impressed by this tries to start the vehicle without using new developments to prohibit sales to on the county. To address the funding need argument. “It is a clear disagreement about the right computer-encoded key. In sum, people under 55. more equably, the commissioners argued the legal authority,” Nick Tennyson, nothing would be lost and much gained While many North Carolina coun- that the county should impose an impact Durham mayor and executive director of if car alarms disappeared, Anderson said. ties are struggling to fund school con- fee for school construction. the local homebuilders association, said to Bleary-eyed New Yorkers will thus struction, the issue is less of an immedi- Impact fees are onetime payments, typi- the Durham Herald-Sun. be happy to hear that, thanks to the ate concern in the state. The state, and cally made during the permitting process, “They can characterize it in this pejora- grass-roots efforts of Transportation Al- not localities, provides most of the fund- to be used for a designated purpose. tive way, but I am very disappointed. Some- ternatives and Silent Majority, the New ing for education in North Carolina. As a To support their contention that the one advocating for [his or her] rights is York City Council is considering whether result, there is less pressure to resort to impact fee would not effect the local real suddenly being accused of being against to outlaw the use of alarms within the the drastic measures seen in other areas. estate market, county staff pointed to the children,” he said. city. Fines of up to $2,100 for frequent A generation ago, observers say, in- economist Keith Ihlanfeldt’s work on Dade The county set the fee at $2,000 for new offenders could be levied. The bill, if dustry was anathema to suburbs, so of- County, Fla. Ihlanfeldt’s work suggests that homes and $1,155 for apartments, condos, enacted, would make New York City the fice buildings and housing were seen as higher home prices associated with impact and townhouses. New dwellings intended first car-alarm-free municipality in the desirable. All of a sudden they realized fees may be offset by savings in property for senior citizens are exempt. The county nation. how expensive schoolchildren are. taxes. also plans to exempt affordable housing Reported in the New York Sun. Reported in the New York Times. CJ A group called Durham Citizens for built by nonprofit organizations, such as Responsible Government opposes the fee. Habitat for Humanity, from the fee. The group argues that, aside from being illegal, the fees would impede construction Let the courts decide Wanted: A Local Government Guru in the county, raise home prices, and make it more difficult for lower-income families Whether the new fee is legal is ques- to buy houses. They contend that builders tionable. The general rule is that localities in The John Locke Foundation is accepting applications for a new full- will attempt to recoup their costs in some North Carolina have only as much power to time position at the Center for Local Innovation, a special project manner, be it in higher housing prices or tax as is granted to them by the General devoted to issues facing North Carolina counties and municipali- lower quality of construction. Assembly. ties. Job responsibilities would include policy research, writing, ana- Opponents of the fee are expected to While the legislature has generally challenge its legality in court. Because of the given localities the authority to levy impact lyzing local government budgets, and con- threat of a lawsuit, fees collected will likely fees for improvements such as sidewalks, sulting with local officials about issues such be put into a special escrow account until parks, roads, and water and sewer systems, Center for as taxes, regulations, growth controls, the issue is settled. schools have not been included. The only transportation, and privatization. A John Locke Foundation policy re- exceptions to this are Orange and Chatham Local port, “By The Numbers 2003,” found that counties, which do have the authority to Experience in county or municipal govern- Durham County had the 10th highest per- levy school impact fees. Innovation capita tax and fee collections of the state’s Impact fees, in all cases, must reason- ment is strongly preferred. Competitive 100 counties. ably reflect the cost of providing the im- salary with full benefits available. Please When the taxes imposed by the munici- provements. New Ideas for Governing North send a cover letter, resume, writing palities are figured in, the average Durham While several bills have been introduced Carolina’s Cities and Counties samples, and references to Vice President County resident paid 5.72 percent of his in the legislature to allow school construc- per-capita income to local government, the tion impact fees in Durham County, none Kory Swanson, 200 W. Morgan St., #200, seventh-highest local tax burden as a per- has passed. Strong opposition from devel- 200 W. Morgan St., Suite 200 Raleigh, NC 27601, or email him at cent of income in the state. opers and real estate agents has been cited Raleigh, North Carolina 27601 [email protected]. as a factor in the bills’ defeat. CJ October 2003 C A R O L I N A 16 Local Government JOURNAL

From Cherokee to Currituck Anti-Automobile Group Cumberland County Loses Money Railroads the Facts Trying to Attract Events at Arena

n anti-automobile group called Admittedly, roads are subsidized, the Surface Transportation too. But most road costs are paid out By MICHAEL LOWREY tions on future use would tend to reduce APolicy Project recently charged of gas taxes and other user fees, and Associate Editor the value of their property. Current busi- that the high cost of driving threatens the remaining subsidies are tiny rela- CHARLOTTE nesses would be grandfathered in, but they the American dream for working fami- tive to transit. In 2001, subsidies for n the 1990s, Cumberland County joined might not be able to expand. lies. People would be better off, the highways, roads, and streets averaged many other communities in building a Charlotte’s move comes after a well- group claimed, if we invested more in just 0.3 cents per auto passenger mile. new arena. While the Crown Coliseum publicized case of zoning not reflecting a transit and less in highways. By comparison, subsidies to transit I is a state-of-the-art facility, one thing has new neighborhood plan. Earlier this year, Personally, I would rather ride a averaged more than 50 cents per pas- been lacking: enough events drawing Ferebee Corp. announced plans to build an bicycle or take the train than drive any senger mile, or 150 times more. enough people for the building to break asphalt plant on a three-acre site near the day. So, I would be attracted to STPP’s even. Optimist Park neighbor. The city council ideas if they worked. But the group’s Fictitious Golden Age In 2000, the county signed a deal with had approved a neighborhood plan that claims about driving costs are com- Arena Ventures, a partnership between envisioned homes, offices, and shops being pletely wrong, and its urban transpor- STPP wants you to believe that Clear Channel Entertainment and National built on the site. The actual zoning of the tation goals will only make cities more America once enjoyed a Golden Age Basketball association’s Development tract, however, was never changed and still congested, more expensive, and less of transit, when everyone was as mo- League, to generate more business for the allowed an industrial usage, so Charlotte livable. bile as we are today, but by streetcars arena. Unfortunately, the county has lost a could not legally stop the plant. and commuter trains. If we only spent substantial amount of money on the ar- The city ended up paying the company Data refutes STPP more money on transit, STPP urges, rangement and is unlikely to cover its costs nearly $800,000 to build the plant on a dif- we can have that Golden Age again. over the contract’s five-year span. ferent site. STPP claims that transportation is This Golden Age never existed. In Arena Ventures brought the Fayetteville costing an increasing share of Ameri- 1920, when America’s cities had the Patriots, one of eight teams in the NBADL, Triangle transit consolidation? can family incomes, and it blames this world’s most extensive network of to town in 2001. Average attendance last on the increasing cost of streetcars, the average season was only 1,626 per game. The arena Local governments in Wake, Durham, driving. But data pub- American traveled just made $3,059 from the team in the 2002-03 and Orange counties are exploring the pos- lished by the U.S. Depart- 1,000 miles a year by tran- season, after a $29,149 loss the previous sibility of merging their separate transit ment of Commerce tell a sit. This is less than 10 per- season. The league’s future is uncertain af- systems into a single, Triangle-wide opera- different story. cent of the travel we do ter the upcoming season. tion. In 1950, says the today by car. Under the agree- Under an outline de- department’s Bureau of Transportation ex- ment, Clear Channel En- veloped by the Triangle J Economic Analysis pert Wendell Cox esti- tertainment was also sup- Council of Governments, (www.bea.gov) , auto mated what it would take posed to bring an addi- The county spent the six existing bus sys- driving consumed 9.8 per- to build and operate a tional number of events $748,471 on manage- tems would likely be com- cent of the average transit system competi- to the coliseum. In the past ment and licensing bined, with routes coor- American’s personal in- tive with the automobile. two years, it has met only dinated across the region come. At that time, Ameri- By this he meant transit half its contractual agree- agreements and has and eventually linked to cans drove an average of that could connect any Randal O’Toole ment and has paid penal- recovered only a light-rail line to be built about 3,000 miles a year. two points in an urban ties to the county. between the Research Tri- Today, the average area in no more than 50 In exchange for the $201,209 from events. angle park, Durham, and American drives almost 10,000 miles a percent more time than it would take additional business, Raleigh. year, yet spends only 8.5 percent of his to drive. A rail system that could do Cumberland County paid “We went into this or her personal income on autos and this, Cox found, would cost 110 per- Arena Ventures substantial management study anticipating there would be ways to driving. cent of the region’s personal income. fees and entered into a licensing arrange- improve service, and I think this study dem- Of course, we spend more dollars A bus system would cost 22 percent of ment. The county expected that additional onstrates this is one way to do that,” Chapel on cars, but we get a lot more, too. the region’s personal income. bookings and revenues from Clear Channel Hill Mayor Kevin Foy said to the Durham Thanks in part to our increased In this light, spending 8.5 percent selling naming right to the Crown would Herald-Sun. automobility, aver- of our personal in- more than offset the additional costs. The How a combined transit system would age incomes have comes on cars is a contract has since been renegotiated and work in practice remains to be worked out, more than tripled STPP’s ideas are es- real bargain. Auto- most county payments end at the end of this especially given that different cities subsi- since 1950 even after mobiles don’t year. dize transit to differing degrees. adjusting for infla- pecially harmful to poor threaten the Ameri- The Fayetteville Observer estimates that Funding would in part come from a tion. Cars get us to people… who see can dream; they through August, the county spent $748,471 proposed, dedicated, Triangle-wide tax to higher-paying jobs automobility as their make it possible. on management and licensing agreements fund transit. than we could reach We need effi- and has recovered only $201,209 from events by transit. Employers best hope for getting cient transit sys- associated with Arena Ventures. Elevated fire stations costs pay more because out of poverty. tems for people “That was just a bad deal that didn’t cars give them access who can’t drive, but work, but there’s no sense in turning [Clear The Winston-Salem City Council has to more highly the sort of transit Channel] down if they bring in a few shows approved a revised budget for a new fire skilled workers. Cars also give us lower- STPP wants — ex- that are good revenue producers,” Civic station on Somerset Drive. While a failure cost consumer goods; without cars, pensive rail transit aimed at attracting Center Commission member Henry Holt to account for the topography of the site Costco, Wal-Mart, and even Safeway a few people out of their cars — doesn’t told the newspaper. was largely responsible for the station cost- couldn’t exist. work. The Crown Coliseum opened in Octo- ing 50 percent more than originally pro- STPP’s ideas are especially harm- ber 1997. It seats 8,145 for basketball. jected, state disability rules also played a Faulty cost analysis ful to poor people, who tend to live in role in the cost overrun. the most congested areas and see Charlotte rezones Among the changes the city was forced STPP says transit is better than driv- automobility as their best hope for to make was to include an elevator. North ing because the average auto commuter getting out of poverty. After an embarrassing, and costly, snafu Carolina’s interpretation of the Americans spends $1,280 a year on commuting Automobiles give us higher-pay- involving the siting of an asphalt factory in with Disabilities Act is that the device is while the average transit commuter ing jobs, lower-cost consumer goods, a fragile neighborhood in contradiction of a required in two-story public buildings, in- spends only $765. rapid-response medical care, access land-use plan, the city of Charlotte is pro- cluding fire houses. The city was unable to Yet cars are so much faster than to distant friends and relatives, and posing the rezoning of about 550 acres of persuade officials with the Department of transit that auto drivers commute much all sorts of recreation opportunities. land. Insurance that the elevator would be un- longer distances. Given equal distances STPP’s prescription for urban areas Over the past three years, the city has necessary. to work, cars cost little, if any, more would stifle these advantages by developed detailed neighborhood plans for Winston-Salem noted that the second than transit. building rail lines that few people use parts of the city. To ensure that they are floor was not a public part of the building More important, STPP ignores the while letting the highways become implemented, the city wants to rezone large and that it did not plan to assign disabled huge subsidies that support transit. Na- increasingly gridlocked. That’s a pre- amounts of land in seven areas. firefighters to the fire station. tionally, for every dollar that transit scription we can’t afford. “This is going to be extremely conten- “This is a classic example of state gov- riders pay in fares, taxpayers pay an tious and controversial,” Assistant Plan- ernment doing something it knows nothing average of nearly $3 more. In Sacra- ning Director Debra Campbell said to The about and causing us financial grief,” Coun- mento, taxpayers paid more than $6 Randal O’Toole ([email protected]) is the direc- Charlotte Observer. “But we believe we are cil Member Vernon Robinson told the Win- more. Factor in this cost, and that $765 tor of the American Dream Coalition doing the right thing.” ston-Salem Journal. a year becomes $3,000 to $5,600 a year. (americandreamcoalition.org). The opposition would come from many The elevator will add $35,000 to the cost of the effected property owners. Restric- of the fire station. CJ October 2003 C A R O L I N A JOURNAL CJ Interview 17 Lawyer Gene Boyce: Guardian of the Public’s Pursestrings

