Carolina Journal Weekly Report

November 11, 2002

In This Issue:
Feature 1 - Political Parity in N.C.

Feature 2 - Mountain Mischief

Feature 3 - More Monkey Business

Feature 1
Political Parity in N.C.
Legislative, local races follow trend of steady GOP gains

A preliminary analysis of state and local results from North Carolina’s 2002 elections suggests that North Carolina is continuing its move toward political parity, says John Hood, president of the John Locke Foundation.

Developments late Friday that apparently gave the N.C. House to Republicans, 61-59 seats, because of a computer glitch in Wayne County, further illustrated the striking balance between the parties in the state. The contest between Rep. Phil Baddour, D-Wayne, and Republican Louis Pate swing into the GOP column after an official recount gave the victory to Pate.

“Republicans made significant gains on Tuesday, but the end result was to catch up to, but not pass, the Democrats,” Hood said. “We now have a U.S. senator of each party, a 7-6 split in the U.S. House delegation, a Democratic governor but an overwhelmingly Republican judiciary, a 61-59 Republican N.C. House, and a narrowly divided Democratic N.C. Senate. This is a fairly accurate reflection of the political balance in North Carolina.”

Hood pointed to the little-noticed outcomes in county commission races across the state to illustrate how competitive North Carolina has become. Going into the 2002 elections, Democrats controlled 61 of 100 county commissions. According to preliminary information, the GOP gained 11 commissions Tuesday, leaving the counties evenly divided between the parties for the first time in state history. North Carolina’s largest counties, Mecklenburg and Wake, led the trend by returning to Republican majorities similar to those enjoyed by the party in the mid-1990s.

Hood said that one likely explanation for the historic turnover in county commissions was the General Assembly’s decision in September to take tax reimbursements away from local governments in exchange for a new local-option sales tax. Most commissions felt compelled by the state’s fiscal pressure to impose the new tax, often just weeks before Election Day. “Basically, state government got the taxpayers’ money, but county commissioners got the boot — from outraged taxpayers,” Hood said. In other findings:

• Republican Elizabeth Dole’s margin of victory was far larger than some were led to expect by widespread press reports of a “tightening race” in the last three weeks of the campaign. “The idea that Erskine Bowles was ever within striking distance of Dole was an invention of the national news media,” Hood said.

• As for the lottery debate in North Carolina, Hood said the results were mixed. While Tennessee voters approved a referendum to allow a state-run lottery, Democratic governors in South Carolina, Georgia, and Alabama who had tried to use the issue to build political bases in their states all lost their re-election bids.

Ahead of the Curve

• With Tennessee voters’ approval Tuesday of a constitutional amendment allowing its General Assembly to create a lottery for education funding, all of North Carolina’s neighbors will likely be in the business soon. The referendum won 58 percent of the vote, which The Tennessean newspaper reported “was less support than polls had indicated for years but still a comfortable margin.” The newspaper said Southern Baptists and other religious groups “worked hard” to get voters out to oppose the lottery, but a Middle Tennessee State University poll conducted Oct. 21-Nov. 2 found churches were “preaching to the choir,” because most said they had already formed their opinions about the lottery. William Lyons, a political scientist at the University of Tennessee, said, “You’re talking about a lot of minds to change.” The main antilottery group outspent the state’s primary lottery-supporting organization by 4-1.

• The National Conference of State Legislatures reported that Republicans “had a surprisingly strong showing in state legislative elections Tuesday, wrestling control of at least five state legislative chambers, tying two others and possibly having more Republican legislators than Democrats for the first time since the 1950s.” The organization said the GOP this year became the first party of presidential power to gain state legislative seats in a midterm election since records were kept.

Feature 2
Mountain Mischief
FBI probes voting irregularities in Madison County

The FBI and local and state elections boards are investigating the Madison County clerk of court for apparently mishandling absentee ballots.

