INSIDE THIS ISSUE: DEPARTMENTS Legislature North Carolina 2 C A R O L I N A Education 7 to revisit Local Government 10 From Page 1 13 issue of Higher Education 17 photo ID Books & the Arts 20 Opinion 24 for voting/3 A MONTHLY JOURNAL OF NEWS, ANALYSIS AND OPINION Parting Shot 28 JOURNALFROM THE JOHN LOCKE FOUNDATION February 2013 Vol. 22 No. 2 STATEWIDE EDITION Check us out online at carolinajournal.com and johnlocke.org N.C. Revenue New Era Dawns in N.C. Politics assessment notices resemble tax bills 2013 kicks off with By Barry Smith Associate Editor GOP-led legislature RALEIGH stint as a prosecutor in and GOP governor a South Carolina county ended up earning Eric By Barry Smith and Dan Way ARowell a notice of failure to file a Associate Editors North Carolina income tax return RALEIGH for 2008. Rowell neither lived avels in both the House and the nor worked in North Carolina Senate fell at noon Jan. 30 as that year. But that didn’t keep the General Assembly began its the N.C. Department of Revenue 2013G session in earnest. from sending him an automated Gone is the ceremonial first day, notice of intent to assess taxes for when lawmakers trekked to the state that year. capital three weeks early to elect their As it turns out, Rowell isn’t leadership and take care of ceremonial the only person who received duties. such a notice. His wife got one, Legislators began to tackle a $20 For the first time in more than a century, North Carolina has a Republican governor, too, as did another acquaintance billion General Fund budget, reform Pat McCrory, left, a Republican House speaker, Thom Tillis, right, and a Republican of his. the tax code, and push through new Senate leader, Phil Berger (not shown). (CJ photos: McCrory by Rick Henderson and Tillis by Don Carrington) In fact, a Department of election laws that are almost certain to Revenue spokeswoman says that include a photo identification require- of what to expect out of Raleigh by the ond-term House Speaker Thom Tillis, 147,800 “Notices of Intent to As- ment to cast a ballot. time lawmakers adjourn, likely around R-Mecklenburg, said Jan. 29 at a press sess” have been sent out since the Also expect efforts to reform the middle of the year. conference. department began sending out the state’s education system in a way “We’re going to continue to focus “First and foremost, we’ve got to such notices in 2010. that focuses on technical education on, I believe, policies that are going to worry about the budget,” Tillis contin- “It’s not an actual bill,” Beth and more options for parents and lo- help us grow the economy and hope- ued. “But we don’t have to worry near cal schools. Mix in further regulatory fully continue a positive path toward reform and you’ll have a good preview economic recovery in the state,” sec- Continued as “New,” Page 14 Continued as “Thousands,” Page 13 Competing Tax Plans Seek to Spur Growth PAID Cordato, vice president for research RALEIGH, NC U.S. POSTAGE and resident scholar at JLF. An inde- PERMIT NO. 1766 NONPROFIT ORG. Efforts under way pendent review of the plan concludes it has the potential to create 80,500 new to eliminate the tax jobs and increase the state’s economy by $11.76 billion in the first year. on personal income “Our main plan gets rid of the [state] sales tax also. We replace all of By Dan Way Associate Editor the state’s major tax sources of revenue. We think we get rid of the ones that are RALEIGH troduced a plan including those ele- most damaging to the economy and re- fforts are under way to make ments, along with a repeal of estate place them all with this Unlimited Sav- North Carolina the first state taxes and the retail sales tax at the state ings Allowance plan, which is our term since Alaska in 1980 to eliminate level. Researchers at the Tax Founda- for it, the USA tax,” Cordato said. Etaxes on total personal income. Com- tion, a nonpartisan Washington, D.C- “It’s a consumption tax” or con- peting proposals also would launch a based tax research group, are among sumed income tax and would be lev- pro-growth tax reform renaissance that those lauding the JLF plan. ied at a flat 8.5 percent of money with- would scrap corporate income taxes “The whole point is economic drawn from the account for taxable that discourage capital investment and growth. It’s not just to reform the tax savings. code for the heck of it. It’s to get rid of a The John Locke Foundation 200 W. Morgan St., #200 Raleigh, NC 27601 The John Locke Foundation in- major drag on the economy,” said Roy Continued as “Competing,” Page 15 PAGE 2 FEBRUARY 2013 | CAROLINA JOURNAL North Carolina C a r o l i n a State Bar Solicits Lawyer Help to Pay for New HQ

By Dan Way over its Disciplinary Hearing Commission. Journal Associate Editor Despite that, the Ethics Commission issued a favor- Rick Henderson RALEIGH able opinion to the State Bar to allow the nonprofit North Managing Editor he North Carolina State Bar expects to complete its Carolina State Bar Foundation to raise funds from attorneys $18 million office in downtown Raleigh by March. and law firms. Don Carrington But some legal observers have raised red flags over its “I don’t think we’ve ever faced that before, not saying Executive Editor capitalT campaign through a proxy foundation seeking high- it’s right or wrong either way, it’s just something we haven’t dollar donations from lawyers to help pay for construction. addressed,” Newson said of an agency creating a nonprofit Mitch Kokai, Michael Lowrey The State Bar created the North Carolina State Bar organization to launch a donation and naming rights effort, Barry Smith, Dan Way Foundation, a 501(c)3 charitable corporation with its own which he called “fairly common practice” in capital cam- Associate Editors board and director. Its original goal was “to raise $2.5 mil- paigns. lion, and I understand they now have contributions and Asked if that scenario presents, at a minimum, the Chad Adams, Kristy Bailey pledges in excess of that number,” said Thomas Lunsford, potential for appearance of a conflict, Newson said, “There David N. Bass, Lloyd Billingsley State Bar executive director. isn’t an appearance-of-conflict provision in the [state] Ethics Kristen Blair, Sara Burrows The State Bar is a state government licensing and Act.” Roy Cordato, Becki Gray regulatory agency that oversees lawyers and conducts dis- But, he said, “It’s not out of the realm of reasonable- Sam A. Hieb, Lindalyn Kakadelis ciplinary hearings for those who run afoul of state laws and ness” that a donor to the State Bar’s capital campaign might Troy Kickler, George Leef judicial canons. Lawyers get favorable treatment be- Elizabeth Lincicome, Karen McMahan pay mandatory dues to the Donna Martinez, Karen Palasek cause of the cash gift, but Marc Rotterman, Michael Sanera agency to fund its opera- “it’s a bit of a stretch.” John Staddon, George Stephens tions. “We were certainly Terry Stoops, Andy Taylor “Any time you hear advertent to the possibility Michael Walden, Karen Welsh about anybody who’s been that there might be an issue Hal Young, John Calvin Young reprimanded, or disci- in regard to our soliciting Contributors plined, or disbarred, that’s our members, and because done by the State Bar,” said of that we decided to pose Jeanette Doran, executive Joseph Chesser, Hubert Papes the question to the state Mathew Schaeffer, Daniel Simpson director and general coun- government Ethics Com- Interns sel of the North Carolina mission, and actually re- Institute for Constitutional ceive advice that there was Law. Some legal observers are questioning the capital campaign being not a problem, and there Because of the State used by the State Bar to fund its new building at the corner of would be no reason why Published by Bar’s power to prosecute Blount and Edenton streets, saying soliciting funds from lawyers, we could not go forth with The John Locke Foundation attorneys before its Disci- over whom the State Bar has disciplinary power, creates a conflict of interest. (CJ photo by Don Carrington) the fundraising effort,” 200 W. Morgan St., # 200 plinary Hearing Commis- Lunsford said. Raleigh, N.C. 27601 sion, Doran and others are (919) 828-3876 • Fax: 821-5117 “I couldn’t speak for every member of our board as www.JohnLocke.org leery of the Bar soliciting lawyers for donations to help un- derwrite the costs of the new four-story building — some of to what their personal feelings might have been. Ours is a which are in the $100,000 to $200,000 range — and granting large board, and there’s quite a diversity of opinion, [but Jon Ham naming rights for various rooms in it. everyone] was quite comfortable” once the ethics decision Vice President & Publisher One concern is whether accepting the donations might had been received, Lunsford said. open the State Bar to the suspicion that it might base dis- Further, he said, naming rights to the courtrooms John Hood ciplinary actions against lawyers on the amount of money where disciplinary hearings will take place are restricted to Chairman & President firms gave to the building project. The bar might go easy retired lawyers and law firms that are no longer active. or not act at all on an infraction by a large-scale donor, or Construction of the 60,000-square-foot building at the Herb Berkowitz, Charlie Carter corner of Edenton and Blount streets should be completed Jim Fulghum, Chuck Fuller penalize lawyers whose law firms declined to donate to the Bill Graham, Assad Meymandi building project. around the first of March, with move-in shortly thereafter. Baker A. Mitchell Jr., Carl Mumpower “I think it’s something where there’s enough sunshine, In the meantime, the State Bar is leasing the building it for- David Stover, J.M Bryan Taylor and we’ve got a lot of good media coverage. I think those merly owned at 208 Fayetteville Street, which is about half Andy Wells sorts of things would make it unlikely that any one donor the size of the new building. Board of Directors would receive special treatment. But it is the sort of thing I “We have had to rent space in various other downtown think the public could fairly question,” Doran said. office buildings because we couldn’t house everybody un- Carolina Journal is der our roof,” Lunsford said of the need for a 60,000-square- a monthly journal of news, “I think we should be careful that this isn’t the sort of analysis, and commentary on thing that causes public concern, that in-kind donors don’t foot building. state and local government get special treatment from the State Bar,” Doran said. “I “We know that over the last 10 years or so the [legal] and public policy issues in would emphasize that I don’t think that has happened. But profession in North Carolina has been growing at about 3 North Carolina. it does raise the question if that appearance has happened.” or 4 percent a year. We know that the law schools are full. ©2013 by The John Locke Foundation If a law firm makes a large cash contribution to an Indeed, they are oversubscribed, and it would appear that Inc. All opinions expressed in bylined articles agency that regulates it, “people just instinctively think” it condition will continue at least into the foreseeable future,” are those of the authors and do not necessarily Lunsford said. reflect the views of the editors of CJ or the might be receiving favorable treatment, said Bob Phillips, staff and board of the John Locke Foundation. executive director of Common Cause North Carolina. There were between 7,000 and 8,000 licensed lawyers Material published herein may be reprinted as “Even if it’s not true, there is the perception. Is there in North Carolina when he joined the State Bar’s legal staff long as appropriate credit is given. Submis- a favor, is there a threat, is there some punishment” for law in 1981, Lunsford said. Now the number is “approaching sions and letters are welcome and should be firms or lawyers who either donate or rebuff solicitations, 25,000,” and internal projections show that could double in directed to the editor. Phillips asked. another 20 years. CJ readers wanting more information He said Common Cause is concerned with the increase Meeting rooms in the new building will accommodate between monthly issues can call 919-828- 3876 and ask for Carolina Journal Weekly of organizations in North Carolina using nonprofits to fur- the 68 members of the State Bar Council, the Bar’s govern- Report, delivered each weekend by e-mail, ther their agendas. ing body. In the past, the council had to rent meeting space. or visit CarolinaJournal.com for news, links, It is “something that is all legal, but something that we Of the $18 million construction cost, $12 million was and exclusive content updated each weekday. wish wasn’t happening so much,” Phillips said. borrowed from First Citizens Bank “on very favorable terms,” Those interested in education, higher educa- Perry Newson, executive director of the North Caroli- Lunsford said. “We have realized something in excess of $2 tion, or local government should also ask to na Ethics Commission, said the Ethics Commission does not million from the sale of our current building.” The balance receive weekly e-letters covering these issues. have jurisdiction over the State Bar, but does have authority will come from cash reserves and the capital campaign. CJ FEBRUARY 2013 | CAROLINA JOURNAL PAGE 3 North Carolina General Assembly to Take Another Pass at Photo Voter ID Bill By Barry Smith process if we did not take into account government agency or an Indian tribe. voter registration records did not Associate Editor the recent Department of Justice rul- The documents allowed in the match DMV and driver’s license ID RALEIGH ings that were handed down in South bill would include a driver’s license, data. The board examined registration orth Carolinians should expect Carolina and Texas.” state-issued ID from the Division of documents of the state’s 6.5 million the General Assembly to pass Republicans in the General As- Motor Vehicles, a state employee ID voters and was unable to match 612,955 a strict voter-identification bill sembly are hoping for success after for- card, a University of North Carolina records. Those included 506,763 active Nin 2013, and it will withstand federal mer Gov. Bev Perdue vetoed a measure system ID card, a military ID card, a voters and 106,192 inactive voters. In- and judicial scrutiny, a chairman of the passed in 2011. passport, or a tribal ID card. active voters are citizens who have not House Elections Committee said. This year, Republicans hold veto- Ross believes other forms of voted in the past eight years. “We’re going to get a bill that re- proof majorities in both chambers of identification that lack photos should Veronica Degraffenreid, an elec- quires a photo ID to vote,” said Rep. the General Assem- be acceptable, such tions liaison for the State Board of Elec- David Lewis, R-Harnett. bly. And a Republi- as the forms that are tions who conducted the analysis, said Democrats and liberal activists can now holds the allowed when citi- the state board isn’t saying that all of contend that a photo ID requirement governor’s office, zens register to vote. those voters don’t have a driver’s li- would disenfranchise poor, elderly, though GOP Gov. Those forms include cense or photo ID. and minority citizens who lack proper Pat McCrory has said utility bills, bank “What we’re saying is that we identification documents. Moreover, that he would con- statements, tax bills, have no information to suggest that they say a recent report by the State sider a voter ID bill and payroll state- they do have a DMV ID,” Degraffen- Board of Elections showing a large that did not require ments. reid said. number of voter records don’t match voters to present a “ W h a t e v e r The analysis noted that nearly Division of Motor Vehicles data would photo ID at the polls. you’re allowed to use two-thirds of those without a match lead to major hassles when North Car- Democrats were solid in their op- to register to vote should be sufficient olinians show up at polling places. position to such a bill during the previ- to vote,” Ross said. are women and that women are more Lewis minimized those con- ous General Assembly. And although Lewis said he and a number of likely to change their last names based cerns, though he noted that voter ID Democrats’ numbers have dwindled, other Republicans felt that photo IDs on marriage or divorce, which could laws in several other states have been they continue to say such a measure is were necessary to prevent voter fraud. account for the high number. struck down in court. To prevent that unnecessary. “Many of us are very concerned Lewis questioned the number. outcome, he said North Carolina’s Rep. Deborah Ross, D-Wake, said because, frankly, my 12-year-old with Moreover, he said the General Assem- law likely would be modeled after a strict ID requirement would dilute a laser-jet printer can forge a Progress bly must “figure out how to get them one passed in Georgia that has been voters’ rights. Energy light bill,” Lewis said. “We a photo ID [at no cost] to have any precleared by the U.S. Department of “It smacks of voter suppression, think you should have a photo ID to chance at all to make sure that our bill Justice under the federal Voting Rights which more than a few proponents of present at the polls to vote.” is precleared, that our bill can become Act. voter ID have cited as a reason why Lewis said that he knows some law,” Lewis said. “We want to do it in a way that they want voter ID,” Ross said. voters don’t possess a photo ID. Ross questioned how the state it becomes a reality,” Lewis said. “It Lewis said that the photo ID re- A recent analysis by the State would find the money in tight bud- would be a neglect of the legislative quired would have to be issued by a Board of Elections found that many get times. CJ PAGE 4 FEBRUARY 2013 | CAROLINA JOURNAL North Carolina State Briefs JLF Report Criticizes Occupational Licensing Easley law license By CJ Staff ensure safety and quality. “Research is enforce safety and quality through the Former Gov. Mike Easley, a RALEIGH mixed over whether licensing actually courts.” Democrat, has asked the N.C . State orth Carolina’s aggressive ap- has a positive effect on safety or qual- The first of Sanders’ six recom- Bar to restore his law license. Eas- proach to occupational licens- ity.” mendations involves reducing the ley’s license was suspended as part ing raises prices and protects “In practice, occupational licens- number of state licensing boards and of a felony plea Easley accepted in Ncurrent members of a profession more ing tends to be motivated more to pro- licensed job categories. “Legislators a probe of his campaign’s finances. than it protects consumers. That’s a key tect current members of a profession could adopt a ‘last in, first out’ rule of Easley is the first governor in North finding in a new John Locke Founda- from competition and thereby make thumb for licensing boards,” he said. Carolina history to be convicted of tion Spotlight report, which compares them wealthier,” Sanders added. “One “If a practice just recently came to be a felony as the result of actions tak- occupational licensing to outdated study suggests licensing boosts earn- viewed as needing state oversight, it is en while in office. “medieval guilds.” ings for current practitioners by 15 per- likely that need wasn’t that obvious.” The State Board of Elections The report recommends six ways cent. In higher-wage licensed occupa- The report also recommends fined Easley’s campaign $100,000 to “de-guild” North Carolina’s econo- tions, the wage premium can reach as reforming and merging existing li- for failing to report a helicopter my. Those recommendations include high as 30 percent. Instead of being a censing boards, along with encourag- flight that was provided by former cutting the number of case of the state versus ing reciprocity with similar licensing N.C. State University board mem- licensing boards and li- the professionals, licens- boards in other states. ber McQueen Campbell, a contrib- censed job categories. ing actually helps the A fourth recommendation in- utor to Easley’s campaigns. The “ C o n s u m e r s two sides work in con- volves applying a principle of the campaign did not pay the fine. Fol- would benefit from low- cert against the interests “least-cost state.” “Where another lowing that, Easley pleaded guilty er costs, more competi- of new competitors and state’s licensing standards are less bur- to a felony charge of filing a false tion, a wider range of consumers.” densome on prospective workers in service levels, and more Licensing has campaign report. He was fined terms of fees, training, or ongoing li- reliance on private re- grown “tremendously,” $1,000 and served no jail time. cense renewal, North Carolina should view and certification Sanders reports. “In the The State Bar suspended Ea- adopt the less burdensome standard,” processes,” said report 1950s, nearly one in 20 sley’s law license until December Sanders said. author Jon Sanders, workers needed a gov- 2012, saying he had expressed re- Fifth, all licensing boards should JLF director of regula- ernment license, and morse and taken responsibility for face sunset provisions. That would tory studies. “Aspiring now that number is ap- the false campaign report. In Janu- members of a profession proaching one in three.” ensure these boards face a periodic re- ary, Easley’s attorneys formally would be able to enter it As recently as the view to justify their ongoing existence. requested reinstatement of the li- easily, potentially bring- 2011-12 legislative ses- Sixth, lawmakers should enact “sun- cense. At press time, it was not clear ing new ideas that would transform sion, North Carolina lawmakers filed rise” provisions for any future licens- how soon that might occur. the industry or helping contribute to a bills to license musical therapists, na- ing board. “Creating a new licensing larger menu of service choices for con- turopaths, herbalists, personal trainers, board should happen only after it has N.C. State prof defamation sumers.” X-ray technicians, and others. None of been demonstrated that there is a de- “Society would benefit from more these bills won legislative approval. cided health, safety, or quality issue in A 4-2 majority of the N.C. Su- human and entrepreneurial liberty, as Sanders offers a response to those the market that warrants licensure to preme Court reversed an appellate well as from greater employment ac- who fear the potential impact on safety solve.” court decision and ruled against a cess for the poor, the less educated, and and quality if North Carolina scales North Carolina needs to reverse professor at N.C. State University older career changers,” added Sanders, back its licensing regime. “Private its aggressive approach to occupa- who in 2007 sued his department whose study of occupational licensing providers will offer reviews and even tional licensing, Sanders said. “As with head over an unfavorable annual marks the latest installment in his se- certification for consumers who seek toppling medieval guilds in Europe, review. ries of “Carolina Cronyism” reports. that information,” he said. “Compe- removing occupational licensure is Robert Trew, who headed the North Carolina features more tition and market forces will expose an essential step lawmakers can take electrical and chemical engineer- than 50 occupational licensing boards, and winnow out shoddy providers. toward restoring freedom in North ing department at N.C. State, listed Sanders said. “The state licenses more The government will still be there to Carolina.” CJ “specific instances of unprofession- occupations than most other states,” al behavior” in the annual review he said. “A recent report ranked North of associate professor Mark White Carolina in a tie with Massachusetts at Books authored By JLF staFFers and said White had “engaged in No. 15 in the nation for most licensed extremely disruptive behavior and job categories at 154. Among neigh- Efficiency and Externalities conduct.” boring states, only Tennessee licenses White sent a “rebuttal letter” more. Virginia licenses half as many in an Open-Ended Universe saying he was defamed by the re- jobs as North Carolina, and crossing view, which included “false and the border from North to South Caro- malicious” statements that were lina reduces licensed occupations by available for other faculty to read. two-thirds.” No action was taken on White’s Researchers also find that North behalf. White sued the university, Carolina is “one of the more aggres- claiming defamation, and won be- sive states” in licensing occupations fore the state Court of Appeals. that often employ the poor or less educated, Sanders said. “This state li- By Roy Cordato The Supreme Court rejected Vice President for Research the appellate ruling, saying that censes 48 of 102 lower-income occupa- tions highlighted in a recent study,” he John Locke Foundation Trew was protected by sovereign said. “Such occupations are ideal entry immunity, which prevents govern- “Cordato’s book is a solid points into the job market, and their ment employees from being sued as performance, demonstrating importance to a state’s economy is not individuals if they’re acting in their impressive mastery of both insignificant.” official capacity. The court said su- the Austrian and neoclassical An occupational license is a pervisors are expected to maintain literature.” “grant of permission” from the gov- personnel records which can be Israel Kirzner ernment to an individual to enter the reviewed by other managers, and field of work he desires, Sanders ex- Cato Journal threw out the case. CJ plained. The supposed purpose is to www.mises.org FEBRUARY 2013 | CAROLINA JOURNAL PAGE 5 North Carolina N.C. Raw Milk Consumers Use Out-of-State Suppliers for Product By Sara Burrows area farmer said he recently purchased Contributor four more dairy cows from Pennsylva- RALEIGH nia to meet growing demand. He said elling unpasteurized milk has he sells about 170 gallons a week to been illegal in North Carolina customers all over the state. for three decades. But that hasn’t Consumers say they are will- Sstopped growing numbers of families ing to go to great lengths — including around the state from going to extreme making long drives and paying high lengths to obtain it. shipping fees — for raw milk because Some travel to South Carolina, they believe it has a much higher nu- where it’s legal to sell raw milk, and tritional value than most foods avail- bring it home. Others contract with able today and can help with a host of Pennsylvania farmers, secretly arrang- ailments, including allergies, digestive ing delivery to dozens of “drop sites” problems, and heart disease. in cities including Raleigh, Durham, State health director Jeff Engel and Cary. So heavy is the demand that and Agriculture Commissioner Steve one private food club is in the process Troxler disagree that raw milk has a of establishing drop sites in eight new higher nutritional value than pasteur- cities, including Asheville, Charlotte, ized milk and warn of its dangers to and Wilmington. The sale of raw milk, meaning unpasteurized milk straight from the cow, has been consumers, including the risk of bacte- illegal in North Carolina since 1983, and cow-sharing, the practice of families join- rial infection and even death. Growing demand ing to buy a cow and share its milk, was outlawed in 2004. (Photo courtesy of http:// “Raw milk may contain a wide The growing demand from North chicmummy.blogspot.com) variety of harmful bacteria — includ- Carolina has been a boon to farmers in ing Salmonella, E. coli, Listeria, Cam- Public health officials warn of ucts include meats, vegetables, and pylobacter, and Brucella — that may nearby states. For example, an Amish potential dangers from consuming un- bread. The truck delivers to a central farmer from Pennsylvania has seen his cause illness and possibly death,” they pasteurized milk, including the risks of location, where volunteers divvy up said in a Department of Health and raw milk sales increase 25 percent over contracting debiliatating bacterial and the food and deliver it to their home- the past two years, in part because Human Services press release. intestinal infections. But consumers towns. “The harmful bacteria in raw North Carolina has become one of his say raw milk offers a healthier alterna- The farmer, like many who sell largest sources of customers. milk can be especially dangerous for tive to its pasteurized counterpart. And raw milk, has seen other Amish farms pregnant women, the elderly, infants, The sale of raw milk for human critics of the ban on raw milk sales say raided and sometimes shut down. The consumption has been illegal in North young children, and people with individuals should be able to decide U.S. Food and Drug Administration weakened immune systems,” the re- Carolina since 1983, and in 2004 the which risks they are willing to accept. prohibits the interstate shipment of state outlawed cow-shares, which al- lease said. raw milk, and even though he’s not Pasteurization, the officials said, lowed people to purchase joint owner- Pennsylvania transporting it, he could be prosecuted ship in a cow and share its milk. Since eliminates harmful bacteria and slows The Amish farmer wishes to re- for participating in an illegal enter- microbial growth. then, local producers of raw milk have prise. become scarce, and those that remain main anonymous. Carolina Journal interviewed his brother, who works The farmer, producing food the Risk vs. reward have become extremely careful about way his family has done for genera- selling to customers they don’t know. on the farm and also asked not to be But many North Carolina moth- named. The brother said the farm sells tions, does not meet the profile of the South Carolina and Pennsylvania typical “criminal.” His customers see ers said they don’t believe the warn- are two of 25 states where selling raw to nearly 150 customers in North Caro- ings about harmful bacteria. They ar- lina. Consumers in the Tar Heel State him as a hero, participating in an un- milk is legal to some degree — either derground railroad of sorts, giving gue that raw milk from healthy cows from a farm, in farmers’ markets, or in have banded together to cover the cost is loaded with beneficial bacteria that modern-day people access to good, grocery stores. An increasing number of sending a refrigerated truck to pick actually fight off any harmful bacteria old-fashioned food. of North Carolinians are obtaining un- up goods from the farm once a month, that may be present in the milk. He understands FDA regulations pasteurized milk from those states. which in addition to raw dairy prod- CJ surveyed several mothers who prohibit people from buying his milk are members of the North Carolina Al- and taking it across state lines for re- liance for Raw Milk — who did not sale, but he believes people have a con- wish to be identified in this story — stitutional right to do so. He said laws about why they use raw milk. against selling raw milk are “quite cor- Many said their children cannot rupt.” digest conventional milk. They said “We’re excited about the future, their children begin to tolerate lactose, and trust in God, that if it’s His will, which is altered by the pasteurization the government will leave us alone so process, when they drink raw milk. we can continue to provide the real Some mothers said they used raw food,” he said. cow or goat milk to supplement a low North Carolina breast milk supply, against their physi- cians’ advice, if their babies could not North Carolina has some of the tolerate store-bought formula. nation’s strictest laws against the sale Other critics of the raw milk ban of raw milk. It cannot be sold at gro- say that people should have the right cery stores or other retailers. Nor can to decide if the risks of consuming raw farmers’ markets or dairy farms sell milk are worth the potential benefits. raw milk for human consumption. Former Rep. Glen Bradley, R-Franklin, Raw milk can be sold as “pet’s milk,” proposed legislation last year legaliz- but few farmers do so because they say ing raw milk, but it died in committee. the label sends red flags to regulators. In Congress, legislation allowing Those willing to take the risk the interstate shipment of raw milk tend to keep their operations small so has been introduced every year but they do not attract attention from law received little support. Meanwhile, a enforcement. The organizer of one un- large raw milk dairy in California is derground buying club in the Triangle suing the FDA over its ban on the in- area has roughly 80 members. A Triad- terstate shipment of the product. CJ PAGE 6 FEBRUARY 2013 | CAROLINA JOURNAL North Carolina Legislative Leaders Want Review of ‘Nagging’ Medicaid Problem Cousins first wrote about his con- Land of Lincoln. CCNC-like fee-for-service model with cerns with the CCNC evaluative re- The CCNC primary care case a program that helps to pay premiums Oversight committee ports in 2009. management model, “unfortunately, is for private insurance plans and, ulti- He said his concern grew since not working,” said Jonathan Ingram. mately, deflate costs. must authorize then because methodologies used in He is senior health care policy analyst “We would give eligible indi- more recent evaluations commissioned at the Illinois Policy Institute, a free- viduals premium support and then a program review on behalf of CCNC “are so weak, the enterprise research and education or- also a medical savings account, kind conclusions so flawed, that the funding ganization. of like a health savings account,” with By Dan Way decisions made by [the N.C. Division The CCNC approach assigns a number of private market options, Associate Editor of Medical Assistance] based on these each Medicaid recipient to a primary he said. The goal would be to help the RALEIGH reports has, by definition, resulted in care physician. It is an enhanced, coor- recipients eventually move off the tax- s a growing number of skeptics misguided appropriations.” dinated, fee-for-service plan, meaning, subsidized program into the private question the fiscal soundness Al Lewis, an instructor of health basically, every time a patient shows insurance market. of North Carolina’s centerpiece policy at Brandeis University who for- up for care, the fee is paid. “Basically, it injects both choice AMedicaid program, there is a push for merly taught economics at Harvard, Such regular, ongoing, and moni- and competition into a market that’s a legislative review of the system. agrees that the tored care — a dreadfully lacking,” Ingram said. The In a recent press conference, state wrong evalua- medical home proposal is a policy quilt woven from Senate leader Phil Berger, R-Rock- tion tools were — is intended the best ideas showing the most prom- ingham, spoke of “a continuing and used to look at to reduce more ise in multiple states. a nagging problem” with Medicaid CCNC’s costs. costly hospi- “Right now, bureaucrats here in overspending. “There’s a tal admissions Springfield and Washington control “Quite frankly, we’re concerned lot of state tax- and emergency everything,” Ingram said. “Consumers about whether we’re getting accurate payer money room treatment are very smart. They know what they information from the Department of being spent due to prevent- need, and right now government’s just Health and Human Services about the with impossible able episodes, being in the way.” level of spending that we are commit- results being thus saving Illinois faces a number of govern- ted to at this point,” Berger said. money. claimed,” Lewis ment hurdles in dealing with Medicaid Free-market advocates contend said. I l l i n o i s ’ reform. Then-state Sen. Barack Obama Community Care of North Carolina, But state goal has been to helped to usher into Illinois’ Medicaid a nonprofit organization that runs the Rep. Nelson Dollar, R-Wake, co-chair- get 50 percent of Medicaid recipients program “multiple aspects” of what state’s Medicaid program, has contrib- man of the Joint Legislative Oversight into a primary care medical home to later became part of the federal Afford- uted to the $1.17 billion deficit in Med- Committee on Health and Human Ser- reduce costs. icaid that has occurred over the past vices, is a staunch advocate of CCNC. “They haven’t actualized any re- able Care Act, Ingram said. three years. They say CCNC is not held He steadfastly has defended studies of duction in costs by moving those peo- “They all led to worsening care to accountable for cost overruns and sim- the program’s spending and savings. ple yet,” Ingram said. the most vulnerable,” he said. ply passes unbudgeted expenses on to If the Program Evaluation Di- In response, the Illinois State States that choose to expand their state taxpayers. vision “wants to look at CCNC and Medical Society is moving forward Medicaid rolls under the Affordable Yet separate studies commis- evaluate, I think I am quite confident “to basically draft a plan and waiver Care Act “are going to be dumping sioned by the state claim CCNC has they would come away extremely im- to the federal government to do more thousands — and here in Illinois it’s generated savings of $984 million from pressed,” Dollar said. choice and competitive reform here in going to be more than a million peo- 2007-10, and $1.5 billion from 2007-09. “In my view, CCNC has been an Illinois,” Ingram said. ple — into a broken program,” Ingram Critics have called those savings wild- outstanding asset for the state and has Ingram said the Illinois Policy said. ly optimistic. been an outstanding asset for our citi- Institute is proposing, separately, a “There’s just so much the pro- “We have received a request to zens and for our health care communi- complete transformation of Illinois’ gram will be able to take before it col- look into that,” said John Turcotte, di- ty, and I think they continue to expand Medicaid system. It would replace its lapses,” he said. CJ rector of the General Assembly’s Pro- their capability,” Dollar said. gram Evaluation Division, which re- The CCNC system has improved views state programs for effectiveness structurally to take on more projects, and efficiency. “I think it’s a worth- which “have done extremely well, while project.” saved the state money,” Dollar said. Visit Turcotte is confident “there will With 95 percent of the state’s general be a project proposal at least. But until practice doctors affiliated with CCNC, Carolina Journal Online that proposal gets in front of the Joint Medicaid recipients don’t have health Legislative Program Evaluation Over- care access issues like those in some sight Committee and we approve it, other states, he said. there won’t be a project.” “I think there are a lot of states “It’s a small but positive step for- that would love to have a network like ward that the Oversight Committee CCNC,” Dollar said. for the legislature’s Program Evalua- “I support CCNC and think the tion Division may consider authoriz- feds are going in the right direction to ing a credible evaluation of the CCNC copy it,” said state Rep. Verla Insko, program,” said Michael Cousins of D-Orange, also a member of the HHS Clayton. He is a nationally recognized oversight committee. expert in evaluating programmatic “Other states will tweak the health care outcomes. model and find ways to improve it” in “Since tens of millions in North an atmosphere of beneficial competi- Carolina taxpayer money has been tion, Insko said. spent on CCNC — and the previous Meantime, advocates of reform- evaluations are marred by flaws — the ing Illinois’ Medicaid system hope to Oversight Committee should take the pull the plug on its program, mod- next step and approve an evaluation eled after CCNC’s “medical home” that uses credible methods,” Cousins plan. They say it hasn’t lived up to its said. national hype in reducing costs in the http://carolinajournal.com FEBRUARY 2013 | CAROLINA JOURNAL PAGE 7 Education Freshman Lawmaker Proposes COMMENTARY Letting Districts Go All-Charter Head Start