By PAUL CHESSER Boyce: I would expect a very expedited Boyce: That might become an issue; it is not lawsuit after that sales tax was enacted? Assistant Editor decision. The judge has already been in the currently an issue in the lawsuit because RALEIGH case and has studied it, and it is a pure that happened a year or so after the lawsuit Boyce: No, in fact, I think some came in aleigh lawyer Gene Boyce, who has question of law for him to decide, up or was commenced. It could possibly become even after that was enacted. It was partly a sued the state of North Carolina down. an issue. It all depends on whether it can be stopgap measure to the cities and counties. R five times and won all five lawsuits, made clear as to whether that money which is at it again. But this time he has four CJ: Does that mean a black- and-white issue? is being spent is a prospective expenditure CJ: Where does that case stand now? lawsuits pending against the government. of prospected funds, rather than a retro- Decisions are expected soon in some of Boyce: It is pretty much a black-and-white spective expenditure of money that is al- Boyce: That case is scheduled to be tried in those cases. issue. The state has two defenses, both of ready in the trust fund. There is also an November. There again, that will be a non- which they have tried before in a prior case issue on the… in that instance an issue on jury case, it shouldn’t take more maybe two CJ: You’ve got four lawsuits pending against and the Supreme Court answered those which the purposes the bonds were voted or three days to try that case. It’s primarily the state on various… are they tax-issue re- defenses against the state in the Wachovia on and whether or not any bond money that a question of law. The assistant attorney lated? case in 1939. The state’s defense is fairly is voted on for a specific purpose can be generals that we are working with, we have straightforward and simple. They say, num- applied, particularly by a governor, to a stipulated probably 80 percent of facts have Boyce: They are all tax- and constitutional- ber one, the Congress makes tax laws retro- different purpose. been stipulated to. law related, yes. spective to the first of the year, and if the Congress can do it, then the state legislature CJ: What is the state’s argument on the highway CJ: Now are all of these going to be tried in CJ: You had told me that all four were coming to can do it. The response to that is the U.S. trust? Raleigh? a head. Can you give me a rundown? Constitution has no antiretrospective tax provision in it, so that is Boyce: The state’s argument is the governor Boyce: All of them will be tried in Raleigh. Boyce: We have been work- the material difference. had a deficit problem, and there is a consti- Judge Barnett has the retrospective tax case, ing on all four of them and The other defense that the tutional provision, when the revenue for a retired judge. And retired Judge Robert all of them are about to come state has already asserted particular fiscal period is not adequate to Farmer has both the city-county and high- to a disposition by the trial and lost on one time be- pay the expenditures for a particular fiscal way trust fund cases. The issues in the ones court. The probability is that fore is that taxes are not period the governor shall “effect the neces- that Judge Farmer had are basically the whichever side wins or loses, paid until April 15, when sary economies in expenditures” to correct same issues. The first issue being the re- all four cases will go to the you file your return. That the deficiencies. quirement that the law designate the pur- North Carolina Supreme is based on very old law In this case, the governor did not act pose of the tax and that the executive… the Court ultimately. The first that the legislature relied within the receipts and expenditures of the legislature must designate the purpose for case is a retrospective tax case on. I’ve seen those legal fiscal year in question. He reached outside which we are taxed and the executive branch that came about in Septem- opinions, those cases they the fiscal year and took money out of a trust must spend the money for that purpose. ber 2001, when the legisla- relied on pre-dated the fund that had been collected in prior years. That is the issue in both the highway trust ture, in response to the withholding tax system So the meaning of that provision about and city-county, and Judge Farmer has both governor’s plea to raise more that came into effect dur- balancing the budget is subject to interpre- of those cases. money, increased the top tax ing World War II in about tation. Gene Boyce rate of 7.75 percent and raised 1943, and as we all know, The attorney general interprets it to the CJ: And last, the tobacco case. it up 8.25 percent for three we begin paying taxes at governors benefit, and we interpret it to the years. It has now been extended. It was the first of the year on payroll… and self- taxpayers’ benefit. In the highway trust case, Boyce: The tobacco case has been on the supposed to be a temporary tax; it has now employed people start paying on a quar- there is provision in the recent stature that back burner for quite some time. Initially, at been extended for another three years. But, terly basis beginning in April of the tax money taken out of the trust fund, was the request of the attorney general, but it’s in any event, the constitutional inference is year. So, taxes are collected way ahead of constituted a loan. The present legislature still a viable case. We have held up on that they made that tax retroactive or retrospec- April 15, as a matter of fact, the money is has made a commitment on behalf of future to watch some of the developments particu- tive back to January 1st and there is a clear spent, collected and spent, long before the legislatures that that money will be repaid. larly some of the activities of the Golden prohibition… tax-return due date. That is a significant issue, whether or not LEAF Foundation. the highway trust fund is a lending institu- CJ: The issue is that they enacted it at what point CJ: Can you briefly explain the highway trust tion, whether or not the governor or the CJ: What is the basis of the lawsuit, at this point? in time? case and the state of that one? legislature can borrow money from the trust fund on a promise that it would be paid, or Boyce: There are several. Number one, that Boyce: They enacted it on September 26, Boyce: The facts in that case have been might be repaid. case is one we refer to as “lunchtime litiga- 2001, but they made it retroactive to Janu- stipulated, to a large extent, by the parties, tion.” It was brought about… twelve o’clock ary 1, 2001. The constitution in North Caro- and we expect for that to have a trial date of CJ: Cabarrus County just got hit big-time with noon during the lunch and recess at the lina is very clear that no tax retrospectively… the third week in October. That case is the the Pillowtex layoffs, right? So they are coinci- courthouse and resolved about nine min- no law retrospectively taxing any sales pur- one in which the ultimate result was that dentally at the head of city-county case. utes past one that same day. It was a $4.6 chases or other acts previously done shall the governor took $80 million out of the billion case involving public funds. The be enacted. North Carolina and Delaware Highway Trust Fund and the suit is brought Boyce: Cabarrus County is the lead plaintiff basic complaint of the plaintiffs in that case, have an explicit prohibition against back for the purpose of restoring that money to and they had enough troubles losing all it was a true violation of separation of pow- taxing. Some of the other states have ruled the trust fund. their tax receipts income and they now ers. The judicial branch and the executive it unconstitutional on the basis of impair- The basis for that suit is twofold. Num- have been hit again. That case involves the branch got together and entered a judg- ment of contract or lack of due process ber one, you don’t take money out of trust ongoing problem of the legislature enact- ment that required the legislative branch to because of retrospective applications. and use it contrary to the trust purposes. ing appropriate laws permitting the mu- enact certain legislation under a threat that Number two, the main constitutional objec- nicipalities, the towns and the counties, to the tobacco settlement might fall through if CJ: So your suit seeks to recover just those nine tion is, the North Carolina Constitution says, collect taxes other than property tax. The the legislature didn’t act. months of retrospectivity or for the whole year? when a tax law is passed it has to specifi- legislature has deprived the cities and coun- An act by March 16 was given a dead- cally tell the people what that tax is for, and ties of a source of income that they had been line from December of 1998. The judgment Boyce: Yes, I’ve just gotten something spe- second, once that tax is collected that tax depending on for years. was entered and the legislature was im- cific from the Department of Revenue and money has to be spent for the purpose At the end of the fiscal year, I noted that posed a deadline by the executive and judi- there are approximately 85,300 taxpayers in which is stated in the law, for which it was there was a surplus of $250 million on June cial branch of March 15, to enact, what that category and I am told that the amount collected. In this case, the $80 million was 30 of this past year, but I’ve also noted that turned out to be the legislation that divided of taxes involved is something over $63 paid by taxpayers in the form of automobile no effort had been made to repay it in the up the public funds among three slush million for that nine-month period. That license tax, gasoline tax, lease-car tax, tax on money that was taken away out of that funds… three political appointed commit- case has just been decided, that the rule will purchase of vehicles. That money was des- surplus at the end of the year. What we have tees: the Golden LEAF, the Health and be a class action by the four main plaintiffs ignated for the specific highways construc- evidence that the state took money away Wellness, and the Tobacco Trust. on behalf of the 85,000 taxpayers. That case tion and urban loops specified in the law from the cities and counties, when they With half of it going to Golden LEAF is almost ready for trial and after the class and opposition is the money has to be spent were operating on a $250 million surplus. and we have been tracking expenditures by notice, the mandatory class notice goes out, for the purpose it was collected. Golden LEAF and as we predicted a lot of it will probably be tried sometime, hope- CJ: The amount that the state took on those taxes that money is being spent by a politically fully, in mid-October. CJ: Where does that case stand right now? was mitigated by raising the sales tax, right? appointed committee, way beyond even what some of the legislative leadership ex- CJ: Any idea, how long it will last? Boyce: That case will probably be tried the Boyce: There was an offer to that effect, pected that money to be spent for. The legal third week in October. It’s ready for trial. It some, but not all of the localities opted to point in that case is that the legislature Boyce: It has already been pretty much will take probably two days to try that case. enact the sales tax. That was part of the cannot delegate to spend public funds with- agreed by parties and the judge that it is a It’s a nonjury case, and pure questions of crumbs left on the table by the legislation out putting some fairly clear restrictions on pure question of law, there will be no jury law. and the governor. My best information is how public money is to be spent. trial. It will be probably a day or two-day even with the sales tax it only replenished trial, at the most. CJ: Does recent actions by the governor, and I about 50 percent of that lost income, I’m not CJ: And trial action? guess supported by the legislature, of the $700 positive about the statistics, but I remember CJ: How long would you expect for the judge to million for his Moving Ahead Project, moving reading something to that effect. Boyce: Because of our schedule, probably render a decision? funds to fix up roads in the state. CJ: Did any cities and counties drop out of the December. CJ October 2003 C A R O L I N A 18 Learning Curve JOURNAL

