Heard on the Street Posted: Thursday, November 12th, 2009 Perdue gets loopy over Charlotte
Governor Beverly Perdue went to Charlotte this week and told folks in the Queen City what they were longing to hear, namely that the state would complete the loop around the city ahead of schedule. To do so requires some very creative and controversial action. The state will use $265 million from Highway Trust Funds and borrow $250 from federal Garvee bonds. No word from the Governor about where the Highway Trust Funds will come from…they have all been promised for other projects. The Garvee money is much like Wimpy in the old Popeye cartoons. “I`ll gladly pay you tomorrow for a hamburger today.” The state will get the money to build today from future funding from the federal government, meaning future funds will be reduced in order to pay back these bonds.
But it gets even more creative. Perdue is asking the highway contractors to essentially loan the state part of the money, between $25-50 million. The contractor would borrow the money from their bank, construct the road and the state would pay them back over time.
Perdue says this is a good move because construction costs are lower today than in recent years and we can get more roads for our bucks. But many are raising concerns about the package. This move essentially restricts the list of those contractors who can bid on this project to one or two that are financially strong enough to borrow this amount of money. Who gives the Governor the authority to borrow this money? Will some other body like the Council of State or legislature be asked to concur with this scheme? What does this do to the state`s borrowing power? Is this the beginning of more state borrowing without public approval?
Look for more conversation on this topic on this week`s NC SPIN.
Just plain politics
There is speculation that Perdue was pandering to Charlotte on the I-485 decision, trying to bolster her popularity with voters in the state`s largest city. No doubt it will help her. In fact, PPP reports that former Mayor Pat McCrory remains very popular with voters in Charlotte, but not as a candidate for Governor. Pat left office with a 59 percent approval rating, unheard of in this day. But only 51 percent of those polled in Charlotte want him to challenge Perdue again in 2012.
However, a recent Civitas poll shows that Perdue`s popularity has jumped from 29 percent to 43 percent in a matter of weeks. Civitas credits that increase to Perdue`s recent stand in opposition to releasing prisoners. Was this a momentary blip or the resurgence of Bev Perdue? Give this two or three months to answer to that question but when you are at 29 percent there`s not much way to go but up.
Senator Kay Hagan remains on the hot seat regarding Health Care Reform. While saying she favors reform she doesn`t like parts of the bills being discussed. Advocates from all sides see her as an important swing vote and are lobbying hard for her support.
The Fayetteville Observer is reporting today that R.C. Soles, the senior ranking North Carolina state Senator, is hinting that he might not run for re-election in 2010. While he says that if he had to make the decision today he would like file for re-election Soles admits that his family doesn`t want him to run and he acknowledges that all the reports about his interactions with young men weigh on his decision. Republicans believe this is a seat they could gain, especially if Soles runs.
Senator Richard Burr`s term expires in 2011 so he must face re-election next year. There have been many Democrats whose names have been proposed as opposition but most of them have declined the race. This week former Senator Cal Cunningham joined the list refusing to run, some say because he couldn`t get the backing of the Democratic Senate Campaign Committee. DSCC has been (and we understand still is) recruiting name candidates to run against Burr. Secretary of State Elaine Marshall has declared her intention to run. Handicappers believe that even though Congressman Bob Etheridge continues to appear interested he will decline the race. Etheridge loves serving, has an extremely safe seat in Congress and is a smart politician who knows that political winds change direction quickly. Even if successful in winning the seat, our history is that Senators (with the exception of Jesse Helms) have a tough time holding it.
Former Lieutenant Governor Dennis Wicker is also considering the race. Wicker recently joined a new law firm with great political clout and includes a former Senator. Observers aren`t sure what this means regarding Wicker`s re-emergence in politics. He will likely wait for Etheridge`s decision but in the meantime is enjoying the publicity.
For what it`s worth longtime political strategist Gary Pearce, in his Talking About Politics blog, isn`t sure Cunningham has definitely given up the race. Pearce remembers two years ago when the DSCC courted Kay Hagan to run against first-term Senator Elizabeth Dole. Hagan refused the DSCC and tried to convince Wake Representative Grier Martin to run. When Martin declined the DSCC went back to Hagan on their knees and convinced her they would raise the money needed to win. Pearce wonders if history might repeat itself.