By Barry Smith give local boards of education more Shenanigans Associate Editor flexibility than they currently have. hat were you doing the entering 3- and 4-year-old children RALEIGH “I think there are several districts Friday before Christmas? to Head Start and non-Head Start hile the Republican leader- in the state that would be interested in Many of us were buying programs through their third-grade ship is talking education re- exploring that,” Martin said. Wlast-minute gifts, embarking on year. Random assignment, also form — including offering “This would be charting new trips to visit family and friends, or called experimental design, is the Wmore choices for parents and students waters for the state,” said Joel Medley, making other preparations for the unequivocal “gold standard” in — a freshman GOP representative is director of the N.C. Office of Charter holiday season. social science research. putting forth a new twist on charter Schools. But if you were a senior Researchers examined several schools. Medley said that it’s a safe as- official working for the U.S. De- Rep. Donny Lambeth, R-Forsyth, sumption that there would need to developmental areas, including partment of Health and Human would like to give entire school dis- be clarifying legislation for a school measures of cognitive, social-emo- Services, you were releasing one of tricts the option of converting to char- district to convert entirely to a charter tional, language and literacy, and the most important, and damning, ter school districts. school district. health outcomes. They found that studies of the Head Start preschool Lambeth, who was chairman of Judith Rizzo, executive director Head Start improved the preschool program to date, the “Third Grade the Winston-Salem/Forsyth County of the James B. Hunt Jr. Institute for experience of participating children, Follow-up to the Head Start Impact Board of Education for 18 years, said Educational Leadership and Policy, but the program provided few Study.” that school officials often discussed said that there is potential for such a benefits beyond kindergar- Why would HHS charter schools and their flexibility. concept to move forward, “even if this ten. Researchers con- choose to release an im- “It often came up that charter just creates a forum for folks to identify cluded, “[T]here was little portant report the Friday schools have an advantage because what’s in the way.” Rizzo notes that a evidence of systematic before Christmas? Call they don’t have to follow the same lot of educators feel “overwhelmed by differences in children’s me cynical, but I think it rules and regulations that we follow,” paperwork.” elementary school experi- had something to do with Lambeth said. Martin has pushed for the ability ences through 3rd grade, the unwelcome (for HHS) He said in for local school between children provided but largely predictable his discussion boards to have access to Head Start and conclusion of the report. with other educa- more authority their counterparts in the Researchers concluded tors, the concept in issuing char- control group.” Head Start Would school that Head Start, an $8 bil- TERRY evolved that tra- ter schools. He Director Yvette Sanchez- lion program that enrolls STOOPS ditional public produced a white Fuentes issued the classic districts be more approximately 21,000 schools and charter paper for school Orwellian response, “Chil- low-income children schools should co- innovative if superintendents dren who entered the pro- in North Carolina and 1 million operate more. on the issue. gram 10 years ago clearly benefited nationwide, delivered almost no “ C h a r t e r they were under Currently, from their Head Start experience.” lasting benefits to participating schools make pub- all charters have Proponents of preschool charter rules? children. lic schools better,” to be granted by programs like Head Start argue Head Start, nicknamed Project Lambeth said. the State Board of that “investments” in early learning Rush-Rush, was one of the signa- “ C o m p e t i t i o n Education. provide long-term benefits to chil- ture initiatives of President Lyndon makes everybody better.” Allowing local school boards dren, families, and the community. Johnson’s War on Poverty. It was Charter schools are public schools to grant charters would give both lo- Preschool advocates contend that the federal government’s first and that generally don’t have to comply cal school administrations and charter spending a dollar on early inter- largest foray into early childhood with as many regulations as traditional schools the ability to prepare students vention programs will save several education and services. Since its public schools. They generally operate better, his report says. dollars down the road. They main- introduction in 1965, Congress has independently of local school boards “We can provide some infrastruc- tain that those who receive state- poured approximately $123 billion and have their own governing board ture and work with the charter school,” subsidized preschool education and into Head Start programs for nearly of directors. Martin said. services will require less remedia- 30 million low-income children. Charters get government fund- School systems could help pro- tion in school, commit fewer crimes, Apparently, there was no ing, which is usually comparable to vide things such as transportation and and have higher salaries than those rush-rush to release the Head Start what is spent per pupil for operating school lunches, Martin said. He noted who do not. There is some evidence Impact Study. Researchers com- expenses in their local area. However, that that the inability of some charter this is true for a small number of pleted data collection in 2008, and they don’t receive additional capital schools to provide meals and means destitute children in high-quality it took two years for HHS to release funds to pay for school buildings the of getting to school can become barri- its initial findings. The 2010 report preschool programs. But these chil- way traditional schools do. ers for some parents who want to send concluded that the average pre- dren are the exception, not the rule. Lambeth said that over the past their children to charter schools. schooler enrolled in Head Start did In his 2010 State of the Union several months, the idea of giving tra- Lambeth said that he had origi- not maintain academic and social Address, LBJ’s ideological suc- ditional public school systems more nally thought about introducing legis- gains through first grade. cessor, Barack Obama, declared, flexibility continued to evolve. lation that would just convert the Win- By early 2012, HHS continued “The idea here is simple: Instead of “What if we changed and al- ston-Salem/Forsyth County Schools to sit on a follow-up report that rewarding failure, we only reward lowed a district to operate under the into a charter district. But he said since tracked Head Start children through success.” The president is right. same guidelines and rules as a charter the idea has surfaced, other legislators third grade. Sen. Richard Burr, R- It is a simple idea. But it is easier school?” Lambeth asked. “Would that and school districts have discussed the N.C., and four of his colleagues sent said than done. By continuing to allow them to be more creative and possibility of allowing charter school a letter to HHS Secretary Kathleen pour billions into programs like more innovative?” district pilot projects across the state. Sebelius demanding the release of Head Start, the federal government Lambeth is drawing some sup- He has not written the legislation, the follow-up report. The agency chooses to reward failure. CJ port for the concept from the superin- Lambeth said. “It is a concept,” he said. released it — Friday, Dec. 21, 2012. tendent of the Winston-Salem/Foryth “We’re just going to think through all The Head Start Impact Study school system. the implications.” was rigorous, to say the least. Dr. Terry Stoops is director of Donald Martin, the superinten- He noted that any move to con- Over a six-year period, research- research and education studies at the dent, said that having the ability to vert a local school system to a charter ers randomly assigned 5,000 newly John Locke Foundation. have a charter school district would school system would be voluntary. CJ PAGE 8 FEBRUARY 2013 | CAROLINA JOURNAL Education Regulators Flooded With 154 New Charter Application Letters By Dan Way school movement grows, so does the state would not accept applications for bitrary tipping point they decided to Associate Editor creep of the State Board of Education’s virtual charter schools. His action is come up with.” RALEIGH regulatory vines. now the subject of a lawsuit. Medley said he viewed the Arap- otential charter school operators, “I think it’s absolutely worrisome Allison said he would reserve ahoe decision as a case-by-case vote including two that would oper- that since 2005 the number of charter any comment about the virtual school based on the merits. ate online, flooded the state with school regulations passed by the State guidelines until the General Assembly “I can’t really speak for the state P154 letters of intent to open in fall 2014, Board of Education has accelerated,” takes up the proposal. board, but I believe the concern rested punctuating a growing appetite for al- Stoops said. “Before we rush into the details, I with the impact it would have on the ternatives to traditional public educa- Charters “should be free from want us all to step back and take note [school district],” Medley said. tion. regulation, and they should be given of what happened [Jan. 10] from a big But some education observers a measure of autonomy that allows point of view,” Allison said. Changes on the board worry that the State Board of Educa- them to be innovative and experiment Until now, virtual schools were Gov. Pat McCrory could swing tion is signaling an eagerness to im- with new ap- “never part the 13-member State Board of Educa- pose regulations that would defeat the p r o a c h e s , ” of the conver- tion to a majority that’s sympathetic to innovation that makes charters an at- Stoops said. sation, never his perspective by March. The gover- tractive option for parents. “If we given even a nor will make three appointments that Critics contend that regulations continue to second of de- were held over from the last session of just rolled out by the State Board of regulate them, liberation,” the General Assembly, terms will ex- Education for digital distance-learning in fact, over- he said. “I pire for three others in March, and re- providers are more restrictive than regulate them, think this is necessary, and that the board’s “un- then they just form-minded Republican Lt. Gov. Dan the first step, Forest sits on the board as an ex-officio precedented” refusal to allow a Pam- become like but I think it’s lico County charter to add high school any other dis- member. a major step,” Stoops said the new General As- grades to its class offerings is “worri- trict school,” and demon- some.” and it defeats sembly and new State Board of Educa- strated a land- tion “will have to answer the question “We were expecting quite a few, the purpose of mark shift in [but 154] was not what we were expect- creating them, of what type of regulations do we want thinking on a State Board of Education on charter schools, especially with re- ing,” Joel Medley, director of North he said. whose members were appointed by “What we have to do is get rid of gard to how fast they’re growing, are Carolina’s Office of Charter Schools, previous Democratic governors. said of the huge volume of letters of the lists and lists of regulations, con- there limits to how many students intent received by the Jan. 4 deadline. trols, and other impediments that just Arapahoe denial they should be enrolling or no limits. Formal applications are due by noon get in the way of teaching,” Rep. Thom I’m inclined to say there should be no March 1. (Initial reports said 161 ap- Tillis, R-Mecklenburg, said after being Stoops also criticized the board’s limits, but the regulations are there to plications were filed, but that number re-elected speaker of the House. Jan. 10 decision to deny Arapahoe limit the enrollment in charter schools, was overstated because of a database “We must find meaningful ways Charter School permission to expand and I don’t think those are going to go glitch.) to deregulate K-12 public schools to its kindergarten through ninth-grade away.” put the power back in the schools and model to include grades 10-12 “based Formal applications received by Mecklenburg a surprise back into the classroom,” he said. solely on the fact that they felt that March 1 will go to subcommittees of Tillis recounted a recent discus- Arapahoe had too large of a market the 15-member North Carolina Public “One of the things that we did sion with a superintendent of “one of share,” Stoops said. “This is really un- School Advisory Council for review not expect was as many as we saw in the largest school districts in the state.” precedented.” before being voted on by the full coun- Mecklenburg County,” from which He was considering applying for a Arapahoe “is extremely popular cil for recommendation to the State there were 30 applications, including charter school because of the added in Pamlico and surrounding counties,” Board of Education. the two virtual schools, Medley said. flexibility to create innovative pro- Stoops said. “This is an arbitrary cap “They’ll get their preliminary ap- Multiple letters of intent also were sent grams. placed on charter schools by the State proval sometime in July or August,” from the Greensboro and Raleigh ar- “And I asked him, ‘Rather than Board of Education based on some ar- Medley said. CJ eas. giving you one or two schools in your “There were even some in small- district that have that flexibility, why er counties that currently do not have don’t we work on what we have to do charter schools, so there is a possibility to give every school in your district of breaking some new ground in some that flexibility,’” Tillis said. new areas,” Medley said. Darrell Allison, president of Par- Board barriers ents for Educational Freedom in North Some, like Stoops, believe the Carolina, a Raleigh-based school- State Board of Education is not only a choice advocacy organization, said key hindrance to removing regulatory with 30,000 North Carolina families on barriers to education reform, but also charter school waiting lists, he was not the architect of the hurdles. He cited surprised to see 154 letters of intent. the board’s new guidelines for online “This is proof that that demand charter schools as an example. and desire is there,” he said. “They’re very stringent guide- However, he cautioned: “When lines,” Stoops said. They include en- they open up that application packet rollment restrictions, limiting offerings and see what’s in it, trust me, you will to K-12, and prescribing “ways the not have 154 applications. It’s hard money is doled out,” he said. work, and there will be some, I’m sure, “What [the State Board of Educa- that will pull off to the side of the road tion] is doing is they have a monopoly and take a break.” right now with the [state-run] North More choices, regulations Carolina Virtual Public School, and they’re limiting competitors,” Stoops Terry Stoops, director of research said. and education studies at the John Last year, the board’s president, Locke Foundation, said as the charter Bill Harrison, unilaterally decided the FEBRUARY 2013 | CAROLINA JOURNAL PAGE 9 Washington JLF Book Promotes Reforms to N.C. Public Education oped by two Washington, D.C.-based need Common Core. “North Carolin- system to use for a performance pay Proposals target groups, Common Core picked up the ians should insist that our schools use component,” Stoops said. “School and federal government’s endorsement in world-class standards, curricula, and district administrators in our state 2010. The feds urged states to adopt tests — nothing less.” have used the state’s Education Value- Common Core Common Core standards in return for Speaking of world-class tests, Added Assessment System, or EVAAS, a better chance at winning education Stoops devotes attention to North Car- since 2007. If the state wants to iden- and teacher tenure grant money. olina’s existing testing program. While tify and reward the best teachers in the “Critics of the Common Core he reserves judgment of a new state- state, EVAAS data is the best place to By CJ Staff standards remind us there is no consti- developed READY Accountability start.” RALEIGH tutional or statutory basis for national Model, Stoops endorses North Caroli- The book documents nationwide orth Carolina should break standards, national assessments, or na- na’s use of national tests that will allow efforts to reform public teachers’ ten- free of the so-called Common tional curricula,” Stoops said. “There is state-to-state comparisons. ure. Stoops highlights several recom- Core State Standards, which no consistent evidence that a national Turning his attention to teach- mendations for North Carolina from Nare tied to attempts to nationalize curriculum leads to ers, Stoops sug- the National Council on Teacher Qual- public school education requirements. high academic achieve- gests it’s time to That’s one of the key recommenda- ment. Plus the national scrap the uniform ity. “NCTQ criticizes North Carolina tions the John Locke Foundation’s new standards on which the teacher salary for failing to base tenure on student book makes for traditional district-run administration plans to schedule North performance or teacher effectiveness,” public schools. base a national curricu- Carolina has used he said. “Recommended improve- First in Freedom: Transform- lum are inadequate.” for a century. “A ments including ensuring evidence ing Ideas Into Consequences for North The Common growing num- of teacher effectiveness, setting out a Carolina devotes a full chapter to re- Core standards face ber of lawmakers clear tenure process, and requiring a form measures for traditional public other objections as and school of- longer probationary period.” schools. Other recommended reforms well, including one ficials are work- Stoops also recommends improv- target the state’s existing testing sys- that affects the state’s ing to discard the ing the way North Carolina funds tra- tem, teachers’ credentials and pay, ten- bottom line, Stoops one-size-fits-all ditional district-run public schools. ure, and the way state taxpayers fund said. Estimates suggest salary schedule “Rather than asking whether the state public schools. North Carolina might and implement allocates ‘enough’ resources to pro- “While lawmakers should feel need to spend $525 mil- comprehensive vide children a quality education, we free to sever North Carolina’s ties to lion over seven years, teacher pay pro- should be asking ‘how’ public schools the Common Core State Standards, a or $75 million a year, to grams that attract spend their money.” number of the structural reforms out- adopt the standards. and reward excel- North Carolina should work to lined in this chapter address some of “There is no mon- lence.” improve existing schools, even as it North Carolina’s most deeply embed- ey,” he said. “Given First In Free- pursues school choice options out- ded, and in some cases deeply cher- continuing fiscal pres- dom critiques the lined in a separate First In Freedom ished, practices,” said Terry Stoops, sures, states such as state’s current chapter, Stoops said. “Most parents JLF director of research and education North Carolina can ill afford to appro- teacher pay plan, including pay hikes will continue to choose to send their studies. “Indeed, one should not ‘take priate tens of millions of dollars a year tied to National Board Certification. a stab’ at changing teachers’ salary for new standards and tests.” Stoops also questions the benefits of children to district-run schools,” he schedule, tenure, or the state funding Since Common Core would re- the cumbersome state teacher certifica- said. “As such, ensuring that all chil- system. It will require surgical preci- quire North Carolina to give up con- tion process. dren receive a high-quality educa- sion to restore the health of our public trol of its public school curriculum and A section on instituting per- tion requires much more than school schools.” testing programs, at great expense and formance pay for teachers urges the choice. It requires rethinking the way Stoops leads his examination of with “growing evidence that the quali- state to focus on an existing resource. that our traditional public school sys- district-run public schools with the ty of the standards is low,” Stoops con- “North Carolina should select parts tem delivers instruction, employs Common Core State Standards. Devel- cludes that North Carolina does not of the state’s new teacher evaluation teachers, and allocates resources.” CJ FIRST IN FREEDOM Transforming Ideas into Consequences for North Carolina In First in Freedom the John Locke Foundation’s president and research staff apply the timeless ideas of 20th-century conservative thinkers to such 21st-century challenges as economic stagnation, tax and regulatory burdens, and educational mediocrity. First in Freedom contains practical suggestions and advice for North Carolina’s new governor and General As- sembly. To get your copy, go to JohnLockeStore.com.