From the Liberty Library Museum review

• Years before the public knew about Osama bin Laden, Bill Clinton Spies Come Out of the Cold at Raleigh Conference did. Bin Laden first attacked Ameri- cans during Clinton’s presidential By DONNA MARTINEZ After retiring transition in December 1992. He Associate Editor from the KGB in struck again at the World Trade Cen- RALEIGH 1990, Kalugin be- ter in February 1993. Over the next pies have fascinated Americans ever came a vocal critic of eight years the archterrorist’s attacks since Sean Connery and Dean Mar the Communist sys- killed hundreds and wound thou- S tin broke box- office records as suave tem. The Soviet sands of people — while Clinton did secret agents James Bond and Matt Helm. Union dissolved the his best to stymie the FBI and CIA Martin’s velvet-voiced Helm was my fa- next year, and the life and refused to wage a real war on vorite. Cigarette and drink in hand, he was he had known for de- terror. Why? Investigative reporter a delightful caricature of the 1960s swing- cades ended. Today, Richard Miniter claims to have the ing-single culture as he romanced the girls, Kalugin speaks answer in Losing bin Laden: How Bill outsmarted the bad guys, and saved the proudly of his new Clinton’s Failures Unleashed Global Ter- world, all without breaking a sweat. It was U.S. citizenship, a ror, an exposé that includes exclusive great entertainment, and for several de- dream he achieved interviews with both of Clinton’s Na- cades, the classic Helm series and the spe- several weeks ago. tional Security advisors, Clinton’s cial effects-laden Bond blockbusters em- He now teaches at counter-terrorism czar, his first CIA bodied the term “spy” for movie-going the Centre for Coun- director, his secretary of state, his sec- Americans. terintelligence and retary of defense, top CIA and FBI When the Soviet Union dissolved in Security Studies, agents, lawmakers from both parties, 1991, the stark reality of the spy business based in Alexandria, and foreign intelligence officials from replaced Hollywood’s version in the news. Va., and is a frequent Carolina Journal photos by Donna Martinez France, Sudan, Egypt, and the United Soviet spies, free of the bonds of a totalitar- talk-show guest and Oleg Kalugin, a former KGB major general, talks after the conference. Arab Emirates. Published by Regnery ian society, began selling information to lecturer at events at www.regnery.com. U.S. authorities and publicly telling stories such as the Raleigh spy conference. the tape, it wasn’t Kelley they heard. It was about their lives as KGB agents. While Kalugin’s remarks shined light one of their own: FBI agent Robert Hanssen. • Terrorism still threatens the on the shadowy work of the KGB to disrupt Faced with undeniable proof of Kelley’s United States — and jihad, Islamic Ex-KGB spy embraces America the United States, the session featuring CIA innocence, the FBI refocused its massive holy war, is the reason why. In On- officer Brian Kelley was the most valuable investigative and surveillance powers on ward Muslim Soldiers: How Jihad Still Oleg Kalugin is one of the men who and timely. In a post-Sept. 11 world, it’s Hanssen. On Feb. 18, 2001, Hanssen was Threatens America and the West, author tells a riveting story every American should easy to discount the concerns civil libertar- arrested in a park as he attempted to ex- Robert Spencer details how jihad hear. A former KGB major general, he cap- ians have with the Patriot Act’s investiga- change top-secret documents for $50,000. warriors have already established tivated those in attendance at the Raleigh tive powers as unrealistic and out of touch Kelley learned of the arrest from his sons. numerous footholds in America, and International Spy Conference, conducted with grave world threats. But Kelley’s story As he watched the story on CNN, he doubled are an established, growing, and omi- Aug. 27-29 at the North Carolina Museum reminds us of the dangerous potential of over in front of the TV as he realized the nous threat in Europe. He reveals the of History and organized by Metro maga- unchecked government power. enormity of the intelligence loss. open violent contempt of radical zine Editor Bernie Reeves, a spy history “I knew he knew all the secrets,” Kelley Muslims in the United States and enthusiast. FBI targets its own said of Hanssen, a man he had known for 23 around the world for Western free- Kalugin’s discussion of his efforts while years and describes as quiet, thoughtful, dom and tolerance, and details why attending Columbia University to recruit From 1996 to 2001, the FBI and imaginative. “You never a clash of civilizations is already upon students and professors to spy for the So- targeted Kelley, believing he would have suspected Bob us. Using Muslim sources, Spencer viet Union was startling. Later, as a corre- was a spy who had sold vital Hanssen,” he said. uncovers the tracts that influence spondent for Radio Moscow at the United U.S. secrets to the Soviet Union. The damage Hanssen in- radical Muslims — material full of Nations, Kalugin continued recruiting, spy- The government’s surveillance flicted on U.S. intelligence was hatred and intolerance that is freely ing, and using Communist-sympathizing and intimidation was relent- immense, even though he re- and popularly available, and that is Americans to distribute propaganda. His less. The FBI followed him, portedly told his wife he was almost completely ignored by the es- objective was simple, but profound: to turn bugged his house, put cam- selling useless information. tablishment media. Also from Reg- Americans and the world against capital- eras in his office, monitored Kelley dismisses Hanssen’s nery. ism by presenting the United States as an his computer, interrogated characterization and supports oppressor and aggressor, rather than a land him, and told his family he the government’s sobering • In Breach of Trust: How Wash- of freedom and opportunity. “I was a dedi- was a traitor. Despite evidence assessment. ington Turns Outsiders Into Insiders, cated Communist even though I spent years to the contrary — Kelley “It is a 500-year flood. He former U.S. Rep. Tom Coburn of in the U.S,” he explained to the audience of passed FBI and CIA poly- turns out to be the worst spy nearly 150 who gathered in the museum’s graphs — the surveillance and in American history,” Kelley Oklahoma explores how Washington Brian Kelley resists critical reform by co-opting auditorium. interrogation continued. said. men and women who seek to change Kalugin said his ideological views When some investigators the system. A “congressional maver- changed when he was moved from the began expressing doubt he was the mole U.S. exonerates Kelley ick” who kept his promise to serve KGB’s political wing to its domestic service they were searching for, other FBI leaders three terms and then leave Washing- around the time Mikhail Gorbachev as- dismissed the possibility, saying he ap- It took the U.S. government six months ton, Coburn looks at the inner work- sumed power. In his new assignment, peared innocent because he was such a to apologize to Kelley, via a hand-delivered ings of Congress — why the system Kalugin discovered that fellow citizens were brilliant spy and knew how to evade their letter signed by the head of the National changes politicians instead of vice being jailed for criticizing the government, efforts. Security Agency. To celebrate, his friends versa. He shows readers through be- and he was expected to support and carry Kelley eventually was put on leave and threw an “exoneration party” with the hind-the-scenes stories why Wash- out the sentences without hesitation. That stripped of his CIA credentials. He was theme of faith, family, and friends. Since ington resists the reform he says experience shook his core beliefs, and he devastated and prepared himself to be ar- that time, George Tenet, director of the CIA, America desperately needs, and how realized Commu- rested. “The worst apologized to him personally. voters can make wise, informed de- nism wasn’t the ideal thing in the world Despite his experience, Kelley isn’t bit- cisions about current and future po- system he had be- anyone can say or ter and doesn’t want people to believe the litical issues and candidates. An of- lieved it was for so think about you is intelligence community is inept. “The great fering from www.wndbooks.com. many years. He con- that you’re a traitor majority are outstanding people who work cluded that his faith to your country. It’s very hard for you,” he said. • The central issue of day care is had been based on very hard,” he told Kelley is one of them. He’s back at work often framed in a way that pits work- “youthful illusions.” the audience. at the CIA, helping train agents by, among ing moms against stay-at-home Kalugin’s re- It was the after- other things, relating his role in the Hanssen moms, and feminists against tradi- marks were particu- math of a historic investigation. His commitment to his work tional families. But the real conflict, larly thought-pro- event — the fall of has never been stronger. Brian C. Robertson shows in Day Care voking when he dis- the Soviet Union — “It’s my country,” he said with emo- cussed present-day that convinced the tion in his voice. Deception: What the Child Care Estab- Spies left coffinlike cards for their enemies. lishment Isn't Telling Us, is between all Russia and President FBI they were tar- In addition to Kalugin and Kelley, the parents and the burgeoning day-care Vladimir Putin, who geting the wrong conference featured other spy trade no- establishment itself — a multimillion- once worked for Kalugin at the KGB. man. According to Kelley, the U.S. govern- tables, including Christopher Andrew, co- dollar lobby with a vested interest in Kalugin cautioned the audience not to be- ment bought intelligence information from author of KGB: The Inside Story. the expansion of subsidized day-care lieve that Russians no longer see the United former Soviet spies, including details on Attendees also were treated to a pre- services. Robertson shows how this States as the enemy. After all, he noted, 60 Americans operating as agents. Among the sentation about spy gadgets that Bond and establishment works to expand its percent of its current government officials windfall of material received was a phone Helm would die for, conducted by Keith power and silence its critics. More at are former KGB and military members. “The conversation of a Soviet agent talking to the Melton. Items from Melton’s personal col- www.encounterbooks.com. CJ old habits prevail,” he said. “Don’t lull your- American traitor the FBI believed was lection were displayed in the museum lobby self into complacency.” Kelley. But when the FBI team listened to during the conference. CJ October 2003 C A R O L I N A JOURNAL Learning Curve 19

