Civitas Review

Cato @ Liberty's Take on Vong v. Aune


In a recent post, I discussed our amicus brief in Vong v. Aune, a case of occupational licensure run amok. We partnered with the Cato Institute to support an entrepreneur's plea to be heard at the United States Supreme Court. You can now read the Cato Institute's take at their blog, Cato @ Liberty:

Ms. Vong has now filed a petition asking the U.S. Supreme Court to hear her case and vindicate her right to earn an honest living. Cato and North Carolina’s Civitas Institute have filed a brief supporting her petition. We argue first that the Court should take the case to clarify that lower courts need not be willfully blind to the actual motives of state economic regulations. Second, this case offers the Court an opportunity to resolve a pressing circuit split regarding the use of total bans on certain kinds of economic activity. Finally, occupational licensure may deserve heightened scrutiny under the infamous Footnote Four of the New Deal case of Carolene Products (1938), which aims to protect against laws that rig the political process. Occupational licensing regulations rig the system by monopolizing state-licensed businesses, leaving no realistic political redress for individual entrepreneurs who go against the grain.

Read the entire post here.

New Baseline Budgeting Brings Transparency to NC Budget Process


Gov. McCrory is expected to release his budget proposal today, and in so doing will mark the beginning of a new, more honest and transparent budgeting process. As reported by the N&O:

A new state law has ended the decades-old practice of automatically building in numbers that account for expected growth, such as covering the cost of more children attending public schools each year. Also no longer part of the beginning, or baseline, of the budget is the cost of covering additional people expected to enroll in Medicaid, the government health insurance program.

Those items are now debatable, instead of being included automatically based on regular forecasting.

For decades now, progressives have decried budget "cuts" in cases where the budget actually spends more than the previous year. The reason they made the claim is that the state budget didn't grow as much as the automatic increases dictated it should. With the new baseline budgeting process, these misleading cries of budget cuts that aren't really cuts will be exposed for the fabrication they are.
The old way of putting the budget on a sort of "cruise-control" in which it automatically increased every year helped lead North Carolina's per capita spending to grow by 62 percent over the last 30 years – even after adjusting for inflation.   Perhaps this new method of budgeting will push legislators to more closely evaluate and prioritize how they spend our tax dollars – maybe even they'll begin to question taxpayer support for some of the items features in our Waste of the Week series.

Challenging Occupational Licensure


Yesterday, the Civitas Institute filed a joint amicus brief with the Cato Institute at the United States Supreme Court. In the brief, we ask the Court to grant certiorari (take up the case) in Vong v. Aune. Should the Court grant cert, the ramifications could be felt in North Carolina, which has one of the most expansive and complex licensing regimes in the nation. In this post, I'll explain the background of the case, why we filed an amicus brief, and why an Arizona entrepreneur's legal battle is relevant to the lives of North Carolinians.

The Vong v. Aune Saga

The story of this case begins a long time ago in a land far, far away – Arizona. I'll let the Goldwater Institute sum up the background:

Cindy Vong has operated a nail salon in Gilbert, Arizona since 2006. In 2008, she began providing a foot therapy popular in the Middle East and Asia which uses small Garra Rufa fish to exfoliate dead skin from the feet. Ms. Vong remodeled her salon to create a separate area where the foot treatment would be offered. She wrote an extensive policy on customer safety for her staff and legally imported the fish from China to launch the service. A number of Ms. Vong’s customers enjoyed the treatment and none lodged any complaints about it with her business or any state agency.

…In January 2009, Ms. Vong received an undated letter from [Arizona Board of Cosmetology] Executive Director Sue Sansom that accused her of violating the agency’s safety standards and said Ms. Vong could face criminal charges.

…Ms. Vong asked the board to use her spa as a six-month test project so the state agency could write new rules that covered this practice. The board ignored Ms. Vong’s request.

In February 2009, the cosmetology board formally notified Ms. Vong that the state was considering possible civil or criminal penalties for offering the service. Ms. Vong signed an agreement with the cosmetology board in September 2009 and closed the fish spa as the board requested…[S]he was forced to lay off three workers and lost a substantial amount of income.

In November 2009, the Goldwater Institute filed a lawsuit against the Board of Cosmetology on Ms. Vong’s behalf. The board exceeded its statutory authority by unconstitutionally applying regulations to her spa fish business that, in this context, are not rationally related to a legitimate government purpose. The board violated Ms. Vong’s constitutional rights to due process, equal protection and the privileges and immunities afforded to everyone to make a living.

The Arizona courts ultimately sided with the Board of Cosmetology, leading attorneys Clint Bolick and Christina Sandefur to petition the United States Supreme Court.

Why file an amicus brief?

An amicus brief, or "friend of the court" brief, is a brief filed by someone who is not a party to the case. Such a brief presents the court with additional legal or policy reasons to rule a certain way. The goal in our brief was to show the Court that this case is a chance to clarify several unclear points of law surrounding occupational licensing. While we certainly hope Read More »

Gas Tax, Corporate Welfare Bills Head to House Floor Today


Following up on yesterday's post about two recent Bad Bills of the Week, HB 117 and SB 20 are both scheduled for a vote this afternoon in the NC House.

The House yesterday approved a substitute for SB 20 – the new version of this bill would drop the state gas tax from its current 37.5 cents per gallon to 36 cents, effective through the end of this calendar year. At that point, the gas tax formula would revert to its old formula. Legislators have commented that this bill is intended to spark a more permanent, wholesale change in transportation funding and is not intended as a permanent change.

HB 117, the NC Competes Act, is loaded with corporate welfare handouts and targeted political privileges.

Both bills are expected to pass the House and move to the Senate.

NC House Finance Committee to Hear Two Bad Bills


Today's House Finance Committee is scheduled to debate two recent bills featured as Civitas Institute Bad Bills of the Week.

One of the bills is HB 117 – the NC Competes Act. This bill would expand the state's Job Development Investment Grant (JDIG) program, extend tax refunds for American Airlines' purchase of fuel, and expand tax breaks for datacenters.

The other bill is SB 20 – the bill earlier approved by the Senate that would drop the gas tax in the immediate short term, but result in a billion dollar tax hike over the next four years.

As reported by The Insider – a subscription based news service – however, the House Finance Committee is expected to alter the gas tax bill to keep the gas tax floor significantly lower than the Senate-approved bill, while not lowering the tax as much in the near term.

Stay tuned to track the progress of these bills.

UPDATE: The House Finance Committee changed the gas tax bill so that the tax would fall from its current 37.5 cents per gallon to 36 cents per gallon until the end of this calendar year. At that point, the tax would return to its previous calculation formula. Legislators claimed this would be a temporary measure to encourage a permanent solution before the end of the year. This new measure passed out of committee.

The "NC Competes Act" also passed committee, by a vote of 30-9. Both bills are expected to be debated in the House Appropriations committee this afternoon.

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