Heard on the Street Posted: Thursday, August 20th, 2009 Is anybody home?
The actions of people in government often leave us scratching our heads. Take the 5 percent budget cuts Governor Perdue announced last week. Didn’t anyone involved in the budget process (especially legislators) recognize that it would take some months before the new tax increases actually started showing up in state bank accounts? If not, why not? If so, why didn’t they think through the matter before passing the budget or announce when the budget was passed or signed that state agencies couldn’t be funded at 100 percent for the first few months?
If Governor Perdue had announced, while signing this document she didn’t especially like, that she was, at the same time, implementing budget cuts because of the lag in time between tax increases and actual cash in the bank everyone would have understood and gone about their business. As it was, it just makes leaders look badly and drives another wedge in public trust of guv’ment.
By the way, most everyone agrees she did the right thing but did it the wrong way. First off, the media was misled when they asked if the budget cuts were a result of declining state revenues. Revenue numbers are down. We were informed that July revenues were 4 percent below last July and the state is 11 percent below last year. Further, we haven’t hit bottom. A growing number believe we may be experiencing a “double-dip” recession, at least in North Carolina. No one in any position of responsibility in this state will tell you they are confident the revenue projections upon which this budget was based are rock solid. They aren’t and July’s revenue report is evidence. We hear that tourism revenues are down, especially in Western Carolina, and back-to-school retail sales have not been strong. There is, therefore, some evidence that state revenues will continue to decline.
The sales tax increase passed by the legislature doesn’t begin until September, so it will be October or November before that anticipated revenue finds it ways into state coffers. The tax increases on smokes and alcohol will be similarly delayed. And the income tax surcharge won’t come until April.
The sinking revenues, coupled with delayed tax increases might not have been so bad had our leaders built a sufficient cushion to get us through the early months of the state budget. But their budget only anticipates a surplus of less than 20 million dollars. In a 19 billion dollar budget that is no margin for error and no reserve to help get through these early months.
Bottom line: The spending side of the budget began immediately while revenues will be months later before appearing, IF they come in as projected. Governor Perdue had little choice. We just keep wondering why she didn’t tell us this when she signed the budget instead of waiting until Friday afternoon, a time when politicians release info they want buried, to tell us.
You will want to hear what our panel has to say on this subject, so be sure to tune in this week’s NC SPIN.
Health care debate
Like most other states in the nation North Carolina has become embroiled in the health care debate even as a report just released indicates North Carolinians have seen health insurance premiums increase 97 percent since 2000 while wages have risen just 18 percent. These facts, reported by Families USA and by Action for Children North Carolina, help explain all the anger and fear that is evident at Town Hall meetings.
Is all of this animated and emotional rhetoric getting us anywhere? Read what we have to say in this week’s My Spin “A Moderate Speaks Out on Health Care.”
UNC problems
Most of us would agree we wouldn’t want UNC President Erskine Bowles’ job right now. Everywhere he turns there is more news demonstrating the university system is out of control and needs reform. The Mary Easley debacle has turned into a tsunami of bad news about our public universities. First we learn that the system has paid out 8 million dollars to 117 administrators over the past five years as severance or “retreat” settlements. The News and Observer follows this revelation with statistics showing that administrators and support personnel grew twice as fast as the growth in students, 28 percent versus 14 percent.
System President Erskine Bowles, to his credit, has talked about the burgeoning growth in administrators and has taken some steps to flatten the lines of administrators at General Administration at UNC, but this revelation clearly demonstrates a lack of accountability and oversight, both within the system and by our lawmakers.
The Charlotte Observer had a good editorial on the subject. Read Are UNC system’s campuses top-heavy?
Confidence in the system is plunging as it is becoming obvious the system is bloated and has lost focus of its primary objective of teaching our children. The question we asked our NC SPIN panelists this week was whether or not President Bowles could fix this problem and restore confidence. You will want to hear their responses.
Recanting fever sweeps Columbus County
Swarming controversy surrounding Senator R. C. Soles took new and mysterious turns this week when not one, but two of the young men who had reportedly accused the Senator of inappropriate conduct recanted their stories.
27 year-old Stacy Scott stated that the interview he had given to WWAY-TV was not true because his mother had prompted him to make the statements and that he had taken Xanax, Percocet, cocaine, alcohol and marijuana they day of the interview. It’s a wonder he wasn’t comatose.
Prompted by Scott’s burst of conscience, 17 year-old Allen Strickland decided he had better come clean so he confessed that Senator Soles had not attempted to grab his genitals, nor had he pepper sprayed him as he had previously stated.
For his part Soles said he was relieved that these young men had come clean.
The rest of us are trying to figure out what in the world is going on here. Either R.C. Soles is the most persecuted man in North Carolina (even more than Mike Easley) or all these rumors point to some really bad conduct on his part.
Both these (and other) young men with whom Soles has had contact report that the Senator has given them money, houses, cars and other gifts of value. One of them reported that Soles’ assistant had given him more than $30,000 in cash. Is R.C. Soles a raging philanthropist?
Some are speculating that he might even be a target of people who have learned they can blackmail him.
We may never know the truth regarding R.C. Soles but we do know there have been insinuations and rumors about the longest-serving Senator in our legislature ever since he came to Raleigh.
Ethics issues continue
News and Observer reports that former Governor Mike Easley received free membership at a posh country club while he was governor continue to point to ethics problems by the governor. The waiver of dues is reported to amount to almost $50,000 during the years of Easley’s administration. Reportedly Easley had paid a similar amount for initiation fees, but we have heard rumors that someone else fronted him the money.