Book Review Future of Freedom: Author Tosses Toothpick to a Drowning Man

• Fareed Zakaria: The Future of Freedom; greatly expanded, leading to the election in the spread of direct democracy — that is, Norton, 2003, 256pp., $24.95 1895 as mayor of Karl Lueger. Lueger was a ballot initiatives and referenda. Those pro- precursor of Hitler, a nationalist who ap- cesses, he says, gives us “a jumble of laws, By GEORGE C. LEEF pealed to the poorly educated (and now often contradictory, without any of the de- Contributing Editor enfranchised) masses with anti-Semitism bate, deliberation, and compromise that RALEIGH and socialism. Had it not been for the fact characterize legislation.” ne of the most annoying things that the Austrian emperor invalidated Zakaria’s solution is to move toward that Americans have to put up Lueger’s election, perhaps the Nazi move- more decision-making that is not demo- Owith during elections is the rheto- ment would have originated in Austria and cratic, and not as susceptible to shortsight- ric that sanctifies democracy. We are bom- spread to Germany, rather than the other edness and special-interest pressure. He barded with admonitions to vote and with way around. In any event, the episode shows admires the Federal Reserve, for example, hints that there is something shameful in that making a society more democratic can because it is insulated from democracy. not “participating in our democracy.” I have at the same time make it hostile to freedom. This part of the book is not well thought heard the statement even that voting is “our A more recent example is Indonesia. out. The problem we face in the United most precious right.” No doubt about it: Zakaria shows that under the dictatorial States is not that we are making too many Democracy is an over-hyped idea. rule of Suharto, the nation was politically political decisions democratically, but rather It takes some intellectual acumen to see stable and making steady economic that we are making too many political deci- through all the adulation for democracy progress, but after becoming democratic in sions. We need to return to the constitu- and ask whether it is always desirable. In 1998, “gross domestic product has con- tional liberalism of our early years, but I his new book, The Future of Freedom, Fareed tracted by almost 50 percent...pushing more doubt that de-emphasizing democracy in Zakaria does exactly that. The subtitle of the than 20 million people below the poverty our political institutions would make much book, Illiberal Democracy at Home and line. The newly open political system has difference. Many of our most authoritarian Abroad, tells the reader what the author has also thrown up Islamic fundamentalists government mandates now come from in mind. Democracy is often very illiberal in who, in a country without much of a politi- unelected individuals who face no demo- its workings. That is to say, democratic cal language, speak a very familiar dis- cratic pressures — bureaucrats. The Con- decision-making frequently leads to authori- means ‘liberal democracy’: a political sys- course — that of religion.” He fears that the gress of old was less democratic, but it still tarian outcomes. Far from being a guaran- tem marked not only by free and fair elec- nation will slide into chaos and Islamic passed a lot of terrible legislation. Even if tor of freedom, democracy can be its worst tions, but also by the rule of law, a separa- radicalism, a case of replacing a corrupt we could ratchet down the level of democ- enemy. That’s a very contrarian message tion of powers, and the protection of basic dictatorship that at least provided a sem- racy, as Zakaria wants, it’s hard to see that and it is welcome to have a clearly “estab- liberties of speech, assembly, religion, and blance of the order that capitalism needs it would halt the erosion of our liberties, lishment” figure (Zakaria is a columnist for property. But this bundle of freedoms — with an illiberal democracy that will turn much less restore those that have been lost. Newsweek and a political commentator for what might be termed ‘constitutional liber- the country into a basket case. I’m afraid that Zakaria has lost sight of ABC News) saying it. Although the book alism’ — has nothing intrinsically to do The move toward ever-greater democ- the goal (or at least what I think should be doesn’t hit on all cylinders, it succeeds in with democracy and the two have not al- racy is also evident within the United States the goal), namely, a restoration of constitu- showing that democracy is not always a ways gone together, even in the West.” He and Zakaria does not like what he sees. tional liberalism. Merely tilting a few de- good thing and that we would be better off adds, “Democracy is flourishing; liberty is “Founded as a republic that believed in a grees back away from hyperdemocracy will if we could halt the trend toward making all not.” Truer words could not be written. balance between the will of the majority not suffice. The move toward democracy is processes and institutions more democratic. After a thought-provoking introduc- and the rights of the minority…America is a symptom of a deeper problem, our grow- Zakaria’s crucial insight is that democ- tory chapter on the history of liberty, which increasingly embracing a simple-minded ing statism. We now insist on making more racy is only a means, not an end in itself. The Zakaria argues is rooted in the competing populism that values popularity and open- and more decisions by government rather Founders of the nation wanted to ensure power centers of the Catholic Church and ness as the key measures of legitimacy. This than allowing individuals to choose for the protection of liberty and property and the numerous feudal states of Europe, com- ideology has necessitated the destruction of themselves. chose to make a highly restricted form of petition that created the “nooks and cran- old institutions, the undermining of tradi- The disappointment of The Future of democracy one of the means toward that nies” where liberty began to thrive, the tional authority, and the triumph of orga- Freedom is that it so clearly makes the point end. It is quite possible to enjoy the rights of book launches its offensive against the no- nized interest groups, all in the name of ‘the that democracy is no guarantor of liberty, liberty and property without democracy, tion that democracy is necessarily good. people.’” Congress, for example, is more but then fails to offer any guidance on how Zakaria argues, and similarly possible to Zakaria’s examples are illuminating. democratic than it was 40 years ago, but it might be guaranteed. A slight de-democ- see those rights destroyed under a perfectly For example, the Vienna of the 1870s Zakaria maintains that it is consequently ratization of our intrusive and overbearing operating democracy. As he states the mat- was noted for its cosmopolitan liberalism. more open to special-interest-group pres- state is like tossing a toothpick to a drown- ter, “For people in the West, democracy But during the 1880s, voting rights were sures. The author also has strong words for ing man. CJ Book Review Naked Economics: Worth Reading Despite Rants on Liberal Themes

• Charles Wheelan: Naked Economics: Un- ists and is trade. From that beginning, he what, in the parlance of graphics-laden texts, cycle) are both discussed. And Wheelan dressing the Dismal Science; Norton; 2002; 288 proceeds to explain that trade makes us causes supply and demand curves to shift). correctly labels Social Security “one big pp; $25.95 richer by allowing greater specialization in Although he does not credit it by name, pyramid scheme” even though his discus- production, that trade is mutually benefi- Wheelan also provides a nice introduction sion focuses more on demographic issues By E. FRANK STEPHENSON cial because it is based on voluntary ex- to the public choice field of economics. In than on individual liberty. Guest Contributor change, and that trade helps consumers by the chapter “The Power of Organized Inter- Unfortunately, as Burton Malkiel notes ROME, GA lowering the prices they pay for both im- ests,” he takes on pork-barrel spending and in his foreword, Naked Economics is “well harles Wheelan’s goal in writing ported and domestic goods. Not yet fin- logrolling and reveals how small interests balanced.” Thus, while one does get nice Naked Economics is to introduce ished extolling the virtues of international such as mohair farmers and ethanol pro- treatments of markets, trade, and public C people who might otherwise have trade, Wheelan turns to slaying the myths ducers can effectively wrangle beneficial choice, one must also endure drivel about avoided economics texts and courses larded of “sweatshop labor” and a trade-fostered legislation out of the political process. The SUVs, suburban sprawl, fast food, global with graphs and equations to “a subject that environmental “race to the bottom.” chapter also introduces the concept of rent warming, and trade-induced “cultural ho- is provocative, powerful, and highly rel- Wheelan’s chapter “The Power of Mar- seeking and explains how regulations such mogenization.” Readers sharing this evant to almost every aspect of our lives.” kets” is another of his better ones. He uses as occupational licensing can become pow- magazine’s love of freedom should expect Wheelan largely achieves his commend- the question “Who feeds Paris?” as a spring- erful tools for self-interested individuals to to utter an occasional groan. On the topics able goal, for Naked Economics is a nifty board for explaining how markets are “a extract rewards that they would be unable of externalities and macroeconomic policy primer that does indeed “walk through powerful force for making our lives better,” to in the marketplace. Here, the author but- in particular, Wheelan envisions a large some of the most powerful concepts in eco- how markets use “prices to allocate scarce tresses a superb conceptual discussion with and active role for government. nomics while simplifying the building resources,” how “markets are self-correct- several examples, including teacher certifi- Early in the book, Wheelan writes, “Life blocks or skipping them entirely.” ing,” and how “every market transaction cation laws. is about trade-offs, and so is economics.” Not surprisingly, since the author’s day makes all parties better off.” And readers of There’s much else to like about Naked Indeed, so is Naked Economics. Although the job is writing for The Economist, the chapter this magazine will be reminded of Hayek Economics. Wheelan debunks the notion that reader must endure occasional rants about on international trade is one of the book’s and Read when the author writes, “Prices “overpopulation” hinders economic SUVs and outbursts of statism, the tradeoff strongest. He begins the chapter by asking are like giant neon billboards that flash growth. He skewers the fixed number of is well worth it. For Wheelan has written a readers to imagine there is an invention important information.” The only signifi- jobs fallacy underlying France’s 35-hour lively introduction to the sexiest discipline that, in rich and poor countries alike, is cant weakness of this chapter is Wheelan’s workweek. The author recognizes the im- known to mankind: economics. CJ capable of turning corn into stereo equip- nearly exclusive focus on market outcomes; portance of property rights and institutions. ment, soybeans into cars, or Windows soft- the chapter could have been strengthened That inflation is a tax on money holdings ware into fine French wines. Wheelan then by the inclusion of more discussion about and the ability to use monetary policy for Frank Stephenson is an assistant professor of reveals that such an invention already ex- the mechanics of how markets work (i.e., political purposes (the political business economics at Berry College in Rome, Ga. October 2003 C A R O L I N A 20 Opinion JOURNAL