But what does this mean for Elaine Marshall`s candidacy? Is the DSCC not content having her as the standard bearer? This story will continue to unfold. Our contacts feel that both Etheridge and Wicker will decline the race and Marshall will be the nominee. But don`t count Burr out. His approval numbers are not spiking but are steady and he continues to outpoll any prospective Democrat. He is raising money, increasing his visibility in the state and has a Republican wind at his back, especially if Democrats bungle health care reform and the unemployment doesn`t improve.
How will the Senate change?
Last week we reported in depth about the sudden resignation of Senator Tony Rand as Senate Majority Leader. Two prominent Senators were interested in taking Rand`s place. They were Buncombe County`s Martin Nesbitt and Mecklenburg`s Dan Clodfelter. Last Friday Senate President Pro Tem Marc Basnight wrote a letter to Democratic Senators urging them to support Nesbitt.
This is a done deal. The question now is whether Nesbitt will also chair the powerful Rules Committee that Rand headed. Nesbitt is a pragmatic, seasoned politician who knows how to get things done. Mental Health advocates are thrilled. There hasn`t been a powerful champion for mental health since Kenneth Royall left the Senate and Nesbitt has demonstrated he will be that champion.
We discuss this in full on this week`s NC SPIN. Be sure to tune in.
State investments rebound
State Treasurer Janet Cowell reports that third-quarter stock market gains helped boost the state pension funds by more than $5 billion during the period. Most investors would be giddy to earn a 10.44 percent return. That`s exactly what the state earned. But it gets better. The rate of return for the year is 12.26 percent, a very respectable return even in a bull market.
Cowell has maintained the relatively conservative investment approach that has been the norm for this state through the years and the outcome is to be lauded. Unfortunately, the story didn`t get much play in the media. Good news needs reporting as much as bad and officials doing good things need applauding for doing well. While much of the credit for these returns can be attributed to former Treasurer Richard Moore, Cowell must accept blame for what happens in the department so she should also get credit.
Sex toys for Duke co-eds?
Campus leaders at Duke (and most other universities) are concerned about the amount of sex taking place on their campuses. What`s new? Some bright, likely well-intentioned administrator tried to determine what could be done to keep 19-22 year olds, full of raging hormones, from hooking up.
The solution is far fetched, even for a liberal university like Duke. Led by a behavioral economist and student health workers, female students who were at least 18 years old were asked to participate in a study in which they would “view sex toys and engage in sexually explicit conversation with other female Duke students." Those who volunteered would be asked to complete an online questionnaire about their sexual attitudes and behaviors, while also agreeing to attend a “one hour party” with seven or eight women. They would receive a goody bag of gifts and the opportunity to purchase items (sex toys) at significantly reduced rates.
Even more incredible is that only one person publicly objected. Father Joe Vetter, head of the Duke Catholic Center, protested the study. “I`m concerned about promiscuity also. And to be honest, I don`t have the solution. ... My concern is these students are in this developmental phase, and I don`t think it`s a good developmental practice to just tell somebody to just sit around and masturbate. I don`t think that promotes relationships."
Maybe they ought to offer a course in common sense at Duke.
I`d like to buy a B
Here`s another strange story that demonstrates common sense isn`t common. A Goldsboro middle school decided that instead of selling wrapping paper, popcorn or other stuff to raise money they would just offer students (actually parents) the chance to pay for higher point totals on tests. For $20 a student could get a ten point boost on two tests of their choosing. It was all the parents` idea, we`re told. The school principal went along with the idea, rejecting the idea that the school was selling grades by saying two tests wouldn`t likely change the overall grade for a grading period. Say what?
Fortunately, the Wayne County Public School System learned about the fundraiser and stopped it. This idea was wrong on so many fronts we don`t even know where to begin. But three obvious points must be made. Do these parents actually think this is a good decision? If so, they need remediation. Buying better grades? This teaches the children that if you have the money you can buy your way into or out of anything. How can you tell a kid to study hard to get good grades but also say, “Here`s a twenty, go get twenty points?” This also puts the emphasis on the wrong end of this equation. The focus should not be on the grade but on what the student actually learned.
We hope the principal gets some discipline that will help her remember her poor judgment. Just yesterday the principal of Fayetteville`s Terry Sanford High School was removed for grade tampering allegations at the school that resulted in one football player being declared ineligible and the team having to forfeit nine wins this season.
People already lack confidence in our schools. The stories above and the following note just reaffirms these beliefs.
Want a High School diploma?
Former Governor Jim Hunt implemented a requirement that a high school senior must pass a competency test in order to graduate from a North Carolina high school. Legislators ended the test requirement, believing that end-of-grade tests and other standardized tests measured competency for students. What they didn`t realize was that schools would retroactively allow students who didn`t pass the competency test to apply for and receive a high school diploma.
