Spotlights | 2009 Archive

Key facts:

• In North Carolina, the government can invoke eminent domain and seize private property even if reasonable alternatives exist to using this power.
• A recent Senate bill (SB 600) would allow conservation easement holders to challenge takings in court by requiring the government to prove that no prudent and feasible alternatives exist to condemnation of properties encumbered by conservation easements.
• The primary problem with the legislation is that it does not provide the same protection to all other private property or to all property owners.
• The bill would lead to absurd results if not expanded to all property owners, including homeowners, businesses, churches, farms, etc.: — It would provide greater protection to conservation easement holders than to the very people that own the land. A homeowner would have less protection than someone with an easement. — It can fairly be said that this bill provides greater protections for mushrooms than it does for homeowners. As harsh as that statement sounds, it is accurate. The language of the bill clearly shows that the legislation exists to protect natural habitats, not a human’s interest in that habitat.

Recommendation: The government should be required to prove that no prudent and feasible alternative exists to condemnation of all properties, not just those encumbered by conservation easements. Author: Daren Bakst

Key facts:

• The original House budget proposal for fiscal year (FY) 2009-10 used $1.5 billion in Federal bailout funds to craft a budget that spent $19.3 billion.
• Although it is nearly $3 billion less than the original $22 billion request, the original House plan would have been just $1 billion less than actual appropriations in FY2008-09.
• Advocacy groups protested program cuts in the spending plan, in some cases justifiably. House Democrats added $870 million in taxes and fees in FY2009-10 to increase spending above $20 billion.
• The Can-Do Budget, building on the Back to Basics Budget released in March shows one way the House could have avoided new taxes and fees in a more responsible way than the original House budget plan.
• This budget would redirect revenues from the Tobacco Master Settlement to the General Fund, eliminate $125 million in non-teaching centers in the UNC System, and remove corporate welfare programs such as the North Carolina Biotechnology Center, Job Development Investment Grants, and tax carve-outs like the recently approved tax break for Apple Computer.
• There is still time for the Conference Committee to bring openness, responsibility, accountability, and fairness to the state budget. They can start by looking at the recommendations in the attached report.

Author: Joseph Coletti

Key facts:

• North Carolina’s public schools continue to add administrative, non-instructional, and instructional support positions at rates that far exceed enrollment growth. Since 2000, North Carolina’s public school student enrollment (Average Daily Membership) has increased by approximately 13 percent, while school personnel has increased by nearly 18 percent.
• North Carolina’s pupil/staff ratio decreased from nearly 8:1 in 2003 to just over 7:1 in 2006.
• North Carolina public schools employ an average of one teacher for every 14 students, one teacher assistant for every 45 students, and one administrative position for every 167 students. All told, the state’s public schools have one employee for every seven students enrolled.
• Since 2000, school districts have added an additional 435 consultants/supervisors and nearly 2,000 “Other Professionals.”
• School districts should tie funds for the salary and benefits of teachers, administrators, and other public school personnel to various performance measures, as well as increase or decrease personnel based closely on yearly enrollment changes.

Author: Terry Stoops

Key facts:

• Either version (House or Senate) of the smoking ban bill is a major threat to personal freedom and property rights.
• The Senate is considering a bill that would prohibit smoking in “public places” and “places of employment,” such as restaurants. The House version has the same general prohibition, but it also would include a very narrow exception for businesses that do not serve or allow entry to minors.
• The ban is being sold as a way to protect people from secondhand smoke. This is a dangerous slippery slope. There are many things, other than exposure to secondhand smoke, that the government could ban under this nanny-state mindset, including diet and sexual behavior.
• The ban violates property rights by prohibiting property owners from being able to use their properties for legal activities, such as smoking. Private property does not somehow get transformed into public property because the public is permitted to enter.
• There is no conflict between property rights and health rights, as ban proponents argue. All citizens have the freedom to decide whether they want to go to a place that allows smoking.
• Smokers do not have a right to smoke on someone else’s property. Similarly, nonsmokers do not have a right to a smoke-free environment when the environment belongs to someone else.
• Smoking-ban proponents actually want to create a new right: the “right” to be able to go anywhere they want, including for-profit private clubs, and not encounter cigarette smoke. Instead of respecting property rights, they want their preferences to take precedence over others’ property rights.