Arts on a Lark, Official Malarkey

he party’s over, now it’s time to face the real music. I’m referring to the boozers at the TN.C. Museum of Art who threw a party during museum operating hours for a departing colleague. Troubling by itself, the festivity, more importantly, poignantly epitomizes what’s wrong with state government today: The in-crowd parties while taxpayers struggle to foot the bill for ever- growing state spending. An investigation by the State Auditor’s Office found numerous violations of personnel policies, security procedures, and most likely of Alcoholic Beverage Control regula- tions. The auditor who crashed the party esti- mated that 35 to 40 mu- seum workers, some of them state employees and others members of the Museum Foundation, at- tended the event. The au- ditor witnessed many of Richard Wagner them drinking beer and wine, some of the alcohol donated by a winery and Editorials buildings. The State Capitol, of all places, bears the shame- some of it supplied by the revelers themselves. ful evidence of state leaders’ irresponsibility. Plaster in its Several of the workers said they partied and im- dome, soaked by rainwater that leaked inside, cracked and bibed while they were on the clock. Even the fell into interior walkways. Some of the falling debris museum’s associate director of administration joined BEWARE THE BLOB reportedly narrowly missed visitors to the Capitol. Now, in. contractors hired through emergency funding are busy Far from an isolated event, partying at the mu- NCCU now, all of North Carolina next repairing the damage. seum was a common occurrence, according to the The Department of Health and Human Services says it tipster who contacted the auditor’s office. needs $238 million for repairs and renovations for its Taxpayers should be furious about this kind of all it the “Revenge of the Blob.” Featuring a not-so- facilities throughout the state. The state budget office says behavior. And they should question why — if the all-star cast of Gov. Mike Easley, Senate Pro Tem the Department of Justice and Public Safety needs about museum can allow so many employees to attend a C Marc Basnight, House Cospeaker Jim Black, and a $106 million immediately for property repairs. State Audi- party during operating hours — it needs a total of 87 host of supporting players in North Carolina’s legislature, tor Ralph Campbell reported in an audit in May that the state-paid workers and 90 foundation members (ac- the riveting drama of an insatiable monster running amok state should build three new juvenile prisons because its cording to figures reported by the Department of is now playing at N.C. Central University. five existing ones are safety and security hazards. Cultural Resources at my request) to carry out its The blob is mold. Some strains of it, such as black mold, mission. Put another way, 20 percent, or one in five are toxic to humans. Innocently enough after it was born, Needs documented workers, was frolicking in a backroom while the the blob hid away in the darkest reaches of mother ship’s museum was supposed to have been serving its infrastructure. In the university’s case, it was the steam Estimates by the State Construction Office show the patrons. How many companies, or other organiza- heating system, the victim of years of budget cuts and lack extent of the maintenance backlog. Nearly $1.3 billion is tions, could afford to operate like that? of maintenance. needed for repairs and renovations on its An analysis of the museum’s annual budget Eventually, the mold was discov- properties. The recent trend of robbing shows how comfy things are over there. The state ered in 14 buildings on campus. Two of the state’s Repair and Renovation Re- budgeted $3.7 million for operation of the museum the university’s newest dormitories, only The tragedy unfolding serve began in 1999 when Hurricane in fiscal 2002-03 and again for 2003-04. The John four years after they opened, and three at NCCU stands as a Floyd ravaged North Carolina. In 2000, Locke Foundation’s Freedom Budget recommended other buildings have been closed. A $60 million of the $150 million allocated that the museum could operate efficiently by trim- consultant’s report issued Sept. 9 said monument to chronic for the reserve was redirected to hurri- ming its staff of full-time state workers and relying the NCCU must gut and completely re- fiscal irresponsibility at cane relief. In 2001, Easley reverted to the more on foundation members for its needs. By doing build the dormitories’ interiors. General Fund $39.5 million of the $100 so, the museum could operate on an annual budget A total of 900 students displaced by the highest levels of million from the reserve. of about $1.6 million, or half of what it now receives. the closings have been transferred to ho- state leadership. The next year, the legislature ear- The party shocked State Auditor Ralph tels in the Durham area. The total esti- marked $125 million for the reserve, but Campbell. “I can’t believe that this sequence of mated repair bill so far: at least $10 mil- $116.4 million was reverted to help bal- events took place,” he said to the News & Observer of lion. A final assessment of the costs and other causes of the ance the general budget. Of the remaining $8.6 million that Raleigh. “What were people thinking?” mold infestation won’t be known until another consultant’s was spent on repairs in 2002, $7 million paid for security State Cultural Resources Secretary Lisbeth Evans study is released Sept. 30. upgrades at state administrative buildings in Raleigh and had a curiously lukewarm response. “Sometimes $1.6 million paid for an air-conditioning system at the people make bad decisions,” she said. No duh. Then Maintenance ignored Museum of the Albemarle in Elizabeth City, another of she said she will launch an investigation and remind Basnight’s pet projects. The legislature allocated no money employees that such parties violate museum rules. Like North Carolina’s chronic over-spending problem, for repairs and renovations in fiscal 2003. For fiscal 2004, it But another quote attributed to Evans makes us maintenance at the university, and other state buildings, set aside only $15 million for repair work. doubt whether she will put a wholehearted effort was ignored for years by the captains of the ship of state. into the probe or whether she will take meaningful The day of reckoning has come at NCCU. No doubt, it will State spending still growing correction action. “These are good employees who reappear quickly in many other state buildings. work hard, and they made a mistake,” Evans said to Former NCCU Chancellor Julius Chambers, in an in- Budget crisis? All of the cuts in repairs and renovations the N&O. “And … they were reported on by their terview with the News & Observer of Raleigh, confirmed were made while state leaders fattened politically favored peers — which is disgusting in itself.” that state leaders neglected the university’s plight. “The programs and created others. Overall, state government Incredible. Evans blamed whistleblowers at the state knew that that school had some major building prob- spending will grow by 3 percent in fiscal 2003-04 and by 5 museum for squealing on the cavorting ways of lems. We went to the state budget committee, the state percent in fiscal 2004-05 after growing at this rate or higher their colleagues. Oh sure, that kind of response by legislative leaders. We went to the governor. We pleaded in most of the past few years. the department’s highest-ranking official is bound for money for repairs, and we didn’t get it,” Chambers said. The tragedy unfolding at NCCU stands as a monu- to inspire a comprehensive, objective inquiry. Jeff Davies, vice president for finance for the 16-cam- ment to chronic fiscal irresponsibility at the highest levels It looks like Gov. Mike Easley, who appointed pus UNC system, told the N&O that he wasn’t aware of of state leadership. Sadly, it also appears to be only the Evans to office, will have to step in if the state hopes mold problems at other universities. But, he said, problems opening act of horror awaiting the state in general. to salvage taxpayers’ confidence in the museum and arising from lack of funding for maintenance could surface Those responsible for bringing disrepair and disgrace in the Department of Cultural Resources. Or does he elsewhere. “We haven’t had repair and renovation money on North Carolina should be held accountable. In the next also harbor contempt for whistleblowers? CJ for three years now,” Davies said. “We all participate election, voters who choose to ignore the crying need for equally in the budget crisis.” fiscal reform can expect to watch the blob devour the rest of Signs of neglect have surfaced at a few other state North Carolina, a la California. October 2003 C A R O L I N A JOURNAL Opinion 21 incentive to minimize claims on the money by keeping their spells of unemployment to a minimum. (Scads of research OPPORTUNITY COST suggests that the current UI system lengthens periods of unemployment as displaced workers seek to maximize Hurricane Isabel A depleted trust fund isn’t all bad news their UI payments a la George Constanza’s antics on Seinfeld). Proves Fiscal Case Until policymakers reform unemployment insurance, t may sound counterintuitive to say so, but the latest however, states will have to fashion policies that best fit ake no mistake: Hurricane Isabel, though news out of Raleigh about North Carolina’s trust fund the system we have. Despite North Carolina’s shaky eco- not nearly as destructive as previous Ifor unemployment compensation — that the balance nomic performance and our resulting bouts with unem- storms such as Fran and Floyd have been is so low that the state may have to borrow from the fed- ployment, state policymakers basically got the policy mix M in North Carolina, has still caused a great deal of eral government for the third time this year to make pay- right here — despite simplistic complaints to the contrary. damage — and has created the need for significant ments — is not all bad news. governmental expenditure. Yes, of course it’s bad news that North Carolina’s un- This is precisely why it is so important for our employment rate has stayed stubbornly high and above political leaders to set firm priorities and to make the national average for much of the past couple of years, good decisions with our money. Instead of trying resulting in significant payments out of the trust fund. But WHICH POISON? to “respond” to every constituency that can quote those who argue that the state’s predicament is due to ex- a statistic or rehearse a sob story, public officials cessive cuts in the unemployment-insurance tax rate in the Both cash incentives, tax credits have cons should start out with the presumption that in vir- mid-1990s are missing the point. tually every case in which a lobby or government Yes, the state did have one of the fattest unemploy- agency asks for taxpayer money, the answer should ment-insurance trust funds in the nation, reaching $1.5 bil- s policymakers in Raleigh continue to consider the be “no” — not “well, we try to help you out,” or lion at one point. But North Carolina was much better off implications of two recent revelations out of the “wait until next year when the economy picks up,” cutting the tax rate and generating a lower, more reason- AN.C. Department of Commerce — a study show- or “it depends: how able amount in its fund during the past decade or so — ing that the state’s tax incentives don’t create many jobs much money do you and is likely better off today seeking an occasional loan and a separate survey showing that they play a relatively have in your PAC?” from the Feds, even if interest is involved, than if it had small role in business-location decisions — it might be Unfortunately, law- accumulated a huge reserve in a government trust fund. worthwhile to take a step back and examine the issue of makers in Raleigh still The issue at hand is called “opportunity cost.” It re- economic-development policy from a different angle. haven’t learned to say fers to the basic economic principle that the real cost of Assume, for the sake of argument, that North Caro- no, at least not consis- doing something (or not doing something) is the foregone lina should play the incentive game. That is, assume that tently. Rosy scenarios opportunities associated with your decision. state government should attempt to create jobs and steer and onetime gimmicks For example, the real cost of buying a hamburger at economic investments by offering targeted incentives to got them through the McDonald’s is not the loss of a couple of pieces of Trea- companies. What should be in the state’s toolbox? 