INSIDE THIS ISSUE: DEPARTMENTS Analysis: North Carolina 2 C A R O L I N A Education 9 State budget Local Government 11 From Page 1 14 incorporates State Higher Education 17 important Budget Books & the Arts 20 Opinion 24 reforms/3 A MONTHLY JOURNAL OF NEWS, ANALYSIS AND OPINION Parting Shot 28 JOURNALFROM THE JOHN LOCKE FOUNDATION August 2013 Vol. 22 No. 8 STATEWIDE EDITION Check us out online at carolinajournal.com and johnlocke.org North Carolina Gets Sweeping Tax Reform dation’s State Business Tax Climate In- dex. Analysts consider That index takes into account personal and corporate income taxes, N.C. plan nation’s along with sales, unemployment in- surance, and property taxes. most significant The compromise tax reform By Barry Smith package passed both legislative cham- Associate Editor bers in mid-July. RALEIGH “This is the biggest one we’ve ov. Pat McCrory on July 23 seen this year,” Malm said, referring to signed a new tax reform pack- the amount of money that would stay age into law, lauding legisla- in taxpayers’ pockets instead of going torsG for their leadership in overcoming to the state as a result of the proposal. obstacles to make the change a reality. “Even though [the plan appears] “As an outsider, I’ve watched as modest, it looks like it’s [more than] committee after committee after com- $700 million in tax cuts,” Malm said. mittee, commission after commission Kansas, which approved a tax reform after commission, governor after gov- package last year, is the only other ernor after governor, legislators after state that came close, Malm said. legislators after legislators, yes, Demo- “I think North Carolina is the big Gov. Pat McCrory (seated) and House Speaker Thom Tillis (right) share a word at crats and Republicans and Democrats one in the South,” Malm said. Malm the tax-reform signing ceremony as (from left) Sen. Bill Rabon, Rep. Mitchell Setzer, thought it was “a pretty big deal” that and then again Republicans say, ‘We and Rep. David Lewis look on. (CJ photo by Don Carrington) must reform our tax system in North the North Carolina reform plan goes Carolina,’” McCrory said. “Well, we’ve affairs at Americans for Tax Reform, Malm, an economist with the nonpar- from the current three-tiered marginal done it.” spoke to the reduction in the top mar- tisan Tax Foundation, said that North rate to one flat rate. The tax reform package ranks as ginal income tax rate from 7.75 percent Carolina ranks at the top of the nation The plan will eliminate the per- the most significant plan in the United now to 5.75 percent in 2015. in magnitude of tax reforms this year. sonal income exemption while in- States likely to be approved in 2013, “North Carolina, with a 25 per- Malm said the changes would creasing the standard deduction. The said an analyst who studies tax reform cent reduction in the top rate, pretty make North Carolina’s tax code friend- standard deduction will be $15,000 for proposals across the country. much blew the other states away,” lier for business, jumping the Tar Heel Patrick Gleason, director of state Gleason said. Gleason and Elizabeth State from 44th to 17th in the Tax Foun- Continued as “North,” Page 14 Embattled Rural Center Defunded in Budget PAID spending for the Rural Center in the RALEIGH, NC U.S. POSTAGE current fiscal year and $20 million in PERMIT NO. 1766 NONPROFIT ORG. Tax-funded nonprofit the fiscal year starting July 1, 2014. The initial Senate budget ended all Rural doomed by audit, Center funding. The fate of the Rural Center and media investigations its more than 50 employees is unclear. By Barry Smith In a statement issued July 22, senior Associate Editor vice president Elaine Matthews said, RALEIGH “The Rural Center board of directors ithin days of the July 16 will meet in July and August to care- publication of a state audit fully weigh the options and determine report slamming the N.C. ing from the 26-year-old nonprofit. directions for the future.” WRural Economic Development Center The compromise budget agree- Carolina Journal first raised ques- for offering excessive compensation to ment reached in late July by House tions about the Rural Center’s funding its executives, keeping $20 million in and Senate leaders defunds the Rural priorities and management in 1997. A interest from unspent funds, and fail- Center and moves rural development series of investigative stories The News ing to monitor claims on jobs created functions to the Commerce Depart- & Observer published in June and July by the projects it has underwritten, the ment. The initial House budget pro- The John Locke Foundation 200 W. Morgan St., #200 Raleigh, NC 27601 General Assembly removed state fund- vided $16.6 million in General Fund Continued as “Embattled,” Page 15 PAGE 2 AUGUST 2013 | CAROLINA JOURNAL North Carolina C a r o l i n a Voter ID Bill Includes Major Election Reforms

By Barry Smith The bill also would discontinue same-day registration, Journal Associate Editor when voters can register to vote at an early voting site and Rick Henderson RALEIGH then cast a ballot. Managing Editor n the closing hours of the legislative session, both cham- The bill also would change the way vacancies in some bers of the General Assembly voted along party lines to elected offices are filled. It would require the governor to fill Don Carrington establish a photo ID requirement for North Carolina vot- U.S. Senate vacancies with a replacement from the same po- Executive Editor ersI on Wednesday. litical party as the person leaving the office until an election The bill, which passed the Senate 33-14 and the House could be held for a permanent replacement. Mitch Kokai, Michael Lowrey 78-41, also would make sweeping changes in North Caro- It would require a study of alternative methods to fill Barry Smith, Dan Way lina’s election law, including shortening the early voting vacancies in the U.S. House and the General Assembly. Associate Editors period from 17 days to 10 days. The broader election law The bill also would: reforms were folded into the bill in late July, causing ad- • Require local special election dates to coincide with Chad Adams, Kristy Bailey ditional controversy from Democrats and liberal organiza- state, county, or municipal general elections, except for elec- David N. Bass, Lloyd Billingsley tions. tions related to the public health or safety, or municipal Kristen Blair, Sara Burrows Democrats argued that the bill would disenfranchise incorporation. Specified recall elections would be allowed Roy Cordato, Becki Gray voters. “It restricts access to the voting process,” said Sen. on other dates also, as would new elections ordered by the Sam A. Hieb, Lindalyn Kakadelis Joel Ford, D-Mecklenburg. courts or State Board of Elections. Troy Kickler, George Leef R e p u b l i c a n s • Allow po- Elizabeth Lincicome, Karen McMahan disagreed. “Our bill litical parties to des- Donna Martinez, Karen Palasek guarantees that any ignate at-large ob- Marc Rotterman, Michael Sanera John Staddon, George Stephens citizen of North Car- servers to view any Terry Stoops, Andy Taylor olina who wants to voting place in the Michael Walden, Karen Welsh vote will have the county. Hal Young, John Calvin Young opportunity to vote,” • Eliminate the Contributors said Sen. Bob Rucho, pre-registration of R-Mecklenburg. 16-year-olds. Cur- Rep. David rently, such persons Joseph Chesser, Andrew Pardue Lewis, R-Harnett, automatically are Trevor Pearce, David Ribar who was the GOP registered when they Mathew Schaeffer, Daniel Simpson Mac Taylor point man in the reach their 18th birth- Interns House for the mea- day. sure, shot down the • Prohibit peo- objections Democrats ple registering voters Published by had made to voters to be compensated The John Locke Foundation about the bill. based on the number 200 W. Morgan St., # 200 “They’ve been of forms submitted. Raleigh, N.C. 27601 told that this bill • Require a (919) 828-3876 • Fax: 821-5117 would somehow www.JohnLocke.org candidate wishing deny them the right to withdraw his or to vote,” Lewis said. Jon Ham her candidacy to do “They’ve been told Vice President & Publisher so at least three days that [the voter ID before the date on John Hood mandate] is a poll tax, Chairman & President when even the Su- which the right to file preme Court has told for that office expires. Herb Berkowitz, Charlie Carter us that it is not.” • Require vot- Jim Fulghum, Chuck Fuller The version of the bill presented in late July to the Sen- ing systems to generate an individual paper ballot marked Bill Graham, Assad Meymandi ate Rules Committee largely focused on voter ID, absentee by the voter by the 2018 elections, effectively eliminating Baker A. Mitchell Jr., Carl Mumpower touch-screen voting in the state by that date. David Stover, J.M Bryan Taylor ballots, and various education provisions. But Senate lead- Andy Wells ers made it clear at the time that they could expand the mea- • Provide that the order of political parties on the bal- Board of Directors sure before bringing it to the full chamber. And they did. lot would be determined by which party received the most The voter ID portion of the bill would require all vot- votes in the most recent gubernatorial election. Carolina Journal is ers to present a state-approved photo identity card at poll- • Eliminate the discretion of county election boards to a monthly journal of news, ing places by the 2016 elections. The state would operate extend election day polling hours by an hour until 8:30 p.m. analysis, and commentary on a phase-in program in 2014. Elections officials that year The State Board of Elections could extend the closing time state and local government would ask voters for an ID at the polls, but an ID would not and public policy issues in if polls have delayed openings or interruptions during the North Carolina. be required. day. ©2013 by The John Locke Foundation The bill defines acceptable photo IDs as a N.C. driv- • Eliminate the N.C. Political Parties Financing fund Inc. All opinions expressed in bylined articles er’s license or state-issued ID card, a U.S. passport, a U.S. and other tax-paid campaign financing. are those of the authors and do not necessarily military ID card, a veterans ID card, a tribal ID card, or a • Increase the maximum individual campaign dona- reflect the views of the editors of CJ or the driver’s license or special ID card from another state if the tion limit from $4,000 to $5,000 per election and indexes that staff and board of the John Locke Foundation. voter had registered within 90 days of the election. Material published herein may be reprinted as limit to inflation. Senate Democrats, however, offered opposition to the • Require that voters can vote only in the precinct in long as appropriate credit is given. Submis- voter ID and numerous other portions of the bill. sions and letters are welcome and should be which the voter resides. “You’re going to have a situation with this bill where directed to the editor. • Eliminate the instant-runoff election to fill judicial you’re going to have people who have voted all their lives CJ readers wanting more information vacancies. and they’re going to show up to the polling place and not between monthly issues can call 919-828- • Allow candidates and political committees to con- 3876 and ask for Carolina Journal Weekly have what they need to vote,” said Senate Minority Leader Report, delivered each weekend by e-mail, Martin Nesbitt, D-Buncombe. “That is outrageous.” duct raffle fundraisers. or visit CarolinaJournal.com for news, links, The bill would shorten the early voting period. Early The bill also sets up the potential of North Carolina and exclusive content updated each weekday. voting, under the proposed bill, would last 10 days, begin- holding an earlier presidential preference primary. If South Those interested in education, higher educa- ning the second Thursday before an election. Currently, the Carolina holds its presidential primary before March 15, tion, or local government should also ask to start date is the third Thursday before an election. It would the N.C. presidential primary would be held on the Tues- receive weekly e-letters covering these issues. end at 1 p.m. on the last Saturday before an election. day after the South Carolina presidential primary. CJ AUGUST 2013 | CAROLINA JOURNAL PAGE 3 North Carolina JLF: N.C. Budget Addresses Essential Tax and Education Reforms

By CJ Staff schools. “Over time, incorporation of RALEIGH the opportunity scholarship has the awmakers enacted a $20.6 bil- potential to serve low-income stu- lion General Fund budget deal dents’ educational needs more effec- that incorporates tax and educa- tively, while spending tax dollars more Ltion reforms with long-term positive efficiently,” Curry said. impacts for North Carolina. That’s ac- Lawmakers also eliminate teach- cording to the author of a new John er tenure, lay the groundwork for per- Locke Foundation Spotlight report. formance pay, and devote more money “With a tax reform plan designed to recruiting and retaining high-qual- to improve conditions for economic ity teachers through an expansion of growth in North Carolina, and educa- the Teach for America program, Curry tion reforms based on years of sound, said. research-based proposals, this budget Critics miss the mark when they moves North Carolina government in emphasize a reduction in funding for the right direction,” said report author public school teacher assistants, Curry Sarah Curry, JLF director of fiscal pol- said. “Ten years of rigorous peer-re- icy studies. viewed studies conducted on the pres- The General Assembly is ad- ence of teacher assistants and other dressing these changes despite unex- paraprofessionals in the classroom pected growth in Medicaid funding suggest that these staffers do little to that limited lawmakers’ ability to fund increase student achievement,” she other government priorities, Curry said. “Lawmakers preferred to devote said. “Medicaid accounts for the larg- scarce education dollars to areas that est increase in spending in the budget, The 2013-15 $20.6 billion budget reflects about $500 million in tax cuts and a 2.5 would have more bang for the buck.” amounting to almost $1 billion over percent increase in spending over the previous budget. Most growth in state funding can the two years of the budget plan.” be traced to Medicaid, which has seen half-billion dollars over the next two and economic prosperity.” Overall General Fund spending spending increase by nearly 90 percent years that North Carolinians will be Education takes up 56 percent increases by 2.5 percent in 2013-14. over the past decade, Curry said. “Be- able to spend, of total General tween the 2009 and 2012 budget years, To account for Medicaid growth, law- save, and invest on Fund spending in makers made adjustments in other de- Medicaid spending exceeded the ap- their own, rather the new budget proved budget by a combined $5.4 partments and agencies, Curry said. than surrendering Backers say plan, amounting billion,” she said. “The cost overruns “While making some cuts, lawmak- the money to gov- to more than $11.4 have averaged 11 percent of the Med- ers also create more accountability for ernment to pay for reform measures billion. Reforms icaid budget.” state funds,” she said. “Meanwhile, politicians’ priori- are expected to incorporated in The General Assembly accom- they were able to update the state’s ties,” Curry said. the budget are plished one of its most important tasks outdated information technology in- “Over time, a flat improve N.C.’s likely to produce of the year when it finalized a budget, frastructure and continue to fund the personal income positive gains in Curry said. “This budget offers the state employees’ pension and health tax rate, lower cor- competitive edge student achieve- best possible solution available now plans.” porate income tax ment if imple- to address the Medicaid spending The tax reform plan Gov. Pat Mc- rate, and the elimi- mented correctly, problem, while it redirects other state Crory signed into law July 23 led to nation of special Curry said. funds to state government’s most criti- adjustments in the amount of money provisions and loopholes will make The budget includes $10 million cal needs,” she said. “Fiscal responsi- available for spending over the next North Carolina more competitive with by 2014-15 for new opportunity schol- bility was the overwhelming theme two years: $86.6 million in 2013-14 and neighboring states. Tax reform will arships. This program offers up to of this year’s budget debate, which $437.8 million the following year. also improve the state’s business cli- $4,200 annually for low-income fami- is a refreshing change from the not- “That amounts to more than a mate, which will promote job growth lies to send their children to private too-distant past.” CJ Keep Up With the Visit our Western regional page General Assembly http://western.johnlocke.org The John Locke Foundation has five regional Web sites span- Be sure to visit CarolinaJournal.com ning the state from the mountains often for the latest on what’s going on dur- to the sea. ing the historic 2013 session of the Gen- The Western regional page in- cludes news, policy reports and eral Assembly. CJ writers are posting sev- research of interest to people in eral news stories daily. And for real-time the N.C. mountains. coverage of breaking events, be sure to It also features the blog The Wild West, featuring com- follow us on Twitter: mentary on issues confronting Western N.C. residents. CAROLINA JOURNAL: http://www.twitter.com/CarolinaJournal JOHN LOCKE FOUNDATION: http://www.twitter.com/JohnLockeNC The John Locke Foundation | 200 W. Morgan St., Raleigh, NC 27601 | 919-828-3876 PAGE 4 AUGUST 2013 | CAROLINA JOURNAL North Carolina State Briefs Critics: Jobless Benefits Don’t Boost Economy ‘Caveman’ blogger in court By Dan Way “The idea that every dollar in unemployment benefits The 4th Circuit U.S. Court Associate Editor boosts the economy by $2 is ridiculous on its face,” Sanders of Appeals on June 27 reversed a RALEIGH said. trial judge’s decision to dismiss emocratic lawmakers and left-leaning activists are A recent report from the U.S. House Ways and Means Charlotte-area “paleo diet” blogger advancing a meritless argument that unemploy- Committee by Chairman Dave Camp, R-Mich., and Hu- Steve Cooksey’s free-speech case. ment benefits are an economic stimulus, critics say. man Resources subcommittee Chairman Dave Reichert, R- In October, a U.S. District DThat debate was renewed in the weeks leading up to Wash., said that after five years of operation, the emergency Court judge in Charlotte threw out the federal government’s July 1 cutoff of federal emergency unemployment compensation program “has fallen far short Cooksey’s lawsuit, which claimed unemployment compensation benefits for North Carolina of Americans’ expectations.” the North Carolina Board of Di- residents. According to the committee report, “Instead of being etetics/Nutrition had violated his “How could anyone believe that unemployment bene- one of the ‘biggest stimuluses,’ as [former] House Demo- freedom of speech by censoring his fits are the linchpin to economic growth?” said Jon Sanders, cratic leader Nancy Pelosi once said, scholars have suggest- blog about his Paleolithic or “cave- director of regulatory ed that recent extended man” diet. studies at the John Locke UI benefits actually con- The board went through 19 Foundation. tributed to higher unem- pages of Cooksey’s website with a “It was originally ployment.” red pen, marking out what he could conceived as a tempo- In previous reces- and couldn’t say about his diet. rary safety net to tide sions dating back to the Specifically, the board’s director people over until they 1950s, it was customary told Cooksey he could not tell dia- find another job. I’m not for federal policymakers betics what they should and should sure how it came to be to add 13 to 26 weeks of not eat. viewed as the goose that federal unemployment The board then asked him to laid the golden egg,” checks to the 26 weeks of change and remove portions of his Sanders said. state checks. website and made it clear he could A Congressional But after the 2007- face fines and jail time if he did not Budget Office report in 09 recession, maximum comply. 2012 to the U.S. House weeks of benefits “soared When the libertarian public- Committee on Ways and beyond the longstand- interest law firm Institute for Jus- Means said unemploy- ing norm to a record 99 tice sued last summer on Cooksey’s ment benefit extensions weeks,” the report said. behalf, U.S. District Judge Max actually “contributed to It also was unprecedent- Coburn dismissed the case on the the increase in the pro- ed that three-fourths of grounds that Cooksey “had not yet portion of unemployed people who have been seeking jobs those weeks were paid entirely with federal funds. been injured” because the board for more than 26 weeks” during and after the recession. Spending on the federal extended benefits leapt from hadn’t yet made a “final or official” The state’s decision to lower weekly maximum pay- $20 million in fiscal years 2005-07 to $138.6 billion in fiscal decision about his website. outs and reduce the number of weeks an applicant may years 2008-10, “an astonishing 692,900 percent increase,” Coburn also agreed with the receive state benefits breached a federal law barring states the report said. state that even if the board “offi- from reducing benefits while receiving federal emergency Further, recent experience has established “record un- cially” had demanded that Cook- unemployment compensation. employment benefits don’t necessarily stimulate a robust sey remove parts of his website, it The state reduced its benefits to accelerate repayment recovery or the rapid return of the unemployed to work. If would not have violated his free- of a $2.5 billion debt to the federal unemployment system, they did, the benefits since 2008 would have resulted in an dom of speech, because — the rea- effective July 1. The federal government refused to grant a historic economic boom and minimal durations of unem- soning went — dietary advice is not waiver allowing North Carolina to be grandfathered into ployment,” the report said. a constitutionally protected form of the federal benefits program as the state repaid its outstand- “Unfortunately, the opposite occurred — a historical- speech; it is occupational conduct, ing debt. The move disqualified the state from the federal ly weak recovery and continued near-record durations of emergency unemployment program, which allows unem- which government must regulate to unemployment long after the recession officially ended,” it ployed workers to draw federal checks when their state protect consumer safety. said. benefits run out. The three-judge appellate That congressional report was consistent with a previ- panel — which included retired Senate Minority Leader Martin Nesbitt, D-Buncombe, ous study by the Heritage Foundation, a Washington, D.C., U.S. Supreme Court Justice Sandra was among Democrats who urged Republican Gov. Pat think tank. Day O’Connor — disagreed. It held McCrory to save the federal unemployment compensation That report stated empirical research in a number of that advice — even advice that falls before the July 1 cutoff. Democrats wanted to delay the ef- studies “concluded that unemployment insurance plays at under the umbrella of occupational fective date of the benefit reductions to Jan. 1, 2014, which best a small role in stabilizing the economy. Empirical re- licensing — is constitutionally pro- would have allowed emergency benefits to continue. search at the state level also finds that UI plays a negligible tected speech, and that Cooksey “It gives our economy some stimulus right now when role in stimulating the economy.” suffered a First Amendment injury. it needs it,” Nesbitt told WRAL.com. There are a number of reasons for that conclusion. The panel sent the case back to Democratic U.S. Reps. David Price, G.K. Butterfield, Because unemployment benefits are a financial cush- the trial court and ordered that it be and Mel Watt urged McCrory by letter to veto the state’s ion for the jobless, they spend less time looking for work re-analyzed under a First Amend- unemployment insurance reform because of its “regressive than the unemployed who have no benefits. Those without ment framework. impact” on the state’s economy. benefits, or whose benefits are about to expire, have greater “This is a decisive, pivotal They wrote that “eliminating this important safety net incentive to seek work and spend more time looking for em- decision in Steve Cooksey’s favor,” for jobless residents would cost North Carolina’s economy ployment, the study said. Institute for Justice senior attorney $1.5 billion in economic activity at a time when we cannot Likewise, spouses of the unemployed who are receiv- Jeff Rowes said. Telling someone afford to drive business away.” ing benefits tend to work less than those without benefits. what food to buy at the grocery The Obama administration’s acting Labor Secretary, “For married men, each dollar of benefits reduces their store is “not the equivalent of tell- Seth Harris, said in a February news release that North Car- wives’ earnings by between 36 and 73 cents,” the study said. ing him to open his mouth and olina would lose $780 million in federal funds because it is drilling his teeth out.” being cut out of the program. Increased benefits generally are financed by debt, the Rowes said Cook- Harris said the loss to the state’s economy actually report said, so they “simply transfer resources from future sey’s case still could end up would be double that amount due to a multiplier effect cre- taxpayers to UI recipients. The lost production resulting in the U.S. Supreme Court. ated when unemployed workers and their families spend from increased unemployment diminishes the effect of this spending, resulting in a negative return. Receiving less GDP ­— SARA BURROWS CJ the benefit dollars in local grocery stores and small busi- nesses, and pay mortgage, rent, and utility bills. than is spent cannot sustain economic growth.” CJ AUGUST 2013 | CAROLINA JOURNAL PAGE 5 North Carolina Two Clinton Women Plead Guilty to IRS Stolen-Identity Tax Fraud Flores and Mejia, with the help of a tax preparer, conspired to file numer- Each could face ous false tax returns beginning in 2009. They obtained identification docu- 10-year prison terms ments of people who do not reside in the United States and used those IDs to make fraudulent applications for Indi- when sentenced vidual Tax Identification Numbers. By Don Carrington Executive Editor They generated fake W-2 earn- ings statements from companies that NEW BERN did not employ them. On the returns, linton residents Angela Chris- they included exemptions for multiple tina Lainez-Flores, 44, and her dependents that didn’t exist. One re- daughter Karen Mejia, 23, both turn filed in 2010 under the name Jose Ccitizens of Honduras, pleaded guilty as Garcia claimed 11 dependents. charged in a conspiracy to defraud the They requested returns for the federal government through the filing 2012 tax year be mailed to a post office of false income tax refunds. box in Clinton. They had been paying Each signed a plea agreement the tax preparer $100 for each false with the federal prosecutor following form, but for forms filed this year, the hearings July 22 at the federal court- tax preparer raised the fee to $400. house in New Bern. Lainez–Flores also The fate of the tax preparer is un- pleaded guilty to a separate charge of clear, and no one else has been charged aggravated identity theft. publicly in this particular scheme. The Their scheme involved the filing court records of cooperating witnesses of multiple tax returns using fabricated — such as the tax preparer in this in- identities, phony W-2 earnings state- A federal official escorts Karen Mejia into the federal courthouse in Raleigh for her stance — often are sealed for a period initial appearance on May 16. (CJ photo by Don Carrington) ments, and the listing of dependents of time. that do not exist. Their sentencing hearing is the IRS has described it as the No. 1 tax Their arrests in May followed an scheduled for Oct. 28, and each is fac- fraud scheme for 2013. It affects an un- Other reports IRS undercover operation conducted ing up to 10 years told number of in- Over the past several months, with the assistance of an unnamed co- in prison for the nocent taxpayers, Carolina Journal has reported on a SIRF operating witness who prepared the conspiracy to de- costing the federal scheme involving five other Hondu- fraudulent tax returns with informa- fraud charge. They IRS agent says government bil- rans who tried to cash fraudulent re- tion provided by the two women. remain in custody lions. It relies on fund checks in Sampson County, and The federal government’s crimi- because they “rep- the two women two weaknesses separate schemes in which fraudsters nal complaint stated that seven fraud- resent a substan- are responsible in the operations used mailboxes on a street in Durham ulent returns claiming a total of $60,784 tial risk of flight of the Internal to collect illegitimate tax refund checks. in refunds, signed by Lainez-Flores or as they are in the for fraud totaling Revenue Service: Another CJ report involved a Mejia, were prepared for tax year 2012. U.S. from Hondu- its desire to get Long Island, N.Y., woman who has But at a probable cause hearing in ras,” according to $1.4 million returns to taxpay- spent nearly two years trying to con- May, IRS special agent Bennett Strick- the criminal com- ers quickly, and a vince the IRS and the U.S. Postal Ser- land stated the women were involved plaint. timing gap in how vice that people with Hispanic-sound- in much more, filing fraudulent feder- This type it deals with em- ing surnames are using her address al tax returns for refunds totaling $1.4 of crime often is referred to as Stolen ployees and employers. to obtain tax refunds from the IRS as million involving tax years 2006-12. Identity Refund Fraud, or SIRF, and The complaint stated that Lainez- part of a fraud scheme. CJ Visit our Western regional page http://western.johnlocke.org

