Spotlights | 2008 Archive

This report develops a system to evaluate school districts on how “parent-friendly” they are. In other words, to what extent do North Carolina’s school districts provide children a sound, basic education in a stable and safe school environment that is responsive to the needs of children and the concerns of parents? Key facts:

• In general, North Carolina’s school districts are not parent-friendly organizations. While a handful of school districts fare reasonably well in the final ranking, the highest score was a 3.5 or a B+.
• School districts in western North Carolina generally fared very well in the ranking, while those in the Triad, Triangle, Charlotte, and northeastern regions fared poorly. Eight of the ten most parent-friendly school districts are located in western North Carolina.
• In general, smaller school districts are more parent-friendly than large school districts. Most of the top-performing school districts enroll between 1,000 and 5,000 students.
• Without the threat of losing its clientele to competitors, many schools and school districts behave like the monopolies they are — focused on strengthening the organization’s position and goals, rather than meeting the needs of students and parents. Genuine accountability to parents begins with school choice.
• Further research will be required to pinpoint the combination of factors that contribute to their success, but district size and high quality administrative or teaching staffs (or both) appear to be outstanding reasons why districts fared well in this ranking.

Key facts:

• The North Carolina General Assembly approved a $21.4 billion budget for fiscal year (FY) 2009, up 3.4 percent from FY 2008, with $21.2 billion in appropriations for operating expenses, up 4.0 percent.
• As usual, the final budget was prepared behind closed doors by the House Speaker and President Pro Tem of the Senate with minimal involvement from all but a dozen legislators of either party and little opportunity for the public or other legislators to review spending proposals before a final vote.
• New debt not subject to voter approval in the budget totals $858 million, the highest amount in four years, including $109 million for a new library at North Carolina State University and $50 million for open space, none of which is subject to voter approval.
• In addition to making an ongoing commitment in the budget of $15 million per year to corporate welfare through the Job Development Investment Grant (JDIG) program, the General Assembly added another $10 million to JDIG after passing the budget.
• Legislators committed $156 million more to ongoing programs than is available from ongoing revenue sources and put no new money in the Savings Reserve Account, the state’s rainy day fund.
• Teachers get raises of 3.0 percent, although they already earn $5,401 per year more than the national average, adjusted for cost of living and years of experience.1 Other state employees get either a 2.75 percent raise or $1,100, whichever is greater.
• Legislators reduced the $172 million transfer from the Highway Trust Fund to the General Fund by $25 million, which they dedicated to toll road project.

Key facts:

• The North Carolina Senate approved $21.2 billion in appropriations for operating expenses in fiscal year (FY) 2009, which would be a 3.9 percent increase from FY 2008, which ends June 30.
• Senators would add $135 million in capital spending and $672 million in debt that would not face voter approval. Total appropriations would be 3.4 percent higher than in FY 2008.
• Although the Senate budget is just $15 million more than the House budget, it would set aside $50 million less in the rainy day fund and increase the shortfall between recurring expenditures and revenues by 40 percent to $175 million.
• Good news in the Senate budget includes more realistic approaches to children’s health insurance and statewide water conservation than those offered by Gov. Easley or the House, as well as yearly comparative evaluations through ninth grade of More at Four.
• Pay raises in the Senate budget for teachers and state employees are comparable to those in the House budget.
• The Senate would cut $65 million from traditional road construction and redirect $25 million from the General Fund to help pay for toll roads.
• Pet projects would include an inflatable planetarium for Duplin County schools, a music hall in High Point named after John Coltrane, another alternative fuel center at N.C. State, and mandatory purchases of biodegradable bottles by state agencies.

Key facts:

• The annexation law, despite hollow claims to the contrary, imposes few requirements on municipalities and offers little protection for citizens when it comes to forced annexation.
• Municipalities can forcibly annex areas that do not meet density requirements.
• Municipalities can forcibly annex areas that are not “urban.”
• The public hearing likely is the biggest sham of the entire process. Municipal leaders have no relationship with the affected property owners. The affected property owners have no way of holding municipal leaders accountable. As a result, municipalities have no reason to care about what those property owners say at the public hearings.
• Municipalities usually do not have to provide water and sewer services within two years. Affected property owners must know about an obscure requirement to request water and sewer within five days after the public hearing, otherwise it could take more than a decade (if not longer) before water and sewer service is provided.
• Municipalities can violate the law’s procedural requirements so long as a court finds that the violation does not “materially prejudice the substantive rights” of the property owners. assuming property owners could even afford the considerable resources necessary to challenge a municipality in court, it would be unlikely for a court to find that a procedural violation caused the required material harm.
Download PDF file: Ten Myths of the Annexation Process: The truth is, N.C.'s annexation law lets municipalities run wild (122 kb)

Key facts:

• The North Carolina House passed a $21.35 billion budget for fiscal year (FY) 2009, with $21.18 billion for continuing operations, which would be increases of 3.3 percent and 3.7 percent, respectively, from FY2008.
• Teachers would receive an average 3.0 percent pay increase and state employees 2.75 percent. Those raises would total $367 million.
• The House approved $550 million in new debt without a vote of taxpayers and $179 million in capital spending, nearly $80 million more than the governor proposed.
• Traditional road construction funding would fall by $65 million, but $25 million redirected from the General Fund would help pay for toll roads.
• The House reduced the number of new employees from 830 recommended by Gov. Mike Easley to 329. Representatives also eliminated his suggested alcohol and cigarette tax increases.