The story raises not only the question of whether or not perks like these should be given folks in government, elected or otherwise, but also points to a very serious violation to disclose these gifts on annual ethics reports. Not just a failure to disclose for one year, but during the entire 8 years of the Easley administration.
But here’s the kicker. No less than Frank Daniels, Jr., former publisher of the N&O and Howard Lee, whom Easley appointed to be chair of the State Board of Education and also gave a plush job on the NC Utilities Commission, both on the board at the time, along with other prominent members of the board thought this was a “proper courtesy to pay the office…” Are they really telling us they think it is alright to give the governor $50,000 worth of freebies? People who do business with, have interests in and want access to the upper echelons of state government think it is ethical and proper to give the governor $50,000?
Talk about feeding at the public trough. No wonder our state has problems with corruption, pay to play, and ethical breaches. The Charlotte Observer says the governor got a mulligan and everyone concerned should have known better. Read their opinion And for more information on this “invitation only” Old Chatham Golf Club visit their web site.
Jack Betts, Charlotte O columnist and NC SPIN panelist was so inspired by his paper’s editorial he felt compelled to disclose before appearing on this week’s NC SPIN that he was being given free membership in the Rocky Knob Tractor and Yacht Club. A hastily called meeting of that board and of the NC SPIN executive committee concluded that he should be allowed to appear on this week’s show since nobody either knew or cared about the organization and that even fewer considered this a perk.
Paintball vigilantes?
Did you catch the story from Durham about a group of citizens who have decided to do something about speeding in residential neighborhoods? The formed a group “Angry Neighbors With Paintball Guns” and put up posters announcing that they would shoot paintballs at cars who exceeded posted speed limits.
The story got a lot of media attention but so far no one has reported being spray painted. Would the group actually resort to this vigilante style of crime control?
But it did get us wondering if this was the beginning of a new era in citizen action groups seeking their own solutions when the establishment (government, business, the church, etc.) didn’t heed requests for action. Could we see cabbages on slow cell phone drivers or lemon Jello on unresponsive legislators? You get the drift. In fact, why not send us your suggestions and we will post them on our web site.
Halifax Superintendent “resigns”
Geraldine Middleton, Superintendent of Halifax County Schools, one of the worst performing public school systems in North Carolina, has announced her resignation to take a job with the Chicago Public Schools.
Who’s kidding who here? The state has all but taken over this school system and Middleton was part of the problem. She had to go and rather than being fired was allowed to resign. Now the state will put someone in this school system who isn’t obligated to hire friends and family and won’t tolerate poor teaching and lack of effort from students. It should be someone who doesn’t live in Halifax.
Republicans salivating over 2010
New GOP state chair Tom Fetzer is salivating over his party’s prospects in 2010. The Burlington Times-News reports that Republicans kicked off a statewide “budget tour” to win seats in the NC legislature. Along with Senate Minority Leader Phil Berger and House Minority Leader Skip Stam, Fetzer spoke to an enthusiastic group, outlining goals to win 12 state House and eight Senate seats in 2010 and gaining solid control over the legislature.
Their message was that state Republicans want to “restore the Republican brand” of fiscal responsibility and limited government. The message isn’t hard to sell, according to Fetzer, because the Democrats are helping them. They are railing against the Democratic control of the legislature, especially reflected in the state budget which raised taxes $1 billion in a recession.
Indeed, many political observers are already predicting 2010 will not be a great year for Democrats, either nationally or in our state. Republicans are actively recruiting candidates to run for legislative seats they feel are winnable.
R.C. Soles’ most recent controversies lead to speculation about what might happen to his 8th district seat (Columbus, Brunswick and Pender Counties). We hear speculation that Senator Charlie Albertson is considering retirement from his Duplin, Lenoir and Sampson County district. We hear that District Attorney Dewey Hudson is being encouraged to run if Albertson steps down. Former House Member Nurham Warwick may be a candidate and perhaps incumbent Lenoir County Representative Van Braxton might consider the race. It could be very interesting in this very conservative district.
We also hear that former House member, Republican Louis Pate is being urged to run again against Senator Don Davis in the Pitt, Greene and Wayne County district held for many years by John Kerr.
There are rumblings across Eastern Carolina that Senator Marc Basnight might resign before the start of next year’s short session, leaving questions about who would replace him in the Senate and in Senate Leadership. As we reported last week conversation about this is spreading and Basnight isn’t commenting on the subject.
Senator David Hoyle is also reportedly ready to retire. His Gaston County district is considered a swing district that might be fertile for Republicans.
The GOP will have their best shot in many a year in taking control of one or both houses.
But the legislature is only part of the equation. The Congress is also up for grabs next year. 8th District freshman Congressman Larry Kissell will be challenged. Former Congressman Robin Hayes says he won’t run. Neither will Charlotte Mayor Pat McCrory, according to today’s Charlotte Observer. But Hayes is putting his energy into helping the GOP find a good candidate.
Second District Congressman Bob Etheridge might get a serious challenge, depending on his stance on the Health Reform issue and his vote on the Cap and Trade legislation. We hear that Johnston County’s Alan Mims might be gearing up for a run against Etheridge.
For people who enjoy politics next year will be fun.
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Until next week, watch out for the SPIN!
Claire Cox-Woodlief
Editor
Tom Campbell
Publisher
contactus@ncspin.com
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