The John Locke Foundation has five regional Web sites span- ning the state from the mountains to the sea.

The Western regional page in- cludes news, policy reports and research of interest to people in the N.C. mountains.

It also features the blog The Wild West, featuring com- mentary on issues confronting Western N.C. residents.

The John Locke Foundation | 200 W. Morgan St., Raleigh, NC 27601 | 919-828-3876 PAGE 6 AUGUST 2013 | CAROLINA JOURNAL North Carolina Kentucky Censors N.C.-Based Syndicated Columnist Rosemond By Sara Burrows to come from the psychology board. over the Internet. Contributor CJ asked both agencies whether Allowing such speech to be regu- RALEIGH the law could be applied to someone lated by occupational licensing laws astonia-based psychologist like Dr. Phil or Dr. Laura, who have would set “an extraordinarily danger- John Rosemond’s popular par- popular television and radio shows ous precedent that will only grow as enting advice column has been giving one-on-one psychological ad- more and more occupations become Gsyndicated in more than 200 newspa- vice to viewers and listeners across the subject to government licensure,” the pers across the country since 1976, but country and in Kentucky. release continues. “Today, one in three soon it may disappear from all news- Johnson said the A.G.’s office workers needs a license from the gov- papers in the state of Kentucky. doesn’t comment on “open and ongo- ernment to work in their chosen oc- Kentucky’s attorney general sent ing matters.” cupation, up from just one in 20 in the Rosemond a letter in May asking that The state’s “logic seems to be that 1950s.” he “cease and desist” publishing his if you answer an individual’s ques- Dear-Abby-style advice column in the tion in a way that is visible to people Free speech vs. licensing state, saying that doing so constituted in Kentucky, that is the practice of Government power to license the unlicensed “practice of psychol- psychology,” said Institute for Justice advice — and to silence unlicensed ogy,” a crime punishable by $500 per attorney Paul Sherman. “They don’t speakers — could lead to “widespread offense and up to six months in jail. know that the person who asked the censorship and deprive millions of Rosemond is licensed to practice question was from Kentucky, or that Americans of their ability to use news- family psychology in North Carolina. Parenting columnist John Rosemond he ever even saw the answer.” papers, blogs, social media, and other But because he does not hold a license Kentucky’s definition of the prac- ogy” in Kentucky or face “further legal online venues to seek advice about to practice psychology in Kentucky, tice of psychology “is so broad, and the action.” topics such as parenting, pregnancy, the Kentucky Board of Examiners of board has demon- According to the A.G.’s office, marriage, and oth- Psychology and the state’s attorney and the Kentucky Board of Examiners strated itself to be general reason that his opinion column so aggressive, that er serious issues.” of Psychology it represents, answering S h e r m a n cannot be syndicated in their state. individual readers’ questions in a col- we don’t know Kentucky’s The Institute for Justice — a lib- what they think said Rosemond’s umn is akin to one-on-one psychologi- case probably will ertarian public-interest law firm — cal counseling. the limits on their attorney general, filed a federal lawsuit in July against power are,” he end up in the 6th The letter cited, as an example, a U.S. Circuit Court the psychology board on Rosemond’s column published Feb. 12 in the Lex- said. who signed letter, behalf. Rosemond’s attorneys say the The “danger of Appeals. The ington Herald-Leader. claims he’s not 4th Circuit recent- case is part of the institute’s larger ef- “The article [responding] to a is not that they fort to get the U.S. Supreme Court to could go after Dr. ly ruled that di- specific question from a parent about involved etary advice may settle an unanswered question: Can handling a teenager was a psychologi- Phil,” he said. occupational licensing laws trump free “The danger is the be protected by cal service to the general public, which the First Amend- speech? constituted the practice of psychol- law is so broad, they can go after whomever they want. ment. If the 6th Dear Abby and Dr. Phil? ogy,” the letter said. Circuit ruled against the idea that Kentucky law defines the prac- And they’re probably not going to go after Dr. Phil, but they are going to go parenting advice is protected speech, Rosemond holds a master’s de- tice of psychology as “rendering to after smaller people, who they think it would increase the likelihood that gree in psychology and is a licensed individuals, groups, organizations, or don’t have the resources to defend the Supreme Court would have to re- psychologist in North Carolina. He has the public any psychological service themselves.” solve the greater question of whether written more than a dozen books on involving the application of principles, In the last year alone, the Insti- occupational licensing laws trump free parenting, books that have sold more methods, and procedures of under- than one million copies. His syndicat- tute for Justice has filed lawsuits on speech. standing, predicting, and influencing Herald-Leader ed opinion column — which often in- behalf of North Carolina diet blogger editor Peter Ba- behavior, such as the principles per- Steve Cooksey and a Texas veterinar- niak said his newspaper “has run John cludes questions from readers all over taining to learning, perception, moti- the country — is the longest-running ian, both of whom were targeted by Rosemond’s column for years. We plan vation, thinking, emotions, and inter- government officials for giving advice to continue doing so.” CJ advice column written by a single au- personal relationships. …” thor in America. (Dear Abby had two Neither the attorney general’s authors.) office nor the psychology board re- Initially, his column answered sponded to Carolina Journal’s requests questions from parents he met at semi- to define the activities constituting the Visit nars he teaches around the country. “practice of psychology.” With the advent of the Internet, he in- Carolina Journal Online The director of the psychology vited parents to submit questions to board, Robin Vick, only said, “This his website, Rosemond.com. Rosemond advocates a no-non- matter is still open and ongoing. The sense, old-fashioned approach to par- board sent a cease and desist letter and enting and discipline. He promotes requested additional time on May 31, ideas like children being “seen and not 2013. No final action has been taken by heard,” spankings “when necessary,” the board.” and “tough love.” He criticizes what A.G. says ‘not involved’ he calls newfangled approaches to par- enting — such as attachment parenting Shelley Catharine Johnson, a — as “extreme and destructive.” spokeswoman for Kentucky Attorney While he knew his parenting ad- General Jack Conway, said the attor- vice was controversial, his lawyers say ney general’s office had “nothing to he never dreamed he’d see the day do with” the letter that came from the when the government told him to shut attorney general’s office, sent on the up. attorney general’s letterhead, includ- On May 7, Rosemond saw that ing the closing, “Sincerely yours, Jack day. He received what the Institute Conway, Attorney General.” for Justice calls an “astonishing” letter “It would not be appropriate for from the Kentucky attorney general’s us to comment on a matter that we office telling him to “cease and desist” had nothing to do with,” Johnson said, the unlicensed “practice of psychol- adding that any comment would have http://carolinajournal.com AUGUST 2013 | CAROLINA JOURNAL PAGE 7 North Carolina Major Regulatory Reform Addressed as 2013 Session Culminates Rep. Pricey Harrison, D-Guilford, ordinances,” which could assess fees the advertising surface area is not in- said the review process was trouble- on businesses with “large carbon foot- creased. It also would allow them to Changes will affect some, particularly in the Department prints” that do not limit air pollution change an existing multipole structure of Environment and Natural Resourc- allegedly related to their employees’ to a monopole sign. state as well as es. She said that merged divisions and commutes to and from work. •Prohibit local governments funding crunches could make the re- During Senate debate on the from requiring employers to devise local governments views difficult. measure July 20, Sen. Floyd McKissick, plans for paying for the commute or “I don’t know how DENR is go- D-Durham, peppered Sen. Brent Jack- transportation of their workers. By Barry Smith ing to do that without a lot of extra son, R-Sampson, about the provisions, • Allow a bed and breakfast to Associate Editor funding,” Harrison said. saying that Durham had adopted “liv- serve three meals per day to its guests, RALEIGH During Senate debate of the bill, ing wage” ordinances. instead of just breakfast. awmakers wound up the 2013 Sen. Ralph Hise, “They want- • Allow businesses that offer em- legislative session by enacting R-Mitchell, object- ed to make sure ployment preferences to veterans and broad regulatory reform. The 68- ed to a provision in that individuals their spouses to get immunity from po- Lpage bill crossed into several functions the bill that would that were provid- tential violations of state or local equal of state government and reached into give students fac- ing those services employment opportunity law. the powers of local governments. ing disciplinary were paying liv- • Direct the Building Code Coun- A key piece of the reform would procedures in the able wages,” McK- cil to adopt rules requiring hotels to require that state regulations would UNC or commu- issick said of Dur- install carbon monoxide detectors in come up for periodic review, an action nity college sys- ham’s contractors. facilities that are heated with fossil- that one study suggests is a top action tem the right to be Jackson re- fuel radiators, fireplaces, or other fuel- that can be taken to reduce a state’s represented by an sponded that burning appliances. “It does include regulatory burden. attorney or a non- minimum wage the existing facilities,” Rep. Becky The bill also sought to rein in reg- attorney advocate. laws are already Carney, D-Mecklenburg, said when ulations and requirements that some Hise said he in place, and a an earlier measure was debated in the local governments put on businesses, thought it was a livable wage is a House. The provision is in response to such as requiring sick leave or prevent- “huge mistake” matter of interpre- three deaths blamed on carbon monox- ing billboard owners from cutting trees to start injecting tation. ide toxicity in a Boone hotel earlier this blocking their signs. attorneys into the Brock said year. “I think it’s a great idea,” said Jon procedure. the transportation impact require- One provision in a previous ver- Sanders, director of regulatory studies Sen. Andrew Brock, R-Davie, said ments also could be job killers. sion of the bill that was left out of the at the John Locke Foundation. “Sunset- the bill, overall, would have a positive “You’re putting an unfair bur- final legislation would have repealed ting has been proven to be a very effec- effect. “This will help North Carolina den on business owners to try to pro- tive way of reducing regulation in the in so many different ways, with our vide transportation for its employees,” the state’s zoning protest petition law. state.” companies, our businesses, those that Brock said. That law remains in effect. Sanders pointed to a study by are here now and those that want to The bill includes other provisions When neighboring property the Mercatus Center at George Mason move to North Carolina,” Brock said. that would: owners successfully file a protest peti- University, concluding that sunset pro- The bill also would bar local gov- • Prohibit local governments tion, a three-fourths supermajority of visions had a significant impact on eco- ernments from requiring their contrac- from enforcing zoning ordinances a local government body is required nomic growth. tors to include in their compensation against grandfathered practices after before a zoning change can take ef- Under the bill, the Rules Review packages requirements such as “liv- 10 years. fect. Supporters of repealing protest Commission would establish a sched- ing wages” — pay scales with wages • Allow billboard owners to re- petitions said that the current law al- ule for regulations to be reviewed. If higher than the federal minimum move trees blocking their signs along lows a small percentage of neighbor- an agency does not conduct the review wage — or sick leave. It also would highway acceleration and deceleration hood landowners effectively to block by the date set in the schedule, the rule prohibit local governments from enact- ramps. It also allows billboard com- a request unless the project has near- would expire automatically. ing “transportation impact mitigation panies to repair their signs, provided unanimous support. CJ