Key facts:

• Our public schools are struggling to meet the needs of special-needs students throughout North Carolina. During 2006-07 school year, less than 50 percent of high-school students with disabilities graduated in four years.
• A legislative analysis found that the state would save at least $3 million a year in the cost of educating special-needs students, so long as at least five percent of the special-needs students in public schools transfer to a private provider or facility.
• Studies have found that parents of special-needs children are much more satisfied with their choice of school, compared to their assigned public school. In addition, research confirms that private schools offer a superior learning environment for special-needs students.
• The state can save money and provide quality education for special-needs children by providing a tax credit to parents and other individuals interested in helping special-needs students.

Key facts:

• The Legislative Commission on Global Climate Change’s work expired in April 2008. The legislature currently is considering the extension of the commission’s work.
• A commission to study global climate change can serve a vital purpose, but unfortunately this commission has failed miserably.
• The commission has ignored the will of the legislature. For example, the commission was required to address how climate change policies would affect temperature. It also was supposed to identify the costs and benefits of policy proposals. The commission has disregarded these common-sense requirements.
• The commission is dominated by environmental extremists. One commission member at a recent meeting suggested that not taking action on global warming would have been like the United States not taking action to confront Adolph Hitler.
• In addition to simply doing what it was supposed to do in the first place, the commission should expressly consider the impact policies will have on energy costs. There also should be at least some balance in the commission membership.
• On an issue of this magnitude, North Carolinians should expect a legitimate commission; otherwise the commission’s work should not be extended.

Key facts:

• Tax increment financing (TIF) is a type of public-debt financing that is supposed to promote private economic development in designated districts through the development of public improvement projects.
The private development is supposed to generate additional property-tax revenue that would not be realized without the public improvement projects. This additional (incremental) revenue would help to pay off the debt for the public improvement project. Citizens have no voice in whether their city or county can use TIF for specific projects. The very first TIF project in North Carolina was the Randy Parton Theatre. It has been a financial failure and a source of controversy and alleged corruption. Reform One: Citizens should be allowed to vote on TIF projects. The constitutional amendment that allowed TIF would permit voting and, in fact, it clearly contemplated that voting may be necessary. Reform Two: There needs to be a meaningful oversight process. Currently, oversight by the Local Government Commission (LGC) is just a rubber-stamping process. The LGC should be required to view TIF projects critically. Cities and counties should have the burden of proof to demonstrate that a project meets adequate standards. Reform Three: The TIF statute should have clear protections against inappropriate private benefits and conflicts of interest. Reform Four: There should be basic financial protections. For example, the LGC should be required to deny a TIF project if it is not likely to generate significantly more property tax revenue than if the TIF had never existed. These reforms share a common theme: ensuring that there is honest and open government.

Key facts: * Citizens don’t have the ability to easily track how state and local governments spend their tax dollars — but they should. * Budget information isn’t available online in easily searchable databases, but it should be. Citizens shouldn’t have to make special requests to obtain budget information. * Not every state agency needs to provide its budget online, but their Web sites should at least link to the budget and financial reporting pages at the Office of State Controller and the Office of State Budget and Management. * Thanks to broadband Internet connections, people can download even large files relatively quickly now, so there is no reason not to provide budgets as single documents. * Kansas, Texas, and Missouri provide good examples of transparency in state government. Every level of state and local government in North Carolina must do better reporting contract, grant, and check registry information. * Tax-referendum defeats, corruption in state government, and the continued population influx mean governments must be more transparent to earn public trust. Download PDF file: Fiscal Transparency in N.C.: Surveying state and local governments (3.5 MB) Link directly to the: Transparency Report Card 2008

Gov. Easley proposed $21.4 billion in state appropriations for continuing operations in fiscal year 2009, up $1 billion (4.9 percent) from the final budget for fiscal year 2008. Combined pay increases, including one-time bonuses, for teachers and state employees total $594 million. Less than a fifth of the $400 million in spending reductions are much more than reclaiming money that would not otherwise be spent. Cigarette smokers and alcohol drinkers would face $165 million in new taxes. The proposal includes $553 million in new debt without voter approval and another $97 million in capital spending. Transportation spending declines another $30 million due to lower dedicated revenues. The budget would make money available to hire nearly 830 new state employees, including 282 clinical and other staff in state mental hospitals, 132 new staff for local mental health crisis response, and 42 chief probation/parole officers.

