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AN AWARD-WINNING JOURNAL OF NEWS, ANALYSIS, AND OPINION FROM THE JOHN LOCKE FOUNDATION CAROLINAJOURNAL.COM VOL. 30 • NO. 3 • MARCH 2021 • STATEWIDE EDITION CJ PHOTO BY GREG DE DEUGD DE GREG BY PHOTO CJ Kathy Harrington: Senate's first female leader Harrington is She is one of the most Senate Caucus. “She’s proba- ture. She is reserved with im that the closed mouth chair of the Senate Trans- powerful lawmakers in Ra- bly going to text me and say, the press — but not with swallows no flies,” said portation Committee — known for her leigh. She sports a con- ‘Dylan, what the hell?’” her constituents. She is fa- Blaine, who now runs a po- something her husband, a cealed-carry permit, and her The Senate is famous for mously private, but she ad- litical consulting firm. “She former lawmaker himself, no-nonsense daughter is a law enforce- how little is said on the floor. mits her favorite part of pol- says little, but she listens teased her about. ment officer. She listens Compared to the House, it’s itics is campaigning. She is carefully. She pays atten- “I jokingly blame him approach more than she talks, and she run with iron control. De- also a devout Catholic. She tion, and she files it away for for getting me into politics,” doesn’t forget. scribing its culture, Watts used to sprinkle holy water later. Kathy does not forget.” Harrington, R-Gaston, said. She is not someone to quoted the former majority on Jim Blaine’s desk, calling Harrington swept into of- “We have the distinction of BY JULIE HAVLAK cross. leader and Democratic pow- him the “Devil.” Blaine de- fice in the Republican wave being the only husband and “She always fascinated er broker Tony Rand: “Your clines to say how he earned in 2010, when Republicans wife who lost to the same en. Kathy Harrington, me. She’s a whiskey-drink- enemy is not Democrat or that nickname. Blaine was seized control of the Sen- person.” R-Gaston, doesn’t seem ing, cigar-smoking, motor- Republican — your enemy is N.C. Senate leader Phil Berg- ate for the first time in 140 She laughs — but she impressed at becom- cycle-riding badass,” said the House.” er’s chief of staff. years. There were so few ex- runs a tough campaign. ing the first female majority Dylan Watts, political direc- Harrington has risen to “She strongly adheres to perienced Republicans that continued PAGE 10 Sleader of the N.C. Senate. tor at the N.C. Republican the highest ranks in this cul- the very wise political max- Harrington walked in as the CAROLINA JOURNAL 4800 SIX FORKS ROAD, #220 RALEIGH, NC 27609

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FROM THE PUBLISHER Economists raise Arabella Advisors and the political soul of North Carolina: outlook for state budget, Can David slay Goliath? predicting more tax PUBLISHER Amy O. Cooke revenue despite COVID @therightaoc

INTERIM EDITOR-IN-CHIEF John Trump @stillnbarrel

OPINION EDITOR Ray Nothstine [email protected]

STAFF WRITERS Julie Havlak @juliehavlak Dallas Woodhouse [email protected]