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By Dan Way The report must show how finan- that the state will end up negotiating something special could try to hold up Associate Editor cial risks will be allocated and how pri- with the feds are things that they are the whole thing in return” for approv- RALEIGH vate contractors will be held account- going to be considering when they’re ing their requests. he new state budget includes a able for implementing the plan. negotiating with the [advisory] com- Ingram said it is good policy to provision creating an advisory The McCrory administration en- mittee,” Ingram said. “They’re hearing move toward multiple providers offer- panel to rewrite the way the state visions three or four competing private the testimony, they’re doing the things ing competing Medicaid plans as op- deliversT Medicaid services. It’s part of managed care organizations would that a committee does, which is build- posed to CCNC, a former state agency the Partnership for a Healthy North deliver Medicaid services, replacing ing the plan, essentially.” that the General Assembly has desig- Carolina reforms championed by the the monopolistic Community Care of When the state negotiates with nated as the sole Medicaid administra- McCrory administration. The budget North Carolina model now in place. the feds on its state plan and waivers, tor. adds $1.5 billion to Medicaid spending The advi- “dozens of par- Under the CCNC “medical to cover what legislative leaders called sory panel fur- ticulars” will be home” model, “Health outcomes are cost overruns. ther is tasked in play, he said. on the decline, costs are well over bud- The additional spending also ac- with developing “And by get, and costs continue to go up. North counts for mandates from the federal Medicaid State having that Carolina is spending more than any government as the Affordable Care Plan Amend- committee there other state in the region on Medicaid Act, aka Obamacare, takes effect. One ments, Med- at the begin- per person, and the Medicaid costs byproduct is the so-called woodwork icaid waivers, ning, they’re themselves, total, are growing,” In- effect. Thousands of residents eligible amendments to able to sort of gram said. for Medicaid who never enrolled now state law, and settle on those “You really have to ask the ques- will sign up because of the mandate for any other ac- and come up tion, If CCNC is so successful, why are individual insurance coverage. Anoth- tions necessary with compelling you spending so much money, and er is the transfer of 51,000 participants to implement reasons of here’s why aren’t your outcomes improv- from Health Choice, the subsidized the reforms. why we’re actu- ing?” he said. The federal government program for low-income children, to “What’s in ally doing this,” “can’t even use CCNC’s reports be- Medicaid. the budget looks Ingram said. cause they say they’re not real robust, The Medicaid Reform Advisory pretty much like what we came up “They will have a detailed analysis of they’re not scientifically valid” in de- Group would comprise one member with,” said State Rep. Marilyn Avila, R- why they’re doing it this way, and that termining whether a medical home of the House of Representatives, one Wake, who served on one of the House puts them in a better bargaining posi- model works. senator, and three additional appoin- subcommittees working to negotiate tion.” The budget allocates $100,000 tees, including the chairman, named with Senate counterparts to develop The report the advisory panel for the state auditor’s office to hire na- by Gov. Pat McCrory. The state Depart- the Medicaid budget. must submit to the General Assembly tionally qualified experts to conduct ment of Health and Human Services Medicaid reform is vital, and ex- “sounds like a typical waiver request a peer-review-quality study using ac- would provide support staff. periences in other states that already you would send to the feds,” Ingram tual data to determine whether CCNC The panel’s final report must be have gone that route demonstrate the said. It makes sense for lawmakers saves money and improves health out- submitted to the General Assembly need, she said. to review and approve the plan “be- comes. for legislative approval no later than “If you look at the numbers and cause then the legislature still gets to It’s a great idea to allow CCNC to March 17, 2014, the results, you be a part of the negotiations, etc., and compete for Medicaid patients, Ingram before it is sent to have to say it’s got they’re not just punting the whole is- said. “If they really are saving money, Washington as the to be the direction sue over to the executive branch.” if they really are able to increase ac- state seeks fed- The Medicaid to move in when There could be downsides to hav- cess, reduce costs, improve health, eral waivers that you look at dol- ing more people with final say over the then they’re going to take a greater would set the re- Reform Advisory lar savings,” Avila plan, Ingram said. The process could share of the market. They’re going to forms in motion. Group must said. evolve and move in unintended ways, get more patients picking them rather The advisory “But to me, “or a few people who might want than picking one of the other plans.” CJ panel is charged report findings as important as with meeting the dollar savings three overarching by March 2014 are the outcomes. reform pillars Mc- You look at the Crory established data where they’re for the Partnership for a Healthy North doing those comparisons of outcomes Visit our Triad regional page Carolina, which will replace what the for people on Medicaid versus other governor and Health and Human Ser- programs, people who are on self-pay, http://triad.johnlocke.org vices Secretary Aldona Wos frequently and things of that nature, and the Med- The John Locke Foundation have called a broken Medicaid system. icaid outcomes are really, really bad,” has five regional Web sites span- The pillars are stability and pre- Avila said. dictability in budgeting, increasing the “And when you’re spending ning the state from the mountains ease and efficiency of navigating the that kind of money, you would expect to the sea. system for providers, and providing a much higher, positive outcome for whole care for the patient by uniting your patients,” she said. Better out- The Triad regional page includes physical and behavioral health treat- comes are “to me, just as critical as the news, policy reports and re- ment. fact that they’re showing savings.” search of interest to people in In addition, 11 components are Jonathan Ingram, director of re- the Greensboro, Winston-Slem, mandated for inclusion in the advisory search for the Florida-based Founda- panel’s report to the General Assembly. tion for Government Accountability, High Point area. Several of those include defin- supports the approach North Carolina ing methodologies used to increase has laid out. Ingram has co-authored It also features the blog Pied- efficiency and reduce cost growth. reports on the state’s Medicaid system mont Publius, featuring com- DHHS also must detail how any pilot with Katherine Restrepo, health and mentary on issues confronting programs will improve current opera- human services policy analyst at the Triad residents. tions, setting forth the methodologies John Locke Foundation. to show they are scientifically valid. “I think that a lot of the things The John Locke Foundation | 200 W. Morgan St., Raleigh, NC 27601 | 919-828-3876 AUGUST 2013 | CAROLINA JOURNAL PAGE 9 Education

School Reforms Advance COMMENTARY Does Average Pay In 2013 NCGA Session Drive Teachers Away? By Dan Way public school advocates disparaged Associate Editor the budget. n editorial the Fayetteville periods of sizable salary growth. RALEIGH “For the first time in my career Observer published in late There was a $2,500 average salary lthough authorized spending of more than 30 years in public edu- June declared that North increase between 1999 and 2000 on K-12 public education in the cation, I am truly worried about stu- ACarolina is facing a teacher short- and a $4,000 increase in teacher pay newly enacted state budget is dents in our care,” Atkinson said in a age because “teacher pay stinks.” between 2003 and 2007. As men- setA to increase by nearly 5 percent over statement. “North Carolina has moved This assessment of the teacher tioned earlier, we would expect the previous school year, education away from its commitment to quality labor supply had been prompted vacancies to decrease when salaries reform foes have orchestrated rallies, public schools. I am disappointed for by remarks from Superintendent of rise, but teaching vacancies rose flooded the media, and vilified the Re- the children in our state who will have Public Instruction June Atkinson, during both periods. Between 2001 publican-dominated General Assem- fewer educators and resources in their who speculated that state educa- and 2003, average teacher salaries bly over its sweeping agenda. schools as a result of the General As- tion policy could produce a teacher and vacancies stagnated simultane- Lawmakers adopted a 2013-14 sembly’s budget.” shortage in the near future. ously. budget conference report spending “The cries of doom and gloom According to this theory, Vacancies are not distrib- $7.9 billion on K-12 education, which from the left surrounded the budget teaching position vacancies in- uted evenly from region to region. is up 4.8 percent over the $7.5 billion process from start to finish,” Sen. Jerry crease during periods of slow School districts in western North budget enacted for the 2012-13 fiscal Tillman, R-Randolph, co-chairman of salary growth. Prospec- Carolina have had relatively few year. the Senate Educa- tive teachers seek better, teaching position vacan- “Since 2010, tion Committee, presumably higher- cies. Over the last five Republican legis- said in a constitu- paying, opportunities years, western districts lators have made The 2013-14 ent newsletter. elsewhere in the job mar- averaged just over 18 it clear that their “If you ket. Similarly, vacancies vacancies per year among policy agenda in- budget is set to bought into their decrease during periods the 17 districts included in the region. In 2012, the cluded a handful fear-mongering, of salary growth. Attrac- highest vacancy total be- of core education increase you were con- tive compensation draws reforms eventually longed to the 14 districts vinced that public prospective teachers to incorporated into spending in the region including education in North the profession. the budget,” said the Triangle and a swath Carolina was flat There are two TERRY Terry Stoops, di- 4.8 percent of northeastern counties. out going to shut possible sources of data rector of research STOOPS The region averaged 188 down,” he wrote. available to test their the- and education vacancies over the last “The bottom line is ory. The annual Teacher studies at the John Locke Foundation. five years. School districts Turnover Report docu- “These include the expansion of that we are funding education in North in Durham, Wake, and Johnston ments the number and percentage parental choice, elimination of teacher Carolina.” counties accounted for much of the of teachers who leave the profes- tenure and certain pay supplements, Some of the most noteworthy leg- total. This is a predictable finding. sion in any given school year. The implementation of a school grading islative reforms were designed to pro- Not only are these districts larger system, and development of a perfor- vide more flexibility to school districts Teacher Vacancy Report details the than most, but teachers in growing mance pay system for school person- to address their specific needs locally, difference between the number urban and suburban counties also nel,” Stoops said. “Simply put, this a goal that Tillman vigorously pursued of teachers who leave their posi- typically have access to greater em- budget is the culmination of an educa- as a way to bring about improvements tions and the number of teachers ployment opportunities than those tion reform agenda that had been laid to one-size-fits-all, top-down educa- who are hired to fill those vacant in rural areas. out for the last three years.” tion. positions. The remaining vacancies Does compensation have a Acknowledging there are nay- They also were part of Senate signal the relative ability of public role in determining the supply sayers who claim that the reforms are leader Phil Berger’s Excellent Public school districts to accommodate of teachers in North Carolina? an attempt to destroy public education, Schools Act in 2012. the annual demand for teachers, Absolutely. Nevertheless, prospec- Stoops said: Those included instructional re- which makes the vacancy report a tive and employed public school “The truth is that these reforms forms. Lawmakers replaced guaran- better choice. teachers base their employment discard or dismantle policies approved teed lifetime tenure for teachers with N.C. Department of Public decisions on any number of factors, decades ago at the behest of a handful a contract system based on job perfor- Instruction data indicate there including salary, benefits, working of special interest groups. Legislators mance. A dual benefit to the system, were nearly 1,000 teaching vacan- conditions, job performance, family both modernized and diversified pub- advocates said, would be to ensure cies at the beginning of the 2012- circumstances, and the health of lic education in North Carolina.” quality instruction by identifying in- 2013 school year. This was a slight the local job market, to name a few. Now comes the hard part, he effective teachers who need to be re- increase from a year earlier. While I would welcome those mak- said. trained or replaced. 1,000 vacancies may appear to be ing claims of an impending teacher “Status-quo teachers and ad- The most effective teachers an extraordinary number, the state shortage to present a more com- ministrators, along with the advocacy would be rewarded through a merit employed more than 95,000 teach- prehensive analysis of the effects groups that support them, will do ev- pay system, and there is $10.2 million ers in 2012. Thus, the vacancy total of salary on teacher supply and erything in their power to undermine in the budget to reward high-perform- represents a small percentage, just demand based on historic trends in these new policies during their imple- ing teachers with $500 bonuses. over 1 percent, of the total number North Carolina. Those who reduce mentation. As such, Republican legis- “I have yet to see a merit pay of teachers in the state. In addition, the complexities of the education lators must remain vigilant,” Stoops system in the United States work,” At- it means that each of North Caro- job market to one factor — aver- said. “Otherwise, these worthwhile re- kinson said when similar legislation in lina’s 115 school districts had, on age salary — demonstrate either forms will flounder through no fault of 2012 failed to become law. average, nine vacancies. an unwillingness or inability to their own.” Other reforms included an A- An admittedly simplistic transcend their own ideological Overall General Fund alloca- through-F school grading system based comparison of average salary and biases. CJ tions to education increase the share of on student achievement and growth, teaching vacancy data suggests spending on education from 55 percent graduation rates, and enrollment in there is no consistent relation- Dr. Terry Stoops is director of of the General Fund budget last year to accelerated coursework. Atkinson op- ship between the two. Vacancies research and education studies at the 56 percent this year. posed that reform last year out of con- increased significantly during two John Locke Foundation. State Superintendent of Public In- cern that it could stigmatize a school, struction June Atkinson, teachers, and its faculty, and students. CJ PAGE 10 AUGUST 2013 | CAROLINA JOURNAL Education School Choice a Big Winner in 2013 Legislative Session By Dan Way cation can set policy for public schools, that we will find yet another victory in Grants, which replaces and expands Associate Editor including public charter schools. our struggle to provide quality public the special needs tax credit, allowing RALEIGH “The bill would require the State schools for every child,” Ellis wrote. more families to benefit from the pro- chool choice advocates won sev- Board of Education to establish charter The scholarships (aka vouch- gram. Low-income families who paid eral high-profile battles this year fees of no less than $500 and no more ers) provide as much as $4,200 to help no or very little state personal income over bills to expand and strength- than $1,000, require charter schools pay for private school education when tax were not able to take full advan- Sen the charter school movement and to to comply with criminal background a parent chooses to remove a child tage of the tax credit. The scholarships, award private school vouchers to stu- check policies of the [school district] from public school. The scholarships however, will be open to children from dents struggling in public schools. in which they’re located, require that expand on current state programs of- all income levels. “The great news for families is 50 percent of teachers in grades K-12 fering taxpayer subsidies for private “The scholarships will be award- that the charter school reforms ap- be certified,” Rep. Jon Hardister, R- prekindergarten and college students. ed to reimburse tuition and special ed- proved by the legislature provide even Guilford, said North Carolina ucation and related services for eligible more high-quality educational options during debate on would become children entering kindergarten or first for their children,” said Terry Stoops, the final confer- the 10th state to grade or children transferring from a director of research and education ence committee offer such K-12 public school to a nonpublic school or studies at the John Locke Foundation. report. scholarships. homeschool. The grants cannot exceed “The new charter school advi- House Bill “Opportu- $3,000 per semester,” beginning in the sory board will ensure that only appli- 250 makes it nity scholarships 2014 spring semester, said sponsor cants with a sound financial and edu- easier for char- will become a Rep. Paul “Skip” Stam, R-Wake. cational plan receive a charter from the ter schools to critical corner- There are reports “from across state. For existing charter schools, laws expand. Charter stone in meet- the state from parents of children with that make grade expansion easier and schools now may ing the growing special needs who have struggled in virtually guarantee sibling admission increase enroll- needs of children our current public school system now provide much-needed stability and ment as much as who show up at to get all of the services that are re- relief for families with multiple chil- 20 percent from the schoolhouse quired,” said Julia Adams, assistant dren,” Stoops said. one school year doors each year government relations director for The The General Assembly has done to the next and still unable to ARC of North Carolina. more to expand the availability of char- add one grade read, write, and Kara Kerwin, vice president of ter schools in the last three years than more than they currently offer without solve math problems at grade level,” external affairs at the Washington, at any time since 1996, when charter having to gain approval from the State said Darrell Allison, president of Par- D.C.-based Center for Education Re- schools first won legislative approval, Board of Education. ents for Educational Freedom in North form, applauded the school choice he said. Most of the education establish- Carolina. reforms. “States where parents have “The bottom line is that there are ment’s rhetorical fireworks were re- options to choose tend to yield higher more charter schools, and more open served for the $20 million included in “We believe the alleged constitu- seats in those schools, as a result of the the budget over the next two years for tional challenges to opportunity schol- growth rates in student achievement,” bold initiatives passed by the Republi- House Bill 944, the Opportunity Schol- arships are misguided at best, and, at Kerwin said. can-led state legislature,” Stoops said. arship Act, which drew immediate worst, impede the progress of children North Carolina currently ranks Senate Bill 337 establishes a Char- threats of lawsuits. who can’t wait another year to get the 21st nationally on the Parent Power In- ter School Advisory Board designed to “You are placing a sign on each foundation they need to be successful dex, which measures the ability in each enhance oversight and speed approval school’s door that says, ‘Quality edu- in life. These scholarships are an ad- state of a parent to exercise choices — of charter school applications. Initially, cators need not apply,’” North Caroli- ditional tool to help the state meets its no matter what their income or child’s the bill gave the board policymaking na Association of Educators President constitutional obligation to provide level of academic achievement — en- powers, but the final version changed Rodney Ellis wrote in a two-page letter a ‘sound, basic education’ for every gage with their local school and board, the board to advisory in nature after le- to lawmakers. child,” Allison said. and have a voice in the systems that gal analysts noted that the state consti- “We will now shift our focus on Also passed was House Bill 269, surround the child, according to the tution says only the State Board of Edu- the judiciary, where we are confident Children with Disabilities Scholarships Center for Education Reform. CJ Visit our Triad regional page Share your CJ http://triad.johnlocke.org The John Locke Foundation Finished reading all has five regional Web sites span- ning the state from the mountains the great articles in this to the sea. month’s Carolina Jour- The Triad regional page includes news, policy reports and re- nal? Don’t just throw it search of interest to people in the Greensboro, Winston-Slem, in the recycling bin, pass High Point area. it along to a friend or It also features the blog Pied- neighbor, and ask them mont Publius, featuring com- mentary on issues confronting to do the same. Triad residents. Thanks. The John Locke Foundation | 200 W. Morgan St., Raleigh, NC 27601 | 919-828-3876 AUGUST 2013 | CAROLINA JOURNAL PAGE 11 Local Government Bill Gives Treasurer Investment Flexibility Town and County Homeowners associations By Dan Way while we were waiting for this bill to be heard we lost $1.5 Attempts to reform how Associate Editor billion in fixed income [investments]” due to market trem- homeowners associations oper- RALEIGH ors over worries that interest rates were going up, Cowell ate met with mixed success in the upporters of a bill giving the state treasurer’s office said. General Assembly, reports the greater flexibility to invest money from the state’s $81 During debate on the conference report, Rep. Steve Wilmington Star-News. While the billion pension plan affecting teachers, local govern- Ross, R-Alamance, a vice president and investment officer mentS officials, police, firefighters, and judges cited a recent for Wells Fargo Advisors, emphasized that theme. General Assembly passed two $1.5 billion loss to make their case. “If we have a 1 percent rise in the 30-year bond, that’s a modest HOA changes, more am- Opponents said the change would lead to gambling negative rate of return for that bond of 17.38 percent,” Ross bitious measures affecting HOA with retirees’ money in high-risk investments seeking large said. “If we get a 3 percent rise in the interest rates, that’s governance failed to gain traction. but often elusive payoffs. a 52 percent decline in the value of those bonds. Multiply One law encourages me- Senate Bill 558, which narrowly avoided defeat in the that times the number of bonds that are in the portfolio, and diation in disputes between a House Finance Committee in a 14-13 vote, passed the House we’re talking about some serious money.” homeowner and an HOA be- in two marathon debates, 61-51 on second reading and 67- Cowell said the bill would enhance her ability to pro- fore the matter ends up in court. 43 on third reading. It passed the Senate by a 43-3 margin in tect the investment portfolio, not jeopardize it. She noted “Although nothing in this the waning hours of the 2013 lesgislative session. that her Investment Advisory Committee unanimously bill is mandatory, I do feel that it A last-minute amendment backed the bill. She appoints provides a less costly or messy op- calling for a formal study of that panel’s members. tion for people in disputes with two issues was defeated. The “We are still North Caro- their HOA,” said Rep. Duane first study would have looked lina. We are still a conservative Hall, D-Wake, a real estate at- into whether the current rule state,” she said. “I think there torney, who sponsored the law. requiring the treasurer to earn are a lot of caps, a lot of checks The other law would an annual 7.25 percent return and balances.” encourages riskier investment Rep. Pat Hurley, R-Ran- bring statewide uniformity than a lower target. The second dolph, a state employee who’s to the enforcement of con- would have asked if principals invested in the state retirement dominium and HOA liens. other than the treasurer — who system for 20 years, cautioned Among the unsuccess- now has sole fiduciary respon- House members to be mindful ful measures that were intro- sibility — should oversee the their vote affects 800,000 em- duced were bills that would retirement fund. ployees and retirees invested in have placed the N.C. Real Estate Though it drew bipartisan the system. Those include the Commission in charge of regu- support, lawmakers feared the Teachers and State Employees lating HOA property managers, late addition could torpedo the Retirement System, Consoli- required HOA board members bill. dated Judicial Retirement Sys- to attend four hours of education “It is highly unlikely that tem, the Firemen’s and Rescue on HOA governance at seminars there will be a studies bill, but Squad Worker’s Pension Fund, run by the Real Estate Commis- as was the practice in the last the Local Governmental Em- sion, and eliminated HOAs’ abil- session, if this were something ployees Retirement System, ity to foreclose on homeowners. that the body wanted to do, then the House would take the Legislative Retirement System, National Guard Pension Rep. Frank Iler, R-Brunswick, position that it would be commissioned through the [Legis- Fund, and the Retiree Health Benefit Fund. lative Research Commission],” said House Speaker Thom “I mean no disrespect for the treasurer or her office,” who sponsored one of the bills, Tillis, R-Mecklenburg. “It’s going to get studied one way or Hurley said, but she believes the bill is unnecessary and sees the potential for additional another.” risky. She said the treasurer already has authority to invest reforms to pass in future sssions. The central debate was whether to give the treasurer up to 34 percent of the retirement fund in alternative asset more flexibility to move more money into potentially riskier classes but is only investing 22 percent in those categories. G’boro noise ordinance investments instead of the current portfolio mix, primarily Cowell said the goal is not always to meet the 34 per- comprising bonds and blue-chip stocks that are considered cent overall cap, but to have more capacity in the subcatego- In April 2012, Greensboro safer risks. Treasurer Janet Cowell and other supporters of ries to respond more easily to fluctuating market conditions. altered its noise ordinance, includ- added flexibility say that a broader range of investments For example, it would not make sense to max out ca- ing, among other changes, increas- could yield higher returns and reduce the taxpayers’ obliga- pacity in an underperforming or money-losing subcategory, ing the amount of noise that clubs tion to pump money into the retirement fund. but it is smart policy to have higher capacity in the subcat- and bars could put out in mixed- The bill raises the cap on alternative investments in egories so when one is outperforming other classes more use districts. Now the city is re- the following amounts: Debt and credit securities, from 5 investments can be placed there to enhance the fund yield. versing direction, reducing the percent to 7.5 percent; nonpublic and hedge funds, 6.5 to “We’re rolling the dice literally like it were [Las] Vegas amount of sound that is audible by putting money in those things,” said Ardis Watkins, leg- 8.5 percent; alternative investments (including private equi- late at night outside these clubs, ty), 7.5 to 8.75 percent; and inflation-protected investments islative affairs director for the State Employees Association says the Greensboro News & Record. (commodities and various bonds), 5 percent to 7.5 percent. of North Carolina. She said the retirement fund should stick Under the 2012 rules, noise Real estate remains at 10 percent. to more traditional and less risky investments, especially above 75 decibels was prohibited The overall cap on alternative investments would given the treasurer’s sole fiduciary authority over the $81 climb from 34 percent of all investments to 35 percent. billion fund. between 11 p.m. and 2 a.m. while “The risk of being very, very heavily invested in bonds “One person is in charge of the amount of money that all audible sound was prohib- is a very strong risk right now,” said Rep. Jeff Collins, R- is four times what 170 of y’all [lawmakers] call the shots on ited after 2 a.m. Readings were to Nash, who works as a financial adviser and managed the over here in a $20 billion [General Fund] budget. That is a be taken 25 feet from the build- conference committee report during final floor debates. tremendous amount of power, and so what some people see ing using the A-weighted scale. “Interest rates have been going down for the last 30 as hamstringing by putting some checks and balances on In response to complaints years. We’ve had a 30-year bull market in bonds. It’s un- that, we think is only reasonable,” Watkins said. from area residents, the city ad- precedented in our nation’s history,” Collins said. But there Richard Warr, professor of finance in the Poole College opted new rules in July, cutting the are growing hints that interest rates are about to start rising, of Management at N.C. State,who teaches advanced invest- maximum decibel level to 65, and and “as interest rates go up, bond values go down.” ments at the M.B.A. and graduate level, said the alternative specifying that the measurement That is why it is vital to have a more diversified portfo- funds “are exorbitantly expensive” and “a complete lottery” be done using a C-weighted scale. lio and to allow the treasurer to be more nimble in reacting whose risks “are horribly understated.” The C-weighted scale is more ac- to market conditions, Collins said. And he echoed remarks “If we managed the portfolio by a passive management curate; sound as measured by the Cowell made during House Finance Committee debate method” by cutting out managers’ fees and using index funds, C scale registers about 10 decibels about the bond market. “we could probably save $200 million,” Warr said. “That’s higher than on the A scale. CJ “The bill came here on May 7, and in May and June what 40 years of academic research supports.” CJ PAGE 12 AUGUST 2013 | CAROLINA JOURNAL Local Government Budget Gives W-S State Chance to Purchase Race Track By Dan Way Associate Editor WINSTON-SALEM surprise 11th-hour deal to re- store a funding mechanism for Winston-Salem State University toA purchase an iconic stadium sparked heated debate in House budget votes but failed to derail the deal. The debate centered over wheth- er it’s in the taxpayers’ best interest for Winston-Salem to keep Bowman Gray Stadium and the adjacent Civitan Park, sell them to the historically black uni- versity that is one of the poorest in the UNC system, or sell them to private investors. The debate included concerns about potential state liability for costly environmental cleanup if the univer- sity bought the property, because the park sits atop an old landfill that may be a health hazard. Senate Bill 480, a $459 million capital projects measure including eight other UNC system campuses, Fans enjoy a night of racing recently at Bowman Gray Stadium in Winston-Salem, which Winston-Salem State University is seeking to purchase. (CJ photo by Dan Way) included $7.5 million to purchase the recreation complex and $20.8 million “I was very surprised” the sta- who makes $400 or $500 a week, he de- ston-Salem State approached the city to build a residence hall at Winston- dium/park provision was restored to serves a place for entertainment,” and with offers to buy separate facilities Salem State. the bill, said Harold Day, a Winston- racing is “a part of our culture and life- three years ago, and “it seemed like a The Senate passed the bill, but the Salem construction company owner, style in Winston-Salem,” Day said. good win-win for our community and House Finance Committee stripped entrepreneur, and racing enthusiast “For 10 bucks he can get in, kids for our taxpayers,” Garrity said. out the funding mechanism for Bow- who has served on various municipal under 7 or 8 are [admitted] free, they Wake Forest plans to buy the city- man Gray/Civitan Park. It was not in boards. can bring their own Cokes or hot owned Lawrence Joel Veterans Memo- the budget conference committee re- Day opposes the sale to Winston- dogs,” and parking is free, he said. “He rial Coliseum for $8 million. It is the port negotiated by House and Senate Salem State and has been assembling can’t go to these big concerts that cost home site for Demon Deacons basket- leaders. But House and Senate confer- investors who would make an offer $50 or $70 to get in, and $10 to park.” ball. ees restored the funding mechanism in for the 17,000-seat stadium and park. Day said that “racing is a big eco- City Council entertained those the closing days of the session. City Manager Lee Garrity said the city nomic thing for this state,” and fans offers “because of the ongoing cost, “What assurances do you feel would be required to allow such an “come from miles around. They get to particularly the [outstanding] debt that we can have as the trustees of the “upset” bid on the property if Winston- whooping and hollering. You’d think costs,” Garrity said. state that there’s not going to be any Salem State completes its purchase of- they were at the Daytona 500 they get In addition, “we have several future liability given the fact that there fer. so involved.” million dollars of capital needs pro- apparently is some contamination on “I was in Maine [recently] talk- He said the council is abandoning jected over the next few years for Bow- man Gray Stadium,” Garrity said. A this property?” asked Rep. Tim Moore, ing to a prospective buyer,” Day said its fiduciary duty to city residents and sale would erase outstanding debt, R-Cleveland, during budget debate. of his investment group. “I talked to a is pursuing a special interest deal with eliminate future capital payments, and Moore supported removing the fund- promoter and a banker up there. The the university, Day said. He worries maintain and upgrade the facility for ing provision. students at Winston-Salem State, why that financially strapped Winston-Sa- Rep. Donny Lambeth, R-Forsyth, racing and football. should we put a burden on them of lem State will take on a larger respon- Nancy Young, Winston-Salem said during budget debate that the $7.5 million for the next 25 years?” Day sibility than it can afford, jeopardizing State director of public and media rela- property has been on the Winston-Sa- said. “Let’s make it as cheap as we can the stock car races. tions, said university officials “were a lem State master plan for several years, for them and not add another burden.” During the House budget debate, little baffled” by the opposition to the and the plan was vetted and approved Winston-Salem State had four Rep. George Cleveland, R-Onslow, university purchase based on fear that by the UNC Board of Governors. home games on the 2011 schedule spoke of his longstanding opposition racing would be eliminated or other- “There will be no liability that and drew an average of 7,141 fans per to “universities continuing to grow at wise impacted. will be shifted over to the state” as a game. It had four home games in 2012, the expense of their students, raising “We have bent over backward to result of any potential contamination, and hosted five additional conference fees so [they] can keep building [their] ensure that NASCAR can continue to Lambeth said. The city would main- championship and NCAA Division II palaces. But buying a race track is re- survive and thrive there. Again, not tain cleanup responsibility. playoff games, with attendance aver- ally disturbing.” just because we appreciate the heritage Bowman Gray Stadium’s quar- aging 7,712. If there are financial problems and history, not just because we appre- ter-mile asphalt track has hosted NAS- The stock car races roughly break with the track, “if the city wanted to ciate the fact that we have coexisted for CAR races for 65 years, and was fea- even most years, city officials said. pawn it off, why didn’t they find pri- 50-some years, but we need the rev- tured for two seasons in The History Average attendance is between 10,000 vate individuals to buy it, because enue stream” from racing to make the Channel’s series “Madhouse.” The and 12,000 weekly during a 20-week that’s what it appears like to me,” deal work, Young said. hillside facility also has been home to season. Cleveland said. “The race track isn’t She defended both the increased Winston-Salem State University foot- Day said he would prefer that making money, so the university can student fees to pay for the sale and the ball for some 30 years. the city keep the complex, with rac- take it over and do whatever they want university’s ability to manage the com- There are no state appropriations ing and university football sharing the with it,” and the state ends up on the plex. under S.B. 480. The funding is self- site. Most people in town don’t want it financial hook. “That’s very normal in how uni- liquidating debt. Winston-Salem State sold, he said. But if it goes on the block, “I think it’s irresponsible to say versities can expand and progress, and would pay the $7.5 million stadium/ he and his investors hope to place an we’ve got … into something that we most of the schools in the university park purchase by assessing an addi- upset bid. couldn’t afford,” Garrity said. system have student fees to help to tional $110 annually in student fees. “For a working man, somebody Wake Forest University and Win- retire debt,” Young said. CJ AUGUST 2013 | CAROLINA JOURNAL PAGE 13 Local Government Court: Sixth Amendment May Not Cover Drug Test Results By Michael Lowrey In Crawford v. Washington, the decision, the federal justices said the Jennifer Mills, a chemist who no longer Associate Editor high court rejected that logic. “Dis- Confrontation Clause does not apply worked at the lab. RALEIGH pensing with confrontation because to nontestimonial evidence. Ray testified about the lab’s stan- ver the past decade, the inter- testimony is obviously reliable is akin The high court did not, however, dard procedures and stated that she pretation of the Confrontation to dispensing with jury trial because a give a precise definition of testimonial had done a “peer review” of Mills’ Clause in the Sixth Amend- defendant is obviously guilty,” wrote evidence. And courts throughout the work in the case. The jury convicted Oment to the U.S. Constitution, giving Justice Antonin Scalia for the court. country, including the U.S. Supreme Ortiz-Zape. Upon appeal, the N.C. “the accused [the right to] be confront- “Admitting a statement deemed reli- Court itself, have struggled to deter- Court of Appeals overturned the con- ed with the witnesses against him,” able by a judge is fundamentally at mine what to include and exclude, par- viction, finding that Ortiz-Zape’s Sixth has become a central question of con- odds with the right of confrontation.” ticularly in drug testing cases. Amendment rights had been violated. stitutional law. The latest development Instead, the high court held that The N.C. Supreme Court then agreed came in late June, when the N.C. Su- what was key was the nature of the The Ortiz-Zape case to hear the case at the state’s request. preme Court addressed the matter in a evidence. If the evidence was “testi- On May 16, 2007, officer Craig In the view of Justices Mark Mar- drug testing case. monial” in nature Vollman of the tin, Paul Newby, Robert Edmunds, and The state’s justices overturned an — if, say, it was a Charlotte-Meck- Barbara Jackson, the fact that Ray had appeals court decision and said that statement made The North Carolina Courts lenburg Police looked over Mills’ notes was enough to the results of a drug test can be admis- to a law enforce- Department saw a allow Ray rather than Mills to testify, sible in court even if the lab technician ment officer or car pull into a gas and the majority reversed the appeals who performed the test was not avail- offered in a hear- station displaying court. able for cross-examination by the de- ing or some other a “ratty and old” “Ray analyzed the data pertain- fense. court-like setting 30-day temporary ing to the seized substance and gave In 2004, the U.S. Supreme Court — the “the Sixth license plate with her independent expert opinion that re-examined when and how hearsay Amendment de- dates that looked the substance was cocaine. Defendant — “a statement, other than one made mands what the to have been al- had the opportunity to cross-examine by the declarant while testifying at the common law re- tered. Vollman ap- the witness against him: Tracey Ray,” trial or hearing, offered in evidence to quired: unavail- proached the car and asked driver Ma- wrote Martin. “The admission of an prove the truth of the matter asserted” ability and a prior opportunity for rio Eduardo Ortiz-Zape about the tag. independent expert opinion based on — can be used at trials. Under previ- cross-examination.” Nontestimonial While Ortiz-Zape went through the expert’s own scientific analysis is ous precedent, the key factor in deter- evidence includes, but is not limited the glove compartment looking for the not the type of evil the Confrontation mining whether hearsay evidence was to, physical objects such as fingerprints car’s registration, Vollman saw what Clause was designed to prevent.” admissible had been whether or not it or, in the case before the state Supreme he believed was a bag of cocaine in Chief Justice Sarah Parker and was reliable. Court, drug tests. And in the Crawford the storage compartment of the open Justice Robin Hudson dissented. driver’s side door. A search of the “Because the expert here (Agent Stay in the know with the JLF blogs car found eight small bags contain- Ray) simply viewed and agreed with the test results of another (Agent Mills), Visit our family of weblogs for immediate analysis and commentary on issues great and small ing a combined 4.5 grams of a white, powdery substance. Ortiz-Zape was while she performed no testing and charged with possession with intent to was not present for those tests, I must sell or deliver cocaine. conclude her testimony violates the At trial, the state argued the sub- Confrontation Clause,” wrote Hudson. The Locker Room is the blog on the main JLF Web site. All JLF employees and many friends of the stance was cocaine using the testimony “The defendant here had the foundation post on this site every day: http://www.johnlocke.org/lockerroom/ of Tracey Ray, a forensic chemist at the right under the Sixth Amendment CMPD crime lab. Ray, however, had Confrontation Clause to cross-examine not done the actual lab work on the Mills, not just Ray.” substance found in Ortiz-Zape’s car. The case is State v. Ortiz-Zape, Right Angles is the JLF’s blog in the Triangle. Several JLF staffers blog on this site to keep folks in Dur- The analysis had been performed by (329PA11). CJ 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- read for anyone interested in issues in the Queen City: http://charlotte.johnlocke.org/blog/ http://triangle.johnlocke.org