2003 budget cycle. Now, John Hood sury-issue paper. It consists of the taco, the hot dog, the In the past, most of North Carolina’s incentive efforts with little fiscal cushion hoagie, the salad — whatever you might have purchased have involved tax credits. Yes, former Gov. Jim Hunt also left, the proverbial rainy day has returned. instead with the same bucks. Similarly, the real cost of pioneered the use of cash grants as “sweeteners” and “deal Now, don’t get me wrong. I do not believe that watching the recent 2003 MTV Music Awards (in addition closers” for particular corporate relocations or expansions, it is the taxpayers’ job to subsidize risky private to the loss of a few brain cells, your dignity, and any shred but his “Competitiveness Fund” was never funded by more choices. I do not favor easy access to government of respect others may have had for you) was the programs than a few million dollars a year. We’ve devoted several bailouts for people who own cottages on the Outer not seen or the other entertainment options not pursued. times that amount each year, in the form of foregone rev- Banks or homes in flood plains. Nor do I think that enue, to our various tax-credit programs — including a natural disasters should be used as an excuse for Applying economics to the trust fund credit for certain venture-capital investments and the communities to try to tap public coffers in Raleigh much-larger William S. Lee package of tax credits. or in Washington for pre-existing needs, which is In investment terms, the cost of purchasing a stock is Now, however, the pendulum may be swinging in the what happened in 1999 when North Carolina poli- properly thought of as the investment (or consumption other direction. While administration officials continue to ticians shamelessly tried to scam the Feds for “Floyd expenditure, actually) that you had to forego in order to defend tax credits, other political leaders are obviously con- expenses” that were anything but. buy it. If the real return on your stock is higher than that of sidering the option of reining in the tax incentives while When I say that Isabel has created new fiscal the alternative investment, then your benefit exceeded the putting more emphasis on cash grants. Once you buy the obligations for North Carolina, I mean for things cost. assumption that government should be playing this game, that are clearly state responsibilities. For example, That’s the issue with regard to government trust funds. it’s not at all clear which direction is the best. we are going to have to repair quite a bit of public There are significant opportunity costs associated with In some ways, cash grants are clearly superior to tax infrastructure, including the major highway along accumulating large amounts of taxpayer money in a trust credits. For one thing, it is at least conceivable that they the Outer Banks and a number of inland roads and fund. If left in the hands of those who originally earned it, will wreak less havoc on the state budget. The annual bud- bridges. There have been public-safety needs, as the money could be profitably invested in the private-sec- get for grants is out in the open, part of the normal bud- well as emergency response and short-term relief. tor economy, creating jobs and raising incomes. To build geting process. Tax credits don’t receive the same level of These are appropriate functions for North Carolina up a reserve against the occasional risk of a depleted UI attention. And plenty of companies get tax credits for ac- to perform, meaning that they are appropriate func- trust fund is to believe that the costs of depletion exceed tions they will do, anyway. With cash, the argument goes, tions for North Carolina taxpayers to finance. the likely investment return on those dollars in the mar- there is more control by public officials, who can limit the So the next time that you hear a politician talk ket. benefits to companies for which incentives are significant. about running (largely empty) choo-choo trains Within the wacky world of unemployment insurance, Also, companies that receive cash grants are necessar- around Charlotte or the Triangle, or the next time however, such costs are likely to be low in any economic ily known to the public. That’s part of the process of award- you hear a UNC lobbyist complain about too-little downturn short of a massive depression. Short-term loans ing such grants. Companies’ tax filings aren’t public infor- subsidy for its high-priced researchers, or the next from the federal government to pay UI benefits are not mation, at least according to the legal opinion prevailing time you hear about how middle-class families only automatic but are also frequently interest-free. In ef- in state government right now, so it’s harder for outside ought to get free day care or health care or school fect, states with accumulated balances — all of which are analysts or the media to keep track of who’s getting what. lunches for their children, or the next time you hear required to be held in federal securities, by the way — cross- Finally, many cash-grant advocates argue that it can assist the case for tossing millions of dollars down vari- subsidize states with low or no balances. For years, North start-up and rapidly expanded companies more effectively ous “economic development” ratholes, remember: Carolina taxed its employers (directly, the employees in- than credits because it is of value to those who have no tax Are any of these requests as urgent and impor- directly) in order to park funds in Washington for other liability and are unlikely to have one in the near future. tant as recovering from a hurricane? If not, then why states to borrow. This was silly. Our lawmakers were right Of course, the flip side of that argument, and one in does North Carolina’s political class continue to to end the practice. favor of tax credits, is that they can’t be claimed by compa- respond so favorably to these proposals of dubious In the current situation, the third loan to North nies that appeared impressive at first but turn out to be merit, when they must know that they are setting Carolina’s fund this year, it looks like state taxpayers might dogs. Similarly, the idea that cash grants can be more suc- the state up for fiscal turbulence in the future? well have to pay the federal government interest. But this cessfully “targeted” to companies likely to succeed pre- Of course, there is a “solution” available other is going to come to about 6.5 percent on a relatively small sumes that the government officials giving them out can than fiscal discipline. It’s the call to raise North sum. Obviously, it would be best if our economy improved guess which businesses will succeed and which will fail. Carolina’s taxes again, at least temporarily, to ad- and the need for large UI payments was lessened. In the That’s a fool’s errand, as economists have been observing dress the new set of needs. I’ll be waiting to see how interim, however, the interest cost is likely to be far smaller for literally hundreds of years now. At least with credits, a long it takes for some politicians or newspaper edi- than the opportunity cost North Carolinians would have wider array of companies might be able to access them, torial boards to utter the t-word. In 1999, in the af- paid over the past decade or so had excessive amounts of thus increasing the odds that some will prosper over time. termath of Hurricane Floyd, it only took a few days. their money been sent off to Washington. And perhaps the most persuasive argument in favor But remember that any tax increase passed now We are not arguing that the current system makes of tax credits is that the potential for political corruption is wouldn’t be to finance disaster recovery. It would sense. North Carolina’s actions were rational only in the lessened. With large cash grants awarded to only a few be to finance all those lower-priority items that poli- context of an unemployment-insurance framework that companies a year, the temptations are great for applicants ticians funded for years with the money they should punishes thrift and rewards risk-taking. Back in 1998, our to play politics and for those in charge to pay attention. have set aside for disaster recovery. CJ colleagues at the John Locke Foundation proposed an al- On the other hand, modest tax credits available on “auto- ternative system based on private UI accounts owned and pilot” to a larger number of companies, regardless of their controlled by individuals. political contributions or connections, would seem to re- Hood is president of the John Locke Foundation, pub- Within such a model, unspent balances wouldn’t re- duce the risk of serious ethical transgressions. lisher of Carolina Journal, a syndicated columnist, and sult in subsidies for others or lost returns. Workers could Basically, you can choose your poison on economic- host of “Carolina Journal Radio,” now broadcast each opt to accumulate significant funds in their accounts, earn- development incentives. Tax credits or cash grants? We’d week on 14 stations across the state. ing market rates of return, and would actually have a strong rather North Carolina not drink either potion. CJ October 2003 C A R O L I N A 22 Opinion JOURNAL

Editorial Briefs

• The number of states having minimum wages higher than the federal level has increased from six to 14, despite rising unemployment rates. Such higher minimum-wage laws lock the least-skilled workers out of the labor force, experts say. According to a study by the Employment Policies Institute, states with high minimum-wage rates also have high unemployment rates. Alaska, Oregon, Washington, Illinois, California, Massachusetts and Connecticut have the highest minimum wages in the country and account for 20 percent of America’s unemployment “black spots.” The states with the highest minimum wages — Alaska, Oregon, and Washington — have the highest unemployment rates in the United States. Leaders from the three states have asked Congress for a dou- bling of federal job-training dollars to help their less- skilled workers enter the labor market. But these workers are most likely to be harmed by minimum- wage increases, and less likely to be able to take advantage of on-the-job training. High wage mandates tend to hurt the entry-level job market, because it increases labor costs and makes competition for jobs fiercer. Less-skilled workers aren’t able to take advantage of on-the-job training that can boost their skill levels and wages, EPI says. Far from helping the poorest residents of a state, as a 1995 Michigan State University study found, minimum-wage laws may actually keep the least- skilled workers out of the job market. Reported in Investor’s Business Daily.