The News-Record & Sentinel, a weekly newspaper based in Madison County, reported that Madison County Clerk of Court Tim Cantrell hand-delivered absentee ballots to a least two voters. North Carolina’s election law states that it is a felony for any person except a voter’s nearest relative or legal guardian to assist a voter with an absentee ballot.

The story was published Wednesday, the day after the election in which Cantrell, the Democrat incumbent, narrowly lost to Republican Bill Briggs by 162 votes. Cantrell received 3,790 votes, and Cantrell received 3,628. According to the news story, Ezekial John Rice and Mae H. Rice, who live at separate addresses, said Cantrell brought them absentee ballots to fill out.

The first news story on the matter surfaced Oct. 31 when WLOS-TV in Asheville reported that 30 absentee ballots were mailed to a single post office box in Marshall. The box belongs to Marty Cantrell, Tim Cantrell’s brother.

The next day, CJ contacted State Board of Elections Attorney Don Wright to discuss the allegations. Wright said he was familiar with the allegations but believed no specific laws were broken. Madison County election officials were unavailable for comment that day.

The same day, CJ reached Marty Cantrell by phone to discuss the allegations. He said he did not know how many ballots were sent to his post office box, and would not explain who asked for them to be sent there. He refused to answer other detailed questions and hung up the phone.

Apparently later Nov. 1, officials of the local elections board and State Board of Elections became more concerned. By the afternoon of Nov. 1, the Madison County Board of Elections had met and rejected about 50 of the questionable ballots.

On Nov. 2 the Asheville Citizen-Times reported that federal agents were investigating the situation. By Monday, the day before the election, the board had rejected about 66 ballots.

State Board Executive Director Gary Bartlett told CJ that his office is concerned about the situation. “We probably do not have the full story. We know the ballots went to two addresses that belonged to persons connected to the current clerk of court. I have heard rumors that the candidate delivered ballots,” he said. “There are procedures in place that allow a local board to catch this sort of thing, but there is not a specific check list,” he said. “Local boards could ask for a computer-generated report that would show multiple ballots going to the same address.

“With absentee ballots the goal is to get them out as fast as possible. The checking goes on at the back-end of the process. Those ballots were denied. The process worked. Our system also depends on the candidates, the political parties, and the media all watching for irregularities,” he said.

Bartlett explained that the local elections board will conduct a hearing on the matter and that if any laws were broken the local board will refer the matter to the State Elections Board for appropriate action.

Sue Ellen Pierce, spokeswoman for the U. S. Attorney’s office, refused to comment on the investigation.

Capital Quotes

“It’s like kissing your sister. You hope to get more than 60. We’d like to have more than 61, but clearly we are not the minority anymore.”

— Rep. Leo Daughtry,, R-Smithfield and current House minority leader, commenting to The News & Observer of Raleigh on the possibility of an evenly divided N.C. House. Preliminary results show the 120-member House evenly split with several races decided by only a few hundred votes. The contest between Rep. Phil Baddour, D-Wayne, and Louis Pate, swing into the Republican column during official tabulations to give the GOP an apparent 61-59 advantage in the House.

“We’re individualists. The majority of Libertarians don't even believe in running for office. But you have to. If you can’t find a politician you believe in, you have to create one. That’s what I did.”

— Thomas Hill, Libertarian candidate for Cabarrus County commission, speaking with the Independent Tribune of Cabarrus County on receiving nearly 5 percent of the vote in Tuesday’s election. Cabarrus County Libertarians achieved their first election victories Tuesday; local party officials Jeff Goforth and Bob Ritchie won seats on the nonpartisan county Soil and Water Conservation board.

“We don’t need to spend $28 million for new programs for 4-year-olds when children in North Carolina aren’t required to attend school until the age of 6. They are balancing the budget on the backs of active and retired state employees and teachers.”