Now we`ve got a lot of finger pointing going on between legislators and the State Board of education as school systems complain about the extra paper work and administrative time they must spend to verify and award diplomas to students from as far back as 1981.
Look for more discussion on this topic on next week`s NC SPIN.
State revenues down
The Department of Revenue reports that tax receipts continue to fall below legislative projections. When legislators crafted the budget for the fiscal year starting in July they thought their revenue projections were conservative. But results for the first four months of this year indicate that revenues are 1.5 percent lower than anticipated. Decreases in sales taxes and withholding taxes account for much of the decline.
Forecasters say that we will continue to see recession-like conditions for the rest of this year and at least four or five months of next. Despite gains on the stock market we won`t see recovery until the unemployment rate declines. Even so, North Carolinians can be happy that we are not having the troubles many states are experiencing. At least 10 big states face deficits so large they are considering drastic actions like mortgaging state buildings, major layoffs and reductions in services and large tax increases.
With all the state`s revenue troubles our Constitutional mandate for a balanced state budget should give us all comfort. We can thank former Representative John Gamble (D-Lincoln) for insisting that our state have such a codicil.
Kent Leaves Realtors
Word received this morning is that Tim Kent, long time Executive Vice President of the NC Association of Realtors is stepping down at the end of this year. No further details were available at press time.
Stimulus Spending tracked
Perri Morgan, president of Capitol Monitor, released a report today showing how much of the federal stimulus money is being spent in each of our state`s counties. In a chart that outlines each county`s per capita spending, the organization also compares spending with the unemployment rate for the county.
The chart shows that the counties with the highest unemployment are not getting the most money. Camden County, with a 7.1 percent unemployment rate, has received $819.52 per resident, well above the $252.49 average for the state. The highest per capita spending is in Lenoir County, with $924.80 per capita, no doubt due to Global TransPark construction.
Says Morgan, “With all this money flooding into state government and so many people out of work, this is a critical time for transparency. Whether you agree with the stimulus spending plan or not, your children and grandchildren will be paying for it, and opinions vary widely on how wisely that money`s being spent – or misspent." The report is worth reading.
Losing Bank of America
We`ve reported about the growing signals that Bank of America may move its corporate headquarters from Charlotte to perhaps New York. A growing number of prominent people in this state have become alarmed to the point of mounting an effort to stop such an action.
Mark Washburn, in Wednesday`s Charlotte Observer, says Bank of America has got to go. It is a foregone conclusion. Also see Kevin Siers` clever cartoon in the Charlotte O.
Look for interesting discussion about B of A on this week`s NC SPIN. Also read My Spin, “Rescuing Bank of America”.
State wastes millions on unused cars
WRAL-TV has uncovered wasteful spending by state agencies, citing millions of dollars paid for state cars that are not being used. The recession has restricted the amount of state travel…and that`s good news. But there`s also a requirement that state agencies must pay a minimum fee for every car, essentially guaranteeing every car will be driven 1,000 miles per month. We are told some of the 8,500 cars in the state motor fleet might be returned because they are not being driven the minimum number of miles. Governor Perdue has pledged to carefully examine this situation and may recommend changes to the policies governing state cars.
This story fuels watchdogs who claim there are major savings that could be undertaken by state government without seriously affecting services. Perdue`s BRAC commission, headed by Norris Tolson, is examining areas where savings could be implemented.
NC SPIN will discuss more on this subject next week.
Corrections:
Last week we incorrectly reported that the Mayor of Oak Island was re-elected a day after agreeing to pay back $300,000 to the Department of Motor Vehicles. We knew better and still wrote it wrong. Thanks to our readers who caught this error and reported it to us. It shows you are reading carefully.
Also, we hear from David Boliek, Jr. that we erred in reporting he learned of Senator Tony Rand`s resignation from the Cumberland County DA. Boliek says it came from a source in Raleigh, but wouldn`t reveal his informant. No word on who the Cumberland Democratic Executive Committee will pick to replace Rand, but the list of candidates has expanded. Insiders believe Representative Margaret Dickson has the favored position. If she gets the nod it will then open up her House seat.
Thanks for giving
Thanks to all our friends and readers who contributed to our family`s walk to cure Juvenile Diabetes. Grandson Hart reports that the effort raised almost $4,000. We appreciate your thoughts and contributions. This is one more disease we need to lick. ");
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