• One reason why women don’t get more top jobs Forget Reform, Politics Corrupts Money may be that they view work differently than do men, researchers say. New research by Catherine Hakim of By GEORGE LEEF political means, he meant the use of force, particularly force the London School of Economics finds that men are Contributing Editor as organized and used by government. three times as likely as women to regard themselves RALEIGH If government sticks to its proper role as a neutral as “work-centered.” n Sept. 8, the U.S. Supreme Court heard oral enforcer of laws that protect life, liberty, and property, Research by economists at two American univer- arguments in the heated battle over campaign people have to use the economic means to achieve their sities suggests that, even in the job market, women finance reform legislation — the so-called Bipar- goals. They have to work to produce goods or services, behave in ways that disadvantage them. At the Uni- O tisan Campaign Reform Act, or BCRA. which they then sell to get money so they can versity of Chicago’s business school, Uri Gneezy and I won’t offer any prediction as to how the buy other things. That regime channels hu- a group of colleagues have used novel techniques to court will rule. Especially in the wake of this man energy into useful endeavors. show that women and men have different attitudes summer’s decision in the University of Michi- On the other hand, if government starts toward competition. gan case, where a majority of the court in- allowing its powers to be used so that some In one study, groups of students were paid to vented out of thin air a “compelling state people can dictate to and live at the expense solve simple maze problems on a computer. In some interest” in “diversity” that allows schools to of others, society will change dramatically as groups, everybody was paid 50 cents per problem ignore the 14th Amendment’s requirement the political means becomes increasingly solved; in others, a payment of $3 per problem went that all citizens be treated equally under the prevalent. Human energy, resources, and only to the individual who solved the most mazes. law, it’s impossible to say how the court will money will go into scheming for the passage Female performance was much the same in both decide, since the language of the Constitution of laws and regulations that benefit a few at groups; but in the second lot, the average man did is so easily evaded. the expense of many. about 50 percent better than in the first, indicating that But I will offer some thoughts on how the Therefore, the temptation of politics cor- competition is motivational for men. court ought to rule. It ought to declare the rupts people into using their money for all A second study, of physical tasks, showed similar George Leef BCRA unconstitutional and should do so in sorts of nefarious purposes. Companies try to results. When 9- and 10-year-old children ran a race language that doesn’t encourage Congress to go back to the buy governmental subsidies. Unions try to buy protection alone, boys and girls clocked similar speeds. When drawing board. The whole enterprise of campaign finance against competition. Various citizen lobbies try to buy children raced in pairs, girls’ speed hardly altered. regulation is not only a violation of the Constitution, but “free” medical care or more “protected wilderness” or But boys ran faster when paired with a boy, and faster logically misconceived as well. increased student aid or hundreds of other governmental still when racing against a girl. The constitutional issue is simple. “Congress shall goodies. But at the same time, individuals and organiza- Gneezy points out that, if men try harder when make no law abridging the freedom of speech or of the tions that don’t want those things foisted on them spend competing, they will disproportionately win the top press,” says the First Amendment. In limiting political their resources on politics to oppose them. Money in poli- jobs, even when doing the job well does not require an contributions, which are instrumental in campaign com- tics is not only spent trying to bring about the enactment of ability to compete. munications, and in restricting political ads, BCRA abridges bad laws and policies, but also to stop their enactment. Reported in the Economist. both. Backers of the legislation say that The proponents of campaign finance there are very good reasons for it. I dis- reform evidently believe that with their • Efforts to stir up “public agitation” about loss of agree, but even if there were good argu- cleansing reforms in place, there will be manufacturing jobs to China are based on lies, says The whole enterprise ments, the Constitution doesn’t say, “no much less support for the political “bads,” Alan Reynolds of the Cato Institute. China accounts law unless it’s really needed.” of campaign finance even though there is no agreement as to for only 18 percent of our imports of merchandise. The central idea of campaign finance regulation is not only a what constitutes a political bad. I submit, However, Chinese imports seem bigger, he explains, reform is also flawed. Money — at least however, that it is at least as if not more because they are concentrated in clothing and con- violation of the Consti- money from the wrong sources, or too likely that campaign finance regulations sumer goods, which are far more visible than more much of it — supposedly corrupts our tution, but logically will do more to impede those who op- costly industrial supplies and equipment. otherwise pure democratic system. Bad pose the political bads than to impede Apparel accounts for only about 6 percent of U.S. misconceived as well. bills get passed just because of donations those who promote them. imports, industrial supplies and equipment for 55 from well-heeled interest groups to poli- The interest groups that push politi- percent. Major industrial countries supply almost 48 ticians whose support is up for sale, and good bills are cians to give them goodies will not be deterred merely percent of U.S. imports of manufactured goods, while blocked for the same reason. The rich have undue influence because we pass laws regulating campaign spending.They all newly industrialized Asian countries account for in the political arena, while “the little guy” is ignored. So will find ways to influence politicians anyway. Regulations 9.3 percent. what could be fairer than to (sorry, but here comes another are apt to have far more impact on “leave us alone” groups, Another factor that is rarely reported correctly, cliché) “level the playing field?” making it hard for them to raise issues with the public, as Reynolds says, is that American workers are more That central idea, however, gets it completely back- with the ban on “issue ads” during campaigns. productive than their Chinese counterparts. The level ward. Money does not corrupt politics. Politics corrupts If you’re serious about cleaner politics, forget about of value-added per Chinese worker in 1999 was only money — that is to say, individuals with money. trying to take out the influence of money. Instead, think 8 percent of U.S. worker productivity, according to Seventy years ago, sociologist Franz Oppenheimer about removing the temptation to use government power.CJ the International Labor Organization. Or to put it pointed out that there are fundamentally only two ways of another way: It takes a dozen Chinese manufacturing getting what you want in life. He called them “the eco- workers to match one American. nomic means” and “the political means.” By economic George C. Leef is director of the Pope Center for Higher Education Reported in Investor's Business Daily. CJ means, Oppenheimer meant producing and trading. By Policy and a contributing editor of Carolina Journal. October 2003 C A R O L I N A JOURNAL Opinion 23

Additional products and lower prices Pillowtex: Consumers Shouldn’t Forget Benefits of Free Trade

By MICHAEL L. WALDEN These job losses are, of course, troubling, and they have cost foreign imports. This can provide substantial savings Contributing Editor caused many people, especially in North Carolina, to ques- to American families and free-up money for spending on RALEIGH tion the wisdom of the trade agreements signed in the other domestically made products and services. he closing of Pillowtex plants in North Carolina is 1990s. Why, they ask, would our country’s leaders agree to A good example of the second benefit is apparel prices. only the latest in a long series of textile and apparel trade deals that have resulted in the loss of so many jobs? Before NAFTA and GATT, apparel prices in the United Tfactory shutdowns. Since 1973, the combined textile The question is a very valid one, and it can be answered States were rising about 4 percent per year, compared to 6 and apparel industry in North Carolina has in the following way. International trade percent for all products and services. But since NAFTA and lost 230,000 jobs, or 60 percent of its job base. agreements involve costs and benefits for the GATT, retail apparel prices have fallen an average of 1 Nationally, textile and apparel mills and plants American economy. Costs include the loss of percent annually, compared to an increase of 2.4 percent have handed out more than 1.5 million pink jobs to countries that can manufacture certain annually for all products and services. I estimate American slips in the past 30 years. products more cheaply than in the United consumers of clothing are saving a minimum of $19 billion Automation is part of the reason for the States. This is the case for many textile and annually as a result of the lower apparel prices after the job cuts. Like all of U.S. manufacturing, fac- apparel products that use relatively lower- institution of NAFTA and GATT. This is enough to pay tory floors today are brimming with machin- cost foreign labor. every former textile and apparel worker in the United ery and technology. This has dramatically But what are often ignored are the ben- States displaced since 1993 an annual amount of $25,000. increased the productivity of factory workers efits of freer world trade. These benefits come Trade agreements such as NAFTA and GATT repre- but has reduced the number of workers needed in two categories. sent a change in the economic “rules of the game” that to produce the same, or greater, output. Each First are the additional products U.S. com- create benefits and costs. Certainly many textile and ap- textile and apparel worker today produces panies can sell in foreign countries due to parel workers in North Carolina and other states have been one-third more than a decade ago. lower trade barriers. Electronic, farm, and on the losing end. But equally as clear is that consumers of A strong argument can also be made that chemical products are a few of the industries clothing products have benefited. Perhaps a method of Michael L. Walden the North American Free Trade Agreement where American firms have a cost advantage shifting some of the consumer benefits to the displaced and the Uruguay Round of the General Agree- over foreign producers. In fact, U.S. factories workers is the “win-win” solution. CJ ment on Tariffs and Trade, signed in 1993 and 1994 respec- increased production by 46 percent in the seven years tively, have accelerated the job cuts. From 1973 to 1993, following NAFTA and GATT and declined only during the 5,000 textile and apparel jobs were lost, on average, in recession years of 2000 and 2001. Michael Walden is a William Neal Reynolds distinguished pro- North Carolina each year. Since 1993, the annual losses Second are the lower prices American consumers will fessor at North Carolina State University and an adjunct scholar have swelled to 15,000. pay for some products by having greater access to lower- with the John Locke Foundation. Piedmont Job Losses Promise to be Potent Political Issue in ’04