CONTRIBUTORS David Bass Andrew Dunn f you thought last fall’s elec- Carolina returned incumbent Johnny Kampis tions were expensive and com- Democrat Gov. and plicated by multiple lawsuits Attorney General to ROSY FINANCIAL PICTURE? New economic estimates for the current fiscal DESIGNER and grossly distorted negative their posts, but rejected the Left year are $4.1 billion rosier than the prediction made in May Greg de Deugd Icampaigns, I have some news. It’s everywhere else. [email protected] about to get worse in what could To ensure voters comply in BY ANDREW DUNN be a decade-long David versus future elections, one of the Left’s BY THE NUMBERS PUBLISHED BY Goliath battle. most well-kept secrets is infiltrat- 2020 was supposed to be the ing North Carolina. he state budget may be spared year that self-described progres- Meet Arabella Advisors, a economists’ worst fears from $27.6 billion Amount of tax revenue North sives would flip North Carolina consulting company that controls the COVID pandemic, accord- Carolina expects this year — blue. Ahead of this year’s redis- a $731 million nonprofit nexus ing to a new tax revenue forecast. $4.1 billion more than expected. tricting, a far-left faction of the from its Washington, D.C., head- TNew estimates for the cur- The John Locke Foundation Democrat party was supposed to quarters. Through four in-house rent fiscal year are $4.1 billion rosi- 4800 Six Forks Road, #220 control the governor’s mansion, nonprofits — innocuously named er than the prediction made in May, Raleigh, N.C. 27609 attorney general’s office, Council New Venture Fund, Sixteen Thirty says the new consensus revenue tax code and responsible budgets (919) 828-3876 • Fax: 821-5117 of State, N.C. Supreme Court, and Fund, Hopewell Fund, and Wind- forecast released Feb. 11 by the Of- that invest in shared priorities,” www.JohnLocke.org at least one chamber of the Gener- ward Fund — Arabella has quietly fice of State Budget and Manage- Moore said in a statement. “Peo- al Assembly. funneled nearly $2.5 billion since ment and the General Assembly’s ple are paying lower taxes in North John Hood Voters proved to be an obstacle Fiscal Research Division. Carolina and benefiting from a pro- Chairman to the Left’s grand plan. North continued PAGE 20 The outlook is not completely growth approach to the public and Jim Anthony, Julie Scott positive. The state’s economic team private sector.” Emmons, Bill Graham, John M. warns that tax revenue may con- However, there are significant Hood, Ted Hicks, Christine Mele, COMMENTARY BY JOHN HOOD tract slightly in fiscal 2021-22 after assumptions made in the new fore- Rodney C. Pitts, Paul Slobodian, years of growth. cast that may not pan out. Paul “Skip” Stam, David Stover, The state now expects a sub- Forecasters are counting on the Edwin Thomas Legislators should stantial tax revenue increase ver- federal government to pass another Board of Directors sus the years prior — $27.6 billion, stimulus bill that makes direct pay- about 15% higher than the $23.9 ments to U.S. citizens and extends ISSN 2578-8167 Carolina Journal is reclaim their power billion collected last year. In May, unemployment benefits still -fur a monthly journal of news, analysis, and commentary on state and local the forecast had been for a 2% de- ther. government and public policy issues cline in tax revenue. The projection also assumes AMONG THE MANY in North Carolina. reasons the online fundraisers than actually State economists credit COVID coronavirus cases continue their re- ©2020 by The John Locke Founda- political discourse in Washing- do their jobs. relief from the federal government cent decline amid widespread vac- tion Inc. All opinions expressed in by- ton has gotten so toxic, and at Here in North Carolina, our for buoying North Carolina’s bud- cinations, and no new strain that lined articles are those of the authors the same time so unproductive, General Assembly has faced get outlook. Stimulus money bol- boosts case counts. and do not necessarily reflect the views of the editors of CJ or the staff is that the legislative branch similar encroachments on legis- stered income tax returns, and the Even this relatively rosy finan- and board of the John Locke Founda- of our federal government has lative authority by Gov. Roy Coo- Paycheck Protection Program aided cial picture is not without cause for tion. Material published herein may business tax collections. concern. be reprinted as long as appropriate allowed itself to become increas- per and, occasionally, the state credit is given. Submissions and let- ingly irrelevant. judiciary. Unlike their federal Sales tax collections were also The state economists forecast ters are welcome and should be di- It isn’t just that the presiden- counterparts, state lawmakers higher than feared, in part due to a that tax revenue will dip slightly in rected to the editor. cy and the courts have usurped haven’t shirked their responsibil- recent change requiring online mar- fiscal 2021-22, falling about 1% to To subscribe, call 919-828-3876. policymaking authority that ity. They’ve fought back. Some- ketplaces to collect sales tax. $27.4 billion. Revenue would then Readers also can request Carolina properly belongs to Congress. times they’ve won. Sometimes House Speaker Tim Moore, grow slowly — 4% — in 2022-23. Journal Weekly Report, delivered Most members of Congress, in they’ve lost. But even losing in R-Cleveland, touted the report as “The state’s economy is in the each weekend by e-mail, or visit CarolinaJournal.com for news, links, both parties, have willingly ced- the short run can bring victory evidence that the Republican-led recovery phase of the business cy- and exclusive content updated each ed that power. With great power on the issue in the long run. General Assembly’s conservative cle after the quick and sudden reces- weekday. Those interested in educa- sion precipitated by the pandemic,” tion, economics, higher education, comes great responsibility, as Why does a weak legislative fiscal policies have helped the state health care or local government also Spider-Man famously learned to branch produce toxic, unproduc- weather what could have been a the report from the Fiscal Research can ask to receive weekly e-letters his horror. To put it bluntly, most tive politics? Because represen- damaging recession. Division states. “The forecast envi- covering these issues. members of Congress don’t want tative bodies are the best places “Today’s revenue forecast rep- sions that the economy will remain the responsibility. They’d rather resents promises kept for North Car- stable throughout the forecast peri- continued PAGE 21 bloviate on television or run olina to prepare for economic and od as the pandemic finally begins to natural disasters with a pro-growth recede later this calendar year.” CAROLINA JOURNAL // MARCH 2021 3 NORTH CAROLINA A bevy of unlicensed providers receiving funds