Author: Daren Bakst

Key facts:

• Only 14 of the 100 schools that received services from dropout prevention grant recipients had substantially lower dropout rates and higher graduation rates from the 2006-07 to the 2007-08 school year.
• Of the five types of recipients awarded grants, grants to non-profit organizations appeared to have the most success.
• Further empirical research is required to get a complete picture of the relationship, if any, between dropout prevention grants and dropout rates.

Author: Terry Stoops

Key facts:

• The budget proposal outlined here reduces appropriations in fiscal year (FY) 2009-10 to $18.8 billion, $2.6 billion less than the final budget for FY 2008-09, and similar to the budget for FY 2006-07.
• In this proposal, per-capita spending adjusted for inflation of $1,969 remains higher than in FY 1997-98 or any year before.
• This proposal broadens the tax base, eliminates special credits and business subsidies, reduces the corporate tax rate to 6 percent, and provides nearly $400 million in tax relief for household investments in education, health care, and child-rearing.
• This proposal injects $200 million each year into the State Health Plan, with the remainder arising from adjustments to the plan and employee contributions. It also puts $300 million each year into the state employee pension fund. Moving both to direct contribution models will limit the need for future injections of taxpayer funds.
• Transparency and accountability are important elements of this budget, as is an option for taxpayers to contribute more than legally required through taxation.

Author: Joseph Coletti

Key facts:

• North Carolina may for the first time begin regulating emissions of carbon dioxide (CO₂), an invisible, odorless gas prevalent in almost every sector of the economy and also vital to human health.
• The Environmental Management Commission, a state commission that adopts environmental regulations, is considering regulations that would mandate certain facilities to report their CO₂ emissions. These regulations would lay the groundwork for far costlier CO₂ regulations.
• CO₂ regulation is not an ordinary policy question — that would be like arguing that global warming is just another environmental issue. Regardless of one’s perspectives, there are significant and unprecedented implications for regulating CO₂.
• The EMC, if it approves the regulations, would be doing so without proper statutory authority and ignoring the will of the legislature — basically taking unilateral action.
• Even if the EMC finds some weak statutory grounds for CO₂ regulation, it is the wrong governing body to make such a critical policy decision — that is the role of the legislature. The legislature is an elected and accountable body that is expected to make these critical policy decisions. The EMC is neither elected nor directly accountable to the public.
• The legislature already is addressing questions regarding CO₂ regulation through a special study commission. The EMC should not preempt the legislature on the question of regulating CO₂.

Author: Daren Bakst

Summary: The Joint Legislative Study Commission on Municipal Annexation failed to address two critical, common-sense reforms properly. First Reform: Municipalities should be required to provide meaningful services to annexation victims—services that an area truly needs.

• Even those commission members who would have wanted a proper definition of “meaningful services” had to oppose the weak definition provided to them by the legislative staff. The chair prohibited commission members from amending the definition.
• The recommendation was so weak that it would have allowed municipalities forcibly to annex areas without providing water and sewer service.
• Municipalities should be required to provide water and sewer if the area needs those services, and furthermore they should be prohibited from simply duplicating services already in an area.

Second Reform: Counties, which are a neutral third party that would represent the interests of municipalities as well as annexation victims, should provide oversight of municipalities that initiate forced annexations.

• As with meaningful services, the commission members were required to consider an inadequate proposal without being able to amend it.
• The commission approved a recommendation allowing the Local Government Commission (LGC) to provide oversight without any clear guidelines. The commission’s choice was either approve the recommendation or not approve any oversight at all.
• The LGC is a poor choice to provide oversight of forced annexations. The LGC is not neutral — four of its five appointed members have a conflict of interest due to their ties to municipalities. The LGC, unlike counties, also is not familiar with the needs of local communities.
• The LGC’s history beyond its debt management oversight has been terrible — for example, the LGC, which has oversight of tax increment financing, approved the Randy Parton Theater debacle.