The John Locke Foundation, 200 W. Morgan St. Suite 200, Raleigh, NC, 27601 919-828-3876 • JohnLocke.org • CarolinaJournal.com • [email protected] PAGE 10 FEBRUARY 2013 | CAROLINA JOURNAL Local Government Town and County Ban Has Not Ended Sweepstakes Operations Durham crime lab By Dan Way strument in their facility voluntarily removed them,” Ha- Durham city and county Associate Editor thaway said. officials are frustrated with slow ROANOKE RAPIDS Attempts to contact Halifax County District Attorney responses when the SBI State layers continue to plunk cash down to play online Melissa Pelfrey were unsuccessful. Crime Lab tests evidence in sweepstakes games at the former Randy Parton The- “We are working to find a business model that will pending criminal cases. One so- atre in Roanoke Rapids despite a state Supreme Court meet the guidelines that the Supreme Court set and comply lution could be for one or both of rulingP banning the electronic diversions. with the statutes of the state of North Carolina,” said Brad the localities to pay the state to Indeed, even after calls by the governor and attorney Crone, a consultant with the Internet Based Sweepstakes hire more people to work only on general’s office to enforce the court’s decision, several hun- Organization that represents a majority of the state’s Inter- Durham cases, reports the Dur- dred Internet cafés remain open across North Carolina as net parlor owners. ham Herald-Sun. their operators reconfigure their games in a manner they “The operators and IBSO will be working with the It often takes more than six say complies with the law. new legislature and the governor months to get test results from the “There are some of the Inter- to take a look at the future of the state, resulting in suspects being net sweepstakes cafés in this area industry,” Crone said. jailed longer than necessary. The that have closed, and there are some The Supreme Court ruling situation has gotten worse in the that are still operating. The theater has taken a toll on the industry, last few years, as Supreme Court is continuing to operate under some which had about 1,000 operators rulings have required technicians new types of gaming machines,” statewide in December, he ac- to spend more time away from said Roanoke Rapids Mayor Emery knowledged. the lab testifying in court. Doughtie. “Probably 70 percent of “The leadership at the state Texarkana, Ark.-based HSV operators have shuttered their level is not there,” said City Entertainment principals leasing sweepstakes rooms until they get Councilman Eugene Brown, the theater “have been very forth- a clear indication of what’s going “putting the burden back on cit- coming” about the machines they to happen with the law,” Crone ies and counties.” are operating in the newly named said. Each Internet café employed, The idea of building a crime Royal Palace Theater, Doughtie on average, six full-time and eight lab in Durham was considered said. “They in no way have done This is the exterior of one of the sweepstakes part-time workers. but rejected as too expensive. At- anything to undermine or circum- parlors in Hillsborough. It is located on Churton The sweepstakes games are tention now is focused on paying vent the law.” Street in the Maxway Shopping Center. Another free add-ons to the purchase of the SBI to hire additional staff for City Attorney Gilbert Chiches- one remains open at The Shops at Daniel Boone. Internet or phone time on an In- Durham cases. The SBI originally ter sent an opinion letter to local law (CJ photo by Dan Way) ternet parlor’s computers. But the opposed the idea, but after Acting enforcement agencies differentiat- Supreme Court held that winnings District Attorney Leon Stanback ing, in his view, between machines that violate and comply could not be revealed on an entertaining display as part of a got involved, the agency was with the state law. Numerous attempts to obtain a copy of game or simulated game. willing to go along. that letter and an interview with Chichester were unsuc- In a recent blog, Christopher McLaughlin, assistant The question remains cessful. professor of public law and government with the UNC whether the city or county will Amid the fast-changing and muddy legal landscape, School of Government, wrote that some mechanisms using provide the required funds. law enforcement agencies are deciding, jurisdiction by juris- a “pre-reveal” program could comport with the law. diction, whether to crack down or back off. The pre-reveal operating system tells a player before a “Our attorneys are fielding questions from local law game in a “nonentertaining” fashion, such as a blank back- High-speed wireless enforcement and district attorneys about how to enforce ground, whether a purchase of phone time or Internet time Winston-Salem is among the recent Supreme Court ruling and how the law applies includes a prize. the communities in the state that to changes the sweepstakes industry claims to have made “[I]t’s real unclear to me what’s going to happen go- may benefit from the N.C. Next to games,” said Noelle Talley, spokeswoman for Attorney ing forward” with the machines, said state Rep. Jeff Collins, Generation Network, a univer- General Roy Cooper. R-Nash, who sponsored legislation in the last session allow- sity-led effort to establish ultra- “We’re recommending that law enforcement inves- ing the state to collect taxes on sweepstakes operations. “If high-speed wireless service, re- tigate video sweepstakes operations in their area to de- they’re going to stay around, then I’ll probably try to resur- ports the Winston-Salem Journal. termine what games are being played, and then take any rect the legislation,” Collins said. Wake Forest University, enforcement action they think necessary against violators,” He was considering levying state business privilege Duke University, N.C. State Uni- Talley said. taxes on each machine and using that revenue to offset other versity, and UNC-Chapel Hill “We believe the law and the ruling are clear, and we’re taxes, such as the one on gasoline. have formed NC NGN as part ready to defend their enforcement,” she said. Collins views sweepstakes parlors as “gambling halls of the GiG.U initiative. The idea “The court has ruled, and they need to enforce the that prey on the poor. My position is if they’re legitimate is to use unassigned television law,” then Gov.-elect Pat McCrory said at a Jan. 3 news con- business operations, let’s regulate them the way we regulate frequencies to increase the area ference. other things.” served and capacity of wireless “These things keep getting reappealed based upon a For now, Roanoke Rapids is receiving tax revenue networks. The universities are new definition. This is getting ridiculous,” McCrory said. from the machines at the city-owned theater, although some big Internet users, and the signals “I’m going to have discussions with the leadership in the illegal devices were removed. also would service surrounding Senate and the House on this issue.” The amusement devices are taxed at $2,000 for the first communities. Eddie Caldwell, executive vice president and general five, and $1,000 for each machine after that, up to a cap of counsel of the N.C. Sheriffs Association, said he anticipated “Connectivity speed is the $80,000 total. the software change. “The drug dealers, the prostitutes, all key to all of this,” said Rick Mat- Repeated attempts to contact the principals of HSV kinds of criminals, are constantly trying to find some tech- thews, an associate provost for Entertainment were not successful. It has a two-year lease technology and information sys- nicality around the law,” he said, adding he expects enforce- ment to become more vigorous as more departments get fa- with a $7.25 million option to buy the property. tems at Wake Forest. “As the mayor, it’s been just such a relief for us to have Internet service provid- miliar with the law. those rental payments coming in to us and we not have to ers “are interested in ultra high- “So much of that law right now is [open] for inter- take care of the day-to-day upkeep on that facility,” Dough- speed service, but because it is pretation. There’s no clear definition of what is acceptable tie said. such an expensive process, they and what is not acceptable except for what the city attorney want assurance that there will be wrote,” said Roanoke Rapids deputy police chief Tommy The city owes about $1.7 million a year on the theater, viable customer bases.” Hathaway. which equals about 25 percent of all taxes the city generates. The hope is that NC NGN “We are being guided by the district attorney of Hali- The $21 million theater initially opened and failed will attract one or more ISPs to fax County. At the present time, we have not been given any under the management of country musician Randy Parton, provide that service, perhaps kind of notification of enforcement,” Hathaway said. brother of the more famous Dolly Parton. It then was sold in 2014. CJ “Our establishments have been notified and checked to Chicago businessman Lafayette Gatling and bought back by law enforcement. Anybody that had a noncompliant in- by the city before the lease with HSV Entertainment. CJ FEBRUARY 2013 | CAROLINA JOURNAL PAGE 11 Local Government

Charlotte Puts Stadium Funding COMMENTARY On Its 2013 Legislative Agenda Internet Sweepstakes