BY JOHNNY KAMPIS Examiners discovered that of Medicaid Services to help com- 66 Medicaid providers disciplined bat waste, fraud, and abuse in the n audit released by State Au- by their licensing board in the system. It’s also a matter of safe- ditor ’s office Feb. 2019 budget year, 26 had their li- ty, as Wood’s office said that some 18 found the state Depart- cense suspended or terminated. providers on the Medicaid rolls ment of Health and Human Services DHHS removed only eight of the lost their licenses due to patient Adid a poor job of gatekeeping the 26 from the Medicaid program. deaths. Medicaid provider enrollment pro- The reasons for the suspend- The audit said unlicensed pro- cess. ed or terminated licenses ranged viders received $1.64 million in The auditor’s office says DH- from substance abuse to sexual Medicaid payments during the HS didn’t properly ensure that only misconduct to a felony conviction 2020 budget year. Providers lack- qualified providers were approved related to health care fraud. ing proper credentials got $11.2 to provide services to Medicaid These errors increased the risk million in funds that year. beneficiaries and to get payments that ill-equipped providers could Dr. Mandy Cohen, secretary of from the state’s Medicaid program. receive millions of dollars in im- DHHS, said in a response includ- DHHS didn’t identify those provid- proper payments, the audit said. ed with the audit that she agrees ers who had professional licenses Such neglect is a big deal across with the findings, and the depart- suspended or terminated so they the country: The Government Ac- ment has removed ineligible pro- could remove them from the pro- countability Office reported that viders and is working to recoup gram, the audit said. noncompliance with provider improper payments.

Furthermore, the audit found PHOTO FILE CJ screening and enrollment require- “Ensuring that we enroll and that DHHS didn’t ensure its con- MEDICAID AUDIT. State Auditor Beth Wood's office found that Health and ments among the states contrib- maintain only qualified provid- tractor General Dynamics Infor- Human Services didn't properly ensure that providers were qualified. uted to more than a third of the ers to care for the beneficiaries is mation Technology verified all pro- $36.3 billion in estimated improp- a fundamental responsibility of fessional credentials and provider er payments in 2018. the Medicaid program,” she wrote. ownership information during the them never had their professional check any credentials during this States are required to screen “I have directed our Medicaid pro- enrollment reverification process. credentials verified. reverification process. None,” and enroll Medicaid providers in gram leadership to make the is- Auditors sampled 191 approved ap- “The Department of Health Wood said in a video accompany- accordance with standards set by sues identified in the report a top plications and found that 185 of and Human Services does not ing the audit. the U.S. Centers for and priority.” COVID restrictions clobber North Carolina jobs