— Mary Singleton, retired school teacher and activist for state pensioners, talking to the Asheville Citizen-Times about the state’s latest budget. Most state employees received no pay increases while seeing their medical insurance costs increase. The state also withheld $144 million to help fund the state pension system and $12 million intended for the state’s health insurance plan.

Feature 3
More Monkey Business
Easley mixes up magazine ranking, 'stimulus' bill

On Oct. 31, Gov. Mike Easley said North Carolina, for the second year in a row, garnered the No. 1 ranking in the nation in Site Selection magazine’s annual assessment of each state’s business climate.

Also, Easley used the good news to promote the value of the recently passed N.C. Economic Stimulus and Jobs Creation Act. Actually, passage of the bill had no bearing on the criteria used to rank the states.

The governor’s press office selectively quoted Site Selection Editor Mark Arend to give the impression that the two were linked.

The magazine’s rankings used data showing new and expanded corporate facilities in recent years, which accounted for 50 percent of the rankings. The other 50 percent came from states’ performance in the magazine’s survey of corporate real estate executives. Arend said the survey was done in August and September, before passage of the “stimulus” act.

Arend’s article credits the bill for “boost(ing) the state’s allure…” He then mistakenly writes, “The [Stimulus Act] earmarks $540 million in cash grants paid for with income tax revenue from the employees of the businesses that get the grants. If signed into law, the Act will put North Carolina in the running to land significant new projects.”
Most estimates, including the one from the governor’s office, puts the value of the incentives program at $240 million. Easley signed the bill into law Oct. 31.

Easley’s press release touted the ranking. “This ranking shows that we are doing the right things to ensure long-term economic growth in North Carolina,” Easley said. “Our challenge is to ensure good jobs for all of our families, and strong investments in all of our communities. Our commitment to quality educational opportunities, affordable health care and a clean environment for all citizens will go far towards realizing that goal.”

The press release, listing Easley Communications Director Cari Boyce as a contact, amends the stimulus act segment from Arend’s article, attributing it to him as a quote. It left out the errant information that the total grants totaled $540 million, leaving the impression that passage of the act was a critical factor leading to the state’s top ranking.

Arend acknowledged in a telephone interview with Carolina Journal recently that passage of the stimulus act had no bearing on the magazine’s rankings.

“North Carolina’s top ranking in Site Selection magazine’s 2002 assessment of each state’s business climate is an indication that the state continues to build a firm foundation for economic growth that can overcome temporary economic downturns,” Easley’s press release read.

Leaders of both houses of the General Assembly pushed through the economic stimulus package at the end of this year’ legislative session. Advocates for the legislation claimed that North Carolina had insufficient economic development and incentive tools to lure businesses, compared to other states.

Site Selection recognized the N.C. Department of Commerce as a top economic development group of 2001 in its May 2002 issue. North Carolina ranked fifth in the magazine’s annual Governor’s Cup competition, which reflects business expansion success.

On The Cutting Edge

Edison Schools

The future of public education in the United States, and efforts to reform it, are closely tied to the prospects of the private, for-profit Edison Schools Inc. Founded in 1992, Edison’s innovations — including a well-conceived curriculum, an emphasis on technology, longer school days and increased teacher training — can only benefit students, its backers say, and its reforms have been praised by many educators.

But Edison has never made a profit for its investors — and the prospects for doing so are elusive. It lost $86 million on revenues of $465 million in the fiscal year ended June 30. Financial failure would severely disappoint advocates of education reform who see private involvement as the last, best hope of salvaging and rebuilding public education.

Edison has management contracts to operate more than 100 schools enrolling 80,000 students.

In recent months, Edison has said it would overhaul its operating strategy, cut unprofitable contracts and rein in its rapid expansion.

Its biggest school district customers are Philadelphia, at 20 schools; Chester Upland in Chester, Pa., at nine schools; followed by the Dallas ISD; and Las Vegas’ Clark County — although the Dallas contract is to be canceled at the end of this school year.