By Michael Lowrey County issued $94.8 million in bonds, Associate Editor mainly to fund school construction. Two-Step RALEIGH The county used interest rate swaps to he libertarian bumper sticker against gambling, or to call for an harlotte City Council has vot- get what it hoped would be lower in- — “Don’t steal from the end to the sweepstakes business. ed in closed session and with terest rates over the life of the bonds. government; it hates competi- Plenty of other risky forms of enter- no advance notice that the is- The strategy worked at first, but things tion” — takes on added meaning Csue was on its agenda to provide $125 turned sour in 2008 and 2009, when the T tainment are legal, too — including every time North Carolina officials million to the Carolina Panthers for county was hit with $2.1 million in un- many extreme sports and physical try to shut down Internet sweep- improvements at Bank of America Sta- anticipated interest-rate costs. contests — and should remain that stakes operations. dium, where the team plays and which Now officials are worried that if way. Adults should be treated as the team owns. The upgrades would be conditions should change in the vola- Sweepstakes opponents — in- responsible individuals. paid for by doubling the prepared food tile bond market, the swaps could cluding supporters of the N.C. Edu- That said, the state’s cam- tax, an idea that had not been debated again wreck havoc on the county’s cation Lottery’s would-be gambling paign against video sweepstakes publicly, reports The Charlotte Observer. budget. monopoly — thought they had the operators is sheer hypocrisy. North What is now called Bank of Amer- “Our concern is we are exposing upper hand in December, when the Carolina does not merely operate ica Stadium opened in 1996. The team the county to risk in a very uncertain N.C. Supreme Court upheld a state a lottery, it pimps for it regularly, has been working on a retrofit package, market,” said ban on Internet sweep- enlisting onetime celebri- though details, Union County stakes machines, saying ties like Ric Flair to pitch such as what the Finance Director they were not protected individual games and improvements Jeff Yates of the by the First Amendment — more shamefully — might involve Cherokee swaps. to the U.S. Constitution. public school teachers and and the cost, The coun- The justices said the administrators to promote have not been to ty estimates General Assembly’s ban the allegedly wonderful announced. The that ending the regulated conduct rather programs made possible Queen City’s swaps would re- than speech, so the First only by the sale of those leaders, both Currituck sult in a $4.2 mil- Amendment did not ap- lottery tickets. elected and in the lion net loss over ply. RICK State lawmakers are business sector, the remaining Even so, several HENDERSON considering legislation had feared that the team might move 16-year life of the bonds. hundred Internet cafés that would bring tax rev- to Los Angeles, which has no National continue operating in the Union County is not the first enues from sweepstakes Football League franchise. state — among them, the North Carolina locality to pay a signifi- operators to Raleigh. City Council voted in October infamous venue formerly known cant premium to get out of the riskier Good. The previous session of the to begin negotiating with the team, as the Randy Parton Theatre — as swaps. Charlotte, Greensboro, Fayette- General Assembly expanded the though there were no public updates vendors modify their software to ville, and Mecklenburg and Guilford gambling options at the Harrah’s about the talks before the Jan. 14 vote. make the devices operate more like counties have paid millions in recent Cherokee casino, citing its “econom- “By acting in closed session, an arcade game than a slot machine. years to end swap arrangements. ic development” potential, though the City Council has endorsed a plan Every time lawmakers or the About 25 localities have engaged lawmakers should have captured which excludes both the industry and courts have tried to outlaw the in swaps since 2003, when the state more revenues from the expansion. citizen input,” wrote Brad Hurley, first allowed the financing method. sweepstakes parlors, the vendors chair of the N.C. Restaurant and Lodg- have developed a variation of the Local jurisdictions also appre- ing Association, in a letter to Charlotte Beach rules games that are not covered by the ciate the revenues they’re receiving Mayor Anthony Foxx. law. And the dance continues. from the sweepstakes parlors. The In November, Wrightsville Beach “There are many unanswered It shouldn’t. former Randy Parton Theatre was voters approved banning smoking on questions, including the analysis of I lived in Las Vegas for four a $20 million white elephant before the beach. There’s only one problem total cost and the possible sources of years, and I came to appreciate that Roanoke Rapids leased the city- with the ban: The town may not actu- funding. There should be an open pub- owned facility to HSV Entertain- ally have the authority to enact a com- gambling is not merely a harmless lic debate.” ment, an Arkansas-based company prehensive ban, reports the Wilming- form of entertainment. In excess, it The current 1 percent prepared that operates sweepstakes termi- ton Star-News. undermines essential foundations of food tax in Mecklenburg County, pri- nals and books live entertainment Ocean beaches in North Carolina a self-governing civil society — in- marily on meals in restaurants, brings there. The lease includes an option generally are considered state prop- dustry, thrift, patience, the concept in $24 million a year. Doubling the that “working hard and playing by to purchase, which will become erty, meaning local governments have more likely if the sweepstakes tax would collect much more than the only as much authority to regulate ac- the rules” leads to financial, social, parlor remains open and profitable. amount needed to cover $125 million tivity on most beaches as the state has and spiritual benefits, among oth- Meantime, the city is collecting tax in stadium upgrades. The city has not given them. That authority may not in- ers. Gambling can prey on the poor, revenues from each sweepstakes stated what it intends to do with the ex- clude banning smoking. who can come to believe that it’s terminal in the theater. tra revenue or whether the tax would “We need them to basically cre- better to dream of an easy payday If a government-run lottery end when the stadium upgrades are ate special legislation to give us that than gain the dignity from earning a complete. authority,” said Wrightsville Beach paycheck at an honest job. is to continue, state policymakers The tax increase requires the ap- Town Manager Tim Owens. “Our at- The gambling moguls do must come to grips with the exis- proval of the General Assembly. torney will work with our local delega- pretty well for themselves, too. tence of legal private gambling, and Steve Wynn and Sheldon Adelson determine ways to regulate it and Union pays to exit swaps tion, and hopefully it will be brought before the General Assembly to give us did not build billion-dollar casinos get tax money from it. Otherwise, In the mid 2000s, many local gov- clarification on this and other rules and because their patrons came home the government looks like little ernments entered into complex bond laws.” winners. And don’t get me started more than a mobster determined to deals aimed at securing lower interest The issue also extends to Caro- on the bank of slot machines that strong-arm competitors out of his rates. Union County is the latest local- lina Beach, which in August passed greets you every time you walk territory. CJ ity that is trying to undo some of these an ordinance banning smoking on the into a Walgreens or Kroger/Ralphs “interest rate swaps” as too risky, re- beach. Its ordinance is subject, howev- supermarket in Nevada. Rick Henderson is managing edi- ports The Charlotte Observer. er, to obtaining approval from the state But I’m not here to preach tor of Carolina Journal. Between 2004 and 2007, Union legislature to enforce the ordinance. CJ PAGE 12 FEBRUARY 2013 | CAROLINA JOURNAL Local Government High Court: Search of Car During Traffic Stop Not Unreasonable By Michael Lowrey dered his conviction overturned as a to us, as it did to the 8th Circuit, to be for a reasonable suspicion in a traffic Associate Editor violation of the Fourth Amendment. consistent with the primary command stop. RALEIGH The N.C. Supreme Court accept- of the Fourth Amendment — that law “The flaws in the majority’s opin- he Fourth Amendment of the U.S. ed the state’s request to consider the enforcement agents act reasonably,” ion are perhaps most apparent in its Constitution prohibits unreason- matter. But the justices were not asked Newby wrote. “An officer may make a single statement that ‘[p]olice officers able searches and seizures. Can to review all of the mistake, including should be entitled to interpret our mo- Ta search be reasonable and thus con- matters discussed a mistake of law, tor vehicle laws reasonably when con- stitutional, if it comes about because in the appeals The North Carolina Courts yet still act reason- ducting routine traffic stops,’” wrote of a police officer’s misunderstanding court’s ruling. ably under the cir- Hudson. of the law? The answer, according to a The state did not cumstances.” “Separation of powers doctrine challenge the ap- divided N.C. Supreme Court, is “yes,” Newby ex- dictates otherwise: It is the legisla- peals court’s de- in a case involving a sheriff’s deputy plained that this ture’s job to write the law and the judi- termination that who stopped a car for an offense that conclusion would ciary’s job to interpret the law. The job did not violate state law. state law required have significant only a single func- of the police is to enforce the law as it On April 29, 2009, Sergeant Matt public safety ben- has been written by the legislature and Darisse of the Surry County Sheriff’s tional brake light. efits. “Indeed, interpreted by the courts. Proper en- Department pulled over a Ford Es- Instead, the state because we are limited the scope forcement of the law requires accurate cort on Interstate 77 for having a right particularly con- of its appeal to the conclusion that the knowledge of the law; as the 11th Cir- brake light that didn’t work. As he was cerned for maintaining safe roadways, giving the driver a warning ticket for search was necessarily unreasonable cuit cogently noted in United States v. we do not want to discourage our po- the brake light problem, Darisse came and thus unconstitutional after the car Chanthasouxat, to decide otherwise is to lice officers from conducting stops for to suspect that the car might contain was pulled over for something that endorse ‘the fundamental unfairness drugs. During a search of the vehicle, was not a violation of the law. perceived traffic violations,” he wrote. of holding citizens to the traditional the officer found “After con- “A routine traffic stop, based on what rule that ignorance of the law is no ex- cocaine; the driv- sidering the total- an officer reasonably perceives to be a cuse while allowing those entrusted to er and passenger ity of the circum- violation, is not a substantial interfer- enforce the law to be ignorant of it.’” were arrested and Court rules an stances, we hold ence with the detained individual and Hudson also noted that most fed- charged with traf- that Sergeant Da- is a minimal invasion of privacy.” eral appellate courts had adopted rea- ficking in cocaine. officer can make risse’s mistake of Chief Justice Sarah Parker and soning similar to that of the 11th Cir- At trial, law was objective- Justices Robin Hudson and Patricia cuit, while the 8th Circuit was alone in Nicholas Heien, a mistake of law ly reasonable and Timmons-Goodson dissented from the its view. the car’s passen- that he had rea- majority holding, finding that an offi- The case is State v. Hei- ger, sought to sup- and still be sonable suspicion cer’s mistake of law cannot be the basis en (380PA11). CJ press the cocaine to stop the vehicle that Darisse had acting reasonably in which defen- found, contending dant was a passen- Stay in the know with the JLF blogs that the officer’s ger,” wrote Justice Visit our family of weblogs for immediate analysis and commentary on issues great and small stop was improper. The judge at trial Paul Newby for a did not agree, and Heien ultimately four-justice majority of the high court. was convicted and sentenced to be- Newby said the search was not tween 20 and 24 months in prison. unreasonable, noting that different That did not end the matter, federal circuit courts of appeal have The Locker Room is the blog on the main JLF Web site. All JLF employees and many friends of the however, as Heien appealed. The N.C. come to different conclusions on the is- foundation post on this site every day: http://www.johnlocke.org/lockerroom/ Court of Appeals sided with Heien, sue. Newby and his colleagues found noting that a single functioning brake the 8th U.S. Circuit’s reasoning more light satisfies state motor vehicle laws. compelling. “To begin, that rationale seems Based on this, the appeals court or- Right Angles is the JLF’s blog in the Triangle. Several JLF staffers blog on this site to keep folks in Dur- ham, Raleigh, and Chapel Hill up to date on the latest info: http://triangle.johnlocke.org/blog/ Visit our Triangle regional page The Meck Deck is the JLF’s blog in Charlotte. Michael Lowrey blogs on this site and has made it a must- http://triangle.johnlocke.org read for anyone interested in issues in the Queen City: http://charlotte.johnlocke.org/blog/

The John Locke Foundation has five regional Web sites span- ning the state from the mountains to the sea. Squall Lines is the JLF’s blog in Wilmington. Chad Adams and a few coastal friends keep folks on the coast updated on issues facing that region of the state: http://wilmington.johnlocke.org/blog/ The Triangle regional page in- cludes news, policy reports and research of interest to people in the Research Triangle area. Piedmont Publius is the JLF’s blog in the Triad. Greensboro blogger and writer Sam A. Hieb mans the controls to keeps citizens updated on issues in the Triad: http://triad.johnlocke.org/blog/ It also features the blog Right Angles, featuring commentary on issues confronting Triangle residents.

The Wild West is the JLF’s blog in Western North Carolina. Asheville’s Leslee Kulba blogs in this site, designed to keep track of issues in the mountains of N.C.: http://western.johnlocke.org/blog/ The John Locke Foundation | 200 W. Morgan St., Raleigh, NC 27601 | 919-828-3876 The John Locke Foundation, 200 W. Morgan St., Raleigh, NC 27601 | 919-828-3876 FEBRUARY 2013 | CAROLINA JOURNAL PAGE 13 From Page 1 Thousands Get Revenue Notices That Look Like Bills Continued from Page 1 2. Fill out an appropriate form Stevenson, a spokeswoman for the and make a payment if the recipient N.C. Department of Revenue, said. agrees that a return is due, but dis- But the notice does not declare agrees with the amount due. that it is not a bill. Nor were the letters 3. Furnish a copy of the recipi- reviewed by Revenue Department em- ent’s tax return (or the exact name, ad- dress, and Social Security number) if ployees before they were mailed. the recipient has filed a return. “I believe that if a private busi- 4. Attach an explanation of why ness sent consumers a notice that the recipient isn’t required to file a re- looked as much like a bill as the ‘No- turn to a copy of the notice and return tice of Intent’ does, it would violate it to the Department of Revenue. unfair and deceptive trade practices and other consumer protection laws,” Burden on the innocent said Jeanette Doran, executive director of the N.C. Institute for Constitutional Rowell questions why he should Law. “The Notice of Intent lists a total have to go to such great lengths to re- amount dude and a due date. People spond when he wasn’t required to file would have a very hard time recogniz- a return. “Why is the burden placed on the ing that the notice is not actually a bill innocent party to justify the error of the they have to pay.” state Department of Revenue?” Rowell Information from IRS asked. He also wonders how many of The notice tells the recipient that the notices go out in error. the N.C. Department of Revenue has Stevenson said that of the 147,800 obtained information from the federal notices sent out, 81,300 cases have re- IRS regarding the recipient’s income. It sulted in billed assessments. details the income information, includ- “How many of those payments ing income from W-2 and 1099 forms. represent excessive payments or du- In a section titled “Substitute for plicative tax payments?” Rowell won- a Return,” the form calculates taxable ders. income, deductions, late payment in- Revenue Secretary Lyons Gray terest, and penalties. The last line in declined to be interviewed for the sto- that section lists the “Total Amount ry. Due.” Stevenson said that she was re- sponding on Gray’s behalf. The bottom of the page provides “We are always willing to evalu- a payment voucher for the recipient to ate our practices and find ways to bet- fill out. ter communicate with our taxpayers,” The second page offers options Stevenson said. “Altering the head- for paying the due amount, tells the ing in our Notice of Intent to Assess, recipient that action is required within in this case, would fail to communi- 30 days, and lists four different actions cate the importance of the document the recipient can take. Those actions to a taxpayer. However, these notices are: This is the first page of the notice sent out by the N.C. Department of Revenue. It tells do include detailed explanations, in- 1. Pay the total amount due, if the the recipient that the N.C. Department of Revenue has obtained information from the structions, and contact information for recipient agrees with the statement. federal IRS regarding the recipient’s income. a taxpayer to speak directly with our staff to resolve the situation.” Subscribe to JLF’s Research Department Newsletters ‘This is not a bill’ Doran said she disagreed that Go to http://www.johnlocke.org/key_account/ to sign up inserting a statement, such as, “This is not a bill,” would make the document any less important. “Common sense would tell you that any notice that you get from the Department of Revenue is important,” Doran said. “We receive large volumes of data from the IRS … allowing us to identify revenue rightly due the state of North Carolina, Stevenson said. “We gener- ate thousands of notices each month. We do spot checks of those documents Vice President for Re- Director of Research and Director of Regulatory Director of Fiscal Policy to ensure accuracy; however we do search and Resident Education Studies Terry Studies Jon Sanders’ Studies Sarah Curry’s not have the resources or employees Scholar Roy Cordato’s Stoops’ weekly newslet- weekly newsletter, weekly newsletter, Fis- weekly newsletter, En- ter, Education Update, Rights & Regulation cal Update, discusses to manually review each notice before vironment Update, fo- focuses on the latest local, Update, discusses cur- issues concerning North mailing. cuses on environmental state, national, and inter- rent issues concern- Carolina government’s “Each individual, business, com- issues, and highlights rel- national trends in pre-K-12 ing regulations, rights, revenues, budgets, pany, etc. … in North Carolina should evant analysis done by the education politics, policy, and freedom in North taxes, and fiscal pro- file and pay their fair share of taxes as John Locke Foundation and practice. Carolina. jections. the law dictates. These notices are a and other think tanks, as tool to make sure everyone is held to well as items in the news. the same standards and accountability in their tax obligations.” CJ PAGE 14 FEBRUARY 2013 | CAROLINA JOURNAL From Page 1 New Era of N.C. Politics Dawns with GOP Governor and Legislature Continued from Page 1 as much about the budget as we did two years ago when we had a structur- al deficit approaching $3 billion.” Both Tillis and Senate leader Phil Berger, R-Rockingham, say North Car- olinians should expect lawmakers to adopt major tax reform this year. “We intend to move forward this time with a tax reform package,” Berg- er said during a separate press confer- ence. “Our tax is antiquated,” Tillis said. “It’s probably approaching — some of the fundamentals of it — 50 years old.” The exact form that tax reform will take hasn’t been revealed. However, parameters mentioned by GOP leaders include broadening the sales tax to include services while reducing or eliminating corporate and personal income taxes. Tillis said that legislators and new Republican Gov. Pat McCrory will have to make sure the new tax system doesn’t replace one complex system with another that’s filled with com- The North Carolina House of Representatives gathers for the 2013 General Assembly’s first full day of business on Jan. 30. (CJ photo by Don Carrington) plexity. Three weeks into his first term, want someone to dig down deep, … executive orders” on regulatory reform Unemployment insurance debt the Republican governor said his ad- and there are more audits to come,” at the Department of Environment and Lawmakers are expected to tack- ministration is working to extinguish McCrory said. Some administrative Natural Resources, and in the area of le changes in the state’s unemploy- “short-term, operational fires of a very audits are complementing Wood’s energy exploration, he said. ment insurance program quickly. A broken system of state government” work. McCrory wants to create a com- proposal approved by an interim com- and reverse systemic neglect and de- “We’re uncovering things every pact with South Carolina and Virginia mittee in early January was to be final- cay of government infrastructure that day. My Cabinet secretaries as they’re to establish a process for offshore gas ized in early February, after press time. hinders progress. getting their feet on the ground are un- and oil exploration, and “speed up a covering things in every department, parallel track for inland gas explora- It would shorten the number of weeks Obamacare decisions unemployed workers could receive some budget transfers, some total in- tion,” policy development, and identi- formation systems breakdowns and benefits and reduce the maximum A scathing performance audit of fication of business connections to de- inefficiencies,” he said. “The system weekly amount of benefits. the state’s Medicaid system released termine the marketplace potential. was much more broken than we ever Sen. Floyd McKissick, D-Dur- Jan. 31 led McCrory to announce that, anticipated.” Voter ID, education reform ham, has said he hopes some form of for now, he would not expand Medic- But as he attempts to shore up compromise would be worked out be- aid enrollment under the federal Pa- While McCrory has said he could a government foundation, McCrory fore the new unemployment insurance tient Protection and Affordable Care accept a voter ID bill that falls short of Act. At a joint press conference with is making progress in some areas. He proposal becomes law. nominated three people to serve on calling for a strict photo ID require- This year, the GOP-dominated State Auditor Beth Wood, McCrory ment, both Tillis and Berger say that said Medicaid accountability issues the State Board of education, including General Assembly also will not have former U.S. Rep. Bill Cobey, a Durham they expect the ID card to require a to face a governor from the opposing had to be resolved before he would photograph. consider any expansion of coverage. Republican, to chair the board. party as it did for the past two years. He said he also would nominate “The mechanics that we’re put- Former Democratic Gov. Bev Perdue “The dilemma with the feds is ting into place are ones that will allow they don’t understand their own bill four or five people for the N.C. Board chose not to seek re-election. McCrory, easy access to a government-issued ID that they passed, and they’re kind of of Transportation in early February. who lost to Perdue in 2008, was elected at no cost to the citizen,” Tillis said. making it up as they go along,” he said governor last fall. No federal extension Education reformers can expect a in the earlier interview with CJ. “These sympathetic ear in the state capital this are multibillion-dollar decisions which McCrory is recommending the New governor’s agenda year. Berger, who pushed through some will have ramifications for decades, state not accept a federal extension of Energy exploration, jobs initia- and I want to make sure I have all the unemployment insurance benefits, but of his proposed education reforms last tives, and regulatory reforms are high facts and information before I make a rather pay back a $2.5 billion federal year, said that he’d like to see some re- on McCrory’s agenda for coming recommendation to the legislature.” loan as quickly as possible. forms in the state’s teacher tenure law. months, and he plans to issue some McCrory said he has asked Wood He said an extension would in- Tillis spoke of looking at ways to help executive orders to pursue those aims. to launch other performance and fi- crease the debt, “which has put a tre- traditional schools transition into char- In a Jan. 29 telephone interview nancial audits to identify problem mendous pressure on small businesses ter schools or even remove some of the with Carolina Journal, the governor areas. And he took a swipe at Perdue to pay those taxes,” and has not helped red tape that traditional public schools gave few specifics about his ambitious over her inaction in that realm. to reduce unemployment. must navigate. agenda, deferring details to a State of “I’ve asked [Wood] to do as many His deputy budget director, rev- Lawmakers also could have a the State address he plans to deliver in audits as she can as quick as possible enue secretary, legislative liaison, and handful of proposed constitution- mid-February. to help us evaluate where the break- policy experts are working with teams al amendments on their plate this “At that time I’ll be discussing downs are in the system, something from the House and Senate on a tax year. Among those are measures in detail some specifics of how I’m go- that the previous governor was at- reform recommendation, which could protecting property owners from ing to implement some of the goals we tempting to dissuade the auditor from come by the middle of February, Mc- eminent domain abuse and mak- have in the areas of education, energy, doing,” McCrory said. Crory said. ing a worker’s desire not to join a la- tax reform, [and] regulatory,” he said. “I’m doing just the opposite. We “We’ll probably be issuing some bor union a constitutional right. CJ FEBRUARY 2013 | CAROLINA JOURNAL PAGE 15 From Page 1 Competing Tax Reform Plans Seek to Spur Economic Growth in State