5% below where they were before lockdowns but hired back only a Net loss in employment in southern states from December 2019 Little COVID, totaling 241,500 “missing third of them as the economy began to December 2020, seasonally adjusted jobs,” as Wells Fargo economists to open slowly. improvement put it. The majority of these are in UNC-Charlotte and Barings pre- Mississippi -1.4% places like restaurants, bars, hotels, dict in their latest quarterly fore- Alabama -1.7% entertainment, fitness, and hair sa- cast that North Carolina will add Georgia -1.7% expected lons — all industries still suffering about 245,000 jobs in 2021, roughly South Carolina -2.4% under emergency restrictions. equal to the number lost last year. until 2022 “While manufacturing ap- Unemployment will remain elevat- Arkansas -2.8% pears to have strong momentum, ed until 2022. Tennessee -3.2% high-contact areas of the econo- As is often the case, North Car- Texas -3.3% BY ANDREW DUNN my will not recover in a meaning- olina’s metro areas are likely to Louisiana -4.2% ful way until the COVID pandem- bounce back more quickly. The NORTH CAROLINA’S North Carolina -4.2% heavy-fist- ic recedes,” the Wells Fargo econo- Charlotte region added some 44,000 ed response to the coronavirus pan- mists write. jobs in the fourth quarter, a 3.5% Virginia -4.4% demic has resulted in a delayed eco- But there is also evidence North growth rate that far outstripped the Florida -4.6% nomic recovery, reports from state Carolina is a distinct case. national average, according to the Oklahoma -4.7% and national economists show. Net job loss in North Carolina Charlotte Regional Business Alli- Kentucky -5.2% Things won’t speed up for a is significantly worse than states ance. West Virginia -6.1% while. The latest projections call such as Georgia, Arizona, South Da- Financial services and head- for relatively high unemployment kota, Tennessee, South Carolina, quarters office jobs were among the SOURCE: U.S. Bureau of Labor Statistics through next year. and Texas, all of which have gained only industries to grow during the School closures and business re- back a much higher percentage of pandemic. Still, the Charlotte re- strictions led to an “unprecedented jobs, according to the Bureau of La- gion had regained just half of the line for more growth, as well, as thargically, we expect the recovery drop in economic activity,” says the bor Statistics. jobs it lost during the first half of warehouse and industrial expan- to gain strength over the course of N.C. Department of Commerce. N.C. manufacturers cut nearly 2020 by the end of the year. sion continues. the year,” Wells Fargo economists Now, jobs are still more than 54,000 jobs during the spring 2020 Mid-sized metros could be in “While the year will start off le- wrote. STAY INFORMED Subscribe to the John Locke Foundation's research newsletter today: johnlocke.org A tangled web of bureaucracy, clout, and backroom deals can crush competition, hurt smaller providers, and endanger patients CAROLINA JOURNAL // MARCH 2021 5 CERTIFICATE OF NEED

A tangled web of bureaucracy, clout, and backroom deals can crush competition, hurt smaller providers, and endanger patients