The John Locke Foundation has five regional Web sites span- ning the state from the mountains Squall Lines is the JLF’s blog in Wilmington. Chad Adams and a few coastal friends keep folks on the to the sea. 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 PAGE 14 AUGUST 2013 | CAROLINA JOURNAL From Page 1 North Carolina Gets Historic, Sweeping Tax Reform Legislation Continued from Page 1 married taxpayers filing jointly, $12,000 for heads of household, and $7,500 for single taxpayers and married taxpay- ers filing separately. Unlimited itemized deductions for charitable contributions will be al- lowed, while mortgage interest and property tax deductions would be capped at $20,000. The corporate income tax rate would decrease from the current 6.9 percent to 6 percent in 2014 and 5 per- cent in 2015. The rate would decrease by 1 percentage point in each of the two succeeding years if certain tax col- lection triggers are met. The corporate income tax rate would decrease to 4 percent in 2016 if during the 2014-15 fiscal year General Fund tax collections exceeded $20.2 billion. It would decrease to 3 percent in 2017 if during the 2015-16 fiscal year General Fund tax collections exceeded $20.975 billion. Such a “fiscal trigger,” modeled on the federal Gramm-Rudman spend- ing reforms of the 1980s, was recom- House Speaker Thom Tillis, left, and Senate President Pro Tem Phil Berger were surrounded by members of the media after the mended in early July to policymakers tax-reform package signing ceremony on July 23. (CJ photo by Don Carrington) by John Locke Foundation President be capped at 37.5 cents per gallon for money back into the pockets of other mittee, said he hoped that the bill was John Hood. two years. The estate tax would be re- North Carolina workers. the first step toward a tax code that The corporate income tax trig- pealed. He said tax reform was part of an would have a 0 percent personal in- gers alleviate a concern raised by Mc- Gleason said the improved busi- overall strategy to increase job creation come tax rate. Rucho proposed a re- Crory, who said he wanted to protect ness tax climate could pay dividends in the state. Other things include edu- form package earlier in the session that the integrity of the budget and make in improving the state’s economy. cation improvements as well as gov- phased out personal income taxes and sure that the tax “Small busi- ernment efficiency. had support in the Senate. It was not code would raise nesses and large During legislative debate, Re- adopted by the House or backed by enough revenue companies across publican supporters acknowledged McCrory. to pay for essen- McCrory credits North Carolina are that the plan was the first step in what Democrats weren’t as happy tial state services. willingness going to see a sig- they hope will be a series of additional about the proposal. “I really don’t see The triggers also nificant increase in tax reforms. it as broad-based tax reform,” Sen. would protect to compromise their job-creating “Does it do everything that we Floyd McKissick, D-Durham, said. lawmakers and capacity,” Gleason really want it to? No,” said Sen. Bob Sen. Josh Stein, D-Wake, also crit- the governor in for tax reform said. “It’s a big step Rucho, R-Mecklenburg. Rucho, co- icized the package for cutting revenues case the state ex- in the right direc- chairman of the Senate Finance Com- instead of leaving them level. CJ perienced a reces- success tion. This final deal sion. represents a huge In addi- improvement over tion, the plan simplifies tax collection the current tax code.” by shifting many purchases that are At the signing ceremony, Mc- taxed in other ways into the sales tax Crory cited two reasons tax reform Help us keep our presses rolling Publishing a newspaper is an base. It also repeals some exemptions. happened now when it remained such expensive proposition. Just ask the For instance, live entertainment and an elusive objective. “The first reason many daily newspapers that are movies, service contracts (warranties), is, people are hurting out there,” Mc- having trouble making ends meet manufactured and modular home Crory said. “The pain has arrived in these days. sales, electricity, piped natural gas, and North Carolina.” It takes a large team of editors, some previously untaxed bakery items The second reason, McCrory reporters, photographers and copy and newspapers would be taxed at the said, is leadership. “Leadership right editors to bring you the aggressive state retail sales tax rate. The special investigative reporting you have here and right here,” McCrory said, become accustomed to seeing in taxes or exemptions that had covered motioning toward legislative leaders Carolina Journal each month. those purchases were repealed. assembled at the Executive Mansion Putting their work on newsprint The plan also ends the back-to- with the governor. and then delivering it to more than school and Energy Star sales tax holi- He said legislative leaders were 100,000 readers each month puts days. Sales tax refunds for nonprofit willing to compromise. “You carried a sizeable dent in the John Locke organizations would be capped at the water to the finish line,” McCrory Foundation’s budget. $45 million, which the N.C. Center said of the GOP legislative leadership. That’s why we’re asking you for Nonprofits said is unlikely to af- McCrory said that tax reform, to help defray those costs with a donation. Just send a check to: fect major nonprofits, including large with its decreased personal income Carolina Journal Fund, John Locke hospital networks, in the immediate tax rate, would benefit teachers, who Foundation, 200 W. Morgan St., future. The center continues to oppose didn’t get a raise in the budget. “Tax Suite 200, Raleigh, NC 27601. the cap, saying it could be lowered or reform will give teachers a 1 percent We thank you for your support. eliminated in a later tax bill. increase in their take-home pay,” he The state gasoline tax would said, noting that it would also put John Locke Foundation | 200 W. Morgan St., Raleigh, NC 27601 | 919-828-3876 AUGUST 2013 | CAROLINA JOURNAL PAGE 15 From Page 1 Embattled Rural Center Defunded in 2013-15 General Fund Budget