Powerful interests in Philadelphia, which have been fighting Edison at every step along the way, would like to see that contract canceled also. Student performance has long been a bone of contention between the company and teachers’ unions. Union-funded studies say Edison’s performance gains are average at best; the company says 84 percent of its schools show improvement.

Reported in the Wall Street Journal, Oct. 22, 2002.

Medigap Insurance

Minimum government standards on private medical insurance for the elderly have led to lower coverage than would have been the case in the absence of such regulations, researchers say. Minimum standards imposed on “Medigap” insurance 25 years ago resulted in a decline in voluntary purchase of the regulated supplemental insurance policies.

This finding is of particular interest because minimum standards continue to be applied or proposed in many different health insurance markets, including state-imposed minimum standards on employer-provided health insurance and federal proposals for a “Patients’ Bill of Rights” that would impose minimum standards on Health Maintenance Organizations.

The introduction of the minimum standards was associated with a 15 percent decline in nongroup coverage in the first two years, and a long-run decline of 25 percent.

There is no evidence that individuals switched to other forms of insurance that were less regulated.

Although few nongroup policies would have met the minimum standards before implementation of the regulations, many of the policies had provided additional benefits — such as prescription drug coverage or coverage for care in a skilled nursing facility — not required by the minimum standards.

The evidence suggests that the minimum standards also were associated with a substantial reduction in coverage of the nonmandated benefits for those who retained nongroup Medigap insurance.

These results highlight the fact that policymakers need to think carefully about the nature of the market failure that motivates the regulation, experts say, and ask whether government intervention might make the problem worse rather than better.

Reported in the NBER Digest, October 2002; based on Amy Finkelstein, “Minimum Standards and Insurance Regulation: Evidence from the Medigap Market,” NBER Working Paper No. 8917, May 2002, National Bureau of Economic Research.

Vineyard “Sprawl”

One might think that growing grapes to make wine might be among the world’s least objectionable uses for land. But environmental groups in California — which produces 90 percent of the country’s wine — find it obnoxious.

Charging that wine makers are wasting precious resources and despoiling the landscape with “vineyard sprawl,” environmentalists are trying to rein in the industry — and some of their efforts are bearing fruit.

About two years ago, Napa Valley officials enacted an ordinance restricting vineyard expansion. Elsewhere in the state, activists have fought vineyards on the basis that they use pesticides and produce excess waste.

Vineyard interests appear to be knuckling under to the attacks , with the state’s Wine Institute trade group and the California Association of Winegrape Growers now about to adopt a code of “sustainable” practices, which includes sharply limiting water intake.

Trying to avoid mandatory state regulation, some vintners see positive aspects in parts of the 360-page code workbook — particularly sections relating to water conservation.

But the environmentalists still complain that the code doesn’t go far enough in the area of curbing “vineyard sprawl.”

Reported in the Wall Street Journal, Oct. 23, 2002.

Coming Up

The John Locke Foundation will sponsor a Post-Election Wrap Up luncheon at noon Nov.11 at the Brownstone Hotel in Raleigh.

What do the election results mean? Join John Locke Foundation Chairman and President John Hood; Locke Senior Fellow Marc Rotterman; American Conservative Union President David Keene; News & Observer chief political reporter Rob Christensen; WRAL anchor David Crabtree; and veteran pollster Bill Lee, president of Tele Opinion Research Inc., for a unique and penetrating look into the 2002 election.

Lee has been professionally involved in political efforts and campaigns for more than 25 years in the United States, Central America, and Africa. An expert in campaign planning and strategy, he was also involved in several of the Reagan presidential campaigns. Lee has been the general consultant for several successful congressional campaigns and involved with successful efforts for gubernatorial and senatorial seats as well.

For more information or to pre-register, contact Kory Swanson or Thomas Croom at (919) 828-3876 or [email protected].



Material published here may be reprinted provided the
Locke Foundation receives prior notice and appropriate credit is given.


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