BY JULIE HAVLAK

coal miner’s son. A power- ful attorney. A defeated sur- geon. Two college sweet- hearts. AAll of them became caught up in a powerful system known as cer- tificate of need. Certificate-of-need laws give the state control of med- ical resources. Twenty-five peo- ple, an advisory board appointed by the governor, oversee the supply of hospital beds, medical equipment, and a host of other resources. In theory, the system is sup- posed to guard patients’ access to health care. But the system offers a wealth INSTITUTE FOR JUSTICE FOR INSTITUTE of opportunities to crush unwanted JUSTICE FOR INSTITUTE competition and hamstring small- DR. JAY SINGLETON. Singleton can’t even perform a five-minute cataract DR. GAJENDRA SINGH. Singh founded his own imaging center in Forsyth surgery without admitting his patients to a hospital. County, and sued to overthrow the CON regime. er doctors’ practices. Under CON laws, incumbent providers can take their competitors to court and force them to bleed money for months, tal systems in North Carolina and ing crushed by medical bills or “Trailblazers are usually found years, or even decades. against the state itself. Singleton catching cancer too late. One man dead on the trail,” Singleton said. It may be easy to praise the sys- is suing to overthrow the CON re- Certificate-of-need put off getting an MRI for more “You want to be the second guy, the tem on the record. But those who gime. His constitutional challenge laws give the state than a year. What he found was third guy. Not the first guy.” criticize it do so quietly, and they could decide the future of health worse than any medical bill. 'Hostage' fear retribution. Many declined to care as North Carolinians know it. control of medical “So, I saw it,” Singh told WFDD. publish their names in this story or Singleton isn’t polished. He resources. Twenty-five “He had a cancer spread every- to speak on the record. tries not to come off as intense, but people, an advisory where. And that was a stage-four For Dr. Richard Bruch, it would “It’s human nature, so I his face always reddens when he’s cancer. And I felt guilty. Like you have been easier if his hospital had shouldn’t be surprised, but I have debating lawmakers or lobbyists. board appointed by the know, that as a society we had just burned down. clients who think it’s unconstitu- All of his in-laws know about CON governor, oversee the failed him.” The McPherson Hospital was so tional, it’s terrible, it’s an unfair re- laws. supply of hospital beds, Singh founded his own imaging old that its elevator dated to 1926, straint on trade,” said a CON attor- But Singleton prides himself on center in Forsyth County a year lat- and modern hospital beds couldn’t ney. “But once they get it, CON is his quips. He jokes that his siblings medical equipment, er and sued to overthrow the CON fit inside. Patients avoided the dat- great, it’s saving money, it’s good used to sit around for hours and and a host of other regime. He is something of a legend ed facility, and the Durham hospi- for the people. It’s incredible the make fun of each other. They were resources. now, at least in pockets of the med- tal faced closure. metamorphosis they undergo.” so poor there wasn’t much else to ical community. Where others saw decay, Bruch The Fighter do. Singh saved his patients thou- saw opportunity. “Growing up, one day I asked sands of dollars. Some drove for A group of doctors wanted to my mom, who was really frustrat- hours; some came from other restore the hospital’s legacy and Dr. Jay Singleton sometimes ed, probably for about a billion rea- blind because they couldn’t afford states. Some came because of mys- build a state-of-the-art facility for says he’s not the right man for the sons, and she was crying,” Single- hospital prices. terious pain and others because patients. But unless disaster ruined job. ton said. “She told me it was be- “You do see things that you these were the only scans they the current property, moving to a Singleton is the son of coal min- cause we were poor. And I was don’t think are right,” Singleton could afford. new building would require a new ers. He spent his childhood criss- thinking: How can I not be poor?” said. “It doesn’t make hospitals sol- “Singh, man, gotta hand it to CON. crossing Appalachia in a trailer, al- That question put Singleton vent. It makes them rich.” him. But he bit off a lot,” Singleton And the state said no. ways in search of another dying on course to become an eye sur- First Blood said. “He went after the MRIs, the Bruch applied three times in a nonunion mine. The good old days geon and to clash with CON laws in ‘Shangri La,’ the temple.” row, dropping $50,000 each time of mining were just a memory, and, New Bern. He can’t even perform a But Singh’s practice collapsed — but the state denied the need more and more, the only thing left five-minute cataract surgery on his Dr. Gajendra Singh is a soft-spo- under the stress inflicted by CON for a better hospital each time. was strip mining, tearing the tops patients without admitting them ken, meticulously polite surgeon laws and the COVID-19 pandem- Duke Health blocked Bruch’s appli- off mountains. to a hospital’s surgery center — and who tried to treat poor patients. ic. His patients have lost their ac- cations, complaining that a new- Singleton is now the cham- saddling them with a bill for thou- He paid the price. Singh began the cess to affordable medical scans, er, 18-bed hospital would unfairly pion of those who would wage a sands of dollars. fight Singleton carries on. and Singh has stopped talking to continued NEXT PAGE war against the wealthiest hospi- Singleton has seen patients go Singh watched his patients be- the press. 6 CAROLINA JOURNAL // MARCH 2021 CERTIFICATE OF NEED

continued from PAGE 5 compete with Duke’s 335-bed behe- moth in Durham. The CON process cost Bruch four years and hundreds of thousands of dollars in the early 2000s. “North Carolina is held hostage by those who have CONs already,” said Bruch. This wasn’t Bruch’s first brush with CON laws, and it wouldn’t be his last. The system once forced him to pay a competitor thousands of dollars. In the early 2000s, Bruch’s Tri- angle Orthopedics was running enough MRI scans to qualify for its own MRI scanner. But the company that rented him a mobile MRI didn’t want to lose his business — and all it had to do was appeal under the CON system to prevent that from happening. Bruch says he settled and po- nied up $100,000 to the rental com- pany. “They wanted to make certain that they got their money,” Bruch said. 'Hoops on Fire'

Dr. Bruce Schroeder is lucky in his marriage. Schroeder is a gutsy - er, his wife an organized pediatri- NC SOHNS NC cian. The two of them graduated SPECIALISTS IMAGING BREAST CAROLINA college together, survived medical DR. RICHARD BRUCH. Bruch wanted to restore McPherson Hospital in DR. BRUCE SCHROEDER: "All CONs are adversarial. You’re always trying to school together, built a breast imag- Durham, but the state said no. Duke Health, which would be a competitor, eat someone else’s lunch when you’re competing with them.” blocked Bruch’s application six times. ing center together, and co