By JOHN HOOD tions have weighed in on the Pillowtex implosion and spent ington and Thomasville, places that have long typified Publisher time in and around the blast area. North Carolina’s small-town mix of manufacturing heft RALEIGH Among Republican gubernatorial candidates, there are and conservative politics. From Transylvania County in the t’s been a truism of North Carolina politics for years already well-traveled campaign trails — and most of their far west to Rockingham and Yancey counties along the that swing voters in Eastern North Carolina hold the mileage lies in the Piedmont counties of the state. Natu- northern rim of the Piedmont Triad, communities that grew Ikey to winning statewide races. I think this notion be- rally, some of this is partisan. That’s where most North up around major manufacturing enterprises are now ad- came outdated a long time ago, and now I think that the Carolina Republicans could be found until relatively re- justing to life without them. Consequently, some local resi- economic reversals of the past three years have clearly re- cently. But there are other factors at work. Like it or not, dents are yielding to the protectionist temptation. Others vealed its obsolescence. the benighted areas of Eastern North Carolina have been are critical of wasteful spending, high taxes, and onerous Of course, votes are votes in this situation. You don’t in economic trouble for some time. Voters have had some regulations that pound businesses already teetering on the get elected governor, or attorney general, or commissioner time to adjust, not that they are happy about it, of course. edge. Still others see their community’s salvation in more of whatever, by winning the electoral votes of counties. In the Piedmont and west, the economic reversals-of-for- government spending for retraining and infrastructure. Every vote counts the same. The issue here is where most tune have been sudden, traumatic, and politically revolu- It’s too early to tell what this political turn to the Pied- of those voters who can be coaxed to voted Democratic or tionary. We’ve seen counties that had virtually no unem- mont means for the 2004 election cycle. My sense is that Republican depending on the particular candidates and ployment three years ago posting double-digit jobless rates. what we are really seeing here is a upswing in political campaign pitches reside. Take Caldwell County, where former Congressman interest. Politics just seems to matter more than it did when Judging by the behavior of many politicians, they’ve and GOP leader Bill Cobey and Senate Minority Leader most North Carolinians perceived their state as chugging already seen the political center of gravity shifting west- Patrick Ballantine each campaigned within a few days of along without major impediments. Now, they are asking ward. You can certainly see this in the case of the Pillowtex each other back in August. Caldwell just experienced a 13 some deep and troubling questions. Many politicians won’t bankruptcy centered in Cabarrus and Rowan counties. Gov. percent rate in July. To the southeast, Davidson County want to hear these difficult questions, and many voters, in Mike Easley, members of Congress of both parties, and just also hosted separate meet-and-greet events for Cobey and turn, won’t want to hear some of the inevitable answers. about everyone trying to take their places in the 2004 elec- Ballantine and just got hit with more plant closings in Lex- But the conversation has begun. CJ John Edwards: a Part-Time Senator for North Carolina’s ‘Little People’

By MARC ROTTERMAN elected him senator? Has Edwards spent so much time invoke a little-known law that hasn’t been enforced since Contributing Editor with the Hollywood elites that he has forgotten who hired 1914. That is U.S. Code Title 32, Section 39, which says that RALEIGH him? Apparently so. “no show” lawmakers have to forfeit their salary for each ouldn’t you like to have a job where you showed According to Edwards’s spokeswoman, Jennifer day he or she is absent from the Senate or the House. The up for work only 78 percent of the Palmieri, “When there is a close vote, he will only excuse for not showing up is sickness of a member or W time — a job where you hobnobbed make it a priority to be there for it.” Yet the of a member’s family. with cultural elites in Hollywood and criss- Charlotte Observer in an editorial June 18 wrote, Edwards has missed 22 percent of the votes cast this crossed the country in private jets? “Edwards has missed some votes on impor- session. His salary is $154,700 a year. It has been calculated That’s the life of North Carolina’s “Part- tant issues this year.” by the National Taxpayers Union that members owe $616.33 Time Senator” John Edwards, now “officially” Case in point: On May 5, Edwards wrote for every day they miss work. Now Edwards is running full running for president. a letter to his Senate colleagues requesting time for president. Since that is the case, perhaps Edwards Edwards has outgrown the little people support for an amendment to the energy bill will do the right thing and return his $154,700 a year salary of North Carolina. He now wants to be com- to remove language that threatens existing to the taxpayers. mander-in-chief of the world’s only super- moratoria that protects sensitive coastal and If most North Carolinians took off work to look for power. In fact, the senator so wants to be the marine areas. “ I am leading an effort to pre- another job, they wouldn’t be paid. Members of Congress, leader of the Free World that he has made the vent drilling for oil and natural gas off the and particularly Edwards who has been blatantly absent in executive decision to send his presidential Atlantic coast of North Carolina,” Edwards the Senate, should not get preferential treatment. campaign chairman, Ed Turlington, to handle Marc Rotterman said. (Edwards’ press release 5/14/03) Edwards was elected senator for the citizens of North town meetings. own meetings are historically However, when the Senate voted June 12 Carolina. He has been derelict in his duty, and he should where citizens gather to interact with their elected repre- on the amendment, Edwards was a “no show.” According forfeit his salary if he does not intend to show up for work sentatives to get an update on what is transpiring in Wash- to CNN, Edwards missed the vote because he was on his and do the job that the citizens of North Carolina hired him ington. This is also when “constituents” — a word foreign way to Nashville to “meet and greet Tennessee Demo- to do. CJ to Edwards — bring their problems and voice their con- crats.” cerns to their elected representatives. In fact, to date Edwards has missed 25 percent of the I have met Turlington several times, and he seems like energy votes cast this session. This is a sad commentary on Marc Rotterman is a senior fellow at the John Locke Foundation a nice guy. But with all due respect to Turlington, who North Carolina’s “part-time senator.” Perhaps it’s time to and treasurer of the American Conservative Union. October 2003 C A R O L I N A 24 Parting Shot JOURNAL Basnight Pushes Moldbusters Jobs Program Mold disposal can be combined with North Carolina’s biotechnology initiative, Senate leader says

By RAY STANTZ operate an industrial park? Locating the Spiritual Correspondent Moldbusters central office there would help RALEIGH people forget about the seafood park,” he said. tate Senate leader Marc Basnight recently unveiled Other reporters inquired about the cost of his Moldbusters job creation program to a standing- the program. Basnight said the initiative would S room only crowd gathered at the North Carolina cost considerably more than the $60 million that Museum of History auditorium. Basnight’s initiative in- the Golden LEAF Foundation had already com- volves combining a biotechnology initiative with the mold mitted for biotechnology. He estimated that cleanup program at North Carolina Central University in startup costs would total about $100 million Durham. and that annual operating expenses would run “This is an historic opportunity for North Carolina to about $350 million, an average of $70,000 per take an unfortunate situation, combine it with a bold initia- employee. tive, and become a national leader in an emerging indus- One reporter asked Basnight what the em- try,” he said. ployees would do after they removed all the NCCU officials shut down two dormitories and the mold. He said he prefers to be optimistic. “I main library after they found “black mold” throughout the believe this will be an ongoing program. We buildings. Basnight said he thinks there is mold at the other don’t want to give these daring employees any schools. reason to be concerned about job security.” Under his proposal, displaced workers would receive Gov. Mike Easley did not attend the press extensive training in the field of moldbusting. The program conference, but issued the following statement: would be conducted at all state universities, allowing “Marc Basnight is a visionary. I do not know if participants to get extensive exposure to mold. this Moldbusters thing is going to work, but When the participants graduate they would be hired as system he predicts a total of 5,000 jobs by November 2004. Marc has enough power to give it a try.” permanent state employees assigned to the campus where After a reporter asked him how he came up with 5,000 Senate Republican leader Patrick Ballantine said that they trained. jobs, Basnight explained that he multiplied 300 jobs per he supported the program, but that he thought the central Basnight predicted North Carolina would become the campus times the 16 campuses and got 4,800 jobs. Then he office should be located in Wilmington. “In addition to the envy of other states. He said that the state’s plan to train added 200 jobs for a central administrative office he wanted State Port we have a struggling film industry here. I am North Carolina workers for jobs in the biotechnology in- built in Dare County. The total, he said, comes to 5,000 jobs. sure there is a way to make a movie about this,” he said. dustry is certainly going to be copied by others and that to Another reporter asked him how he came up with the differentiate we had to offer a unique component. original 300 jobs at NCCU. He said that a staff member It’s about vision “Moldbusting is an emerging industry and North Caro- calculated that figure, but that he planned to appoint a lina is well-positioned to be a world leader,” he said. team of economic developers to review his calculations. Basnight said he got the idea recently while he was He said the Dare County facility will likely be located watching television and flipping through channels. He It’s about jobs at the state-owned Wanchese Seafood Industrial Park. came upon the movie Ghostbusters and “the idea just sort of “I am tired of people making fun of that project. We fell into place. “I often talk to friends and political contribu- Basnight predicts cleaning up the mold at NCCU alone tried to do something good for the people. At the time how tors to get my ideas, but sometimes you just get ideas sitting will create 300 full-time jobs. For the 16-campus UNC was I to know that state government would be unable to around watching television.” CJ

Host Tom Campbell Chris Fitzsimon Barry Saunders John Hood

Whether it’s politics, education, taxes, growth, or the legislature, the issues that affect North Carolina are important to you, so…

THE NC SPIN NETWORK (Partial) Every week, hundreds of thousands of NC SPIN has been called ‘the most WLOS-TV ABC Asheville Sundays 6am North Carolinians watch NC SPIN for a full, intelligent half-hour on North Carolina TV’ WWWB-TV WB55 Charlotte Sundays 11pm all-points discussion of issues important to and is considered required viewing for WJZY-TV UPN46 Charlotte Sundays 6:30am the state. Politics. Education. Growth. anyone interested in state and local politics WHIG-TV Indep. Rocky Mount Sundays 10am, 7pm Taxes. Transportation. and public policy issues. WRAZ-TV FOX50 Raleigh-Durham Sundays 8:30am WRAL-TV CBS Raleigh-Durham Sundays 6:30am A recent poll showed 48% of North Caro- If your organization has a message for WILM-TV CBS Wilmington Sundays 11am lina ‘influentials’ — including elected officials, CEOs or government and education WXII-TV NBC Winston-Salem Sundays 7am lobbyists, journalists, and business leaders leaders, NC SPIN’s statewide network is WRXO-TV Indep. Roxboro Saturdays 6pm — watch NC SPIN, with 24% saying they the place for you to be! Call Rudy Partin WCTI-TV ABC New Bern Sundays 11:30am watched the show ‘nearly every week.’ (919/274-4706) for advertising information. WCTI-DT UPN48 New Bern Sundays 5:30 pm Cable-7 Indep. Greenville Fridays 8pm Tuesdays 6:30pm Saturdays 9pm Mountain News Network Sundays 9:30am (WLNN Boone, WTBL Lenoir) Mondays 7pm