Carolina Journal Weekly Report

July 24, 2009

Carolina Journal Weekly Report

For the week of July 24, 2009 -

Reaction of the Week

RALEIGH — North Carolina’s money-losing tax credit for film production would hit taxpayers’ wallets even harder if it's expanded this year. That’s the conclusion of a new John Locke Foundation Spotlight report.

“Some legislators think North Carolina’s loss of a Miley Cyrus movie to Georgia is a good excuse to expand this state’s tax credit for movie production, but they’re wrong,” said report co-author Joseph Coletti, JLF Fiscal Policy Analyst. “State government already loses $11.2 million on its existing film tax credit. The proposed expansion would increase the cost to $74.5 million.”

Studies that paint film tax credits in a favorable light still show North Carolina’s credit draining taxpayer dollars, Coletti said. “With unrealistic assumptions and questionable methodology that overestimate the benefits of film tax credits, a study from auditors Ernst & Young showed that state government already loses $0.02 on each dollar in film subsidies,” he said. “The state would lose $0.33 on each dollar with a larger credit.”

“As legislators are looking at raising taxes, they are considering an unnecessary film credit expansion that would increase the drain on the state budget from $11 million to $20 million in the first budget year alone,” Coletti added. “That’s the estimate from the General Assembly’s own fiscal research staff, which pegs the loss at $74.5 million per year by 2013.”

Beyond the numbers, the film tax credit raises a question of fairness, Coletti said. “These tax credits take money from taxpayers across the state for the benefit of a select industry with a very localized impact,” he said. “There’s no noticeable impact on the state economy or state revenue.”

News Features

CJ: Employment woes show problems with stimulus
RALEIGH — North Carolina’s latest unemployment numbers help expose problems associated with the federal government’s stimulus plan, according to a John Locke Foundation analyst with a Ph.D. in economics. Proposed state tax hikes of nearly $1 billion a year would make existing problems worse.

CJ: DAQ scrapped report after meeting with AG staff
RALEIGH — The N.C. Division of Air Quality scrapped a pollution report days after lawyers working for Attorney General Roy Cooper expressed concerns that its findings might lead to unwanted questions about the state’s lawsuit against the Tennessee Valley Authority.

CJ: Unused school vexes Guilford officials
GREENSBORO — An abandoned school sits on prime real estate in the middle of Greensboro. A potential buyer practically begs Guilford County Schools to sell the property, and in turn the school system could use the revenue to help offset state and local budget cuts.

Harrison yields control of DPI
RALEIGH — After only six months as state schools CEO, William Harrison said Wednesday afternoon that he will retire from the job of running the education agency on Aug. 31. Harrison will relinquish his $265,000 salary but will continue to guide policy as the unpaid chairman of the State Board of Education.

Democratic Party forfeits donations for Easley
RALEIGH — The state Democratic Party on Thursday forfeited more than $24,000 in contributions reported earlier this decade, nearly all from donors identified as having flown Mike Easley around on private aircraft when he was governor. Party Chairman David Young said it doesn’t know whether the seven so-called “in-kind” contributions violated campaign finance rules, but he wrote a check to the State Board of Elections after questions had been raised about the donations in recent months.

Upcoming Events

Monday, July 27, 2009 at 12:00 noon
A meeting of the Shaftesbury Society
with our special guest Tonya Nelson
The Role of the Pregnancy Center in our Community

Friday, July 31, 2009 at Noon
Friedman Legacy Freedom Lecture
With guest speaker Dr. Jennis Biser
Who will speak on "Milton Friedman and the Public Choice Revolution."

Monday, August 03, 2009 at August 3-August 7
Appalachian Institution Retreat
with our special guest Dr. Michael A. Gillespie
"The Noble, The Good and The Free"

Wednesday, August 12, 2009 at 11:30 a.m.
Health Care Policy Luncheon Briefing
with our special guest Consumer-Driven Health Care Experts
What Small Business Owners Need to Know About Health Care Reform: Why Consumer-Driven Health Care is the Only Way to Reform U.S.Health Care

Thursday, August 13, 2009 at 11:30 a.m.
Health Care Policy Luncheon Briefing
with our special guest Consumer-Driven Health Care Experts
What Small Business Owners Need to Know About Health Care Reform: Why Consumer-Driven Health Care is the Only Way to Reform the U.S. Health Care System

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

Capital Quotes

Who in the world thinks in these trying, challenging times for families that you can raise income tax on working families and middle class families?
— Gov. Bev Perdue, as quoted by the Associated Press, rejecting a proposed state budget agreed to by Democratic leaders in the General Assembly, that included a 2  percent surcharge on all income tax bills.

Either she was in on it and changed her mind, or she wasn’t consulted. Either way, it’s not a good situation.
— Senate Minority Leader Phil Berger, R-Rockingham, commenting to the Raleigh News & Observer on Perdue’s rejection of the budget and tax outline.

They found a way to impose a tax on everybody without consideration for your ability to pay. They even found a way to tax taxes.
— Rep. Thom Tillis, R-Mecklenburg, talking to the Raleigh News & Observer about the proposed income tax surcharge.

We have the fifth highest suburban unemployment rate in the country. The only redeeming (factor) is that Charlotte has the fourth worst rate.
Keith Debbage, professor of urban geography at UNC Greensboro, commenting to the Greensboro News & Record about the unemployment rate in the suburban portions of Greensboro and High Point, which have the fifth highest rate among the country’s 100 largest metro areas.

On The Air This Week…

Carolina Journal Radio

This week on C J Radio…
The Pope Center for Higher Education Policy’s Jane Shaw discusses NC State and the Mary Easley scandal; N.C. House Republicans argue against proposed tax hikes while Gov. Beverly Perdue advocates for them; professor Napoleon Byars of UNC-Chapel Hill explains the importance of the Freedom of Information Act; and JLF’s Joe Coletti discusses the story behind reports of $635 million wasted by the state’s mental health system.

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. This week’s panelists: La’Meshia Whittington; Adam Caldwell; Sally Dixon; and Allyson Brake all of 4-H.

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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