Continued from Page 1 offered recent details about the center, including the revelation that founding president Billy Ray Hall kept dossiers on key state lawmakers and other pub- lic officials. But the audit was the first independent state review of the cen- ter’s activities. The budget eliminates an an- nual $16.6 million appropriation to the Rural Center. Instead, a new Rural Economic Development Division will be set up within the state Commerce Department. The division will receive $11.3 million in state funding during the current fiscal year, and $13.3 mil- lion during the 2014-15 fiscal year. Beth Gargan, a spokeswoman for the Commerce Department, said department officials are still trying to digest the change. “We just learned of this update,” Among the many questionable projects that received funding from the Rural Center was the ill-fated Randy Parton Theatre in Gargan said July 22. “We’re committed Roanoke Rapids. Some $450,000 was given to the project for water and sewer construction. (CJ file photo) to working with the rural counties in ner of waste and lack of accountability Hall went on to discuss some of rules, not operating based on normal North Carolina.” in state government,” Berger said in a the findings. He said that the center means of accounting, “ Luddy said. At press time, CJ was unable to statement. “This audit reinforces my follows accepted procedures on inter- Luddy agreed with Berger that determine if Hall, who resigned July belief that the Rural Center should est, and will work with the General As- the Rural Center “certainly should re- 17, had collected more than $240,000 receive no taxpayer funds in the state sembly to clarify how interest earnings ceive no more state funds for any rea- in severance the center’s board had budget. Funding the Rural Center should be used. He said the center is son. The state should begin the process set aside for him. The audit not only would send the wrong message to vot- refining policies on monitoring those to get back any money [it] can from the revealed the existence of the severance ers who elected Re- who receive grants. And center,” Luddy said. but also questioned why the board publicans to provide he said the center regu- The report recommends that the planned to give it to Hall when he de- accountability in state larly evaluates salaries Rural Center and Department of Com- parted. government.” with similar nonprofits merce request clarification from the Gov. Pat McCrory’s press aides House Speaker and would in the future General Assembly about the intend- would not say whether they knew if Thom Tillis, a Meck- work with the Commerce ed use of interest earnings from state Hall had taken the severance payment. lenburg County Re- Department to determine funds. The office responded with a statement publican, said in a the appropriate amount It also says that the Rural Center by Deputy Budget Director Art Pope. statement that the of state funding to be should verify independently all infor- “We are working with the N.C. audit findings deeply used for executive com- mation provided by grantees for ac- Department of Commerce and the N.C. troubled him. pensation. curacy and reliability, notify grantees Rural Center to address the problems “It is apparent The audit report when they are out of compliance with raised in the recent audit,” Pope said. to me that the time notes that Hall was paid grant terms, and compensate its em- “Our goal is to resolve these issues so for change at the Ru- $221,070 for an annual ployees at a rate that is comparable to that the grants can proceed.” ral Center has come,” Billy Ray Hall served as salary and car allow- executives in similar positions. In the audit, Wood said Hall “mis- Tillis said. “I look for- president of the Rural Center ance during the 2012 fis- The audit report also notes: leads the reader” five separate times in ward to working with from its inception until it was cal year. “This is $96,394 • The Rural Center had a balance his official response to the audit report. Gov. McCrory and the defunded in July. (77.31 percent) more than of $241,856 in the severance pay ac- Wood acknowledged that the au- Senate to determine the secretary of com- count as of June 30, 2012. dit was hard-hitting. the best path forward in a way that merce, whose agency provided the • The Rural Center is not re- “It’s hundreds of millions of our protects the interests of North Carolina primary funding for the Rural Center,” quired to deposit its funds with the tax dollars going out, and nobody’s ap- taxpayers while maintaining our com- the report says. state treasury, instead using a private propriately overseeing it,” Wood said. mitment to rural communities.” Wood said that comparable sala- bank account. Initially, McCrory called for Hall Hall did not respond to requests ries, particularly for an executive who • There is an “increased risk” to resign. “Based upon the recent au- for an interview regarding the audit or doesn’t have fundraising duties, are that more than $58.8 million in grant dit, I believe it is time for new leader- the state budget. Garnet Bass, commu- much lower. funds were not used for their intended ship at the Rural Center in the roles of nications director at the Rural Center, “It’s $70,000 out of whack,” Wood purpose in 2011-12. president and chairman of the board,” pointed reporters to a statement on the said. She suggested that $150,000 • The Rural Center had not veri- McCrory, a Republican, said in a state- center’s website. would be more in line with what ex- fied the number of jobs created at proj- ment when the audit was published. The statement, dated July 16, ecutives in similar nonprofits make. ects it helped fund in Marion, Halifax, “At a time when rural areas of our state concluded with Hall’s signature: Wood said that she found the and Harnett counties. are suffering the most, we must ensure “The Rural Center is commit- need to reply to Hall’s own response • Grant recipients that had not that we are using our limited funds by ted to being a good steward of state in the audit report, even though she submitted required progress reports the most effective, efficient, and trans- funds. In a report released today, the rarely does that. were not notified they were out of parent means. These funds must be Office of the State Auditor has identi- “The evidence and the truth are compliance. used to grow our rural economies and fied opportunities for us to strengthen on my side,” Wood said, adding that The Rural Center was established create jobs.” the way we monitor the performance she vets audit findings thoroughly. in an effort to address economic in- State Senate leader Phil Berger, of those who receive grants, and we Bob Luddy, a Wake County equalities between rural and urban ar- a Rockingham County Republican, are currently making improvements to businessman and Rural Center board eas in North Carolina. The mission of echoed calls to discontinue state fund- address those issues. We have a long member, said he’s not surprised by the the center is to develop, promote, and ing for the center. history of serving the people of rural audit. implement sound economic strategies “Once again, Auditor Beth Wood North Carolina and welcome the op- “It’s not surprising because the to improve the quality of life in rural has shone a bright light on a dark cor- portunity to improve our operations.” Rural Center operates based on its own North Carolina counties. CJ PAGE 16 AUGUST 2013 | CAROLINA JOURNAL Interview Blundell: Margaret Thatcher Aided By ‘Very Strong Moral Compass’

By CJ Staff RALEIGH “I think if [Margaret Thatcher] were ore than 20 years after she left office, the late Margaret here today ... she would be worried Thatcher’s name still evokes more about Obamacare than about strongM positive and negative reactions in Great Britain and around the world. the deficit. She was able to fix the an- John Blundell, former director general at the Institute of Economic Affairs and nual deficit in the British government, current visiting fellow at the Heritage Foundation, wrote the 2008 book, Mar- and she was able to retire a lot of the garet Thatcher: A Portrait of the Iron Lady. debt. But she wasn’t able to take on Blundell discussed his memories of Thatcher during a presentation to the the nationalized health system at all. John Locke Foundation’s Shaftesbury Society. He also discussed Thatcher’s And once that gets embedded, it is a legacy with Mitch Kokai for Carolina Journal Radio. (Head to http://www. really difficult job to change it.” carolinajournal.com/cjradio/ to find a John Blundell station near you or to learn about the weekly CJ Radio podcast.) Visiting Fellow, Heritage Foundation

Kokai: You knew Margaret Thatcher for years and years, long be- fore she became the prime minister of discontent.” And to give you a feel of in England right about the time the eowners through her selling off of Great Britain. Are you surprised that what it was like, as well as the unem- Conservatives displaced her and put public housing units. Homeownership she still evokes such strong reactions ployment and the inflation and the in- John Major in; I remember that dis- soared. Before Thatcher hardly any- today? dustrial unrest, the gravediggers were tinctly. In the 20-plus years since she’s body owned stocks and shares. You did on strike, so coffins were piling up. left office, have we been able to appre- through your pension plan, but you Blundell: No, not at all sur- Ambulance drivers were on strike, so ciate even more the work that she did had no idea what stocks and shares prised. On the positive side, of course, 911 calls were not answered. And … because of things that have happened you owned in your pension plan. And she changed her country enormously. the garbage collectors were on strike, since she left? people started buying shares, and by She took it from being the “sick man so garbage just piled up in the streets. I the time she left power, 30 percent of of Europe,” with a terrible economy mean it was truly awful. Blundell: I think so. I mean, Britons owned shares in companies ranked 19th in the [Organization for In fact, one newspaper, The Daily there’s a saying that we’re all Thatch- that they had chosen. And so the BBC Economic Cooperation and Devel- Telegraph, ran a headline, and the head- er’s children now. In fact, her impact and newspapers and the TV and ra- opment] ladder, to second-ranked in line was “Cheer Up, Things Are Get- on the Labour Party was huge. The La- dio people were forced to add busi- the OECD. And she transformed the ting Worse,” meaning that things were bour Party realized that it had to move ness coverage, because now if a third unions, she transformed the national- getting so bad that it was stoking up a back toward the center if it was ever to of your population owns shares, that ized industries, she slashed taxes, cut huge appetite for change, and people be re-elected to power, and Tony Blair, regulations, and turned the British becomes a major part of your market, really had begun to realize that we of course, became its leader when his like sports or entertainment or what economy around. simply had to change or else we were predecessor, John Smith, died unex- have you. And so there was a massive In doing so, though, of course, going to become a third-world country. pectedly of a heart attack. And he per- change of attitude. And she impacted certain communities suffered. The coal suaded the Labour Party to remove the Liberal Party as well, the Liberal industry, which had been nationalized, Kokai: Still, no one likes change, Clause IV of its constitution. This is Democrats. They moved much closer had not been allowed to decline gently. but she had the fortitude to stick with the clause, or this was the clause, that to the center than they had been previ- And so small towns, mining towns in her ideas. committed the Labour Party to pub- northern England, for example, which lic ownership of the economy. Maybe ously. should’ve been losing, say, 50 jobs a Blundell: Oh, yes. not small shops, but other than sort of Kokai: year for 30 years, suddenly lost 1,500 small family businesses, everything … I would suspect that jobs in one afternoon. So, of course, Kokai: What was it that con- was to be owned and run by the gov- having seen the role that Margaret there was resentment, but I think it’s vinced her that despite all of the cat ernment. And that was an enormous Thatcher played, you would hope unfairly placed. It should have been calls, despite all the criticism, she was shift for the Labour Party to abandon that the Britain of today — the United her predecessors who got the brunt of heading in the right direction? Clause IV. States of today, Western Europe of to- that anger because it was her prede- And, of course, her union re- day — would adopt a little bit more cessors who didn’t let these industries Blundell: She had a very strong forms have by and large not been Thatcher ideas for the types of policy gradually decline. personal moral compass. I mean, she touched. Contracting out has contin- challenges we face today. knew what was right and what was ued. And privatization continued and Kokai: Now someone in her po- wrong, and she had great courage. Re- has spread worldwide. Many African Blundell: Yes. I think particu- sition could have tried to find a way member she took on the [Irish Repub- and Asian and Latin American coun- larly on the deficit and the debt and to help prop up the jobs that were left. lican Army]. They tried to kill her. She tries adopted Margaret’s privatization on socialized medicine. I think if Mar- She didn’t do that. What was it about took on the Argentinian dictators over plans, and Britain became a big ex- garet were here today on your radio her and her approach to public policy the Falklands. She took on the mine porter of expertise on how to privatize program, she would be worried more that said, “Look, we’ve got to take workers when they tried to unseat her. your copper mine or your coal mine or about Obamacare than about the defi- these steps to get the ship righted”? Time and time again, she showed in- your airline or your bus company or cit. She was able to fix the annual deficit credible fortitude and incredible cour- whatever it might be. And privatiza- in the British government, and she was Blundell: Well, there was very age and tenacity. I mean, she fought tion became a worldwide phenomenon able to retire a lot of the debt. But she much a feeling that we were in the the mine workers for a year. That was because of Margaret, and you simply wasn’t able to take on the nationalized last-chance saloon. We’d just been how long that strike went on for, a year can’t have the same attitudes that pre- health system at all. And once that gets through the winter of discontent, Janu- of incredible violence. vailed in ’50s, ’60s, and ’70s anymore embedded, it is a really difficult job to ary through March of 1979, so called in the United Kingdom, toward free change it. So I think if she were here as in the opening line of Shakespeare’s Kokai: It’s been more than 20 enterprise and business. today, she would say beware of Obam- Richard III: “Now is the winter of our years since she left office. I was, in fact, We became a nation of hom- acare more than anything else. CJ AUGUST 2013 | CAROLINA JOURNAL PAGE 17 Higher Education Supreme Court Remands COMMENTARY ‘Is College Campus ‘Diversity’ Case Worth It?’ By George Leef ferently than others can be justified Contributor only by using race as minimally as pos- ou’ve never heard of Sarah argument. RALEIGH sible and avoiding it entirely if there Danaher or the company Easily obtained grants and isher v. Texas was one of the first are race-neutral means that would pro- she founded, Ampersand loans lure many Americans into cases heard in the Supreme duce the same benefits. YPhotography. What makes Sarah’s colleges. That flood of money en- Court’s term this season and one In 2003, the court in Grutter gave story interesting is that she could ables schools to expand, mainly in Fof the last to be decided. The justices Michigan’s law school wide discretion have gone to college after finish- ways that have nothing to do with chose to remand the case back to the to use racial preferences. In Fisher, by ing high school, but chose not to. education — more administrators, Fifth U.S. Circuit Court of Appeals. contrast, the court required the Uni- She likes learning, but is passion- more amenities, more professors Therefore, resolution of the constitu- versity of Texas to prove that its prefer- ate about photography and didn’t doing less teaching. Students wind tionality of racial preferences has been ence system had benefits that could not want to spend years in college tak- up paying more, while usually get- put off for awhile. be achieved in other ways. ing courses she wasn’t especially ting less actual education. Abigail Fisher is a white stu- The lower courts now will have to interested in and piling up debts. Equally important is the dent who applied to the University apply the standard of “strict scrutiny” Now Sarah owns her own decline in academic standards and to the university’s admissions policy. of Texas, but was rejected. She sued, business and manages the consid- the erosion of the curriculum. Col- Rather than merely accepting school arguing that the university’s policy of erable array of work be- lege officials focus more racial preferenc- officials’ claims, the judges are sides photography that it on their bottom lines than es violated her expected to give entails. There was a lot to on educational excel- rights under the “close analysis learn, and she did it with- lence. Among the result- Equal Protection to the evidence out any formal education ing trends are the drop- Clause of the of how the pro- after high school. She is ping of demanding core 14th Amend- cess works in a CEO who never took a curriculum requirements ment to the U.S. practice.” single business course. and the proliferation of Constitution. As the case I know about Sarah soft and fuzzy courses. The court proceeds, the has been wres- because I read the new How do we stop burden of proof book by William J. Ben- this human and financial tling with the will be on the GEORGE nett and David Wilezol Is waste? The authors say legality of using University of LEEF racial preferenc- Texas to show College Worth It? that we need to restore es in education that its admis- The authors (the K-12 education so that since the 1950s. sions policy is former served as secre- students don’t need col- Its most recent necessary to tary of education under President lege to catch up on basic education cases were in produce diver- Reagan, the latter is a fellow at the that was neglected in earlier years. 2003, Gratz and Grutter, both involving sity and that it leads to positive educa- Claremont Institute) have written a Second, they want to see the University of Michigan. In Gratz, tional results. strong challenge to the convention- students given better information the court held that it was impermis- Justice Clarence Thomas wrote a al wisdom that getting a college while they’re still in high school. sible for the university to operate what concurring opinion in which he argued degree is a great idea for almost Far too often, even weak students the majority saw as a quota system that the court should overrule Grutter every American. are herded toward college. Coun- that favored undergraduates of certain and declare that government-run col- “Talented students,” the selors should assess their abilities leges may not use race at all in higher races. authors write, “will be successful objectively and show them that education admissions. Thomas wrote, Grutter was less clear. The court no matter where they go to col- there are often better choices than “Government must treat citizens as said that the law school could use ra- lege or if they don’t go at all.” On enrolling in college. cial preferences if it conducted a “holis- individuals, not as members of racial, ethnic, or religious groups.” the other hand, poorer students Another change Bennett and tic” evaluation of applicants in which (both in the financial and academic Wilezol would make is in the fi- the objective was to secure the claimed Thomas said that is what the challenged admission policies do — sense) need to avoid making bad nancing of higher education. They “educational benefits” flowing from they label students as “representa- educational decisions that will bur- would eliminate all federal aid for having a more “diverse” student body. tives” of whatever group they are said den them with debt and leave them students who are not “needy” and Grutter also contained language to belong to — and then treat some as without gains in useful knowledge tighten eligibility for students who that universities deserve “deference” more desirable than others. The 14th from courts. In Fisher, the University of and skills. are needy by instituting a “skin in Amendment doesn’t allow that, no Bennett and Wilezol are not the game” feature, forcing schools Texas said it needed racial preferences matter how good the reasons for doing to achieve educational benefits from against college education, but to assume responsibility for a por- so might seem to be. caution students to consider the tion of the loans. diversity. The appeals court’s judges Thomas also compared Texas’ ra- entire range of educational alterna- Finally, the book offers a lot of did not disagree with that contention. cial preference regime to actions taken Justice Anthony Kennedy’s ma- by government in the Jim Crow-era tives in light of their own interests useful advice and information: col- jority opinion rebuked that idea. He South. “There is no principled distinc- and abilities before putting down leges that are low in cost but high wrote, “The university must prove that tion between the university’s assertion money for anything. in educational value; noncollege the means it chose to attain that diver- that diversity yields educational ben- Money — that is, the high alternatives and a discussion of the sity are narrowly tailored to its goal. efits and the segregationists’ assertion and rising cost of education — points students and parents should On this point, the university receives that segregation yielded those same comprises a key part of the book. think through before deciding no deference.” That is why the judg- benefits,” he wrote. Bennett advanced the idea when whether to go to college and, if so, ment has been vacated and the case Thomas added that he believes he was the secretary of education where. CJ remanded — the Court of Appeals did racial preferences have “insidious con- that government student aid was not apply the standard of strict scru- sequences,” often hurting the very stu- largely to blame for the steady tiny correctly. dents they’re supposed to help. CJ increases in tuition. That was 25 George Leef is director of re- The “narrow tailoring” language years ago; events and scholarship search at the John W. Pope Center for George Leef is director of research at is crucial. Under the 14th Amendment, since then have strengthened his Higher Education Policy. any policy of sorting people according the John W. Pope Center for Higher Educa- to race and treating some groups dif- tion Policy. PAGE 18 AUGUST 2013 | CAROLINA JOURNAL Higher Education Campus Briefs Charter Teacher Change Could Have Wide Effect he Pope Center often criticiz- es what’s going on at North By Jane S. Shaw and are highly qualified.” Daniel Coupland, an associate Carolina’s universities. This Zachary Williams The UNC Board of Governors professor of education at Hillsdale, summer,T thanks to a generous do- Contributors has set as a high priority the produc- says that once the decision to end ac- nation, the center launched a for- RALEIGH tion of competent teachers from UNC creditation was made, “we realized mal summer internship program small change in a North Caroli- schools. Yet the fact that students must that many of our existing courses had designed, in part, to make up for na law affecting charter schools take education school courses to get a been developed only to meet the state’s the deficiencies on campus. The could have a major impact on license gives education schools an al- onerous standards, which had tightly center hired three interns (all from Ateacher education in North Carolina. most guaranteed market — which may controlled what was taught in teacher UNC-Chapel Hill) who participat- This summer, the General Assem- lead faculty to become complacent education courses.” The department ed in a series of colloquia, debates, bly rewrote the rules governing char- about their responsibilities. eliminated methods and “educational and expert-led weekly discussions ter schools. A compromise between UNC education schools (and psychology and technology” courses; centered on foundational prin- the House and Senate determined most teacher training institutions) are emphasized taking courses in a stu- ciples in American government, that only 25 percent of charter schools’ accredited by the National Council for dent’s major (that is, a discipline like politics, and economics. teachers must be state-certified. Accreditation of Teacher Education. history or math, not education); start- Held at the John Locke Foun- That means principals are free to NCATE has been the subject of wither- ed a new course on teaching English dation office, the discussions also hire whomever ing criticism. grammar; and revitalized courses such were attended by interns from JLF they think will In a 2008 as the philosophy of education and and the Civitas Institute. In prepa- do the best job Pope Center phonics. ration for each meeting, interns to fill the other paper, George Education schools, of course, read selections from influential 75 percent of Cunningham, a have their defenders. The dean of a documents, ranging from John teaching jobs, retired professor private education school in North Locke’s Second Treatise of Govern- whether they of education at Carolina points out that all the educa- ment to Jonah Goldberg’s 2008 best-seller, Liberal Fascism. have a state li- the University tion schools in the state have just gone The discussion leaders in- cense or not. of Louisville, through a major “re-visioning” process cluded policy experts and profes- Those teachers argued that that should make them more effective. sors. For example, Robert Shib- could be retired NCATE is “in It is unlikely that certification will ley, senior vice president of FIRE, chemists, col- the grip of pro- disappear entirely any time soon. The a group that advocates against lege professors, gressive educa- public may prefer state-approved li- speech restrictions on campus, led lawyers, or pro- tion theorists” censure for teachers in traditional pub- a discussion on free speech contro- fessional tutors. and that its lic schools. With thousands of teachers versies in academia. The change could have an impact evaluations “use criteria that fail to hired every year, the public assumes Christopher Wolfe, co-direc- well beyond charter schools. It could emphasize academic achievement.” that certification assures at least a tor of the Thomas International introduce competition into the training Other experts point out that the load minimum of quality. Whether it does Center, a retired Marquette profes- of teachers. of paperwork is extremely heavy, yet remains a topic of debate, as the criti- sor, and a leading constitutional Graduation from an accredited none of it involves actually measuring cism indicates. scholar, led a discussion on natural education school is necessary to get student accomplishment. In any case, for charter schools, rights. a state license, and until now most One school that decided to drop which are supposed to allow more Two Duke University pro- schools required teachers to have a teacher certification a few years ago experimentation than traditional dis- fessors, Jonathan Anomaly and state license (or else they had to begin had something of an epiphany from trict schools, freeing up of the hiring Joseph Connors, led discussions a long and costly alternative-entry pro- the experience — its educators feel that process has begun. CJ on why the free market works and cess). Only private schools are com- it is better off now than it was. In 2007, how to spur economic develop- pletely free to hire whom they want. the state of Michigan announced that ment, respectively. Until the new rules went into effect, it would no longer accredit programs, Jane S. Shaw is president of the John The Pope Center’s Jay Schal- and Hillsdale College, in Hillsdale, W. Pope Center for Higher Education Pol- in and George Leef also led discus- charter schools had tight restrictions on hiring: 75 percent of teachers in Mich., didn’t want to adopt NCATE as icy (popecenter.org). Zachary Williams is sions, Schalin on issues in higher the accreditor. an intern at the Pope Center. education and the progressive elementary schools and 50 percent of movement in America, and Leef teachers in high schools had to hold a on the overselling of higher educa- state certification. Moreover, until re- tion. cently, there was a cap on the number Several JLF experts partici- of charter schools allowed in the state, pated as well. Jon Sanders, JLF’s limiting hiring options even more. director of regulatory studies, Yet education schools — includ- spoke about regulation, and Terry ing UNC schools, which produce Stoops, the director of research one-third of North Carolina’s teach- and education studies, discussed ers — have been under fire. A study why education schools often pro- initiated by former UNC president duce poor teachers. Karen Palasek, Erskine Bowles found that Teach for director of the E.A. Morris Fellows America graduates were more effec- program, also contributed, leading tive in the classroom after a six-week a discussion on Thomas Sowell’s summer program than were recent book A Conflict of Visions. education graduates of UNC schools. The final discussion before A recent study by the National Coun- the interns returned to school, led by Carmela Martinez of the cil on Teacher Quality, an independent Leadership Institute, was about group, gave most of UNC’s ed schools how to make a political im- mediocre ratings. pact on campus. CJ For some school principals, the certification requirement is a negative rather than a positive. Robert Luddy, Duke Cheston is a writer for the founder of a popular charter school John W. Pope Center for Higher Edu- in Wake Forest and the private Thales cation Policy. Academy schools, says, “Many of our best teachers are not licensed, but they AUGUST 2013 | CAROLINA JOURNAL PAGE 19 Higher Education Opinion Crisis: Academia Facing Serious Degradation of Objective Inquiry n 1651, Englishman Thomas Science’s em- However, concept of “post-normal science,” a Hobbes described the lives of men pirical bent makes the fallacy that decision-making tool for situations in the “State of Nature” as ”soli- it more resistant to Issues consensus equals when “facts are uncertain, values tary,I poore, nasty, brutish, and short.” such attacks than truth is hardly are in dispute, stakes are high, and Most people’s lives then were not the liberal arts have in the only assault decisions are urgent.” That is not the much better. been. Still, science on science. There realm of science, but of politics. After That’s hardly the case today. The is endangered by Higher Education are many reasons all, who is to decide whether deci- average lifespan in England has risen a wide variety of for scientists to sions are so “urgent” that they must from 35 years to 77; the average real self-serving interest forsake objective be made even when “facts are uncer- income has risen 40 or 50 times. For groups that reject inquiry: career ad- tain?” many people in objective inquiry vancement and job Other ways the scientific method the industrialized because its methods frequently fail to security, peer pressure, personal agen- is being eroded include the incorrect world today, life is produce politically desired results. das, and submission to “groupthink.” substitution of computer modeling for a series of plea- These interest groups selectively Method is being eroded in general by empirical proof, the confusion of cor- sures interspersed use data to give the false impres- a wide variety of techniques and false relation with causation, using prob- by relatively brief sion that polar ice caps are shrinking assumptions. ability to imply certainty, and attack- periods of enjoy- ominously, overstate the expected rise One is the academy’s blind ac- ing a problem with engineering — the able, meaningful of sea levels, and promote “green” ceptance of “peer review” as the final “how-to” — when the real question is work. The poor energy sources by avoiding mention word on a study’s value. Peer review whether a problem exists, which is the in the U.S. today of their harmful is most useful realm of science. Especially applicable often live better effects on man when a scientist to the climate change controversy is than the nobility JAY and the environ- seeks the advice the attempted reversal of responsi- of old. SCHALIN ment. of other experts bility from the scientists needing to To what Foremost The environmental about proceeding prove their theories to critics who face magic do we owe among the special movement is further with a new demands that they disprove those this bountiful interests pervert- hypothesis. Oth- theories. transformation of material existence? ing science’s foremost in erwise, it is simply If current trends continue, the To no magic at all, but primarily to a objectivity is the other scientists’ academy could become completely way of thinking: the objective inquiry environmental perverting science’s opinions about corrupted, with politicians and aca- of the truth supported by a verifiable movement. One the hypothesis’s demic administrators determining methodology, science. obvious abuse is objectivity acceptability. Even which facts scientists are to prove and Yet, today, after reaching remark- global-warming if all other scien- which they are to deny. After all, that able affluence and technical proficien- advocates’ sub- tists agree with a was much the state of affairs in the cy, we face a severe degradation of sci- stitution of consensus for verifiable hypothesis, it is not proven. Middle Ages, when philosophers from ence and the fundamental principles proof; they insist that the issue is Peer review’s shortcomings were William of Ockham to Galileo were of objective inquiry. “settled” because large numbers of exposed by the editors of the British threatened by authorities for challeng- While some may scoff at the idea scientists agree with them. Medical Journal, who inserted eight er- ing established views. It was also the that science itself is threatened, such But that proves nothing. As the rors deliberately into an unpublished rule in the totalitarian regimes of the doubters likely have not been watch- late science novelist Michael Crichton paper. The 221 scientists who re- 20th century. Unless science and ob- ing intellectual trends in the Ivory said: “Let’s be clear: The work of sci- viewed the paper found an average of jectivity are defended successfully, we Tower. The humanities and social sci- ence has nothing whatever to do with just two errors. Nobody found more could very well return to such inten- ences are already in advanced states consensus. Consensus is the business than five, and 16 percent of the peer tional blindness. CJ of degradation with the spread of of politics. Science requires only one reviewers found none. such nonsensical schools of thought investigator who happens to be right, Particularly outlandish are at- Jay Schalin is director of state policy as postmodernism, critical theory, and which means that he or she has results tempts to inject value-driven methods analysis at the John W. Pope Center for deconstruction. that are verifiable.” into traditional science. One is the Higher Education Policy. PAGE 20 AUGUST 2013 | CAROLINA JOURNAL Books & the Arts

