Civitas Review

High Tech Cronyism


A crony coalition including tech giants Facebook, Google and Apple sent a letter Wednesday to NC legislative leaders urging them to keep the state's renewable energy portfolio standards in place.

Apple, Facebook and Google, which own energy-hungry data centers in North Carolina, have called on legislative leaders to halt a move to freeze the state’s renewable energy standard.

The three companies add powerful voices to the debate over the measure now before the state Senate. The North Carolina Sustainable Energy Association cites reports that estimate their investments in data centers in Rutherford, Caldwell and Catawba counties at $2.7 billion.

In a joint letter Wednesday to Senate leader Phil Berger and House Speaker Tim Moore, the tech giants predict the freeze would have “a significant negative impact” on the availability of green energy in the state.

As global operators, the companies say, “the right and ability to access power from renewable resources is not merely a goal, but an expectation.”

The letter was on the letterhead of TechNet, which calls itself a bipartisan policy and political network of CEOs and senior executives that promotes the “innovation economy.”

To read the letter, click here.

Make no mistake, this letter is not about "renewable energy" but is purely political. TechNet is a special interest lobbying firm that works to exploit political connections to gain advantages for their clients. The head of TechNet is Linda Moore, a long-time political operative and former Senior Advisor to Indiana Senator Evan Bayh, and Deputy Political Director of the Clinton White House.

And Apple's head of "Environmental Initiatives" is Lisa Jackson, former Obama appointee as head of the EPA, and Apple of course boasts Al Gore on its board of directors. Google has grown into one of the largest corporate political lobbying firms in the country.

Recall that Apple and Google received two of the largest economic incentive deals in state history when they chose to locate in North Carolina.

Moreover, the Apple solar farm in Maiden, NC has installed $30 million worth of fuel cells from Bloom Energy, whose cells have been described as "exorbitantly expensive" and are wildly inefficient, but just so happen to financially benefit investor John Doer, a former member of Obama's Council on Jobs and Competitiveness.

Lastly, the letter indicates that the tech giants are interested in a "reliable, sustainable electricity supply" in North Carolina, which is a joke. If solar is such a "reliable" energy source, why does Apple need 44 diesel generators as back up at their Maiden solar farm?

The bottom line is this: wealthy Silicone Valley investors are using their political influence to further advance their financial interest through the scam of "renewable energy", and are doing so on the backs of North Carolina taxpayers and energy consumers.

Teacher Shortage? Not According to NCTQ



In recent months news outlets have been awash with stories about a teacher shortage in North Carolina as well as nationally (see Education leaders address NC teacher shortage crisis and Fewer NC students seeking teaching degrees).

Anyone who has been watching the education landscape knows this dominant narrative. There is a teacher shortage (largely because the experts and media say there is) and we need to do something about it. A number of people are starting to challenge such thinking. Most recently Kate Walsh, a very bright educator at the National Center on Teacher Quality. Earlier this week Walsh opined  Are Big Teacher Shortages Around the Corner? . In it Walsh referred to data comparing new graduates to available opening showed 42 of 50 states actually have an oversupply of teachers. Using the same data, North Carolina had 18 percent more graduates than jobs (2012-13 data).  Walsh writes:

There are real shortages of ELL, special ed and secondary STEM teachers. Some rural schools also face serious staffing problems — even when it comes to elementary teachers. But the truth that the headlines bury is that we have been systematically overproducing teachers in most subject areas for years.  Here's some of the supply and demand data we have collected for the most recent year available (2012-13), comparing the number of elementary teachers who are prepared with how many are needed (for the full table, see here). . . .

If government projections are even remotely accurate, the drop in teacher prep enrollment isn't likely to lead to general shortages, not at their current rates. Further, a decline is not necessarily a bad thing, provided it isn't the better perspective candidates who are making other career choices.  While universities might like the resulting tuition revenue, it's not healthy for a profession to systematically overproduce, and not only because it suppresses wages. 

Teacher shortage? It's more a problem of chronic under-supply in specific targeted areas. That declining enrollments in certain areas are always seen as a bad thing — and not part of the natural process of market correction —  is a problem. Getting past such thinking is a necessary part of the resolving some of the long-term current challenges.

One More Time: Medicaid Coverage Does Not Equal Access to Care


The Asheville Citizen-Times reports on a study from the RAND Corporation showing that emergency room visits are on the rise:

Visits to hospital emergency rooms are on the rise in the Carolinas and around the country, with experts pointing to the physician shortage and Obamacare as possible reasons.  

One in five Americans goes to the ER at least once a year, according to RAND Corp., an independent, nonprofit think tank.

Nationwide, three quarters of ER doctors said that patient volumes increased in the past year, according to a new survey from the American College of Emergency Physicians.


It's often hard for patients on Medicaid-managed care plans to get appointments with primary care providers, with median waits of two weeks, though more than a quarter waited a month or more, leaving them with few options besides the ER, according to the American College of Emergency Physicians. The group also pointed to the nationwide physician shortage.

"America has severe primary care physician shortages, and many physicians will not accept Medicaid patients because Medicaid pays so inadequately," said its president, Dr. Michael Gerardi. "Just because people have health insurance does not mean they have access to timely medical care." (emphasis added)

I have often pointed out that coverage does not mean access to care. Progressive liberals advocating for Medicaid expansion never want to address this fact. Medicaid in NC is already overcrowded, with far too many patients chasing too few doctors.

North Carolina's Medicaid program has added more than 600,000 people in the last dozen years. At the same time, the number of NC physicians treating Medicaid patients has fallen. Expansion, by some estimates, would add another 400,000 to 500,000 to the Medicaid rolls. That would mean a million new Medicaid enrollees since 2001 – competing for access to a shrinking number of doctors.

If the radical Left gets its way and as many as half a million more people are stuffed onto NC's Medicaid rolls: who will these people see to get care? Medicaid enrollees already struggle to access care in a timely manner, just imagine how bad the problem will be with 500,000 more people in the program.

Progressive liberals want to wish this problem away, and never answer the question.

Construction Crony: Raise Taxes to Benefit My Company!


At a conference in Winston-Salem last week, government officials and minority business owners discussed the issue of minority-owned businesses receiving a larger share of state government contracts. When discussion turned to a potential $2.8 billion worth of bonds being proposed for state buildings and roads, one of the representatives from a business seeking to benefit from government largesse made an honest statement about his self-interest in seeing the bonds being passed.

During the conference, Calvin Stevens, director of businesses development and diversity at Balfour Beatty Corp. of Charlotte, said minority- and women-owned businesses could take advantage of additional state contracts if the N.C. General Assembly decides to schedule a special election in November for a $2.8 billion bond referendum.

The money would be used for new roads and renovate or repair state government buildings.

Let all vote to raise our taxes, so we will have something to build,” Stevens said to the audience. (emphasis added)

Yep, tax everybody so I benefit. That in a nutshell sums up the 'concentrated benefits and dispersed costs' portion of public choice theory explaining why special interests and lobbyists wield so much power in government. Each individual taxpayer's taxes may only go up a small fraction to pay off the bonds, but construction companies lobbying the government for fat contracts stand to benefit immensely.

House Passes Crony/Pork Laden Budget


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.

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