Continued from Page 1 of the consumed income tax. “I think ness assets, manufacturing, equipment the theory is sound.” and so forth, which is similar to the purchases, Cordato said. existing franchise tax,” he said. But it “North Carolina officials are ask- Civitas plan would be raised from the current 0.15 ing the right questions, and they’re percent to 1.05 percent and broaden The Civitas model would elimi- heading in the right direction,” said Joe the tax to all businesses, not just the C nate the personal and corporate in- Henchman, vice president of legal and corporations that are generally large come taxes, and the business franchise companies taxed separately from their state projects at the Tax Foundation. tax. owners. Every business would pay at The foundation was asked by the In their place would be a state re- least $500 annually. Carolina Business Coalition to evalu- tail sales tax assessed at a rate of 6.53 “This would be the highest rate ate the state’s tax structure and pro- percent instead of the current 4.75 per- anywhere. It would raise about $4 bil- pose alternative options. It issued a cent. The sales tax would be expanded report in late January suggesting four lion a year. The franchise tax right now to include all services currently taxed raises about $700 million,” Henchman pro-growth tax alternatives: in at least one state and would close • Repealing business taxes while said. loopholes that give preferred rates to “We call them capital stock taxes, lowering the personal income tax rate some goods. In addition, there would and broadening the sales tax to include but they call them franchise taxes in be an expanded 1 percent tax on com- North Carolina. Right now the highest services. mercial and residential real estate [rate] is in Connecticut, and that’s 0.31 • Assessing a 5 percent rate on transactions, and all businesses would percent,” Henchman said. That means corporate income, individual income, be levied a business license fee, simi- North Carolina’s would be more than and retail sales. lar to the current franchise tax but as- three times higher. • Increasing the retail sales tax sessed at a much higher rate. to 8.75 percent and eliminating all in- The business license fee would The John Locke Foundation’s proposal for Need to build capital tax reform is detailed in Chapter One of come taxes. be, by far, the highest in the nation and the just-published book, First In Freedom: “The way I look at it is the South’s • Imposing a consumed income generate some $4 billion, according to Transforming Ideas into Consequences historic problem economically is being tax at a 10 percent rate and eliminating the Tax Foundation. That would rep- for North Carolina. The book can be pur- able to accumulate capital and invest- other state taxes. resent nearly 22 percent of the $18.5 chased at JohnLockeStore.com. ment,” Henchman said. “The Civitas Republican Gov. Pat McCrory billion in state tax revenue collected plan, on one hand, gets rid of the [per- and Senate leader Phil Berger, R-Rock- in the 2011-12 fiscal year. Tax Founda- Economist Steve Entin, who re- sonal] income tax and the corporate ingham, have expressed interest in tak- tion data say North Carolina generated viewed the proposals being pitched in North Carolina, said he favors JLF’s income tax, and that gets rid of a lot of ing up tax reform early in this session only 6 percent of its revenue in 2010 consumed income tax plan. obstacles” to building capital and in- of the General Assembly. from corporate income taxes. “If I were king for the day, I’d vestment. State Sen. Bob Rucho, R-Meck- The idea behind both the JLF and have the federal government go to a But the business license fee “will lenburg, is exploring with the Raleigh- Civitas plans “is to reduce the tax bur- consumed income tax and have North deter a lot of investment,” he said. “The based Civitas Institute a separate tax den on investment and job creation, Carolina piggyback on that,” said En- goal of tax reform in North Carolina is reform plan drawn up by Arthur Laf- and there’s plenty of economic evi- tin. He is former president and execu- to create a tax system that doesn’t dis- fer, an economist who championed dence tying taxes on capital, taxes on tive director of the free-market public courage capital formation.” supply-side economics during the Rea- economic activity, to lower economic policy organization Institute for Re- Brian Balfour, a Civitas policy an- gan era. growth,” Henchman said. search on the Economics of Taxation. alyst, argued that the study supporting The JLF plan would plow new He views both plans as workable Prior to that he was deputy assistant the Civitas plan shows major benefits. ground. “for the most part” and suggests both secretary for economic policy at the “One of the things they did in “It’s something that’s taught to would achieve “very similar” pro- U.S. Treasury De- the study that I students, and it’s in the books on the growth results. He declined to state partment, and was thought was in- theory of income tax. But it would be which plan he would prefer. a staff economist teresting was to with the Joint Eco- brand new if it were to be implement- JLF consumed income tax Gov. McCrory remodel the trajec- ed in North Carolina,” Henchman said nomic Committee of Congress. and legislative tory of North Car- The con- olina’s economy sumed income tax leaders say they since 2000,” Bal- is “a little prob- four said. lematic because want to pursue “If we had the feds don’t used this new tax have one,” so new tax reform plan instead of tax-return forms the tax plan we will need to be cre- actually had in ated, Entin said. “That would be an ad- place, they found, ministrative quirk.” for instance, total personal income in Henchman agreed and said the the state would be as much as $25 bil- JLF plan needs more detailed informa- lion more,” Balfour said. “Job growth tion about how the USA tax would be would have been as high as 378,000 administered. more relative to what we have today.” The “drawback” to the Civitas Regardless of which reform ap- plan, Entin said, is the business license proach gains favor — both are de- tax, which he views as a property tax signed to be revenue-neutral — he be- that “can chase business right out of lieves there will be stiff opposition. the state” because companies would “I suspect [the opposition] will be be stuck paying it whether they have a largely partisan,” Balfour said. good year or a dismal year. “There’s a couple differing kind “I’m a little leery of that portion of political philosophies on taxation. of the Civitas proposal,” he said. “It The left side of the aisle often looks at seems to me the consumed income tax personal income tax as welfare redistri- … would be the better thing.” bution [that] enables a social goal they Henchman also raised red flags have for evening out income,” Balfour about the Civitas business license fee. said. Liberals “are going to fight really “How they see it is a tax on busi- hard to preserve that.” CJ PAGE 16 FEBRUARY 2013 | CAROLINA JOURNAL Interview Salam: Serious Entitlement Cutting Runs Up Against Self-Interest

By CJ Staff RALEIGH onservatives and libertarians “I think that when you have compro- spend a lot of time talking about mise, we should approach it some- freedom: free markets, limited Cgovernment, personal responsibility. what differently. So, for example, Reihan Salam, author of National Re- view Online’s domestic policy blog, Republicans should not enter a ne- “The Agenda,” says much less of the discussion focuses on translating the gotiation preemptively saying, ‘Of principles of freedom into practical course we’re going to embrace tax in- policies. During a recent visit to Cha- pel Hill, Salam discussed these issues creases.’ That’s silly because you’re with Mitch Kokai for Carolina Journal Radio. (Head to http://www.carolina- giving up your leverage.” journal.com/cjradio/ to find a station near you or to learn about the weekly Reihan Salam CJ Radio podcast.) Author of National Review Online’s domestic policy blog, Kokai: Would you agree that “The Agenda” conservatives often shy away from the practical part of linking their principles to real policies?