From the Liberty Library Book review

• In Flight of the Eagle, Con- rad Black provides a perspective Hoover’s Thomas Sowell Deconstructs the Race Industry on American history that is un- precedented. Through his analysis • Thomas Sowell, Intellectuals and Race, Basic Books, 2013, be represented in all institutions according to their percent- of the strategic development of 184 pages, $25.99. age of the population. Sowell finds that no evidence is asked the United States, from 1754-1992, or given for the benefits of this “diversity.” It amounts to By Lloyd Billingsley an “argument without argument,” accompanied by “rep- Black describes the nine “phases” Contributor of the strategic rise of the nation, in etition, insistence, and intimidation” from those who fancy which it progressed through grave RALEIGH themselves “thinking people.” challenges and civil and foreign o subject stands more in need of rational discourse The politically correct vision reduces individuals to a wars, and secured a place for itself than race, says Thomas Sowell, senior fellow at the verbally collectivized “category.” Whites who outperform under the title of “Superpower.” Hoover Institution and author of many books. His blacks are simply unjust beneficiaries of past discrimination. He addresses the present times and Nlatest, Intellectuals and Race, supplies the facts and analysis Asians who outperform blacks and Hispanics are beneficia- America’s future with hope that on race currently lacking among intellectuals, an “occupa- ries of “privilege,” and diversity dogma generally ignores it will return to the dynamism of tional designation,” that implies nothing about the mental discrimination against Asians and Jews, high achievers de- great leadership and pre-eminence capacity of those in that line of work. Intellectuals’ lack of spite centuries of persecution in many countries. in the world, which it richly earned knowledge certainly comes through in their ideas about Sowell finds multiculturalism similar to the caste sys- and still shows signs of today. For race, particularly in the Progressive Era. tem, “sealing members of lagging groups within a bubble more information, visit www.en- Eugenics was the rage, motivated by a fear of “inferi- of their current habits and practices, much as believers in counterbooks.com. or” races. Margaret Sanger took her message to the Ku Klux multiculturalism have sealed themselves within a bubble of Klan, and Madison Grant, a progressive activist educated peer-consensus dogma.” • In the wake of tragic shoot- at Yale and Columbia, penned The Passing of the Great Race, Diversity dogmatists see numerical disparities be- ings in Newtown, Conn., and Au- which Hitler called his “bible.” For progressive sociologist tween groups as proof of discrimination, which can be rora, Colo., the anti-gun lobby has Edward Ross, black Americans were remedied only by some kind of gov- launched a campaign of lies, distor- “several million of an inferior race.” ernment affirmative action program. tion, misrepresentation, and emo- Sir Francis Galton, Charles Dar- Those accused of discrimination tional manipulation to take away win’s cousin and author of Hereditary must prove their innocence, a rever- our Second Amendment rights and Genius, wanted “the gradual extinc- sal of American legal practice. As then disarm law-abiding Ameri- tion of an inferior race.” H.G. Wells Sowell explains, the achievement of cans. In Emily Gets Her Gun, Emily recommended targeting undesirable A becomes a grievance for B, against Miller tells her personal story of people of all races. Author Jack Lon- A. Those who lag behind are not how being a single, female victim don, a socialist, held that “the inferior urged to adopt the means by which of a home invasion drove her to try races must undergo destruction, or others have advanced in the past. to obtain a legally registered gun in some humane form of economic slav- Rather, they are told that their prob- Washington, D.C. The narrative — ery is inevitable.” lems “are due primarily, if not solely, sometimes shocking, other times These noxious ideas found their to the malice of other people.” hilarious in its absurdity — gives way into formal eugenics policies in Sowell sees this leading to a the reader a real life understand- a number of U.S. states, including “never-ending cycle of revenge, the ing of how gun-control laws only North Carolina. From 1933-77, the Hatfields and the McCoys writ large, make it more difficult for honest, state’s Eugenics Board authorized with a whole society caught in the law-abiding people to get guns, the involuntary sterilization of some crossfire.” At the same time, the in- while violent crime continues to 7,600 North Carolinians deemed “un- tellectuals “pay no price for being rise. More at www.regnery.com. fit” to bear children. Hundreds of vic- wrong, no matter how wrong, or tims survive to this day, and they had with what catastrophic consequences • What can’t neuroscience been denied financial compensation for millions of other people.” As an tell us about ourselves? Although until the General Assembly approved example he cites Hitler’s fondness brain scans and other neurotech- it this year. for Madison Grant’s book, and intel- nologies have provided ground- Sowell shows how the genetic lectuals and academics spearheading breaking insights into the work- preoccupation, and the notion that the “mass slaughter” in the Cambo- ings of the human brain, the idea race is everything, defies the realities dian killing fields. that they are the most important of history. The transformation of Scotland from a backward Many of our “social problems,” the author says, “are means of answering the enduring state to the flywheel of the modern world, for example, had differences between the theories of intellectuals and the re- mysteries of psychology is mis- nothing to do with genetics. Black children in Youngstown, alities of the world.” Sowell makes that case without raising guided — and potentially danger- Ohio, scored marginally higher on IQ tests than children of his voice, despite the abuse he has taken from the diversi- ous. In Brainwashed, psychiatrist Polish, Greek, and other immigrants. In World War I, white ty mob. Longtime Washington Post columnist Carl Rowan and American Enterprise Institute soldiers from Georgia, Arkansas, Kentucky, and Mississippi compared Sowell to Vidkun Quisling, the puppet “ruler” of scholar Sally Satel and psycholo- scored lower on mental tests than black soldiers from Ohio, Norway during World War II. gist Scott Lilienfeld reveal how Illinois, New York, and Pennsylvania. A black girl scored Sowell generally has not responded in kind, but after many of the real-world applica- 200 on the Binet IQ test, and Sowell finds no “racial ceiling” Clinton Department of Justice nominee Lani Guinier (whose tions of human neuroscience gloss on anyone’s IQ. mother was a white Jew) questioned Sowell’s blackness, he over its limitations and intricacies, The correlation between skin color and intelligence said, “I don’t need some half-white woman from Martha’s at times obscuring — rather than is not an American fixation. Sowell quotes a 10th-century Vineyard telling me about being black.” Fortunately, he has clarifying — the myriad factors Muslim scholar who charged that Europeans grow paler the continued writing thoughtful, fearless, and well-researched that shape our behavior and iden- farther north you go, and that the “farther north the more books on subjects in need of rational discourse. tities. A provocative account of stupid, gross, and brutish they are.” Intellectuals and Race deserves wide circulation and our obsession with neuroscience, American liberalism abandoned the hereditary-genet- would make a fine college textbook. Sowell touched Brainwashed brilliantly illuminates ic view and emphasized equal treatment regardless of race, on similar themes in The Economics and Politics of Race, what contemporary neuroscience color, or creed. That approach has been overtaken by the and even in Marxism: Philosophy and Economics. There and brain imaging can and cannot multicultural vision, the heart of what Sowell calls the “race he noted that Karl Marx referred to German socialist tell us about ourselves, providing a industry,” which also is at odds with reality. Ferdinand Lassalle as a “Jewish n****r,” whose grand- much-needed reminder about the “Grossly uneven distributions of racial, ethnic, and mother or mother was “crossed with a n****r,” based on many factors that make us who we other groups in numerous fields of endeavor,” Sowell writes, his “cranial formation.” Marx, a believer in phrenology, are. Visit www.basicbooks.com. CJ “have been common in countries around the world and for added that “the fellow’s importunity is also n****r-like.” centuries of recorded history.” But the multicultural view, Those references deserve mention in under the mantle of “diversity,” holds that all groups must any discussion of intellectuals and race. CJ AUGUST 2013 | CAROLINA JOURNAL PAGE 21 Books & the Arts Wilson: An Important Founder Who Came to an Unfortunate End orth Carolina history enthusi- Wilson crossed the Atlantic Ocean in fied. Wilson argued that the president “brain conceived and created a na- asts are aware that President 1765 for the American colonies. Soon should be selected by popular vote; tion,” and his mind anticipated future George Washington nominat- after reaching the colonies, he started his counterparts preferred that an political developments. Ned James Iredell Sr. (namesake of Ire- teaching English literature and Latin. electoral college choose the chief Alexander predicted that Ameri- dell County) as one of the first justices Three years later, he was allowed to executive. cans would frequently consult Wil- on the U.S. Supreme Court. Far fewer walk beyond the separation between Washington acknowledged son’s lectures. Truth be told, Wilson are aware that an- the official and public spaces in a Wilson’s contributions by nominat- generally has been overlooked. This other Washington courtroom — he was an attorney and ing him in 1790 to the Supreme Court, may be because of the jurist’s tragic appointee to the had “passed the bar.” where he served until his end. high court called Wilson soon emerged death in 1798. While on It all started with Wilson’s quest North Carolina as a national leader. He not the court, a friendship de- to be wealthy — a goal that is not in- home, albeit for only wrote political tracts veloped between Wilson herently flawed, by the way. To make only the final year during the Revolutionary and Iredell. Even though a long financial history short, Wilson of his life. War era, but he also acted the two had their profes- consistently invested poorly in land He was as chairman of a committee sional disagreements speculation and continued borrow- James Wilson — of correspondence and was — Iredell cast the lone ing money that he could not repay. one of only six a signatory of the Declara- dissent, for instance, in (He owed one creditor $197,000). As a Americans to sign TROY tion of Independence. Chisholm v. Georgia (1793) result, Wilson, a sitting U.S. Supreme both the Declara- KICKLER After the United — Iredell’s personal cor- Court justice, ended up in debtor’s tion of Indepen- States had gained its respondence indicates that prison. dence and the U.S. Constitution. To independence, Wilson the two jurists got along After his release, an evasive apply a common saying to Wilson’s served as a delegate to the splendidly. Wilson traveled south to Edenton and career, “He was in good company!” Constitutional Convention and signed Wilson read widely and was lived out the remainder of his increas- Indeed, few men were as influential the Constitution. He urged delegates a serious thinker who aspired to be ingly stressful life. Wilson was buried during the time. Some historians have to include a system of checks and a well-known legal commentator. just outside of Edenton, on property contended that only James Madison balances in the document. As a result, He delivered numerous influential owned by former governor and U.S. held more influence than did Wilson Wilson advocated a federal form of lectures at the College of Philadelphia Sen. Samuel Johnston. at the Constitutional Convention. Wil- government, a two-house legislature, (they were later published post- Wilson was exhumed in 1906 son’s praiseworthy career, however, and an independent judiciary. humously by his son). His Lectures and reburied in Christ Church’s cem- ended on a somewhat pathetic note: His fellow delegates rejected on Law cited numerous intellectual etery in Philadelphia. CJ He has been (to date) the only U.S. Su- some of his ideas, though. Wilson influences, including John Locke, Wil- preme Court justice to be imprisoned. believed the president should serve liam Blackstone, Hugo Grotius, and Dr. Troy Kickler is director of the A native of Scotland and a a three-year term rather than the Samuel Pufendorf. In 1907, historian P. North Carolina History Project (northcar- graduate of St. Andrews College, four-year term that was finally rati- H. Alexander remarked that Wilson’s 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 re- search. Either way, we think you’ll find the information presented help- ful and enlightening. http://www.johnlocke.org PAGE 22 AUGUST 2013 | CAROLINA JOURNAL Books & the Arts Book reviews Princeton Scholar Spells Out Consequences of Racial Preferences • Russell Nieli, Wounds That Will Not King, Jr. put it, on the content of their ancestry rather than self-improvement easy but of little lasting value. Heal: Affirmative Action and Our Con- character rather than the color of their to get ahead. Nieli also adduces evidence for tinuing Racial Divide, Encounter Books, skin. But a speech by President Lyndon One of Nieli’s principal argu- the “mismatch” argument — that ad- 2012, 456 pages, $29.95. Johnson at Howard University began a ments is that affirmative action has mitting academically weaker students disastrous change. become a crutch that harms those it is hurts them because they’ll be at a com- By George Leef Johnson argued in favor of using supposed to help. He writes, “[R]acial petitive disadvantage compared with Contributor government power to “make the race preference policies have lulled sub- their classmates, especially in disci- RALEIGH equal,” thereby opening up an entirely stantial segments of the black middle plines where knowledge is cumulative. he U.S. Supreme Court issued its different view of what it meant to advo- class into complacency and half-heart- We would have more minority mathe- opinion June 24 in a case (Fisher cate civil rights — preferences in favor ed performance in our increasingly maticians and scientists if it weren’t for v. Texas) involving the constitu- of people who happened to come from education-focused world.” He sup- affirmative action mismatching them Ttionality of racial preferences in college certain minority groups. The spirit of ports his case by citing the research of with universities that are too demand- admissions. The court’s majority de- this new approach to civil the late University of Cali- ing for them. cided to remand the case to the lower rights was captured in an fornia-Berkeley sociologist Zealots, insisting that racial pref- courts to apply “strict scrutiny” to the unguarded comment Justice John Ogbu, whose study of erences must be maintained, avoid the University of Texas’ admission policy, Thurgood Marshall made black high school students mismatch argument, usually by chang- which favored less qualified students during the debate over the in the wealthy Cleveland ing the subject to the claimed “educa- from certain “underrepresented” DeFunis case in 1974: “You suburb of Shaker Heights tional benefits” that white and Asian groups. guys have been practicing revealed the malign influ- students derive from “diversity” on Only Justice Clarence Thomas discrimination for years. ence of preferences. campus. was in favor of striking down such Now it is our turn.” Ogbu found that Nieli argues that it is merely “affirmative action” policies on the Although civil rights those students, while suf- wishful thinking to believe that engi- grounds that they violate the 14th advocates continued to pay fering from none of the neering student bodies for “diversity” Amendment. lip service to the colorblind handicaps of being “dis- leads to improved cross-cultural un- If you read Russell Nieli’s book ideal, many saw that they advantaged,” neverthe- derstanding. Almost all of the minority would benefit from shifting less performed poorly in Wounds That Will Not Heal, you should students admitted usually are cultur- to demands for “affirmative school. The reason? They come to the same conclusion as Thom- ally indistinguishable from their white as. Racial preference policies (in educa- action,” which is to say preferential knew that with the wind of “affirma- and Asian classmates — they’re all tion and elsewhere), far from helping treatment for favored groups. They tive action” at their backs, mediocre American teenagers who have grown to bring the nation together, keep the started insisting on quotas for minor- work was good enough. up with largely the same influences. old sores of discrimination from heal- ity admissions at elite colleges, for the That mind-set carries over into Moreover, the actual experience of “di- ing. Nieli, who teaches at Princeton work forces at companies and govern- college. Nearly all of our top schools, versity” on campus is often self-segre- University, gives us a scholarly but ment agencies, and for the recipients Nieli points out, bend over backward gation and resentment rather than the not pedantic overview of the effects of government contracts. Today, obli- to create a “diverse” student body. of “affirmative action,” and any objec- gations to satisfy racial quotas (even They admit applicants who have (or at “healing” that college leaders claim. tive reader, even devout liberals, must though they can’t be called that) are least claim to have) “minority status” Wounds That Will Not Heal does concede that he makes a powerful case almost ubiquitous in America. even though their academic profiles the nation a great service by demon- against continuing it. Nieli surveys all of that and ar- are significantly weaker than white strating that affirmative action is an- Until 1965, the civil rights move- gues that affirmative action has ac- and Asian students who must be re- other of those social programs that ment had sought to overturn the en- complished nothing except to turn the jected to make room for them. make leftist politicians and academics trenched, often legally mandated dis- country into “a confederation of con- Once in college, many of those feel good about themselves but harms crimination that was the ugly legacy tending tribes” where ancestry trumps admitted to make the school’s “diver- the imagined beneficiaries and tears of Jim Crow and bring about a color- individual merit. Instead of healing sity” numbers look good continue to at our social fabric. Let’s hope that the blind society where people would the wounds of slavery and Jim Crow, it coast, often gravitating into soft aca- judges who will consider the Fisher be judged, as the Rev. Martin Luther encourages minorities to rely on their demic departments where the work is case again read this book first. CJ Help us keep our presses rolling Publishing a newspaper is an expensive proposition. Just ask the many daily newspapers that are having trouble making ends meet these days. It takes a large team of editors, reporters, photographers and copy editors to bring you the aggressive investigative reporting you have become accustomed to seeing in Carolina Journal each month. Putting their work on newsprint and then delivering it to more than 100,000 readers each month puts a sizeable dent in the John Locke Foundation’s budget. That’s why we’re asking you to help defray those costs with a donation. Just send a check to: Carolina Journal Fund, John Locke Foundation, 200 W. Morgan St., Suite 200, Raleigh, NC 27601. We thank you for your support.

