The Locker Room

November 4, 2009

Rand resigning from the N.C. Senate

Posted by Mitch Kokai at 5:30 PM

One of the state's most powerful lawmakers, Senate Majority Leader Tony Rand, D-Cumberland, will resign before the end of the year, according to this report5:35 p.m. update: The report also indicates Rand will become chairman of the state Parole Board.

His Republican counterpart, Sen. Phil Berger, R-Rockingham, issued the following statement:

“Senator Rand has had a long and distinguished career in the North Carolina Senate and maintained a deep respect for Senate traditions. While he and I have often disagreed on matters of policy, he was always someone who kept his word. Given the dramatic leftward drift of the State Senate Democratic Caucus, Senator Rand increasingly found his views at odds with his more liberal Democratic colleagues and that may have led to this decision.”

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Takeaway from election night: Obama now owns the economy

Posted by David N. Bass at 1:22 PM

The Washington Post has a decent recap of yesterday's elections. One important takeaway: the coalition that Obama built in 2008 is now mostly eroded. Whether it will stay that way is another question.

Equally important, though, is that Obama now owns the economic mess. He can no longer blame Dubya and get away with it.

Another major shift came on the economy. Polls have shown through much of the year that Americans blame former president George W. Bush more than Obama for the recession. But if the economic collapse was a powerful force working for Obama and the Democrats last year, it clearly helped Republicans on Tuesday.

Just over half the electorate in both states said they were very worried about the economy, according to the exit polls, percentages almost identical to a year ago. But last year Obama carried those voters by 59 to 40 percent in Virginia and by 61 to 38 percent in New Jersey. On Tuesday, McDonnell won three in four of those voters, while Christie won about three in five.

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The tax man cometh

Posted by David N. Bass at 12:49 AM

The Triad Business Journal has a gritty example of the tax man hurting small business and — yes — costing jobs.

Jim and Tammy Webster, owners of a graphic design company in Winston-Salem, were the targets of an audit four years ago that ended up devastating their business. By 2005, their shop had grown to 16 employees, but many of those have since been laid off due to financial hurdles associated with the audit.

Here's the catch: $250,000 in legal fees later, the Websters finally got the N.C. Department of Revenue to admit it was mostly wrong. Too bad their business is now in the can.

The Journal reports:

The odyssey that began for Tammy Webster and her husband and partner Jim Webster with that notice would turn their business from one of the fastest growing in the Triad to one on the edge of bankruptcy, put their home at risk of foreclosure and their employees out of work.

And that, Webster says, is after winning her fight.

That fight was over the taxation of “mechanicals,” a design industry term for the computer files that tell a printer how to lay out brochures or other advertising media that a designer has come up with. The term hearkens back to a pre-computerized era when those instructions for setting up the presses were delivered on mechanical art boards.


Webster and other designers interviewed for this story say their long-time understanding — and those of their accountants — based on Department of Revenue bulletins was that mechanicals should be treated as a service provided to the client and therefore not subject to sales tax, unless the designer also took charge of securing and delivering the actual printed products. In that case, they believed, sales tax should be collected based on the value of both the design and printing.

Webster says she had no reason to think her approach was mistaken until the results of the audit came back and identified $600,000 in unpaid taxes, mostly related to mechanicals prepared for past clients, she says. It was money she knew she shouldn’t have to pay.

And for the most part, she was right. It took more than two years of reviewing invoices, detailing arguments and meetings with auditors, plus more than $250,000 in legal and other fees, she says, but ultimately her bill for back taxes was reduced to $46,000, including interest and penalties that accrued during the fight.

I doubt this is an isolated case. Does tax cheating occur? Of course. But many cases like this also exist. It’s no fun being bullied by the tax man.

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About those jobs created or saved ...

Posted by Jacob Burgdorf at 10:45 AM

How has "creating or saving jobs" been working out for Obama and the stimulus plan? The Wall Street Journal reports on how a shoe store owner "saved" nine jobs with just short of $900:

How did Kentucky shoe store owner Buddy Moore save nine jobs with just $889.60 in federal stimulus money? He didn’t, and that’s turning into a big headache for him.

Moore’s store in Campbellsville, Ky., filed one of 156,614 reports from recipients of stimulus dollars designed to show how money from the $787 billion program is being spent, and how many jobs the funds have created or saved.

Moore’s slice of the stimulus came in an $889.60 order from the Army Corps of Engineers for nine pairs of work boots for a stimulus project.

Moore says he’s been supplying the Corps with boots for at least two decades. This year, because he provided safety shoes for work funded by the stimulus package, he said he got a call from the Corps telling him he had to fill out a report for detailing how he’d used the $889.60, and how many jobs it had helped him to create or save. He later got another call, asking him if he’d finished the report.

“The paperwork was unreal,” said Moore, who added that he tried to figure out how to file the forms online, then gave up and asked his daughter to help.

Paula Moore-Kirby, 42 years old, had less trouble with the Web site, but couldn’t work out how to answer the question about how many jobs her father had created or saved. She couldn’t leave it blank, either, she said. After several calls to a helpline for recipients she came away with the impression that she would hear back if there was a problem with her response, and have a chance to correct it. So with 15 minutes to go before the reporting deadline, she sent in her answer: nine jobs, because her father helped nine members of the Corps to work.


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The strangeness of the the ballot in NY 23

Posted by Dr. Roy Cordato at 10:33 AM

Already the analyses of the results in New York's special election are starting to pile up. And certainly, given the quirkiness of this race, on several levels, there will be many different explanations of why the Democrat, Bill Owens won and why the Conservative Party candidate Doug Hoffman lost. But part of the explanation could lie with several peculiarities in the New York State voting ballot.  Typically in New York State there are as many as a half dozen, or more parties on the ballot. In this case there were 5: Democrat, Republican, Independence, Conservative, and Working Families. Also, candidates can be cross-endorsed by political parties. What this means is that a candidates name can appear on the same ballot more than once. Indeed, in NYS it is not unusual for a candidate's name to appear 2, 3, or even 4 times on the same ballot, on different party lines. The final point is that the parties appear on the ballot according to how many votes they received in the previous gubernatorial election. So what might have been the implications of this for the special Congressional election? As noted there were 5 parties on the ballot. Officially, 2 of them endorsed Owens, the Democratic Party and the Working Families Party; two of them endorsed Dede Scozzafava, the Republican Party and the Independence Party, and one of them endorsed Hoffman. This means that even though she dropped out of the race at the last minute, Scozzafava’s name not only appeared twice on the ballot, but, because the Independence Party drew more votes in the previous governor's race than the Conservative Party, her name appeared twice on the ballot before anyone even saw Hoffman's name. In other words, Hoffman's name was four lines down. Here is what the voter saw when he or she went in to the voting booth.





Working Families--Owens 

My guess is that this peculiarity alone could account for the fact that Scozzafava received over 5 percent of the vote, more than the margin of difference between Owens and Hoffman.

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Powell out at the N&O

Posted by David N. Bass at 09:45 AM

Dwane Powell, the News & Observer's political cartoonist for the past 35 years, is out. That leaves just one full-time political cartoonist — Kevin Siers in Charlotte — at a daily newspaper in North Carolina.

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New Carolina Journal Online features

Posted by Mitch Kokai at 05:25 AM

The latest Carolina Journal Online exclusive features David Bass' report on highlights from North Carolina's election results.

John Hood's Daily Journal offers his own expert assessment on those results.

Another new CJ Online exclusive features Karen Welsh's report on the state's latest reported teacher turnover rate in North Carolina public schools.

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