Salam: Yeah, I think it’s a chal- lenge, partly because when you’re our schools at the margin? That’s a Salam: I have a somewhat idio- also helps advance really constructive, looking at these policy questions, kind of thing that Republicans need to syncratic view about this. One of the substantive policy goals as well. they’re immensely complicated, and think about more seriously. things that I believe is that we actu- you’ve got a lot of winners and losers, One issue with small-govern- ally need stronger political parties. So Kokai: If the parties are more from any reform that you’re going to ment Republicans is that, you know, one issue that you have, in our current ideologically pure, how do you en- launch. And some of those losers might we oftentimes talk in these very big, system, is because of campaign finance sure that conservatives can actually get be people who are Republican constit- ambitious, sometimes even apocalyp- regulation, or what other folks call things done when they don’t have the uents. And the thing about an affluent tic ways. And I think the problem is campaign finance reform, we have a White House or enough votes in Con- society is that an affluent society gets that, well, yeah, you can say, “I want very candidate-centered system. And gress? very loss-averse. No one wants to give small government,” but then say noth- so a lot of folks, a lot of candidates, up their piece of the pie. ing about the actual workings of the aren’t all that accountable to their po- Salam: That’s a really, really So, for example, when you think public schools and Medicare and what litical party. They’re really primarily good question. And I’d say that there about entitlement reform, well, look, have you. And really, you know, then interested in getting re-elected, and are a lot of folks who buy into what any entitlement reform that’s really go- you’re not really relevant to people’s that actually makes them kind of risk- you might call the Simpson-Bowles ing to save money over time is going to lives. And so then it sounds a lot like averse a lot of the time. Whereas if model — you know, the idea that, hey, be something that is going to disadvan- hot air, rather than like the kind of you have a stronger political party, my let’s just kind of reconcile what are the tage some people — whether they’re thing that’s really going to be better- sense is that it’s going to do a better job basic principles of these two sides and medical practitioners, whether they’re ing the lives of your average middle- of making trade-offs between achiev- sort of make it work from there. I’ve perhaps some beneficiaries. Even the income voter. ing your long-term ideological goals got to say, I think that doesn’t quite most well-designed reform is going to and winning elections, and, frankly, work. I think that, you know, I would Kokai: generate some losers as well as some Do conservatives and lib- disciplining candidates. think about let’s look at reforming the winners. And that is immensely diffi- ertarians spend too much time making So, you know, here in the South, filibuster in the Senate, you know, let’s cult for any politician, whether they’re the perfect the enemy of the good? in a state like North Carolina, a state look at building a coherent program ostensibly conservative or liberal. like Florida, you have quite a lot of Re- among members of one party or the Salam: Yeah, absolutely. And I publicans who go off the reservation other, before you get into office, so that Kokai: So it’s difficult, but we understand why. Because the thing is on issues like school choice and what you can really move the football down that there are a lot of folks who think, have you because they think, “Well, still have to translate ideas into poli- the field. I think that might be a better “Well, look, if we get stuck in this incre- I’m representing my constituents,” and cies. How do we do that? way to do it, and then you have a clear mental stuff then we’re just entrench- fair enough. But the thing is that if you choice for the electorate. ing the system.” You know, the idea have a stronger political party to guard Salam: Well, what you try to do I think that when you have that Newt Gingrich called Bob Dole the its brand, it might say, “Well, actually, is identify win-win solutions, to the ex- compromise, we should approach it tax collector for the welfare state, very no. Maybe you personally want to be tent possible. There’s an economist, Ja- somewhat differently. So, for example, memorably. And I think that’s an anxi- aligned with the public-sector unions, cob Vigdor, at Duke who’s done a lot of Republicans should not enter a negoti- fascinating work, as you know, about ety a lot of folks have. It’s like, wait a but you’re going to have to do that on ation preemptively saying, “Of course teacher salaries, teacher compensation second, we don’t want to compromise, your own time, and you’re going to we’re going to embrace tax increases.” in North Carolina. Now, you know, because by compromising we’re just have to do that outside of the bound- That’s silly because you’re giving up for a conservative or libertarian, your legitimating big government. And I aries of this political party because our your leverage. But, on the other hand, impulse might be, you know, gosh, we understand that, and it’s not an unrea- movement is about public-sector effi- if you have a sufficiently strong party, really need to introduce market prin- sonable argument. The problem is that ciency.” ciples in this space, and that’s certainly you actually have to persuade people. So I think that actually stronger someone like a John Boehner can say, something I believe. But between here And the surest way to persuade people political parties would be a good thing. “Look, you know, I believe that we’ve and there, you know, there are a lot of is, again, by demonstrating that your Now, of course what most people say actually managed to extract some sig- students who are in public schools and ideas, when put into practice, actually is that, “Oh, our political parties are too nificant concessions, and so we are who, I think, have good reason to want deliver results. strong. The system is too polarized.” willing to play ball.” But you need to those schools to be of better, higher And I actually don’t think that’s right. have a united caucus to do that, and quality. So what are some incremental Kokai: Given where things stand I think that having a clear distinction you need mutual trust within that cau- things that we can do that are not nec- today, what needs to change for the between the parties is actually a really cus, and that goes back to the impor- essarily too threatening, but that can conservative movement, the Republi- good thing, because it actually helps tance of having strong political parties. improve the workings of, you know, can Party, or both? clarify issues for voters, and it actually You need that trust. CJ FEBRUARY 2013 | CAROLINA JOURNAL PAGE 17 Higher Education Critics Question State’s COMMENTARY Texas Customized Job Training Roundup By Duke Cheston vice president of CTP, roughly 3,500 Contributor North Carolinians attended pre-em- he higher education reform say and his co-authors make many RALEIGH ployment training last year, and fewer world is starting to get keen observations and excellent he state of North Carolina’s Cus- than 1,200 found employment — a 34 crowded. It seems as if every arguments for specific policies or tomized Training Program, run percent hiring rate. timeT you blink your eyes, there’s a changes of direction by higher edu- by the state’s community col- This means that thousands of new organization focusing on the cation systems. His top recommen- reform of higher education. dation aims at reversing higher Tleges, has come under fire lately. Some North Carolinians are being trained There’s a very good reason education’s failure to produce an prominent critics contend that it is — every year to work in jobs that they for that: Higher education badly informed citizenry. Many of the at least in part — a wasteful way to never will get. needs reform. At the Pope Center nation’s problems would disappear promote economic development in the The “realistic job previews” rep- for Higher Education Policy, we if our educated elite understood state. resent a small part of the CTP program. believe the more eyes focused on the “moral and intellectual foun- Each year, the CTP program In her Dec. 14 Triangle Business Journal the problem, the better. We’re free- dations of the American theory of spends $12.4 million in state tax mon- guest column responding to Mukher- market types — we like competi- justice.” Instead, Lindsay reveals, ey to train North Carolinians to work jee’s criticism, Little pointed out that tion. “most colleges in the country today at specific companies. The training only 19 companies (out of 261 involved One of our newer friendly do not even require an introduc- is conducted at community colleges with the program) used the “realis- competitors is the Texas Public tory course in American govern- and consists of two parts. One trains tic job preview” service last year. The Policy Foundation’s Cen- ment.” employees who already work for the larger part of the program is post-em- ter for Higher Education. His second area of companies, working to improve their ployment training. In recent years, Texas concern is what might be efficiency, knowledge of safety pro- Mel Collins, vice president of has been one of higher called the Holy Grail of education’s innovation higher education reform: cedures, or other human resources hothouses, implement- finding meaningful out- skills. at Pharr Yarns in ing such concepts at the come measures, particu- The second Gaston County, state university level larly those that measure part, “pre-em- Critics of the praised the pro- as full transparency for student learning. ployment train- program complain gram highly. Pharr professors — including Lindsay and his ing” or “realistic Yarns has worked public online posting of JAY co-authors also zero in on job previews,” is that too many with CTP for about syllabi and student evalu- the array of reasons driv- for people who are 20 years, a time of ations, $10,000 bachelor’s SCHALIN ing up the cost of higher not working at the people are dramatic improve- degrees, and more. TPPF education (which are company; it is part ments in manufac- has played a large part in passed on to either stu- training and part trained and turing technology. this spirit of innovation. dents or taxpayers). These include extended job inter- Collins said Pharr Last year, the Center for faculty members’ teaching loads; view. interviewed, Yarns’ collabora- Higher Education cranked up its according to Vedder’s Center for P o t e n t i a l tion with Gas- profile by hiring former Shimer College Affordability and Produc- but never College president and National tivity, “between 1988 and 2004, it employees are ton Community Endowment for the Humanities is estimated that teaching loads trained to work get hired College has been deputy chairman Thomas Lindsay fell 42 percent,” while nonfaculty for companies helpful in keeping to be its director. In December, staffing — whose numbers now that may or may up with techno- he released a report laying out exceed those of professors — and not decide to hire logical improve- his intended areas of focus, titled administrative salaries increased them. Both types of CTP projects typi- ments and the industry’s best prac- “Toward Strengthening Texas “as much as 50 percent” between cally last 12 to 24 hours — two or four tices. “It was just amazing, the level Public Higher Education; 10 Areas 1998 and 2003. hours per day spread over one to two of cooperation, collaboration,” Collins of Reform.” Lindsay is the primary Lindsay and his co-authors weeks. Most of the time, community told the Pope Center for Higher Educa- author, with contributions from also promote greater transparency college instructors conduct the train- tion Policy. Richard Vedder, Richard Bishirjian, — a crucial step if higher education ing sessions, but outside contractors Businesses support the CTP pro- and Harry Stille. is ever going to mend its wasteful sometimes are called in when special gram enthusiastically. In fiscal year For the most part, Lindsay’s and ineffective ways. Along with expertise is needed. According to pro- 2012, 98 percent of surveyed compa- analysis of higher education’s student learning outcomes, they problems is spot on. One thing also favor making employment gram officials, the average cost per nies rated the Customized Training missing from the report, however, outcomes public, in which state trainee last year was $370.91. Program as “very good” or “excellent.” is any mention of one of higher funding will depend upon “the Each time CTP sets up a “realis- Collins also said that North Carolina’s education’s most glaring problems: employment and earnings of its tic job preview” to assist a company, Customized Training Program is supe- Much of higher education is un- graduates.” This is quite radical it assigns a training budget assuming rior to similar programs in other states. necessary, but still is being pushed and intriguing — how much of an that only one in four trainees will be Pharr Yarns has operations in North as something everybody should improvement over straight enroll- hired. This has led critics such as Tri- Carolina, South Carolina, and Califor- pursue. The educational and po- ment funding it is remains to be angle Business Journal editor Sougata nia, but he said North Carolina’s pro- litical establishments continue to seen, but at least it’s an attempt Mukherjee and John Locke Foundation gram has been most helpful. encourage young people who have to base funding on a meaningful president John Hood to complain that Still, although proponents claim no interest in academic pursuits outcome. because many potential employees are that CTP has helped lure businesses and who have shown little promise Lindsay and company’s trained but never hired, both tax dol- to the state, the evidence is scanty. in high school to chase academic recommendations would go a long lars and the time of the trainees are be- Proponents have not cited a single degrees. Furthermore, even if such way toward improving academia. ing wasted. “If an official says that a 25 business that will say CTP was a de- students complete their degrees, The question is whether any they do so in programs that offer universities care about improving percent success rate is the best the pro- cisive factor in its decision to locate in little hope for professional career- enough to adopt them. CJ gram can do,” wrote Mukherjee, “that North Carolina. CJ track employment. Even worse, official loses all credibility with me.” many such students wind up Jay Schalin is director of state It turns out that a slightly higher Duke Cheston is a writer for the deeply in debt. policy analysis for the John W. Pope proportion ends up being hired. Ac- John W. Pope Center for Higher Education Such objections aside, Lind- Center for Higher Education Policy. cording to Maureen Little, associate Policy. PAGE 18 FEBRUARY 2013 | CAROLINA JOURNAL Higher Education Campus Briefs UNC Pilot Accountability Program Bearing Fruit ssessment scores report- ed by the UNC system By Jenna Ashley Robinson Generally viewed as the most [CLA] test does measure — are pretty Contributor campuses: effective test is the Collegiate Learn- important.” A• Appalachian State Uni- RALEIGH ing Assessment — the assessment that Moreover, postgraduate out- versity freshmen scored 1205 on learning accountability pilot Richard Arum and Josipa Roksa used comes mirror CLA results, Arum and the Collegiate Learning Assess- program is bearing fruit in the in their book Academically Adrift. Arum Roksa found. “For example, students ment, compared to 1278 for se- UNC system. and Roksa’s work revealed that, na- in the bottom quintile of CLA perfor- niors. AIn 2007, U.S. Secretary of Educa- tionally, today’s college students show mance as seniors are more than three • East Carolina Univer- tion Margaret Spellings and the Spell- little to no academic progress by their times as likely to be unemployed two sity freshman scored 1030 on the ings Commission on the Future of sophomore year. The ten UNC cam- years after college than graduates CLA, compared to 1146 for se- Higher Education took steps toward puses that have provided information whose CLA scores were in the top niors. requiring universities to show evidence on learning outcomes have done so by quintile; they were also twice as likely • Elizabeth City State Uni- that students are learning while they’re reporting their CLA scores. to be living back at home with their versity students took the ETS enrolled. In order to fend off federal CLA assesses students’ abilities parents,” Arum said. Proficiency Profile, but had not regulation, uni- to think critically, The members of the Strategic Di- reported results as of Jan. 17. versities created reason analyti- rections Committee of the UNC Board • Fayetteville State Uni- a Voluntary Sys- cally, solve prob- of Governors included CLA in their versity did not administer the tem of Account- lems, and com- new five-year plan. That plan calls for ability, which municate clearly CLA until 2010. Results will be another pilot study to begin in fall 2013, was designed to and cogently. available in 2014. using a revised version of CLA. That • North Carolina A&T persuade a large CLA is made up study will involve five schools and State University students par- number of uni- of four sections: will address the one serious drawback ticipated in the Wabash National versities to publi- a performance of CLA — the difficulty in motivating Study, but had not reported re- cize their success. task, an analyti- students to take the tests seriously. sults as of Jan. 17. In 2007-08, cal writing task, Going forward, the board and • N.C. Central University the UNC system a make-an-argu- students took the Collegiate As- took several steps ment section, and General Administration will have to sessment of Academic Proficien- to meet the ac- a critique-an-ar- consider whether to require partici- cy, but had not reported results countability standard. The university’s gument section. Scores are aggregated pating universities to publish learning as of Jan. 17. General Administration covered the at the institutional level to show how assessment results — and how to do • N.C. State University costs for each school to evaluate stu- large groups of students are perform- so. At a January meeting of the board, freshmen scored 1117 on the dent learning as part of participating ing. After controlling for college en- members of the Strategic Directions CLA, compared to 1235 for se- in the Voluntary System of Account- trance scores (SAT or ACT), freshmen’s Committee and General Administra- niors. ability pilot program. scores are compared with graduating tion indicated that increasing trans- • UNC-Chapel Hill de- The schools were expected to seniors’ scores to obtain the institu- parency of student learning outcomes clined to post CLA results. measure learning outcomes using one tion’s contribution to students’ results. would be a priority in the coming • UNC-Asheville fresh- of several available assessments. They Students’ entrance scores help CLA to years. men scored 1188 on the CLA were told to provide “clear, accessible, determine whether a university is at, The Strategic Directions Commit- compared to 1332 for seniors. and comparable information on the above, or below expected performance. tee will present its final report to the UNC • UNC-Charlotte fresh- undergraduate student experience.” In December, Microsoft founder Board of Governors in February. CJ men scored 1054 on the CLA That information was to be posted on Bill Gates endorsed the CLA method. compared to 1138 for seniors. the VSA’s website CollegePortraits. He wrote on his blog, The Gates Notes, • UNC-Greensboro fresh- org. “most people would agree that skills Jenna Ashley Robinson is director of men scored 113 (out of 130) on Ten schools have reported learn- like critical thinking, complex rea- outreach for the John W. Pope Center for the ETS Proficiency Profile, com- ing outcomes thus far. [See Campus soning, and writing — the things the Higher Education Policy. pared to 116 for seniors. Briefs.] When participating in the VSA, • UNC-Pembroke fresh- institutions have four years after initial men scored 992 on the CLA, sign-up before they are required to re- compared to 1144 for seniors. port student outcomes. • UNC-Wilmington fresh- For the UNC system, this is the men scored 1089 on the CLA, first year its campuses are required to compared to 1201 for seniors. report results publicly. UNC-Chapel • UNC School of the Arts Hill declined to post its CLA results, did not administer any of the officials said, “because campus lead- three VSA Pilot-approved Stu- ers/faculty believed the test results dent Learning Outcomes assess- weren’t representative” even though ments because of concerns about the study used statistically sound and the time investment and because publisher-recommended sample sizes. the results “were perceived as Going forward, schools will update re- not useful or not good measures sults every three years. for our campus.” Schools have many options for • Western Carolina Uni- measuring student learning, includ- versity freshmen scored 1073 on ing national surveys, alumni surveys, the CLA, compared to 1158 for portfolios, employer surveys, and aca- seniors. demic performance indicators like re- • Winston-Salem State tention, completion, and transfer rates. University freshmen scored 882 The VSA relies on three widely ac- on the CLA, compared to 1029 cepted standardized assessment tests. for seniors. CJ Many schools use these measures, but ­—JENNA ASHLEY ROBINSON in the past, few made the results pub- lic. FEBRUARY 2013 | CAROLINA JOURNAL PAGE 19 Higher Education Opinion Some New Year’s Resolutions for Improving Higher Education he New Year is still young, and mission is to be 5. Review the CLA. The UNC system should we at the Pope Center have a carried out; out- faculty work require this test and its publication in few resolutions for 2013. Here comes measures Issues loads and set the future. Tare eight things we would like to see and standards; higher standards. 7. Cut duplication of low-en- change about higher education this organizational in Between 1988 rollment courses. year: charts; and how Higher Education and 2004, teaching One potential area for cost 1. Increase academic transpar- programs get and loads for profes- savings is subjects that don’t attract ency. spend their funds. sors at research many students. A model method for Selecting classes is difficult for It would be just universities fell by realizing these savings is an online consortium called the UNC Foreign students, partly the sort of thing to about 44 percent, Language Assembly. because they must hold officials’ feet according to Na- By using the Web, students tional Center for Education Statistics make decisions to the fire. throughout the system are able to 3. Cut frivolous classes. based on very data. In response to the trend, the N.C. take classes even in relatively obscure short course de- Should state taxpayers be sub- legislature passed a 1995 law instruct- languages. UNC Board of Governors scriptions from the sidizing a class called “Pornography ing the Board of Governors to monitor member Phil Dixon estimated that university’s course and Culture”? What about “Dogs and work loads. The board subsequently pooling resources in this way could catalog. If profes- People: From Prehistory to the Urban- set standard teaching loads for profes- save millions. It’s worth exploring. sors were required ized Future”? These classes have been sors, but the standards are low and 8. Increase the minimum SAT to post course syl- taught at UNC-Chapel Hill in recent apparently poorly enforced. or ACT scores required for accep- labi online before DUKE years. Teaching and research, profes- tance at UNC schools. students made It may be going too far to dis- sors’ two main activities, are both Standardized tests are controver- course selections, CHESTON miss classes like these as frivolous, important, but there is an institutional sial, but they remain the best predic- or if they at least knowing only the title of the courses, bias favoring research: promotions, tors of how well students will fare in posted a moder- but if the course titles bear any resem- tenure, and college rankings depend college. The College Board estimates ately detailed course synopsis, things blance to what is actually taught in on it. Well-enforced teaching loads are that students should score at least would be a lot easier. If syllabi were those courses, we probably are wast- a good way to check that bias. 1030 on the SAT (or the ACT equiva- public, it also would make colleges ing some state tax dollars. 6. Make the College Learning lent) to have a decent chance at col- lege success, but many college-bound more accountable to taxpayers. 4. Provide remedial education Assessment a permanent fixture at 2. Increase financial transpar- at community colleges only. UNC. students score well below that. The UNC system already has ency. How much are students learning Remedial classes are intended to a minimum SAT score: 750 for the in the UNC system? No one knows for Sunshine is the best disinfec- help students “catch up” and be- current academic year, moving up to tant. To that end, the North Carolina come college-ready. They don’t count sure. A standardized test by which the 800 for 2013 and beyond. We think it General Assembly already has a way toward a degree, they don’t count gains in knowledge and reasoning by would be a good idea to increase it to, of increasing transparency: the Ac- for credit, and they are expensive, students, programs, and universities perhaps, 900. That would keep it be- countability for Taxpayer Investment often requiring intensive one-on-one can be weighed properly against each low the college readiness threshold set Act, which passed the North Carolina instruction. They don’t belong at four- other is needed for a true evaluation. by the College Board and ACT, but de- State Senate last session but stalled in year universities. In the Pope Center’s judgment, the termined students could go back and the House. Community colleges educate Collegiate Learning Assessment is the take the test again. CJ The act would require that state students at a much lower cost to stu- best. agencies place specific information dents and taxpayers. If college-bound UNC schools have been told to on a public website. The information students need remedial education, report on some outcome measure, Duke Cheston is a writer for the would include: a mission statement; they should head to community col- and ten have reported the results of John W. Pope Center for Higher Educa- a step-by-step model for how the leges first. a pilot test, although not all are using tion Policy (popecenter.org). PAGE 20 FEBRUARY 2013 | CAROLINA JOURNAL Books & the Arts

From the Liberty Library Book review

• The media dropped the ball in covering the 2012 election, Forbes and Ames Show Virtues of Economic Freedom writes David Freddoso, editorial page editor of The Washington Ex- • Steve Forbes and Elizabeth Ames, Freedom Manifesto: Why phemistic language of their opponents, language that helps aminer, and in doing so the media Free Markets Are Moral and Big Government Isn’t, Crown Busi- them shape the debate. For example, they use the word failed to keep politicians honest ness, 2012, 292 pages, $26. “statist” to refer to people like Obama rather than nicer- and the public well-informed. sounding but misleading terms like “liberal” or “progres- Freddoso’s Spin Masters: How the By George Leef sive.” Regaining clarity in language is part of our task, so Media Ignored the Real News and Contributor Forbes and Ames insist on using accurate terminology. Helped Reelect Barack Obama will RALEIGH Freedom Manifesto consistently makes the point that be the most provocative and ac- finished readingFreedom Manifesto at the end of the 2012 the big-government agenda is neither liberal nor progres- curate take of just how Barack presidential campaign. That campaign was marked by a sive, but authoritarian. It depends exclusively on coercion. Obama managed to get re-elected, full-throated hymn of praise to the supposed goodness The authors keep our minds focused on the fact that all of and how the media helped him Iand necessity of the expanding federal leviathan by Dem- the laws, regulations, and taxes imposed on us are done do it. Freddoso fills this volume ocrats. On the other hand, the losing Republicans offered through force. with dozens of real stories that voters a timorous defense of free enterprise and personal The backbone of Freedom Manifesto is its steady argu- inquisitive reporters should have liberty. ment that the way the statists have conditioned us to think relished but that the liberal press The entire, pathetic spectacle of the campaign showed about government and the private sector is wrong. The didn’t bother to cover. More at just how badly advocates of capitalism and limited govern- book abounds in examples. Among them: www.regnery.com. ment are losing the battle of ideas. We are losing because Do government officials work selflessly for the public our opponents advance a quadrant of falsehoods that they good? Forbes and Ames show that very often they do not. • Across the Atlantic, Ameri- have cultivated for more than a century. Those are: Instead, they work for their own benefit, usually in conjunc- cans see European economies • Government officials work for the public good, not tion with special interest groups. They support each other faltering under enormous debt, profit, and thus are morally pure. and share the gains, which come at overburdened welfare states, • Private action, especially by the expense of society at large. governments controlling close to business, is driven by greed and is Among many examples is the 50 percent of the economy, high therefore at best morally suspect, and housing bubble, which the authors taxation, heavily regulated labor often morally bad. show was a political debacle from markets, aging populations, and • Private actions lead to serious start to finish, with politicians and large numbers of public-sector societal problems, such as inequality, interest groups conniving for short- workers. They also see a European economic instability, and unsafe prod- run benefits. When the bubble political class seemingly unable ucts. burst, the damage was inflicted on to implement economic reform. • Government laws and regula- millions of innocent people. Americans are increasingly asking tions can solve the problems created by What about private, profit- themselves: “Is this our future?” the private sector. seeking business ventures? Aren’t In Becoming Europe, Samuel Gregg So-called “progressives” have they morally tainted? No, argue uses the idea of economic culture worked ceaselessly, largely through the authors. As long as people in — the values and institutions — their dominance in education and the that inform our economic priori- business do not resort to force or media, to propound that set of beliefs. ties to explain how European eco- fraud, they can prosper only if The great virtue of Freedom Manifesto is nomic life has drifted toward what they persuade others to buy their Alexis de Tocqueville called “soft that it takes precise aim at those beliefs products or services. The success despotism,” and the ways similar in arguing, as the book’s subtitle says, of capitalism not only raised living trends are manifesting themselves “Why free markets are moral and big standards for nearly everyone, but in the United States. Learn more at government isn’t.” also catalyzed widespread charity www.encounterbooks.com. Well-known publisher and busi- to help the needy. ness commentator Steve Forbes along There is nothing morally • Award-winning author with co-author Elizabeth Ames give us wrong in earning profits, and capi- Paul Kennedy provides a new and a cornucopia of facts to use against big- talism brings about cooperation unique look at how World War II government advocates, but also an in- among people and demonstrates was won. Engineers of Victory is a tellectual framework for regaining the that mutual gains are possible fascinating nuts-and-bolts account upper hand in the battle for the nation’s soul. when people trust each other. Governmental coercion ac- of the strategic factors that led to Here is their framework — attack those four pillars of complishes none of that. Allied victory. Kennedy reveals progressive ideology by showing that in truth: Is capitalism at fault for our social and economic prob- how the leaders’ grand strategy • Private action through free markets (and other vol- lems? No, the problems blamed on it are almost always was carried out by ordinary sol- untary means) is morally good and actually raises the moral rooted in government actions that have disturbed the natu- diers, scientists, engineers, and plane of society. ral balance we find under capitalism. Health care and insur- businessmen. In January 1943, • Government action often is driven by base motives, ance are a perfect example. The system prior to Obamacare FDR and Churchill established the using coercion to achieve greedy, anti-social ends, and as was quite dysfunctional, but that’s only because of perva- Allied objectives for the war: de- that process grows, society loses its moral compass. sive government meddling going back to World War II. feat the Nazi blitzkrieg; control the • Private action is innovative and remarkably effective Finally, is government good at solving problems? Atlantic sea lanes and the air over in solving social and economic problems. western and central Europe; take • Government action impedes innovation and creates Quite the opposite. Forbes and Ames point to one of my fa- the fight to the European main- new social and economic problems where none would exist vorite illustrations, namely the college debt problem, which land; and end Japan’s imperialism. otherwise. wouldn’t exist if government didn’t make artificially cheap Astonishingly, a little over a year In short, Forbes and Ames argue that we need to tear loans available. Its “solution” (more subsidies coupled with later, these ambitious goals had down the belief structure that supports President Obama “loan forgiveness”) will make matters worse. nearly all been accomplished. Ken- and others who relentlessly push for more government Freedom Manifesto aims to change the national conver- nedy uncovers the real heroes of power. Every page in the book makes that case through sation about the role of government and does so brilliantly. the war, highlighting the creative their four counter-ideas. It’s rather like a great musical America will slide further and further into the statist morass strategies, tactics, and organiza- theme-and-variations composition — a veritable “Goldberg unless we can get people to think sensibly about the few tional decisions that made the lofty things government should do and the many things it should Allied objectives a reality. More Variations” for Americans who want to make the strongest not. at www.randomhouse.com. CJ arguments they can against statism. Statism. It’s worth a moment to discuss the book’s Buy this book and absorb its message if you want to vocabulary and tone. The authors refuse to adopt the eu- help change the way people think. CJ FEBRUARY 2013 | CAROLINA JOURNAL PAGE 21 Books & the Arts Founders Believed Second Amendment Main Protector of Liberty he meaning of the Second own a firearm for sport, hunting, or lated,” Tucker wrote, “is on the brink arms and allowed for a state militia. Amendment is being debated personal protection. (This is not abso- of destruction.” To Tucker, the Sec- The Seventeenth Declaration of Rights once again. Other than in gener- lute; for instance, felons cannot own ond Amendment is the linchpin that in the 1776 North Carolina Constitu- Tal terms, few discuss the amendment’s firearms legally, and respective states, ensures the existence of all the other tion reads: “That the people have a origins, the reasons for its inclusion in wisely or unwisely, can regulate gun liberties. right to bear arms, for the defense of the Bill of Rights, or how the constitu- ownership without violating the Sec- Tucker was not alone. Although the state; and as standing armies, in tional framers and ond Amendment.) U.S. Supreme Court Justice Joseph time of peace, are dangerous to liberty, ratifiers and early What did early Story believed the they ought not to be kept up; and that jurists interpreted jurists and constitu- national government the military should be kept under the amendment. tional commentators should have more strict subordination to, and governed But such a discus- say regarding the authority than did by, the civil power.” Declaration of sion gets to the Second Amend- Tucker, both jurists Rights 13 in the 1776 Pennsylvania heart of the matter. ment? St. George interpreted the Sec- Constitution is more explicit: “That The Second Tucker in View of the ond Amendment as the people have a right to bear arms Amendment Constitution of the liberty’s safeguard. for the defense of themselves and the reads: “A well- United States (1803), In 1833, Story noted state. ... ” regulated militia, the first systematic in his influential Americans, of all political stripes being necessary to TROY commentary on the Constitution after Commentaries of the Constitution: “The the security of a KICKLER its ratification, describes the Second right of the citizens to keep and bear and regions, believed that the Sec- free State, the right Amendment to be “the true palladium arms has justly been considered as the ond Amendment was necessary for of the people to keep and bear arms, of liberty.” palladium of the liberties of the repub- individuals and states to ensure that shall not be infringed.” As the preservation of the statue lic, since it offers a strong moral check other liberties were protected and to “Gun controllers” interpret of Pallas in mythological Troy — the against the usurpation and arbitrary prevent tyranny from encroaching on “militia” to be a professional unit such Palladium — needed to be protected power of rulers, and will generally, other liberties. as the National Guard. The National for the ancient city’s preservation, so even if these are successful in the first For a more in-depth essay Guard Association was not formed the Virginian believed that the amend- instance, enable the people to resist exploring the ideas of the Founders until 1878, however, and the whole- ment ensured liberty’s protection in and triumph over them.” regarding the Second Amendment, sale nationalization and professional- the United States. If the nation had These jurists repeated a wide- please visit northcarolinahistory.org’s ization of the militia, the modern-day a “standing army” — Revolution- spread interpretation that had been home page. CJ National Guard, did not occur until ary era-Americans’ description for a practiced by the states. The first state the Dick Militia Act of 1903. full-time, professional army — while constitutions — which remained Many “gun rights” Americans individual Americans were denied unaltered and in effect after the Con- Dr. Troy Kickler is director of the claim a broad, individualist interpre- the “right to keep and bear arms,” stitution’s ratification — protected North Carolina History Project (northcar- tation: Each American has a right to then “liberty, if not already annihi- individual rights to possess and bear olinahistory.org).