John Locke Foundation | 200 W. Morgan St., Raleigh, NC 27601 | 919-828-3876 AUGUST 2013 | CAROLINA JOURNAL PAGE 23 Books & the Arts Book review Today’s Americans Can Benefit From Edmund Burke’s Legacy • Jesse Norman, Edmund Burke: The For Adam Smith, Burke was “the only the first conservative,” a believer in the Polish War of the Bar Confedera- First Conservative, Basic Books, 2013, man I ever knew who thinks on eco- “ordered liberty” who saw change as tion against Russia, and several revolts 325 pages, $27.99. nomic subjects exactly as I do, without inevitable and careful political reform against the East India Company. In any previous communications having “its natural and proper counterpart.” each, Burke “supported the underdog” “This sycophant — who in the pay passed between us.” At the same time, Burke is “also and often affirmed “his willingness to of the English oligarchy played the roman- Norman also appears to agree the earliest postmodern thinker, the speak the truth unto power.” That re- tic laudator temporis acti against the with Smith and Burke on key eco- first and greatest critic of the modern mains a great need today, particularly French Revolution ... was an out-and-out nomic themes. A market economy, he age, and of what has been called liberal in America. vulgar bourgeois. ... He always sold him- says, is “at once maximally individualism.” Norman Long before the Obama admin- self in the best market.” efficient and maximizes is convinced that “extreme istration, an ever-encroaching federal — KARL MARX the benefit of the people liberalism” stands in crisis. government has been colonizing more in it. Socialism, indeed any He argues that disasters and more of private life, placing liberty By Lloyd Billingsley derogation from perfect have undermined conven- and prosperity at risk. Burke doubtless Contributor competition on a market tional beliefs in the moral would have had plenty to say about RALEIGH economy, not only creates primacy of the individual, massive deficits, runaway spending, n the quote above, Karl Marx was inefficiency but also makes the power of human rea- the creation of new agencies and vast referring to Edmund Burke, the some people worse off. son, and the redemptive entitlements in times of recession, and 18th-century Irish philosopher That’s quite a result.” value of individual con- a rapacious regulatory regime. In the Iand statesman probably less familiar Burke, wrote Samuel sumption. The Western spirit of Burke, someone has to speak to American readers than Marx. Jesse Johnson, “does not talk world “wrestles with the up about all this and take action. Norman, a British parliamentarian, from a desire of distinc- possibility of an extended As a politician, Burke set out to sets out to defend Burke and in so do- tion, but because his mind period of secular decline, abolish the Board of Trade and the of- ing provides an erudite and entertain- is full.” Winston Churchill as it seeks to derive public fice of Third Secretary of State, respon- ing account of his life and thought, called Burke a “foremost benefit from private vice sible for the colonies. He also targeted complete with fine illustrations that apostle of Liberty,” but the “Burke of and to reset its political and economic a range of sinecures and called the make this book a keeper. Liberty and Burke of Authority were course.” Regulating Act “robbery in disguise,” But Norman, who earned a the same man pursuing the same ends, While Burke defended tradition, an attack on private property. So if Ph.D. from University College, Lon- seeking the same ideals of society and he did not — as his critics often charge Americans wish to learn from Burke’s don, where he has taught philosophy, Government, and defending them — defend existing power structures example, they should above all speak doesn’t exactly stick the landing on from assaults, now from one extreme, blindly. Norman believes that Burke the truth to power, and support the how best to apply Burke’s formidable now from the other.” would have seen through today’s election of officials who will abolish legacy. For Burke, Norman writes, “poli- “crony capitalism,” in which executive redundant and wasteful government For Norman, Burke is “both the tics ought to be adjusted, not to hu- pay ceases to reflect achievement or agencies. greatest and the most underrated polit- man reasonings, but to human nature, performance. He would have flagged Burke championed the American ical thinker of the past 300 years,” and of which reason is but a part, and by the “modern nabobs of banking and fi- colonists and noted that “in this char- “the hinge or pivot of political moder- no means the greatest part.” Unlike nance” and their “series of cartels dis- acter of the Americans a love of free- nity, the thinker on whose shoulders Hobbes, Locke, and Rousseau, “Burke guised as markets.” That is doubtless dom is the predominating feature. ... much of the Anglo-American tradition begins not with a state of nature but true, but Burke did more than merely This fierce spirit of liberty is stronger of representative government rests.” with what is given — that is, with the observe. in the English colonies, probably, than For Thomas Macaulay, Burke was “the fact of human society itself.” Burke em- By Norman’s count, Burke ac- in any other people of the Earth.” If greatest man since Milton, yet one in phasizes social order, tradition, habit, cepted or supported five uprisings Americans want to make the most of whom reason was yoked to passion.” fact, and circumstance. “Liberalism is against authority: The Glorious Revo- Edmund Burke’s legacy, they should Burke “chose his side like a fanatic, unimpressed by the past; Burke quar- lution of 1688, the American colonists, cherish and preserve that fierce spirit and defended it like a philosopher.” ries it,” Norman writes. “Burke is then the Corsicans’ struggle for freedom, of liberty Burke so admired. 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 AUGUST 2013 | CAROLINA JOURNAL Opinion

COMMENTARY The Left’s Single-Issue Libertarianism

he General Assembly has Locke Foundation’s book First in generated plenty of public- Freedom: ity while debating a bill that [S]uch concerns are as old as wouldT affect abortion clinics in the very founding of the nation to North Carolina. Senate Bill 353 will which the State of North Carolina (among other things) increase state belongs. Two of the charges laid oversight and regulation of abortion against King George III in the Dec- clinics by requiring the physical laration of Independence were that presence of a physician in the room “He has erected a multitude of new when an abortion is performed and offices, and sent hither swarms of by having the N.C. Department of officers to harass our people and eat Health and Human Services write out their substance,” and that “He rules applying to abortion clinics has combined with others to subject that would be guided by us to a jurisdiction foreign the agency’s standards EDITORIAL to our constitution, and for ambulatory surgical unacknowledged by our centers. laws; giving his assent to The proposed regu- lations have produced their acts of pretended So Long, an epiphany among the legislation.” political Left in North JLF has long warned Carolina: Increasing about the real, significant Rural Center state regulations harms costs of overregulation. the regulated industry Our polls of state business or more than a quarter-century, center; and a board of directors that by making it harder and JON leaders consistently found the North Carolina Rural Eco- acted as a rubber stamp for Hall and more expensive to con- SANDERS that the state’s regulatory nomic Development Center and his associates. duct its business. burden ranked very high Fits President, Billy Ray Hall seemed Since then, CJ has reported that In response, the Left as a factor reducing the invincible. Every year, the General As- the Rural Center gave a $500,000 grant has discovered a nascent, state’s competitiveness. sembly gave the nonprofit millions of to the infamous Randy Parton Theatre this-issue-only libertarianism. The General Assembly of late dollars that Hall — acting like a ward in Roanoke Rapids; collected $3.4 mil- “Opponents say the bill could force has taken regulatory reform seri- heeler in a corrupt political machine lion from Golden LEAF to underwrite abortion clinics in North Carolina to ously, passing the Regulatory Re- — doled out to benefit politically con- a loan program for high-tech startups close because they won’t be able to form Acts of 2011 and 2012. At the nected developers and local officials that were too risky to get credit from afford costly upgrades,” the Raleigh end of this year’s session, lawmak- across the state. In return, he expected, private lenders; and offered a $480,000 News & Observer reported. ers passed an omnibus regulatory and typically received, their support. grant to a Canadian steel company The News & Record of Greens- reform measure making numerous In mid-July, Hall’s shakedown that was hoping to relocate to Sanford, boro quoted Rep. Pricey Harrison, changes, chief among them a peri- operation came to a sudden demise. where it would have competed with a D-Guilford, who said the bill “does odic review of existing and newly A scathing state audit followed within local steel fabricator that had taken no nothing to create jobs.” enacted regulations. A key feature weeks a devastating series of investi- government subsidies. Suzanne Buckley, executive di- of the bill’s three-step process will gative reports in the News & Observer. State Auditor Beth Wood used her access to financial records to rector of NARAL Pro-Choice North require controversial rules that Hall resigned less than 48 hours after Carolina, called the bill a “sneak learn that the Rural Center had ac- agencies consider necessary to go the audit went public. Days later, the attack,” and said, “It’s just clear that cumulated $20 million in interest by through the rules adoption process General Assembly enacted a budget they’re looking to restrict access to socking away money in its private as if they were new rules. cutting off state subsidies to the Rural abortion, and they don’t care how bank account rather than giving it to The business of regulatory Center, shifting most of its functions they do it.” grantees. Center officials claim the reform often draws little attention, and funding stream to a new Division One would almost find this interest is the property of the center, nor are regulations’ effects usually welcome suspicion of government of Rural Economic Development in rather than a public asset — a point of visible. But reducing regulation regulation from the usual cheerlead- the Department of Commerce. Gov. contention with the governor, the state allows more time to be spent on ers of big government encouraging Pat McCrory ordered the center to Commerce Department, and legisla- productive activities, encouraging — but the outrage seems limited to stop spending any state money and tive leaders. more entrepreneurship, more job the issue of abortion. Abortion is no suggested that the state may try to Wood also discovered that opportunities, and more economic doubt the priority here, rather than seize funds from the center’s bank the center’s board had carved out pushing the state to adopt a more growth — allowing government accounts. a $241,000 severance package Hall laissez-faire stance on regulation. to collect more revenue in a more The waste, fraud, and abuse could take whenever he chose to Otherwise, why have there vibrant economy. that permeated nearly everything leave. At press time, even the gov- been no protests about North The Moral Monday sideshows the Rural Center touched should not ernor’s office could not say if Hall Carolina regulators trying to force temporarily may have swerved into have been news to any regular reader collected that windfall before the state the closure of, or restrict access to, the truth about regulation. Their of Carolina Journal. An investigative froze the center’s accounts. outpatient surgery centers? targets in the General Assembly, report in the August/September 1998 The Rural Center flourished It’s no secret that government however, are poised to make more issue of CJ by Don Carrington and because misguided people believed regulation imposes real costs on lasting improvements in the area of Andrew Cline previewed many of the government should meddle directly businesses, hindering commerce, regulatory reform. CJ outrages unearthed in the audit and in private business decisions. Those stifling job creation, and perpetu- the N&O stories, including: excessive people are still around, and it’s up to ating other ills. As I wrote in my Jon Sanders is director of regula- salaries for senior staff; inflated claims those of us who believe in free mar- chapter on “The Next Steps on tory studies for the John Locke Founda- of jobs created by center grants; lax kets rather than government planning Regulatory Reform” in the John tion. oversight of projects funded by the to keep them in line. CJ AUGUST 2013 | CAROLINA JOURNAL PAGE 25 Opinion

EDITORIALS COMMENTARY True Progressives Tax Reform Conservatives move North Carolina forward

n Raleigh, the conservatives are problem, such as slow growth in rural Not Enough confidently progressive, and the counties, they defend the very policies ecently I interviewed one tal necessary to start and grow suc- progressives are desperately con- and institutions that have suppos- of North Carolina’s senior cessful businesses. Where the two servative.I edly been addressing the problem for Democratic statesmen for my sides disagree is on how states best The modern-day conservatives years. And when presented with new Rupcoming biography of former Gov. foster capital formation. In the past, who inhabit the General Assembly, the ideas for reform and growth from oth- Jim Martin. Not surprisingly, the Democrats tended to focus primar- executive branch, and other institu- er states and nations, they insist that interview occasionally veered from ily on public capital, on schools and tions believe that the state’s best days North Carolina — lackluster economy the events of 20 years ago to the roads, while worrying less about still lie ahead. But they recognize that and all — still deserves to be a teacher, events of 2013. the private investment that typically North Carolina’s traditional public not a student. “John,” said the Democratic accounts for about 80 percent of the policies have to change before prog- Not everyone in North Carolina politico, “you and I have very dif- economy’s capital stock. ress is possible. politics fits neatly into the conserva- ferent views” about the state’s role Higher taxes can finance That’s why conservatives fa- tive/progressive inversion we’re in promoting economic higher levels of public vored this year’s major rewrite of the describing. But in general, we think growth. While taxes need investment, yes. But they state’s complicated, anti-competitive this inversion conveys the political to be “reasonably compet- also can give entrepre- tax code. That’s why they favored reg- moment. Conservatives are confident itive,” he said, what really neurs, investors, execu- ulatory reform to encourage business about the future benefits of such ideas matters is education and tives, and professionals a starts and expansions. That’s why as lower marginal tax rates, energy ex- infrastructure. “But your reason to take their capital they favored structural reforms of the ploration, greater accountability and view is that if you just cut elsewhere. That might be state’s ineffective economic-develop- competition in education, competitive taxes a lot, you’ll be more worth it to a state if the ment, transportation, and Medicaid contracting for Medicaid and other successful.” rate of return on the pub- programs. That’s why they favored services, and redirecting transporta- I responded that I lic capital its taxes finance education reforms that set higher stan- tion dollars to congestion relief and didn’t actually see things is higher than the rate of dards, reward high performance, and JOHN economic growth. They are confident return of the private capi- expand choice and competition. that way, which surprised HOOD that most North Carolina voters agree him. I explained that I and tal it chases away. In contrast, the “progressives” Unfortunately, that who inhabit Raleigh’s legislative mi- with them about economic-growth most other conservatives policy, the death penalty, and voter ID, see tax reform as part of a broader, has not been North Carolina’s nority and liberal institutions tend to recent experience. For one thing, for example, and welcome the oppor- evidence-based strategy for eco- dwell in the past. They venerate pub- we’ve spent a lot of our relatively tunity to ask them in 2014. nomic recovery, a strategy that also lic policies enacted decades ago, when high tax revenues on public con- Progressives, on the other hand, includes regulatory relief, education times were very different, and seem sumption such as Medicaid. More- are pessimistic, despondent, and often reform, and smarter investment in unwilling to reconsider them in light over, in both education and infra- angry. We won’t deny that anger can infrastructure. of major changes in public policy in structure, at times North Carolina be politically powerful. But it has to As the details of the tax reform America and beyond. Two characteris- has not spent wisely. Meanwhile, tic traits are inflexibility and insularity. be married to something other than deal struck by legislative leaders private investment has been weaker When confronted with a persistent reflexive defense of the status quo. CJ and Gov. Pat McCrory emerged, here than in most of our competitor it struck me that after hearing states, with both taxes and regula- months of spirited debate among tions hampering the growth of our Republicans about taxes, many private capital stock. Unbalanced Rules North Carolinians may have come Job creation and income gains to believe GOP leaders are counting flow from productivity, which in Big government slams small firms on tax reform alone to produce their turn flows from effective investment promised “Carolina Comeback.” in facilities, machinery, technology, ow can you put a price on A large multinational corpora- That’s like letting your eyes be and know-how. Studies show that health or safety? It’s certainly tion with an entire division devoted drawn to a busy corner rather than state government can help build not easy. But it has to be done. to legal and regulatory affairs may be taking in the entire picture. As the and maintain public capital — but IfH you propose a regulation that costs able to handle constantly changing House and Senate negotiated the only if it does so in a cost-effective $1 billion per life saved, you have to rules without much trouble. But what final tax reform package, lawmakers way so that the resulting taxes don’t consider the reality that you would be about a small company with a few also were passing an important and inhibit the vast majority of capital forgoing other uses of that $1 billion employees? The owner might also be welcome change to North Caroli- investment that occurs in the pri- — including the possibility of adopt- the one in charge of regulatory com- na’s transportation-funding formula vate sector. ing, say, 100 other rules that cost only pliance, and might have little time or and fashioning another major regu- By broadening the tax base $10 million per life saved. In other knowledge to apply to the problem. latory reform bill to follow previous words, being too risk-averse in one For a new study in the journal and lowering marginal tax rates, measures in 2011 and 2012. They area can allow greater suffering and Small Business Economics, two econo- particularly on capital formation, also worked out a deal on two key loss in another area. mists used a large sample of business the new tax reform law will attract Regulatory trade-offs contain data from 1992 to 2004. They found education issues — school choice private investment to North Caro- many subtleties. For example, the that, adjusting for other factors, states and teacher tenure — as part of the lina while preserving the state’s cost of complying with business with more and costlier regulations 2013-15 budget bill. ability to invest effectively in public regulations isn’t simply passed along tend to have fewer small firms. In reality, most Republicans assets such as roads and schools. to the owners of businesses. Some As North Carolina legislators agree with their Democratic pre- State leaders have a plan, in of that cost turns into lower wages and policymakers continue to reform decessors about the economic other words. Their critics just have a for employees and higher prices for the state’s regulatory system, they importance of infrastructure and plaint. CJ consumers. Furthermore, regulatory should take into account the dispro- education. Long-term growth comes compliance can have disproportion- portionate burden on small business. from investment, from building the John Hood is president of the John ate impacts depending on the size of Some 35 states have a formal process financial, physical, and human capi- Locke Foundation. businesses. for doing so. Our state should, too. CJ PAGE 26 AUGUST 2013 | CAROLINA JOURNAL Opinion EDITORIAL BRIEFS Unemployment Rate

