Civitas Review

District Court Rules Against Obamacare


A ruling today states that the provision in Obamacare that says those enrolling in health insurance exchanges "established by the State" are not eligible for government subsidies to help pay for premiums. The court ruling is in contrast to a previous rule created by the IRS that attempted to reverse this very specific provision.


A federal court on Tuesday struck down a rule from the Internal Revenue Service making Americans in federally run health insurance marketplaces eligible for subsidies, a decision that could seriously imperil implementation of the Affordable Care Act….

Lawmakers drafted the Affordable Care Act so that if a state did not set up a health insurance marketplace – known as “exchanges” – the federal government would do so in its stead. But shortly after the first major challenge to the law’s insurance mandate failed, opponents of the law began arguing that Americans participating in the federally run exchanges were ineligible for subsidies meant to help working and middle class Americans purchase health insurance. Thirty-six mostly Republican run states have opted not to build exchanges.

“If the D.C. Circuit’s opinion stands, it will be a devastating blow to Obamacare. It would cripple the law in the 36 states with federal exchanges,” said Adam Winkler, a law professor at UCLA.

Cato Institute's Michael Cannon has an excellent overview of the case here, including the notion that those states that did not establish an exchange not only would not be eligible for subsidies, their citizens would not be subject to the taxes levied on those not complying with the individual mandate.

This ruling shows why it was so important for NC to refuse to set up an exchange, and if it stands will serve a crippling blow to Obamacare.

The Obama administration will appeal the decision.

Obamacare Mandate to Cost NC Taxpayers Millions for State Employee Coverage


Thousands of state employees will be newly eligible for mandated health insurance coverage this January, courtesy of Obamacare. This has presented an additional challenge to state budget writers of how to pay for their coverage.

The issue has been a concern for months, as state agencies must absorb the cost of covering temporary employees who work 30 or more hours a week. The category could include as many as 24,000 employees statewide, though that number may be reduced significantly once state agencies determine their personnel needs and workers' eligibility under federal guidelines.UNC estimates 8,600 work in the university system.

The Senate budget allows the UNC system to go it alone and put out bids for its own plan for these workers, which include graduate student teaching assistants, postdoctoral fellows, student workers, library employees and others. The House budget requires that all employees in the category statewide be covered under a new option in the State Health Plan.

The decision has put UNC at odds with the State Health Plan and the State Employees Association of North Carolina, which have both opposed the university system's authority to carve out a segment of their workers for a separate plan.


Early on, UNC Board of Governors members feared that the new federal requirement would cost the university system $47 million — based on the State Health Plan's$5,500 annual cost for other state employees.

The $47 million cost may be roughly cut in half depending if the UNC system decides to enroll their newly eligible employees in the State Health Plan or a separate plan.

Senate Bill Allows Local Sales Tax Hike for Ed Expands Corporate Welfare


In a new "committee substitute" bill introduced by the Senate Finance Committee yesterday, the state would authorize local governments to raise their sales taxes by 1/2 cent to fund education (but create a cap on the local tax rate), and a new corporate welfare program would be created. A summary on the local sales tax provision from WRAL:

The legislation, unveiled as a Senate substitute in the Senate Finance Committee on Wednesday, would allow counties to raise sales taxes by a half-cent, rather than a quarter-cent, to pay for education funding. It would cap the local rate at a maximum of 2.5 percent, which, when added to the current state sales tax of 4.75 percent, would mean a maximum sales tax of 7.25 percent in any county.

Counties would still need to obtain voter approval for any increase.

However, the proposal require counties seeking an increase to raise their local rate all the way to 2.5 percent, disallowing counties currently at 2 percent from seeking a smaller quarter-cent increase. It would also require counties to use all new revenue generated by a hike for either education needs or transportation needs but not both.

Counties would not be allowed to have a quarter-cent sales tax for transportation and another quarter-cent for schools. If they have or institute a sales surtax for schools, they would have to repeal it or allow it to expire before going to voters for a new increase for transportation needs.

That change would most immediately affect Mecklenburg County, where commissioners are backing a quarter-cent sales tax increase on the ballot this fall. The money would mostly go to supplement teacher salaries. But the county would have to scuttle that plan, since it has already enacted a half-cent transit tax, bringing it to the cap of 2.5 percent.

It could also affect Wake County, where Democratic commissioners have proposed a quarter-cent sales tax increase to pay for teacher raises. The county Board of Commissioners is expected to vote Aug. 4 on whether to put the referendum on the ballot in November.

Also included in the bill is an expansion of the state's corporate welfare efforts. It creates a new "Job Catalyst Fund" which, similar to other already existing funds, would award taxpayer dollars to select businesses meeting certain "job creation" requirements. Unfortunately, there is no provision to track whether the workers hired by these new firms are actually coming from the ranks of the unemployed and thus creating new jobs, or merely being hired away from their current jobs in which case there wouldn't be "new" jobs being created but just a shift in the mix of jobs toward the politically-privileged company. And there is also no way to determine the loss of jobs and investment suffered by those businesses being placed at a competitive disadvantage, or the jobs never created because tax rates remain higher than they otherwise would be without the corporate welfare programs.

Moreover, the bill would expand the eligibility for the JMAC (Job Maintenance and Capital Development) fund, and also increase funding for the JDIG (Job Development Investment Grant) fund. Both of these programs are corporate welfare schemes that have been in place for several years.

NCSU Students Travel to Forsyth County to Advocate for Early Voting Site at WSSU


North Carolina's 100 county board of elections are in the process of making one-stop early voting site selections for the November election.

This article looks at Forsyth County's process and reports that three NC State Students drove all the way from Raleigh to voice their support for the Anderson Center at Winston-Salem State University to be used as a one-stop site. The Anderson Center was used for early voting in 2010 in Forsyth County.

While the Winston-Salem Journal describes NC PIRG as non-partisan campaign to engage young voters, it is really a liberal advocacy group. In 2004 NC PIRG was investigated for voter registration fraud.

While James Alexander of NCSU (Raleigh NC) told the Forsyth County Board (Winston-Salem NC) that many students don't have cars and not allowing early voting sites on campus was disenfranchising the student vote, the Forsyth Board of Elections Chairman, Ken Raymond, indicated that he focused on geography. According to the WSJ, Raymond said, “The only thing that I was trying to achieve was to have the sites spread out throughout the county.”

All local boards must submit a one-stop voting plan to the State Board of Elections no later than 07/31/2014.

NC should look to DC charters


If you 're a fan of charter schools you should be watching what's going on in Washington DC.

Last week the Washington Post ran a very interesting article on DC principals going door-to-door to tout the benefits of a public school education.  What prompted  principals to take to the streets?  Numbers and test results. Charters enroll 44 percent of  all DC students. However, charter test scores are also impressive. The academic gains of charter schools are even better than the fast-improving DC public schools which lead the nation in academic gains.

What to make of all this news? Heritage's Lindsay Burke did a follow up on the Post story on Heritage's blog, the Daily Signal. Burke addressed the impact of all this activity and said:

It's good schools increasingly must compete for students. Competition encourages schools to create safe learning environment that are desirable to parents and perform academically. . . Not only does the research suggest school leaders themselves respond to competitive pressure, but that response appears to manifest in positive gains for students who remain in traditional public schools.

Let's hope educators and those who working on The Charter School Modification Bill  (SB-793)  are watching.