Civitas Review

House Passes Crony/Pork Laden Budget

May
22

Late last night (or early this morning, however you want to look at it) the NC House passed its budget plan for the next biennium. Dozens of amendments were debated, and 42 passed. Some of the relatively more significant changes made from the original version include:

  • Several DMV fee increases were reduced from 50 percent to 30 percent
  • Expansion of the tax deduction for medical expenses
  • Elimination of the R&D tax credit
  • The film production grant program was reduced from $60 mil per year to $40 mil

Overall, the plan would spend $22.16 billion. Current year actual spending is projected to come in at $20.85, so the spending plan would mark a 6.3% increase.

One of the Amendments passed approved $1 million of taxpayer dollars to fund refrigerators and shelving for small convenience stores in "food deserts" – a proposal that was featured as a Civitas Bad Bill of the Week. Another amendment that would have sunset the renewable energy tax credit was defeated.

Outside of the two exceptions noted above, all of the pork and cronyism noted in this Civitas blog post earlier this week remains in the budget passed by the House. Other additional items included in the final House budget plan worth mentioning include $367k in the UNC budget for a 4-H Camp in Columbia NC, and an additional $190k a year in Commerce for extra staffing to administer the historic preservation tax credit program. This last item is yet another hidden expense to taxpayers of crony programs of political privilege – the additional gov't workers require to administer the program.

The budget will move to the Senate next week where it is expected to undergo major revisions.

California school case attracting a lot of attention

May
20

backtoschool

Valerie Strauss is a perceptive education columnist for the Washington Post, who many times sees things coming before they happen. Earlier this week she blogged  about a heavily-watched lawsuit in California that may portend a massive shift in education law. Lawyers representing students and teachers are claiming that since trauma impacts a child’s ability to learn and academic performance, school districts that fail to address these needs are in violation of federal law.

The suit was brought by Public Counsel, the nation’s largest pro bono law firm, and filed against the Compton Unified School District in California. Why Compton? The web site Trauma and Learning, which has written about the case, speaks directly to those concerns on its web site:

Although trauma is widespread and affects children in all communities, complex trauma is particularly ubiquitous among Compton schoolchildren like students and plaintiffs. Compton is among the most socioeconomically distressed cities in Southern California, and it experiences attendant high rates of violent crime:

  • Compton's poverty rate is twice the national average and its murder rate is five times the national average. 
  • Violence, poverty, and discrimination are so pervasive that in any Compton classroom, the only reasonable expectation is that a significant number of students are likely suffering from complex trauma.

Yes the second bullet raised my eyebrows. The statement …. “the only reasonable expectation is that significant number of students are likely suffering from complex trauma,” gives the reader much to think about. Unfortunately, a factual basis for the lawyer's claims is not on the that list.

No doubt trauma impacts learning. The courts are being asked to determine who will shoulder the long-term costs associated with trauma. Another question the courts might want to consider; Are students merely products of their environment? The decision on the former question– which is likely to be appealed by the losing party – will have massive consequences not only for California, but likely North Carolina and elsewhere. Stay tuned.

Civitas Action to Score Votes on House Budget Proposal

May
20

The N.C. House budget proposal for FY 2015-16 would introduce more than $1 billion in new budgeted spending year-over-year and include tens in millions in targeted tax breaks doled out to special interests while being stuffed with pork barrel spending. The increase of more than 5 percent outpaces measures of population plus inflation growth.

The lineup of crony carve-outs and pork spending is extensive and was listed at the Civitas Institute’s blog on Monday. Some of the more egregious items include:

  • $200K for a youth baseball tournament in House Speaker Tim Moore’s district
  • $5 million expansion in funds for the NC Biotech Center
  • $50K for a museum dedicated to the history of the town of Stanley, located in Rep. Kelly Hastings’ district
  • $300K increase in funds for grassroots science museums
  • $2.5 million expansion of funds for The Support Center (formerly The Minority Support Center, a  partner in the organizing group for Moral Monday protests)
  • $60 million per year for film production taxpayer handouts
  • $3 million per year for data center tax breaks
  • $8 million for historic preservation tax credits

Indeed, no fewer than five items identified in Civitas’ Waste of the Week series receive funding in the House budget, and most of them actually receive an increase of taxpayer dollars.

Civitas Action considers the current House budget proposal to NOT reflect sound, fiscally conservative policy, and finds the pork spending and targeted tax credits to special interests to be poor management of taxpayer dollars.

Civitas Action intends to grade a vote in support of  House Bill 79 – the House budget proposal in its current or any similar form – as a negative vote in its 2015 Civitas Action Conservative Effectiveness Ranking.

An Open Letter From Civitas Board Chair to NC House Repub Caucus

9
May
19

The following email was sent from Civitas Institute Board Chair Bob Luddy to House Republican Caucus members expressing his opinion of the "Liberal House spending plan":

Subject: House Budget, Major new spending and no Tax Relief

Dear House Caucus Members,

Since 2010, I've given consistently to help elect House Republicans.  We now find that based on the Republican budget, special interests such as film producers, non-competitive solar energy manufacturers and out of state companies are favored over hard-working taxpayers and North Carolina businesses.  

I had planned to donate $25,000 this year to the House Republican Caucus to help re-elect a conservative super-majority.

Unfortunately, after seeing the $1.3 billion in additional spending and no across the board tax relief in the proposed house budget I had to reconsider. 

Today, I decided to give the $25,000 intended for the House Caucus to Americans for Prosperity NC to fight the Liberal House spending plan.

BL

Solar Crony Admits Solar in NC Completely a Gov't Creation

2
May
19

In the N&O, the CEO of a crony solar company that has profited not because it created value for consumers but rather due to political privilege lobbied in the backrooms of the General Assembly, discusses threats to the continued success of his business.

But this sunny forecast could quickly cloud over. Two of the most critical policies to North Carolina’s solar growth are in immediate jeopardy, a third faces long-term uncertainty and a fourth is stuck in legislative limbo.

Note that the threats to his business have nothing to do with changing consumer preferences, or competitors in his industry, but the possible expiration of the government privileges he's exploited for personal gain at the expense of everyone else.

We're being told that solar and wind are now cost competitive with more traditional energy sources. If that's true, why would solar CEOs panic at the expiration of political privileges? Solar should be able to compete without government favors if it truly was cost competitive and anywhere near as efficient as traditional energy sources – and surely not need a state government law forcing utilities to buy their product.

This article is crystal clear evidence that the solar industry is a government-created scheme to enrich politically-connected cronies at the expense of ratepayers and taxpayers. As the crony CEO concludes:

government policy has powered the state’s solar growth so far

Will NC legislators keep the solar gravy train flowing?

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