n an analysis for the Brookings Institution, economist Gary Burtless says the official unemployment rate masks the true amount of hardshipI in the American labor market. Burtless explains how the commonly used rate misses large segments of the work force. The U.S. unemployment rate was 7.6 per- cent in May, which is some 2.5 to 3.0 percentage points above what we’d expect to see when the economy is at full employment. Private-sector employment bottomed out in March 2010 and has been growing ever since, yet the unemploy- ment rate remains far higher than we’ve seen in past recoveries. That 7.6 percent figure fails to include several groups adversely affected by the weak economy. The number of eligible workers who have part-time jobs but want to work full time — counted as “employed” in the official statistics — has grown by 70 percent since late 2007. There are also some 780,000 discouraged workers, those Worries About Low Inflation who don’t have a job but have stopped looking, as they regard hunting for a job as pointless. recently listened to Federal Reserve chairman High inflation makes it tougher for these price There are twice as many discouraged workers Ben Bernanke speak at a press conference (I signals to come through. If most of a price change now as at the end of 2007. Discouraged work- know, I need to get a life!). Anyway, he said is simply due to inflation, then inflation can over- ers aren’t included in the official unemployment Isomething that struck me as contrary to the way whelm — or mask ­­— any price fluctuations due to rate. most people think. He said that while inflation cer- fundamental changes in supply or demand. While the government calculates a broader tainly can be too high, it also can be too low. But can inflation ever be too low? Bernanke unemployment rate to capture the discouraged Actually, I agree with him. So it’s Ben and me thinks so. I also think so. But are we thinking and those working part-time who can’t find against perhaps the majority of people who think clearly? full-time work, even that rate doesn’t attempt to inflation never can be too low. Let me try to explain Actually, when Bernanke worries about low measure the underemployed — those with jobs my (and Ben’s) thinking. inflation, his concern is really about negative infla- who don’t use all of their skills. First, here’s the easy part. tion — meaning a sustained drop in average prices. Most agree inflation can be too Yet, what would be so bad about seeing lower prices “The job market is recovering, but it is high for both the good of the in stores, shopping centers, and malls? recovering slowly, and the patient remains a long economy as well as the good of There can be several problems. Wages and way from good health,” says Burtless. most people. By inflation, I mean salaries also would drop along with prices. If busi- the rise in an average of prices, ness revenues are lower due to lower prices, then Cost of regulation which some translate to mean a firms have fewer funds to pay workers. rise in the cost of living. While Debts also would become more difficult to A new study highlights the high cost of there’s a technical difference be- pay. Debt payments — say on a home mortgage increasing government regulation. In their paper, tween the two, I won’t quibble. MICHAEL or car loan — are usually specified in a set dollar published in the Journal of Economic Growth, econ- Higher inflation hurts WALDEN amount, like $250 or $500 a month. But negative in- omists John Dawson of Appalachian State Uni- households in several ways. It flation increases the purchasing power of the dollar, versity and John Seater of N.C. State University means we have to pay more for the things we buy. making the dollars repaid worth more. This adverse concluded that the increase in federal regulations It means — therefore — we have to get bigger pay impact is made even worse if the household’s salary between 1949 and 2005 depressed U.S. economic raises to keep up with the higher cost of living. It also has dropped. output by 72 percent. also means we have to earn more on our invest- Falling prices can motivate households to The authors note that the macroeconomic ments to keep ahead of the erosive power inflation postpone buying, as they think products and ser- literature rarely has considered the impact of has on the value of the dollars we save. vices will cost less in the future. But since 70 percent regulation over lengthy time periods. In their High inflation also drives up interest rates, of our economy is driven by consumer spending, research, Dawson and Seater use a standard sta- making it harder to borrow money to purchase a any significant slowdown in household buying can tistical model to project economic growth, with home, vehicle, or furniture. For younger people, it send the economy into a tailspin. an additional variable — the number of pages in becomes more expensive to borrow money for col- It is for these reasons that negative inflation the Code of Federal Regulations — to measure lege. can be scary for the economy. Economists think the the level of regulation. Last, inflation makes it difficult for the “signal- negative inflation, which occurred in the 1930s in The model suggests that the increased ing power” of price changes to work their magic. our country and in 1990s Japan, contributed to the federal regulation has slowed economic growth Changes in the price of a product give us important lousy economy in both of those periods. by an average of 2 percentage points per year. information about its relative scarcity. When the As with many things in life, too much of a Dawson and Seater project that, had federal price rises, that tells us the product is scarcer, and good thing can actually be bad. In this case, the regulations remained at the 1949 level, U.S. gross more people are trying to buy a limited supply. “good thing” is low inflation, and the “too much” domestic product would have been $53.9 trillion The higher price motivates many of us to look for is inflation so low that it is negative. This is what in 2011 instead of the actual $15.1 trillion. The alternatives. Ben Bernanke means when he says he will defend model also accounts for slower U.S. economic Conversely, when the price of a product drops, against inflation being both too high and too low. CJ growth in the 1970s, a phenomenon that has it says supplies are abundant and the product is baffled researchers. CJ a relative bargain. This motivates many people to Michael Walden is a Reynolds Distinguished Pro- “stock up” while the bargain lasts. fessor at North Carolina State University. AUGUST 2013 | CAROLINA JOURNAL PAGE 27 Opinion A ‘First In Freedom’ Legislative Session

he 2013 legislative session has at states at $350 a week for 20 weeks. or more children and those whose sounder budgets in the last biennium. times been contentious, some- Employers must contribute more, annual income comes mostly from The $20.6 billion 2013-15 General times controversial, often frus- and the unemployment reserve fund self-employment or pensions — may Fund budget is fiscally responsible Ttrating, but in the end, very successful. is being replenished. As a result, the see a small increase. With competi- with no tax increases and no new This has been a good session for fiscal debt to the federal government will be tive tax rates to encourage and entice debt. Instead of new programs, there responsibility, government efficiency, repaid three years early. (House Bill 4) businesses, all North Carolinians will are efficiency and accountability mea- common-sense reform, school choice, • North Carolina made the benefit from a more robust economy sures. Responsible funding sets aside and accountability. State government critical decision to opt out of the with more and better jobs. According money for the state’s depleted reserve has made protect- Obamacare health exchanges and to the Tax Foundation’s State Business accounts. (Senate Bill 402) ing freedom a Medicaid expansion. Instead the focus Tax Climate Index, this tax reform • More of the state’s debt, in- priority. will be on fixing a broken and expen- package catapults our state from 44th cluding Certificates of Participation, Here are a sive Medicaid system by offering real to 17th nationally. (House Bill 998) will require voter approval. (Senate few highlights: reforms, cost containment, and better • Economic growth and long- Bill 129) • One of patient outcomes. By saying no to the term recovery need more than a • Funds are available for oppor- the first issues exchanges and expansion, the respon- better tax code; they require less tunity scholarships, letting children addressed was sibility for a deeply flawed and widely burdensome regulations. For the third from low-income families attend a pri- preparing young unpopular health care policy stays straight year, the General Assembly vate school, if that is the best option. Local school districts will gain more adults for careers right where it belongs — with the passed a reform bill. This one calls for funding and more flexibility to best by increasing federal government. North Carolina periodic and regular review of rules meet their needs, reducing mandates access to career BECKI decided to focus on fixing health care. to make sure unnecessary ones are from Raleigh. Teacher tenure will be and technical GRAY (Senate Bill 4) repealed, necessary rules are main- replaced with regular evaluations education in high • Unlike previous General tained, and those we’re not sure about based on how well students are learn- schools and refocusing skills training Assemblies and governors, the 2013 get a complete, public review and ing. (Senate Bill 402) in community colleges, particularly in session reformed North Carolina’s common-sense reform. Costs associ- It hasn’t been easy, but this Gen- areas with high unemployment. (Sen- outdated, cumbersome, and com- ated with implementation and compli- eral Assembly and administration are ate Bill 14) plicated 70-year-old tax system. The ance will be considered. (Senate Bill on the right track. This session signaled • The General Assembly started new tax plan lowers and flattens the 74) a commitment to a government that getting the state’s fiscal house in order personal income rate to 5.75 percent, • Wise investments in infra- allows taxpayers to enjoy the fruits of by accelerating repayment of a $2.5 broadens the sales tax base by elimi- structure also spur economic growth. their labor, encourages personal respon- billion debt owed to the federal gov- nating dozens of exemptions, and Rewriting the state’s equity formula sibility, and protects liberty. Before you ernment for unemployment insurance. phases down the corporate tax to 3 will allow transportation dollars to be know it, First in Freedom should be Overly generous long-term benefits percent. The death tax was eliminated spent on priorities and take politics more than an old license plate slogan in were trimmed, too. Instead of provid- and the gas tax capped. out of highway building and mainte- North Carolina. CJ ing $535 maximum weekly benefits Most taxpayers will see a tax nance. (House Bill 817) for up to 26 weeks, North Carolina’s cut under the new plan, while a few • Efforts to curtail unsustainable Becki Gray is vice president for out- benefits are now in line with nearby — some married couples with three growth in government started with reach at the John Locke Foundation. Using the Right Words in Warming Debate here is no public policy debate important. There is a propaganda-driven used kerosene to light their houses, in which the language has been The question of whether or not reason for this. CO2 is an invisible, would bring about no noticeable gain manipulated more than in the the planet is warming is factual, based odorless gas that helps vegetation in temperature reduction. Once again, caseT of global warming. In fact, the on temperature data. The answer may grow and supports life on Earth. CO2 the shyster ad man can shift attention language has been changed to such be yes or no. On the other hand, the is not scary. On the other hand, carbon away from reducing temperatures, an extent that the words being used, climate never has been unchanging suits the propagandists’ purposes the actual purpose of the policy, and when viewed objectively, have little and never will be. much better. toward reducing “carbon emissions,” to do with either the science or the By conflating “global warming” Most people associate carbon which can be measured in terms of thousands of tons. public policy concerns. and “climate change,” propagandists with a black, sooty substance that is Honest policy analysts should Three ex- like President Obama can refer to harmful to inhale and soils everything people who point to data showing it touches. The negative image of car- just say no to this propagandist as- pressions are so sault on language. Whenever “climate ingrained in the that global temperatures have stopped bon presents a much better target for rising over the last 15 years as “flat the shyster ad man than does CO2. change” is used instead of “global conversation that warming,” or “carbon” is used in earthers” and “climate change de- To make the trilogy complete, even skeptics place of “carbon dioxide,” the person niers.” Of course, such accusations the propagandists have changed the (mis)use them. using those terms should be called out These terms are would be true if the issue were indeed goal of policy from reducing tem- and made to explain himself. part of a propa- climate change. But it is not. peratures to reducing emissions. When someone claims that a Since most people do not have There is a very good reason for this. ganda drive meant particular policy will reduce emissions much knowledge of science, the Temperature reduction resulting from to confuse the pub- by a certain amount, we should refo- propagandists have started lying. In policies such as the Waxman-Markey lic on both the sci- cus the discussion on temperatures: newspaper articles and reporting on cap-and-trade legislation, designed to ence and policy of ROY “Tell me how much temperatures will global warming, commentators have reduce CO2 emissions by more than be reduced and over what period of global warming. CORDATO substituted carbon, C, for carbon di- 80 percent, would be unnoticeable. The three terms time.” oxide, CO2. In terms of emissions, the Using the Intergovernmental Panel Propagandists, ad men, and are climate change, issue is the latter, not the former. on Climate Change’s own data and magicians always invoke the same carbon, and emis- CO2 is the greenhouse gas ac- methods, the Waxman-Markey plan technique to perpetrate their illusion sions. cumulating in the atmosphere that would have reduced global tempera- — take the audience’s eye off the ball. First, the expression used to presumably will warm the planet to tures relative to what otherwise would We will defeat these illusionists if we identify the problem has changed intolerable levels. It is CO2 emissions occur by 0.2 degrees over the next 100 keep the ball front and center and in subtly from the accurate and specific that government policies are meant to years. plain sight. CJ “global warming” to the inaccurate reduce. But carbon dioxide is rarely In other words, a policy that and general “climate change.” From mentioned. Instead, we hear of “car- would reduce CO2 emissions to levels Dr. Roy Cordato is vice president the perspective of the propagandists, bon taxes,” “carbon emissions,” and last seen in the late 19th century, when for research and resident scholar at the this language change is the most “reducing our carbon footprint.” people rode horses and buggies and John Locke Foundation. PAGE 28 AUGUST 2013 | CAROLINA JOURNAL Parting Shot Commerce Chief Wants Moral Mondays to Continue (a CJ Parody) By Madge I.K. Multiplier venes. Economics Correspondent After law enforcement officials RALEIGH let them, sing, chant, and pray for he Moral Monday protests that about 15 minutes, the crowd is told to have been held in Raleigh since disperse. The ones who refuse to leave April may be a headache for are arrested. Arrests now total more CapitolT and Raleigh police, but Com- than 800 people. merce Secretary Sharon Decker sees a Decker said that the North Caro- silver lining in the circus surrounding lina Film Office has had a number of the Legislative Building. inquiries from movie producers want- “Our econometric model shows ing to shoot stock video of protesters that tourism generated by the protests, in action. augmented by constant coverage in Decker said the protests also all the liberal Northeastern press, has have given her some ideas on how to been a boon to our state,” said Decker. “rebrand” the state to attract atten- “Some people might call all those tion. One proposal she is considering: New York Times editorials about our “North Carolina: You are on your own state ‘negative,’ but, hey, if they spell here.” your name right ... Am I right?” Decker Decker made a formal request to added. Commerce Secretary Sharon Decker has commissioned a new postcard in hopes of House Speaker Thom Tillis, R-Meck- Decker said an econometrics stimulating more “protest tourism” in North Carolina. (CJ spoof graphic) lenburg, and Senate leader Phil Berger, model developed by the Department rboro go to the N.C. Farmers Market grotesque damage that a new Republi- R-Rockingham, to hold a nonvoting of Commerce and the Golden LEAF and purchase organic produce,” Deck- can majority has been doing to a tradi- session every Monday so that the pro- foundation shows that tourism gener- er said. “And every out-of-state news tion of caring for the least fortunate.” testers will have a reason to return to ated by the protests, led by hotel and crew rents 15 hotel rooms, consumes With Republicans in control of Raleigh. She also asked the organizer restaurant revenues from out-of-state 45 restaurant meals, and pays $50 in the executive and legislative branches, of the protests, Rev. William Barber II, media organizations and visiting la- fuel taxes.” the editorial said, “state government president of the state chapter of the bor union officials, has stimulated the Decker admitted she was a politi- has become a demolition derby, tearing NAACP, to promote the fake legisla- economy and created jobs. cal novice. “Some of those folks act a down years of progress in public edu- tive sessions. At press time, Decker The model relies on the IMPLAN bit strange, but their protests are gen- cation, tax policy, racial equality in the said she has been unable to meet with software used by many government erating a lot of publicity for the state, courtroom, and access to the ballot.” Berger or Tillis, as both cited political entities to exaggerate the benefits of and any publicity is good publicity,” The protests that started in April fundraising commitments. government economic development she said. “I don’t really care about the have attracted more than 1,000 people Barber told CJ he would love to projects. nature of the protests, but I see the po- every Monday to Halifax Mall, adja- keep the protests going for the rest of According to a “conservative” tential economic benefits,” she said. cent to the Legislative Building. After a the year, but he needed funding to con- analysis from the model, each week’s A recent New York Times editorial series of prayers and speeches, some of tinue. He said the $25,000 weekly cata- protests generate $5 million in addi- titled “The Decline of North Carolina” the protesters march to the legislative lyst grants he had been receiving from tional economic activity, supporting has increased interest in protest tour- chambers and block the front doors to the N.C. Rural Economic Development 10,000 job-days. ism, Decker said. The editorial said the the House and Senate chambers before Center ended abruptly without expla- “The retired hippies from Car- weekly protests have arisen from “the the weekly legislative session con- nation in late July. CJ Michael Reagan: ‘Restoring America’s Greatness’ On Saturday, Aug. 17, Michael Reagan, the eldest son of former President Ronald Reagan, will appear at the Richard Childress Events Center in Welcome, N.C., at an event called “Restore America’s Great- ness.”

The author, columnist, and radio personality, who champions the conservative vision of his father, says, “Because of my father, we are that Shining City on a Hill. I wonder if people today would think Reagan was a Reagan conservative.”

Tickets for the event are $125 per person, which in- cludes a catered meal and a meet-and-greet with Mr. Reagan. For tickets, go to http://www.gaalive.net.