Carolina Journal Weekly Report

January 16, 2009

Carolina Journal Weekly Report

For the week of January 16, 2009 -

Reaction of the Week

RALEIGH — Rampant state government spending bears much of the blame for North Carolina’s current budget woes, according to a new John Locke Foundation Spotlight report. State spending has increased 41 percent in the last 20 years.

“Returning state spending to 1990s levels would save the government and taxpayers $3 billion,” said report author Joseph Coletti, JLF Fiscal Policy Analyst. “That would generate more than enough money to cover the projected state budget hole.”

“No one should be surprised that North Carolina faces a shortfall for the current budget year and another projected shortfall for the new budget year that starts July 1,” Coletti added. “The state’s tax structure is based on two volatile taxes: the progressive income tax and the sales tax. The General Assembly has failed to budget accordingly.”

Budget writers relying on volatile taxes should set aside money in good economic times to cope with the inevitable downturns, Coletti said. “Instead the General Assembly has consistently failed to plan ahead, creating a spend-and-tax roller-coaster ride of a state budget process for the last 20 years. Budget writers spend too much when tax revenues are high and raise taxes when revenues are low.”

Lawmakers should be cautious about budget estimates involving individual income and sales taxes, Coletti said. Those two taxes and the corporate income tax make up roughly 90 percent of state General Fund revenue each year.

News Features

CJ: Raleigh planners embrace compact growth
RALEIGH — Dressed in a crimson-stripped tie and black suit, Mitchell Silver smiled as residents streamed into the street-level mezzanine of the Raleigh Convention Center. It was the night the city’s Planning Department would unveil the first draft of a new comprehensive plan, a 388-page document dedicated to corralling growth in high-density areas, curbing suburban development, and orchestrating land use during the next 20 years.

CJ: Green for thee, but not for me?
RALEIGH — Raleigh Planning Director Mitchell Silver owns an SUV and lives in an upscale neighborhood while he spearheads a new comprehensive plan that promotes public transit and small housing. Since joining the city’s Planning Department in 2005, Silver has advocated policies that would create denser neighborhoods, curb suburban development, and encourage residents to use rail, bus, or bicycles for transportation rather than cars.

Gov. Perdue signs first executive orders
RALEIGH — Gov. Beverly Perdue followed through on pledges in her first weekday in office Monday by signing executive orders she said will reduce the power of political influence on road-building and fundraising for future gubernatorial campaigns. Her five directives also formed a committee that would recommend ways to improve state government and told her budget office to set up a method to evaluate whether agencies are meeting their goals.

State’s air is better, but EPA raises bar
RALEIGH — The air quality in North Carolina has improved in the last decade, but government regulators say millions of people still breathe unhealthy levels of ozone, the state’s most widespread air pollution problem. New, tighter federal standards for ozone — the primary ingredient in smog — mean that the Triangle, Charlotte and the state’s other metropolitan areas likely will return to the federal dirty air list next year.

Report: NC lawmakers should drop some incentives
RALEIGH — North Carolina should drop some business tax credits that began in the 1990s because they no longer create jobs, and the state should give more cash grants and lower the corporate tax rate, according to a university report released Tuesday. The recommendations from the University of North Carolina Center for Competitive Economies were offered to a legislative committee.

Upcoming Events

Monday, January 19, 2009 at 12:00 PM, Noon
Shaftesbury Society Luncheon
with our special guest Dr. Holly Brewer
John Locke and the Issue of Slavery

Wednesday, February 04, 2009 at 6:30 p.m. General Reception-Cash Bar
7:15 p.m. Dinner

19th Annual Anniversary Dinner in the Triangle
with our special guest The Honorable Bobby Jindal
America: An Agenda for the Future

Wednesday, February 11, 2009 at 6:30 p.m.
A Headliner Event in Hickory
with our special guests Dr. John R. Christy and Dr. William H. Schlesinger
A Forum on Climate Change: Opposing Views

Friday, February 20, 2009 at 6:30 p.m. General Reception-Cash Bar
7:15 p.m. Dinner

19th Anniversary Celebration in the Charlotte Area
with our special guest Winston Churchill III
Register Now!

John Locke Foundation Carolina Journal Online
The Locker Room Carolina Journal Radio

Capital Quotes

You can’t find $2 billion without making tough choices.
— Gov. Beverly Perdue, as quoted by the Associated Press, speaking about the state’s budget deficit. She hopes to close half the deficit with federal stimulus funds.

The pendulum has swung in the state where tobacco has been king.
— House Majority Leader Hugh Holliman, D-Davidson, talking to the Charlotte Observer about the odds of passage for a bill he will introduce to ban smoking in all indoor public places in the state. Holliman introduced similiar measures in 2005 and 2007, which were narrowly defeated.

Not making any money is a great source of motivation.
Desiree Brint, an Apex contract technical writer, explaining to the News & Observer of Raleigh why she’s taking classes at Wake Technical Community College to learn medical terminology. Enrollment at Wake Tech is up 14 percent, a pattern repeated at other community colleges across the state.

If this were someone working for the state, it would be pretty clear they would be in a conflict of interest and they would have to recuse themselves from the discussion.
Jane Pinsky, of the N.C. Coalition for Lobbying and Government Reform, commenting to the Asheville Citizen-Times on the situation Asheville City Councilman Kelly Miller finds himself in. Miller’s day job is as vice president of the Asheville Area Chamber of Commerce. Asheville is considering redirecting the flow of hotel-tax money, a portion of which ultimate goes to the chamber. The state sets lower ethics standards for local government officials than it does for state employees, and Miller’s recusal is apparently not required.

On The Air This Week…

Carolina Journal Radio

This week on C J Radio…
JLF’s John Hood assesses Mike Easley’s legacy, state legislators discuss reform of forced annexation law, Sen. Curtis Blackwood and Lou Fabrizio of N.C. DPI discuss changes to the public school testing program, David Bobb of Hillsdale College advocates for restoring the U.S. Constitution’s role in society, and JLF’s Michael Sanera critiques Wilson’s investment in fiber-optic technology for its residents.

NC Spin

This week on NC Spin…
Join moderator Tom Campbell for another week of political discussion and debate on the most intelligent television talk show in the state. Topic this week: Think big, dig deep, and push ahead; spending $700 million; do we need auto inspections?; and how much summer vacation?. This week’s panelists: John Hood, president of the John Locke Foundation; Chris Fitzsimon of NC Policy Watch; former Rep. Gene Arnold; and News & Observer columnist Ruth Sheehan. 

At Issue

This week on At Issue…
Watch At Issue, hosted by Kim Genardo, Sunday at 9:00 a.m. Also available on the web at


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