Carolina Journal Weekly Report

April 24, 2009

Carolina Journal Weekly Report

For the week of April 24, 2009 -

Reaction of the Week

RALEIGH — Continued bad unemployment news should prompt North Carolina lawmakers to rethink plans for raising taxes. That’s the assessment of a John Locke Foundation analyst with a Ph.D. in economics.

The N.C. Employment Security Commission's latest report lists the state’s unemployment rate at 10.8 percent for March, up slightly from the February rate of 10.7 percent. North Carolina’s unemployment rate has climbed month-to-month for more than a year.

“The governor and General Assembly should come to grips with the fact that North Carolina is in a deep recession,” said economist Dr. Roy Cordato, JLF Vice President for Research and Resident Scholar. “Both Gov. Beverly Perdue and the N.C. Senate have proposed tax increases in their budget plans. Any tax increase only makes things worse. If we want to bring the unemployment rate down, then spending should be cut, the private sector should be expanded, and tax increases should be avoided.”

Instead of tax hikes, lawmakers should consider legitimate tax reform, Cordato said. “There are three basic principles of tax reform: simplicity, transparency, and neutrality,” he said. “Adopting a tax system based on those principles would have a major positive impact on the North Carolina economy.”

“Simplicity speaks for itself,” Cordato added. “If the average North Carolinian cannot do his or her own taxes in a couple of hours, then the tax code is too complicated. Second, the principle of transparency suggests that taxes should not be hidden from those who pay them. In other words, lawmakers ought to scrap taxes such as the corporate income tax that hides taxes from the consumers, workers, and corporate shareholders who pay the bill.”

News Features

CJ: N.C. Republicans push education reform agenda
RALEIGH — Republican leaders in the N.C. House and Senate have laid out this year “an aggressive agenda for education,” as described by House Minority Leader Paul “Skip” Stam. Stam and Senate Minority Leader Phil Berger called for a tax credit for families in private and home schools, merit pay for individual teachers rather than schools, an end of the cap on charter schools, and major changes to standardized testing.

CJ: Proposal would increase taxes on investors
RALEIGH — A bill being considered in the U.S. House Ways and Means Committee would impose an excise tax of 0.25 percent on the purchase and sale of all stocks, options, and futures. The tax would apply to the entire transaction amount, regardless of whether the trade results in a profit or a loss.

CJ: Report: One-fifth of students ineligible for meal programs
RALEIGH — A sour economy is prompting more families to enroll in subsidized school nutrition programs, but new data from Mathematica Policy Research finds that one-fifth of students get benefits that don’t match their economic circumstances.

Plan would alter taxes
RALEIGH — Democratic leaders in the N.C. Senate proposed yesterday a historic overhaul of North Carolina’s tax system that would generate more than $1 billion in new revenue over the next two years. The large package of proposed tax changes would help reduce the state’s projected budget shortfall, and according to supporters, would modernize an outdated, often convoluted system that hasn't been revamped in nearly 80 years.

State proposes to intervene in school district
RALEIGH — Tougher oversight and training are needed at an embattled school district in northeastern North Carolina that a judge accused of committing “academic genocide,” education officials said Wednesday. Gov. Beverly Perdue announced a turnaround program to help Halifax County schools, where scores on statewide academic tests are significantly lower than the state average.

Upcoming Events

Monday, April 27, 2009 at 12:00 PM, Noon
A meeting of the Shaftesbury Society
with our special guest HansMarc Hurd
Army Transformation during War

Friday, May 01, 2009 at 9:00 am
North Carolina Coastal Conservative Conference
with Conservative leaders from across North Carolina including John Hood
The Conservative Movement in North Carolina

Saturday, May 02, 2009 at 9:00 a.m.
North Carolina Coastal Conservative Conference
Day 2 Conservtive Leaders
The Conservative Movement in North Carolina

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

Capital Quotes

You can’t get beyond the fact that from the get-go it’s a billion-dollar tax increase during the biennium.
— Senate Minority Leader Phil Berger, R-Rockingham, commenting to the Associated Press on a proposal by Senate Democrats to restructure the state’s income and sales taxes.

Western North Carolina in particular is driven by tourism so much. I think it’s the wrong message at the wrong time.
Steve Shiver, CEO of the Ghost Town amusement park, commenting to the Asheville Citizen-Times on a proposal before the N.C. Senate to tax services, including admission at amusement parks. At the proposed rate of six percent,  the tax would add $1.80 to a $30 adult ticket at Ghost Town.

If we don’t get serious about trying to hold the costs of this down, this (plan) is going to be a luxury this state will be able to no longer afford.
— Sen. Tony Rand, D-Cumberland, talking to the Associated Press about the state employee health insurance plan. The General Assembly approved a $675 million bailout of the health plan this week that does not address all of its problems.

…Anyone who thinks Charlotte is going to turn around at the end of the year is being too optimistic.
Gerard Cassidy, an analyst at RBC Capital Markets, talking to the Charlotte Observer about the Queen City’s prospects.

On The Air This Week…

Carolina Journal Radio

This week on C J Radio…
George Leef of the Pope Center for Higher Education Policy discusses essay mills and grade inflation; Sen. Harry Brown, Superintendent June Atkinson, Courtney Clapp and Bill Downey discuss career and technical education; Sen. Dan Clodfelter defends the decision to propose unspecified tax increases during budget negotiations; NC State professor Holly Brewer explains John Locke’s opposition to slavery; John Locke Foundation Fiscal Policy Analyst Joe Coletti breaks down the Senate’s budget plan.

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. Topics this week: North Carolina’s budget picture; why some schools are cutting out summer school; a new bill on sex education; and merging More at Four with Smart Start. This week’s panelists: John Hood, president of the John Locke Foundation; Chris Fitzsimon of NC Policy Watch; Elaine Mejia, Project Director of the NC Budget & Tax Center; and Ruth Sheehan, columnist for The News and Observer of Raleigh.

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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