Author: Daren Bakst

When adjusted for pension contributions, teacher experience, and cost of living, North Carolina’s adjusted average teacher compensation is $59,252, which is $4,086 higher than the U.S. adjusted average compensation and ranks 14th highest in the nation. In a comparison of Southern Regional Education Board (SREB) states, North Carolina’s adjusted teacher compensation is $674 higher than the SREB average adjusted compensation. Author: Terry Stoops

Key facts:

• Forced annexation is a kind of city-initiated annexation that allows municipalities unilaterally to force citizens living in unincorporated areas into the municipalities.
• North Carolina has an extreme annexation law even among states classified by recent studies as forced-annexation states.
• Based on the level of recourse provided to property owners in state statutes, nearly every state in the country (48 states) has abandoned North Carolina’s outdated approach to forced annexation.
• The primary purpose of forced annexation, according to the North Carolina Supreme Court, is for municipalities to provide meaningful services to the annexed areas.
• Except for courts that can review very narrow issues, there is no oversight of city-initiated annexations.
• Counties should provide the necessary oversight. Close to half the states (45 percent) with annexation of unincorporated areas allow counties to approve annexations. That does not include the other means by which states provide oversight, such as through boundary commissions.
• Two-thirds (67 percent) of states that have annexation of unincorporated areas allow a vote or approval by the affected property owners.
• The trend among states with city-initiated annexations is to allow more voting for affected property owners. From 1978 to 1997, five additional states allowed property owners a vote.
• There are 11 states that have at least four municipalities with a top rating from Moody’s or Standard and Poor’s. North Carolina is the only state on the list that is a forced-annexation state. Six of the states have more top-rated municipalities than North Carolina — Massachusetts has more than double the number.

Author: Daren Bakst

Key facts:

• In June 2008, the U.S. Supreme Court in a case called Davis v. Federal Elections Commission struck down a federal law that punished Congressional candidates for spending too much of their own money on their campaigns. Under that law, once personal spending exceeded a threshold level, the opposing candidate was given fundraising advantages.
• According to the Court, the punishment was a substantial burden on the free-speech rights of the self-financed candidates and there was no compelling interest for this type of speech regulation.
• North Carolina’s public (i.e.) taxpayer financing systems for appellate judicial races and select Council of State races also would be unconstitutional. Any reasonable interpretation of Davis would lead to this conclusion.
• As in Davis, the N.C. system punishes candidates for spending too much. Once a candidate who has chosen not to accept public funding (a traditional candidate) spends beyond a threshold level, then his opponent who has decided to take public funds (a subsidized candidate) is given what are called “matching funds.” For example, if a traditional candidate spends $5,000 above the threshold level, the subsidized opponent is provided $5,000 as well.
• The burden to traditional candidates is even worse than that burden on the self-financed candidates in Davis. For example, traditional candidates have limited control over whether matching funds are triggered because spending by independent groups, such as PACs, also can trigger matching funds for their opponents.
• North Carolina’s taxpayer-financing systems also punish independent groups for their speech because they can trigger matching funds to the candidates those groups oppose.
• Legislators should not sit idly by and let North Carolinians’ First Amendment rights be trampled on. These taxpayer-financed systems should be repealed, or at the very least a moratorium should be placed on them.

Author: Daren Bakst

Key facts:

• Tax revenue in North Carolina is volatile because of the dependence on income and sales taxes.
• Proper budgeting would account for the rise and fall in tax revenues over time.
• Instead of proper budgeting, legislators have been on a spend-and-tax roller coaster for the past twenty years, spending when tax revenues are high and raising taxes when revenues are low.
• $2,311: The amount of budgeted appropriations per person for the current fiscal year ending June 30, 2009.
• 41.3 percent: The amount by which inflation-adjusted spending per person climbed between FY 1989 and FY 2009.
• $3.0 billion: The amount state government could save if spending per person were brought back to 1990s levels, adjusted for inflation.

Author: Joseph Coletti