More research at your fingertips at the redesigned John Locke Foundation home page You can now search for research by John Locke Foundation policy analysts much easier than before. Our new web page design allows you to search more efficiently by topic, author, issue, and keyword. Pick an issue and give it a try. Or choose one of our policy analysts and browse through all of their research. Ei- ther way, we think you’ll find the infor- mation presented helpful and enlight- ening. http://www.johnlocke.org PAGE 22 FEBRUARY 2013 | CAROLINA JOURNAL Books & the Arts Book reviews Phillips: 1775 Was Year That Spawned The War For Independence • Kevin Phillips, 1775: A Good Year for the very important ethnic component in that area largely were discontented Carolinas, though, the later stages of Revolution, Viking, 2012, 628 pages, the churches represented. “[It’s] often with the present government, which the war had a score-settling vindictive- $36. difficult to disentangle which identity had sent corrupt officials to rule them ness which surprised both sides. The was the motivating factor,” he writes. and left them often at the mercy of rov- Carolina Piedmont was particularly By Hal Young “Was being Scotch-Irish the key or be- ing bandits and raiding Cherokee. unstable, and the divided Cape Fear re- Contributor ing a staunch Presbyterian? Sometimes While the British eventually saw gion was full of Scottish loyalists, with RALEIGH a political or military service choice that inland settlers’ anger toward coast- Wilmington a hotbed of Whigs nearby. he American Revolution was not might reflect both influences.” al elites could be used against the Patri- Whatever New England looked like, it a crime of passion, and it should Most of the German and Celtic ots, in their isolation they were unable was internecine war here. be a well-understood fact that immigrants to to recognize the In this very detailed narrative, 1776T was a milestone, not the start- America did not unique troubles Phillips recalls a plethora of interesting ing point, of the Revolution. Political come to form re- of each region; ideas. When Britain was forced to hire historian Kevin Phillips believes most ligious colonies Phillips writes mercenaries, the infamous Hessians of us don’t appreciate that detail, and as such, but the “only subtle and were King George’s second choice; he his new book 1775 is meant to explore natural prefer- well-informed asked the Russians first. Either way, the the numerous precursor events and ence to settle British strat- use of foreign troops against supposed streams of thought which led to the with people who egy could have Englishmen solidified opposition to more-acclaimed year of the Declara- shared a culture maximized” the the king in many colonial homes. Also, tion. and a language situation for the the success or failure of the Revolution Phillips believes that 1775 has (remembering Crown, which hinged largely on the Patriots’ ability been over- that many from was represented to buy or capture firearms and other looked in favor Scotland and by the same cor- munitions. While the British had their of a “Spirit of Ireland brought own logistical nightmares, the Ameri- ‘76” mythology: their Gaelic rupt and inept officials who cans’ desperate need for military sup- Bluntly tongue with plies consumed British resources to put, much of them) tended brought about guard or blockade them — ultimately, ‘the history’ of to form pockets tensions in the without success. And at every level, the American of Presbyteri- first place. the economic stress that started long R e v o l u t i o n ans, Lutherans, “On the before the war only grew during the suffers from and German Re- other hand,” conflict. By 1780, Phillips says, many distortion and formed believ- Phillips admits, omission tied Kevin ers. The spread “five years hence former colonists may have been asking to the 20th Phillips of Baptist sepa- in 1780 and 1781, if self-determination was such a great century’s ex- ratists through British policy- idea after all. cessive immersion in 1776 as a moral the backcountry makers brought “Had the policymakers of 1775 and ideological starting point. If July crossed ethnic boundaries, but in all about a prolonged civil war in the two better understood the economic strains 4 of that year is truly the nation’s cases, the common thread of elected Carolinas along similar fault lines.” He and damages to follow from fighting birthday, then 1775 was little more leadership for churches and their sur- devotes a chapter to the question of the mother country, they might not than a number of months in utero. rounding communities produced a whether the conflict rising in the 1770s have wanted to gamble,” he concludes. And this it categorically was not. taste for democracy. was a civil war rather than a revolu- “But 1775 was the year to do so, with … [Rather], in many respects, 1775 Even among the plantation-belt tion, noting that “Over one-third of the the political, global, and military stars was more important than 1776 Anglican community, there were frac- colonists taking up arms for ‘the rights in alignment; it was the critical year [author’s emphasis]. tures between the high-church party of Englishmen’ were German, Dutch, for an American Revolution. No other Rather than fastening on one or which hungered for an American Irish, Scottish, or Scotch-Irish.” In the would have proved so fruitful.” CJ two keys to understanding the why of bishop, while the low-church con- the Revolution, Phillips embraces them gregations were well-pleased to rule all. In the years 1774-75, he says, “no themselves through vestries of elected sweeping one-dimension explanation laymen rather than ordained clergy. Ef- … works everywhere, all of the time, forts to call an American prelate, nec- or even most of the time. If anything, essarily a representative of the king, Share your CJ the upheavals of 1775 were laborato- met with surprising resistance among ries for the complexity of local behavior these “vestry Anglicans” and split the and Revolutionary motivation.” larger Established Church community. Take the role of religion. Phillips “We can fairly say, based on the Finished reading all notes that scholars from the 19th cen- patterns of political faction, that reli- tury onward have tried to downplay gion — though only a collateral cause the great articles in this the role of religion, particularly the of the Revolution — played a major hard-line Calvinism common to New role in guiding its political alignments month’s Carolina Jour- England Congregationalists and back- and loyalties,” Phillips says. This was country Scotch-Irish Presbyterians not a reprise of the religiously driven nal? Don’t just throw it alike, as a factor in the Revolutionary English Civil War, but neither was it a movement. The level of conviction of secular event. in the recycling bin, pass 17th- and 18th-century believers is just The backcountry experience incomprehensible to modern readers, played a pivotal role — one that swung it along to a friend or they think, but Phillips says neverthe- both ways. The royal governors, sur- less, “Perhaps the history of religion rounded by wealthy, high-church An- neighbor, and ask them in American war and politics needs a glicans in their coastal cities, were con- rebalancing.” fident that Patriot rabble-rousers were to do the same. In his argument, Phillips brings outnumbered by loyal king’s men, and out not only the doctrinal inclinations they failed to grasp the level of resent- Thanks. of the evangelical churches, but also ment pooling in the upcountry. Settlers FEBRUARY 2013 | CAROLINA JOURNAL PAGE 23 Books & the Arts Book review MIT Professor’s Alone Together Shows Dark Side of Technology • Sherry Turkle, Alone Together: Why We Expect More line world. Another chapter describes online confes- From Technology and Less From Each Other, Basic sional sites that allow users to post their most pain- Books, 2012, 384 pages, $16.99 paper. ful, intimate secrets anonymously. “At the screen, you have a chance to write By David N. Bass yourself into the person you want to be and to imag- Contributor ine others as you wish them to be, constructing them RALEIGH for your purposes,” Turkle writes. “It is a seductive ho knew, two decades ago, that “distracted but dangerous habit of mind. When you cultivate walking” would be a growing problem in this sensibility, a telephone call can seem fearsome the 21st century? because it reveals too much.” WIt’s everywhere: people walking with smart That’s the dark side of our new digital para- phones in hand, texting, posting a status update to dise. Is the companionship of a robot, however easy Facebook, or checking the weather, oblivious to peo- and convenient, any match for the love and care of ple and traffic around them. It’s concrete evidence of another human being? Are those multiple digital our hypertechnological society. connections as fulfilling as a face-to-face conversa- Putting aside the danger factor, many would tion with a real person, in real time? see distracted walking as part of a larger good: gad- In our tech-saturated world, people are asked gets that allow us to connect with our loved ones in out through Facebook and broken up with through ways unimaginable even five years ago. Yet there is text message. There is a large degree of coldness. a dark lining. MIT professor Sherry Turkle discusses Something important — the human soul — is miss- the downsides of tech in her new book Alone Togeth- ing. er: Why We Expect More From Technology and Less From Partly due to all of the technological distrac- Each Other. tions, the modern American family is as connected While a bit dense in places, Alone Together still yet disconnected as ever, another aspect explored presents a worthy exploration of the issues surround- find moments of solitude, time when other people by Alone Together. The majority of homes have two ing modern connectivity. The first section deals with are showing us neither dependency nor affection,” breadwinners, and family time has diminished. Di- the advent of robotics and the trend of people by- Turkle writes. “In solitude we don’t reject the world vorce — sometimes multiple divorces — is common, passing real relationships for those of mechanical but have the space to think our own thoughts. But if and children sometimes are shuffled from parent to origin. (Consider the recent controversy surrounding your phone is always with you, seeking solitude can parent with little sense of stability. Notre Dame football star Manti Te’o and his online Even in stable homes, we’ve allowed technolo- “girlfriend.”) look suspiciously like hiding.” The second section — far more interesting to One enticing aspect of digital connections gy to invade. “These teenagers grew up with parents this reviewer — explores how networked our lives is their presumed safety and expediency. In real who talked on their cell phones and scrolled through have become, and how much we’ve lost as a result. life, one has to invest time and emotional energy messages as they walked to the playground,” Turkle One of Turkle’s best points relates to the dichot- in a friendship or relationship. Then, it might end writes. “Parents texted with one hand and pushed omy of technology: It makes our lives simpler, yet abruptly with little to show for it. But in the digital swings with the other. They glanced up at the jungle more complex. In fact, the newfound simplicity and world, connections are simple and made to order. Or, gym as they made calls.” efficiency created by modern devices actually lead to as Turkle puts it, there is “companionship with con- In this atmosphere, it’s little wonder that young more complexity, as we try to do more, say more, and venience.” people increasingly turn to the virtual, electronic manage more. “A robot will always be there, amusing and world for connection. It’s safer, more stable, and Solitude is a foreign concept when we con- compliant,” she writes. “On the Net, you can always more responsive than their parents. tinually are connected. Time for sitting alone, just to find someone.” In the end, Turkle concludes that we must return think, is difficult when the cell phone is turned on Turkle’s point is underscored by the online to the importance of “solitude, deliberateness, and liv- and the laptop nearby. game “Second Life,” which allows players to create ing fully in the moment.” We should control technol- “A stream of messages makes it impossible to virtual identities and live second lives in a fake on- ogy, not the other way around. It’s good advice. CJ Books authored By JLF staFFers Free Choice for Workers: Selling the Dream A History of the Right to Work Movement Why Advertising is Good Business

By John Hood President of the John Locke Foundation By George C. Leef Vice President for Research at the John William Pope Center for Higher “[Selling the Dream] provides a Education Policy fascinating look into the world of advertising and beyond ... “He writes like a buccaneer... Highly recommended.” recording episodes of bravery, Choice treachery, commitment and April 2006 vacillation.” Robert Huberty www.praeger.com (Call Jameson Books, 1-800-426-1357, to order) Capital Research Center PAGE 24 FEBRUARY 2013 | CAROLINA JOURNAL Opinion

COMMENTARY Unrealistic Employment Expectations

“I’m highly educated, very quali- worker is great, though an ad- fied. I don’t need training. I need a job.” vanced degree in ancient Chinese pottery or 19th-century feminist hat matter-of-fact statement theater might not be the best prepa- stood out among dozens of ration for the 21st-century work comments addressed recently force. toT a legislative committee looking The point, though, is not to into the best way for North Carolina pick on a particular unemployed to repay its $2.5 billion debt to the worker. Instead, I suspect that her federal government for unemploy- attitude about her current job pre- ment insurance benefits. dicament is a common one. The speaker who uttered these You’ve heard the message: Go three short sentences was not the to college, and boost your lifetime only unemployed person earning potential. You’ll EDITORIAL to address the commit- make much more money tee. Nor was she alone during the course of your in urging lawmakers to working years. reconsider options that Ask how much License would involve reducing education is enough, the maximum amount and you’ll likely hear the of future unemployment answer “more.” Ask what To Stifle benefits. kind of education, or what What struck this basic skills that dollar- ov. Pat McCrory and Republi- landscape someone’s lawn for money? listener as particularly MITCH generating education must can leaders of the 2013 General Moreover, in many instances, Assembly seeking an inexpen- licensing boards are not responsive interesting about her KOKAI include, and the answer is Gsive way to create jobs and expand en- or accountable to the public when comments was the degree even less clear. trepreneurship would do well to scrap its members allegedly misbehave. to which they betrayed a If politicians and many of North Carolina’s oppressive The boards offer the public little fundamental misunder- pundits continue to over- and unnecessary occupational licens- information about practitioners who standing about jobs. sell higher education, it’s hard to ing requirements. have provided substandard or even “I need a job.” I don’t doubt it. blame a “highly educated” person Licensing mandates are sold fraudulent services. Medical societies No one should envy a person whose for believing that she’s “very quali- as protection — saving the public and bar associations are notorious for livelihood depends on government- fied” for a job, regardless of the type from scoundrels and charlatans who clamming up if one of their members issued unemployment benefits. I of education she’s pursued, the type pretend to be skilled professionals but faces a disciplinary action, meaning a do not intend to make light of any of qualifications she’s developed, or aren’t. In the case of certain medical careless dentist or a negligent lawyer hardships she and her family have the types of jobs available in a given specialties and skilled crafts (such as may continue practicing after being endured since she lost employment, market. building), the consequences of deal- punished, and their clients may be ing with an unqualified professional unaware that they’ve hired a quack. and hope she has found a new job. Regardless of the political could be lethal. By contrast, private, user-driven But one suspects her job promises, a job is not a reward for In practice, however, these li- services such as Angie’s List and search might have been made more some level of educational achieve- censing rules have morphed into more third-party reviewers like the Better difficult by the first two sentences ment. You can’t trade your cap and of a protection racket, letting those Business Bureau are eager to inform quoted above. She informed her gown for a weekly paycheck. who have gotten into the club erect consumers about the competence of audience that she’s both “highly Your “highly educated,” barriers keeping newcomers (meaning professional services. These orga- educated” and “very qualified.” “very qualified” background means competitors) out. The requirements to nizations offer ratings and reviews, Educated in what way? Qualified little if it doesn’t mesh with the get a license typically involve dozens, and some allow providers to respond for what? employer’s needs. A larger dose of if not hundreds, of hours of training directly to consumer complaints. In She also tells us definitively traditional higher education is not from government-authorized outlets, other words, left to its own devices, that she doesn’t need training. That the one-size-fits-all answer to future or years of “apprenticeship” before a the marketplace works. is almost certainly untrue. Each of economic needs. potential member can join the “guild,” The JLF report points out that the six different full-time jobs I’ve On-the-job training and even if a person is capable of perform- North Carolina has one of the nation’s ing a job competently without massive most restrictive occupational licensing held in the past 20 years required job-related courses available a la amounts of formal training. regimes, subjecting 154 lines of work some degree of training — even the carte from both traditional and The number of occupations to some sort of licensing mandate. jobs that seemed on the surface to nontraditional sources might help. requiring government licenses also In another survey, the Tar Heel State be nearly identical to the job I had Rather than sitting in a classroom has grown. According to a recent John ranked No. 15 nationally among the just left. Technology changes. Differ- for another year while chasing an Locke Foundation report, require- most intrusive states in occupational ent employers have different rules academic credential, new and future ments have mushroomed over the licensing requirements. and procedures. Jobs with the same workers could devote time instead past half-century: while roughly one The JLF report suggests straight- title almost invariably have at least to building the types of skills and in 20 workers needed some sort of oc- forward reforms to aid consumers a slightly different mix of duties qualifications that will help them cupational license in the 1950s, today and practitioners — among them, and responsibilities. cope with the economic ups and that number is approaching one in scrapping the most recently created Perhaps she meant that she downs they’re bound to face in the three. licensing boards, and subjecting every didn’t need to return to school for years ahead. CJ While the public may demand board to a periodic sunset review, some official seal of approval before a abolishing those that serve no defen- a formal job training program. That surgeon can operate or an electrician sible public purpose. might be true, though we need to Mitch Kokai is an associate editor can wire a house, is the public safer if It’s time to end the state’s choke- know more. A “highly educated” of Carolina Journal. anyone with a green thumb has to get hold on entrepreneurship, one licens- permission from the government to ing board at a time. CJ FEBRUARY 2013 | CAROLINA JOURNAL PAGE 25 Opinion

EDITORIALS COMMENTARY Time For a Breakup Make N.C. Large school districts just don’t work

ant to make North Carolina A large body of academic re- First In Freedom public education more cost- search demonstrates the drawbacks n 1948, the University of Chi- to William F. Buckley’s National effective? of school-district consolidation. The cago Press published one of the Review and the first article in the WYou should. The future of our most recent study we’ve seen, pub- foundational texts of the modern first issue of Modern Age, a journal economy is at stake. States with high- lished in The Social Science Journal in Iconservative movement: Ideas Have created by conservative scholar performing students experience faster 2007, used a large national sample to Consequences. Coming just a few Russell Kirk. economic growth than states with evaluate the assertion that consolida- years after another foundational American conservatism — low-performing students. But because tion results in lower per-student cost text, Friedrich Hayek’s The Road that fusion of free-market econom- economic performance is also related and higher student achievement. The to Serfdom, described the costs of ics, traditional values, and consti- to the cost of government, North assertion proved to be false. Unfor- expansive government, Ideas Have tutionalism — owes a great deal to Carolina could increase job creation tunately, wrote study author Frank Consequences focused more on is- North Carolina. Richard Weaver is and income growth by either generat- Robertson, these findings arrived long sues of culture and morality. Its but one of many prominent public ing the current level of educational after “many American school districts main argument was that achievement at a lower cost to taxpay- intellectuals with signifi- had transitioned from small adaptive by embracing relativism ers or generating higher educational cant ties to the Tar Heel affiliations to large sluggish bureau- over absolute truth, the achievement at the current cost to State who have played cracies.” West had set the stage taxpayers. major roles in building North Carolina should not live for its own decline. The Of course, the real sweet spot the modern conservative with the negative consequences of is to be found in doing both: to save consequences would be movement. For example, past political decisions. Local leaders money and improve outcomes over not just political and eco- Gastonia native Thomas should work with their legislative del- time. One way to accomplish both nomic chaos but also the Sowell is one of the coun- egations to design 21st-century school would be breaking up our sprawling loss of individual liberty try’s most prominent free- districts that are efficient, innovative, urban school systems into smaller and social order. market economists. His and competitive. districts. Decades ago, policymakers The book’s publica- many books, articles, and Mecklenburg and Wake coun- consolidated school districts, assum- tion gave the movement columns explore a wide ties easily could accommodate four JOHN ing that economies of scale — achiev- one of its most enduring range of issues, from fis- or more school districts. Other popu- HOOD ing lower overhead and service costs intellectual concepts and cal and regulatory policy lous counties such as Cumberland, per unit by expanding the number of marketing slogans. Since to education, affirma- Durham, Guilford, and Forsyth could the early 1950s, few conservative units under administration —were tive action, and economic history. accommodate two or three districts or libertarian organizations have just as present in public education as Vermont Royster, a Raleigh native apiece. failed to proclaim that “ideas have they were in other industries. and graduate of UNC-Chapel Hill, Many states have several dis- consequences,” and many have They were wrong. While there became editor of The Wall Street may have been some efficiency gains tricts within county lines, as North included the phrase in their mis- Journal and two-time winner of from merging very small districts, Carolina once had. The arrangement sion statements, stationery, and the Pulitzer Prize for commentary. once school districts exceeded 15,000- discourages sluggish bureaucracy websites. The publication of Ideas His editorial direction and erudite, 25,000 students, both their efficiency while giving parents more options. In Have Consequences also launched its and their outcomes tended to suffer. short, it’s time for a breakup. CJ author, a previously obscure profes- elegant columns helped make the sor of English at the University of Journal’s editorial page a must-read Chicago, into the forefront of the for conservatives everywhere — postwar debate about the future of and for those who would under- Reform Judicial Elections American culture and politics. stand the American Right. His name was Richard Weav- In the John Locke Founda- Public funding and judicial elections need to go er. Although he spent much of his tion’s just-published book First career elsewhere, Weaver was a in Freedom: Transforming Ideas into proud North Carolinian. His family Consequences for North Carolina, my tate policymakers will have a lot in which party. had deep roots in the Tar Heel State. colleagues and I apply the timeless on their plate in 2013. Neverthe- Robbed of this information, In fact, his hometown is actually ideas of thinkers such as Weaver, less, it’s time to take care of a voters had to resort to guesswork. named Weaverville, in Buncombe Sowell, and Royster to such 21st- lingeringS legal problem: North Caro- Some chose not to choose at all. In century challenges as economic County. lina’s system for electing members of this year’s general election, more than After obtaining his Ph.D. in stagnation, tax and regulatory bur- the state’s appellate courts. a million voters, or nearly a quarter dens, and educational mediocrity. The current system deprives of the electorate, declined to indicate English from Louisiana State Uni- First in Freedom contains lots voters of relevant information and a preference for Supreme Court or versity in 1943, Weaver took his first of practical suggestions and advice reduces voter participation in judicial Court of Appeals. teaching job at North Carolina State elections. Some years ago, Democrats The public funding element of University, after which he relocated for North Carolina’s new governor got worried about the increasing North Carolina’s election system also his academic life to the University and General Assembly. But the book numbers of Republicans being elected proved to be unconstitutional. The of Chicago. Still, Weaver never re- also serves to honor those intellec- to the Supreme Court and Court of U.S. Supreme Court ruled in 2011 that ally left North Carolina. It was more tual forebears who helped build the Appeals. Dressing up their partisan a similar program in Arizona consti- than just a birthplace to him. He case for conservative reform in the worries in good-government cloth- tuted an assault on the First Amend- purchased a home in Weaverville first place. ing, they voted to strip party labels ment. North Carolina’s law is still on and spent most of his summers “All work,” wrote Richard from the ballot for judicial elections. the books. there. That’s where his mother Weaver, “is a bringing of the ideal They also instituted a government- State lawmakers should repeal lived, and where the extended from potentiality into actuality.” funding scheme designed to discour- the government-funding system Weaver clan would gather for an Let’s get cracking. CJ age judicial candidates from running and restore party labels to statewide annual reunion. campaigns that were funded privately judicial races. Failing that, lawmakers During the 1950s and early with enough dollars to communicate should do the next-best thing: Sub- 1960s, Weaver wrote many other John Hood is president of the John effectively to voters. mit a constitutional amendment to books and articles as a leading Locke Foundation and a contributor After these reforms, both Demo- referendum that allows governors to spokesman for the traditionalist to First in Freedom: Transforming crats and Republicans continued to re- appoint the judges, subject to legisla- strand of the conservative move- Ideas into Consequences for North cruit and endorse judicial candidates. tive confirmation and perhaps a sub- ment, including early contributions Carolina. But many voters had no idea who was sequent retention election. CJ PAGE 26 FEBRUARY 2013 | CAROLINA JOURNAL Opinion EDITORIAL BRIEFS Hospitals Offering Insurance he medical industry continues to evolve. The latest development is an increas- ing number of hospital systems that are Tbranching out to offer insurance plans, reports The Wall Street Journal. In Atlanta, for example, Piedmont Health- care and WellStar Health System are planning on creating a jointly owned insurance arm. California’s Sutter Health and New York’s North Shore-Long Island Jewish Health System are also among those planning to offer insur- ance plans. A 2011 survey found that 20 percent of hospital leaders had plans to provide health insurance. The push into insurance comes from increasing pressure to reduce costs and the need to adjust for changes brought about by Obamacare. Hospitals are expected to receive a decreasing share of the reimbursements insur- ers pay for services. Medicare and Medicaid also are expected to reduce the amount they pay hospitals for services. Hospital systems say the move would Policies That Boost Growth give them more data on their patients, avoiding both duplication of services and costly proce- ur elected officials agree on at least one occupations. A high school student successfully dures through early interventions. agenda item: economic growth. Virtually completing a vocational or technical skill program Hospital system-created health plans are everyone wants to boost economic growth could have a job waiting at graduation. likely, though, to create tensions with existing inO the state so jobs can be added at a faster pace. A proposal at the four-year university level to insurers. But how? Unfortunately, there’s no magic “growth strengthen student focus and efficient completion “Many of [the hospital systems] are also switch” to pull. Instead, alternative policies will be of studies would link tuition costs to length of time folks we do business with,” notes Juan Davila, proposed, debated, and maybe approved. Here I in school. That is, students completing their college Blue Cross/Blue Shield of California’s se- examine practical proposals in four areas. studies in four, or maybe, five years would pay a Updating the state tax system nior vice president for network management. • : Many econo- lower annual tuition than students who have been mists say moving away from taxing income to enrolled six years or longer and have not received a “There’s a potential for that to be difficult.” taxing spending is a way to en- degree. courage income and job growth. • Medicaid: Medicaid is the joint federal and How the FHA harms families They say taxing spending — but state funded program for assisting lower-income exempting from taxation what households with health care expenses. In the last The Federal Housing Administration people save and invest — would quarter-century, it has been the fastest growing part lends to low- and moderate-income Americans make North Carolina a magnet of the state budget. Medicaid operates as a program and first-time homebuyers with the aim of for business development and that reimburses doctors and other medical provid- expanding homeownership and neighborhood expansion. ers after they have provided services. Some say this stability. Unfortunately, the FHA’s lending prac- While I am sympathetic encourages more spending. tices are inconsistent with its mission and result to this viewpoint, some issues Several states, including Florida, have received in an unacceptably high percentage of loans will have to be confronted. MICHAEL permission from the federal government to try going into foreclosure, writes Edward Pinto in a Since lower-income households WALDEN alternative ways of operating Medicaid, methods report for the American Enterprise Institute. spend more as a percentage that encourage cost competition and consumer While the FHA historically has enjoyed of their income than higher- involvement. Some studies show significant savings very low foreclosure rates, in recent years those income households, a spending-based tax would as a result of these innovations. North Carolina may rates have risen as the FHA has lent to families be “regressive” unless rebates, exemptions, or rates want to study these alterative procedures to see if with shakier finances. Today, an estimated 40 adjusted with income were introduced. Spending on they can provide needed coverage at lower costs. percent of the FHA’s loans are to those with many services not now taxed would be taxed. And • Transportation: Study after study finds that FICO scores below 660 and/or a debt ratio of there would be debates about what would count well-maintained highways are absolutely vital for 50 percent or higher. These measures are both as “investment spending” — for example, would economic development. But the big question is: characteristic of subprime loans. spending on purchasing a home or college expenses How do we pay for roads? Drivers are resistant to Pinto says that the FHA’s underwriting qualify? the gas tax, especially if it rises at the same time the policies encourage such families to make risky • Supporting education: A well-educated and cost of the fuel is jumping. financial decisions, by adding a 30-year loan trained work force is essential to economic growth. Toll roads — where drivers of a specific stretch with a low down payment to the mix. And There are many issues and challenges for both PreK- of highway directly pay for that road — are one many of these loans do go into default. Nation- 12 and post-secondary education in North Carolina, funding alternative. Tying the gas tax to median wide, 9,000 ZIP codes have projected foreclo- but clearly one of them is dropout and graduation household income — rather than the cost of gas sure rates of 10 percent or higher. Foreclosure rates. Although major improvements have been — is another idea. Both should be examined and rates that high result in reduced home values, made, one of four high school freshmen in North evaluated. a lower tax base, blight, and a higher cost of Carolina does not graduate in four years. And the So, taxes, education, Medicaid, and roads — providing municipal services. four-year graduation rate is even lower for college that’s certainly a full agenda for thinking about “It is obvious that far too many families and university freshmen. ways to promote economic growth in North Caro- who took out FHA and other high-risk loans One idea at the high school level to motivate lina. Let the debates begin. CJ have seen their wealth destroyed, their credit the interest of some students and improve gradu- severely damaged for many years into the fu- ation rates would be to increase the offerings of ture, and their neighborhoods sent into severe vocational studies. As the baby boom generation Michael Walden is a Reynolds Distinguished Pro- retires, some analysis points to a pending shortage fessor at North Carolina State University. He recently decline,” says Pinto. CJ of qualified workers for vocational and technical was awarded the Order of the Long Leaf Pine. FEBRUARY 2013 | CAROLINA JOURNAL PAGE 27 Opinion Suggestions for the GOP on Higher Education know Gov. Pat McCrory and the training camp for a state’s businesses the number of instructors. UNC has chair of political science at N.C. State, Republican leadership at the — and incidentally, a nice subsidy for contributed to this trend. Like other our annual budget was roughly $1.4 General Assembly are inundated at them. It also must serve its students’ institutions, it also supports many million. We produced approximately theI moment. There’s no lack of people (or principal customers’) personal in- units that are distant from the univer- 14,000 undergraduate student credit offering policy advice or pleading for tellectual, professional, and economic sity’s core responsibilities. hours — or about $100 each. In-state their cause or group. Why should I be needs as well as strengthen broader Before they start to prune, students, however, were paying more different? Two recommendations for civil society. however, policymakers should assign than $150 a credit hour. What hap- the new leadership in state govern- Second, I worry that this ap- personnel to serve the mission better, pened to the other $50? The calcula- ment follow. They are about the UNC proach views the global economy not cut across the board reflexively. tion excludes some overhead (really system and are too parochially. Many current state Administrative bloat is generally just our share of building costs) but part advocacy and legislators have been leaders in North greater in the middle tiers. Positions also our graduate teaching, share of part suggestions Carolina’s traditional economy — one frequently are carved out for faculty the university’s state appropriation, for reform. based on agriculture and low-tech, who are among the least productive out-of-state students, and grants and • There is small-scale manufacturing. If North teachers, scholars, and grant-getters. contracts. The extra, of course, went to a great deal of Carolina wants to be a winner, its Since administrative work can be college and university administration discussion that graduates need a skill set different lucrative, this creates perverse incen- and other departments, particularly public universities from the one many policymakers tives. As staff positions are cut, admin- those in STEM fields, which charge in North Carolina have. Students must be able to solve istrators must do clerical-type work the same amount for a considerably are not provid- problems and communicate effec- for which they are overqualified and more expensive product. ing young people tively to diverse audiences. Their need overpaid. Faculty and students in the with the necessary ANDY to learn will be continual. They must The second view, widely held humanities and social sciences con- training to meet TAYLOR contribute to the kind of robust civic at N.C. State, is that greater invest- the demands of the life the state needs to attract and keep ment in STEM (science, technology, tribute greatly to this subsidy. So do state’s businesses. important people, companies, and in- engineering, and math) disciplines is taxpayers. Because tuition and grants The draft of UNC’s latest strategic stitutions. The competencies essential critical. The assumption is that this do not cover their bills, science and plan describes this extensively. Mc- to success are not technical or voca- investment would come at the cost engineering departments in UNC Crory has talked about it repeatedly. tional; they are inherently academic. of other academic fields and depart- schools grab a disproportionate share A 2011 Pew Research Center poll • The current macroeconomic ments. McCrory has said this. Gov. of their university’s state appropria- revealed 47 percent of Americans and fiscal environment requires the Rick Scott of Florida has argued tion. Moreover, in midcareer their believed the primary purpose of a university to be more efficient. Its students in STEM fields should pay graduates make three times more than college education was to teach work- teaching, research, and service mis- less tuition. But science and engineer- their counterparts in fields like social related skills; only 39 percent said it sion is critical, but should not come at ing education already is subsidized work and teaching. Scott might be was to help a person grow intellectu- any price. heavily. Its professors are paid con- right about differential tuition; he just ally and personally. There are two main arguments siderably more than colleagues across believes the wrong group of students Preparing young people with about how to gain efficiencies. The campus, and these disciplines require should benefit from it. CJ technical skills required by the state’s first is administration. According to costly overhead — federal govern- economy is a central responsibility of the U.S. Department of Education, ment grants offset these expenses only Andy Taylor is a professor of the UNC system. But there are two between 2001 and 2011 the number of partially. political science in the School of Public important qualifiers. First, a public administrators on American college To give you some idea of the and International Affairs at N.C. State university should be more than a campuses grew 50 percent faster than magnitude of the subsidy, when I was University. Tax Reform Key to Economic Vitality s the new General Assembly and agriculture. It needs a complete porate, estate, and state sales taxes to understand and administer, and gets under way, there are lots revamp. Study committees, lawmak- altogether. It’s based on a consump- elegant. Article V, Section 2 (6) of the of issues to be considered. Re- ers, economists, and others have tion tax called the Unlimited Savings N.C. Constitution says, “The rate of payingA the unemployment insurance talked about reform for 20 years. Allowance tax that would be collected tax on incomes shall not in any case debt owed to the federal government, Despite good intentions, tax using the current income tax structure. exceed 10 percent,” thereby capping requiring photo identification to vote, reform has not happened because it’s Taxpayers would use the ad- the rate should big spenders retake restructuring the state’s information hard and it’s complicated. I suspect justed gross income they report to the control. technology sys- we’ll have lots of ideas on the table IRS, include a standard deduction, If incremental reform is more tems, rejecting the and intense debate. In the end, we and deduct all charitable giving and feasible politically, a modified USA health exchanges need a plan that eliminates the current savings. On that remaining amount — plan should be considered. Adopting and Medicaid tax bias against saving and investment your consumption — you’d pay a flat a 6 percent USA consumed-income tax expansion un- and gets the economy moving, busi- rate of 8.5 percent. This would operate while cutting the state’s retail sales tax der Obamacare, nesses growing, and people working. much like an IRA, allowing income to rate to 4.5 percent would be a move repealing costly The Senate’s proposal would accumulate, and taxing it only once, forward, creating (according to the energy renewable rely on expanding the sales tax — rais- when it is spent. A study shows this study) 10,000 jobs and $4 billion in portfolio stan- ing the base rate to 8.05 percent — plan should boost the state’s economy economic impact. dards, and reduc- while eliminating corporate, franchise, by $11.6 billion and create 80,000 new Comprehensive tax reform ing regulations on and income taxes. Concerns about the jobs in the first year it was in place should result in a system that is businesses are on BECKI plan include a new business tax that and thousands more each following simple, transparent, fair, provides the table. GRAY would generate twice the revenue year. stable revenue for core functions of But the derived from the corporate and fran- Participating financial institu- government, and, most importantly, leadership and our chise tax; a tax increase on real estate tions could set up Carolina USA encourages economic growth and job new governor have made clear that transactions; and asking more busi- accounts (again, like IRAs) to ensure creation. The Senate has done a good their top priorities are boosting the nesses (mainly service providers) to accurate reporting and accountabil- job of starting the debate on real tax economy and pushing new private- collect taxes that never have done so. ity. The plan eliminates the tax dis- reform. There are other ideas to con- sector employment. Tax reform offers The plan would not limit additional crepancy between Internet sales and sider, too. It’s a challenging job, but the best way to accomplish these rate hikes, leaving the door open for brick-and-mortar stores. It puts the substantive, thoughtful tax reform is things. “temporary” and unlimited incremen- government, rather than businesses, doable. Let’s get started. CJ North Carolina’s tax system tal increases. in charge of collecting taxes. It intro- was set up in the 1930s based on an A proposal by the John Locke duces no new taxes or fees, picks no Becki Gray is vice president for out- economy driven by manufacturing Foundation would eliminate cor- fights with special interests, is easy reach at the John Locke Foundation. PAGE 28 FEBRUARY 2013 | CAROLINA JOURNAL Parting Shot Perdue Shares Job-Announcement Form With McCrory (a CJ Parody) By B.S. Artiste Corporate Welfare Correspondent RALEIGH n one of her final acts as governor, Bev Perdue quietly transferred the confidential “Governor’s Jobs Announcement Template” to incoming Gov. Making governors look good for more than 20 years PatI McCrory. A Perdue official who wished to remain anonymous told Carolina Journal that, aside from the $______grant from the One North tion for a strong and sustainable economic veto stamp, Perdue prized the template more than Carolina Fund. future. any other official tool she possessed. Salaries will vary by job function, but INSTRUCTIONS The template originally was developed by De- the average annual wage for the new jobs Be sure to advise company officials partment of Commerce officials to make Democratic will be $______, plus benefits. The that any public statements must say the Gov. Jim Hunt appear to have a direct role in creat- ______County average annual wage is ing all positive economic activity in North Carolina. grant from the state was a deciding factor in $ ______. the company’s decision to locate or expand Hunt shared it with his successor, Gov. Mike Easley, “This is a major step in providing ser- and Easley passed it on to Perdue. in North Carolina. This must be emphasized vice to our customers,” said (name of com- strongly to the media. CJ learned some Democratic insiders were pany) President ______. “We shocked when they learned Perdue had given the Remember to thank other government are happy to be in North Carolina and thank agencies for their assistance, even if their template to the new governor. “McCrory needs to Gov. ______and the staff of the come up with his own job announcement form,” role was insignificant or nonexistent. Some North Carolina Department of Commerce good ones are the Department of Transpor- outgoing N.C. Democratic Party Chairman David for making this announcement possible,” tation, the community college system, the Parker told CJ. he/she said. Golden LEAF foundation, and the N.C. Rural After witnessing Perdue slip an envelope to a “Creating jobs is a top priority of Economic Development Center. McCrory aide before the Jan. 12 inaugural ceremo- mine,” said Gov. ______. “Our top- nies, a CJ reporter asked the aide for a copy of the notch business climate continues to at- contents. tract companies to North Carolina. These Will McCrory use it? It reads as follows: companies know our customized job train- CJ asked McCrory spokesman Ricky Diaz if the ing programs will provide a highly skilled new governor planned to use the jobs announcement Gov.______on (day of week) workforce that’s essential to competing in a form. “I don’t have an answer for that right now. We announced that (name of company), a (type global economy.” appreciate the cooperation that Gov. Perdue provid- of company), will expand (or locate) its fa- North Carolina continues to have a ed to us during the transition, and the jobs announce- cility in (location). The company plans to top-ranked business climate. Through Gov. ment form was a big surprise. The form is nearly 30 create _____ jobs and invest $______’s JobsNOW initiative, the state years old, however, so the governor may wish to million over the next ______years. The works aggressively to create jobs, train and update the template so it reflects the job announce- project was made possible in part by a retrain its work force, and lay the founda- ments of the 21st century,” he said. CJ

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