Key facts:

• Low-cost energy is not only critical to the economy, but also to our health, safety, and general welfare.
• Despite concerns over energy prices, policymakers are intentionally increasing energy prices through new taxes and regulations.
• The stated rationale for these harmful policies is to reduce carbon dioxide emissions in order to address climate change.
• These costly policies are being seriously considered even though they could devastate the economy and would disproportionately hurt the poor. Even worse, the most ardent global-warming alarmists admit these policies would have no effect on temperature.
• Among other policy options, federal and state policymakers are currently considering cap-and-trade programs. A cap-and-trade program could, by 2030, increase the price of gasoline in North Carolina to nearly $8 a gallon and result in a net job loss of about 146,000 people.
• North Carolina legislators already passed a renewable energy bill that could cost North Carolinians a half a billion dollars annually by 2021.
• Higher energy prices means far less wealth for the state. Wealth is crucial to major technological breakthroughs; they can happen only when there is significant wealth to invest in research and development.
• Wealth also enables individuals to better adapt to extreme weather events, such as those predicted by global-warming alarmists.

Key facts:

• Wind power is generated through large groups of massive industrial wind turbines, sometimes as tall as 50-story skyscrapers.
• Like the wind itself, wind power is intermittent and extremely unreliable. The wind must be strong enough, but not too strong, to generate power. So wind cannot be used for baseload generation nor to meet peak demand. For example, to avoid a blackout, a Texas grid manager recently had to cut off electricity to some customers, in large part due to a sudden drop in wind power.
• The National Academy of Sciences has reported that wind power would not significantly reduce emissions of nitrogen oxide or sulfur dioxide. Its impact on carbon dioxide emissions would be miniscule.
• Wind power would have no effect on energy independence. Electricity generation accounted for only 1.5 percent of all petroleum consumption in the United States. With respect to electricity, the U.S. already is energy independent.
• Wind power plants take up to 88 times more land than coal plants. To generate 1,000 MW of electricity would require acreage the size of Fayetteville, Raleigh, and Wilmington combined. Placed in the mountains, it would require 300 miles of ridgeline.
• Wind power plants have proven to be exceedingly deadly to wildlife, especially birds and bats, and the U.S. Government Accountability Office reports that recent efforts to mitigate bird and bat deaths have failed.
• The noise effects of wind power plants are potentially so severe to people that both the French National Academy of Medicine and the United Kingdom Noise Association recommended against building wind turbines within a mile of residences, at least until further research has been conducted.
• North Carolina’s legislature should develop a “Coast Law” to prohibit the construction of industrial wind turbines on the coast. Both the coast and the mountains should be protected from this unreliable form of electricity that would permanently ruin local landscapes, harm wildlife, and pose potential health risks to residents.

Key facts:

• Researchers have consistently found that government-provided job training and placement programs are wasteful, inefficient, and sometimes even counterproductive.
• Researchers have also consistently found that private providers of job training yield strong, positive results.
• State job training and placement programs in North Carolina span 13 departments and divisions and include 27 programs.
• Total state expenditures on job training and placement programs (including federal and local grants) were over $476.1 million in 2005-06; the state budget for 2008-09 includes over $49.2 million’s worth in state appropriations for job training and placement programs.
• State programs show only modest benefits in clients finding employment.
• Private training, from on-the-job training to charitable providers of training, has demonstrable benefits.
• Private charities, even though their clients included ex-offenders, former addicts, former drug pushers, and others considered “hard to employ,” show significantly higher placement rates than government programs.

Key facts:

• Sixteen percent of all jail and prison inmates have serious mental illness.
• One in every 10 police encounters involves a mentally ill individual.
• Mentally ill inmates cost more to detain and are detained longer than other inmates.
• Diverting mentally ill individuals into community-based care instead of jail and prison can improve health outcomes, reduce recidivism, maintain public safety, and reduce total system costs.
• The nationally recognized Sequential Intercept Model provides a good basis for establishing jail diversion priorities.
• Communities should start with crisis intervention teams or other pre-booking methods before implementing mental health courts or other post-booking interventions.

Key facts:

• Last year’s 5.24 percent dropout rate was a four-percent increase from the 2005-06 school year and was the highest rate in seven years. Only 70.3 percent of students in North Carolina graduate in five years.
• Over the last ten years, the North Carolina General Assembly has repeatedly tried to address the troubling dropout problem with no apparent success. The latest initiative, dropout prevention grants, will likely have little short-term or long-term effect on the dropout rate.
• Grants were awarded based on the strength of the grant proposal and the location of the schools served, rather than need and practicality. As a result, a majority of the dropout prevention grants went to school districts or individual schools that had a higher percentage of graduates than the state average, a lower percentage of dropouts than the state average, or both.

Key facts:

• North Carolina cities and towns can spur redevelopment of their downtowns without using economic incentives or eminent domain to seize private property to give to private developers.
• The city of Anaheim, California, adopted policies that revitalized its downtown without using eminent domain powers or economic incentives. Under the leadership of Mayor Curt Pringle, Anaheim developed a plan that relied on reducing government regulations and stimulating private-sector investment.
• Anaheim’s efforts achieved results. Property values in the project area increased. New residential and commercial developments were built, and billions of dollars of private investment flowed into the area. This was all accomplished by getting government out of the way and allowing the private sector to lead the way.
• North Carolina’s community leaders can revitalize their cities and towns without the use of eminent domain powers. Anaheim demonstrates that it is possible to create economic growth in urban areas while respecting citizen’s property rights.
• “A Tale of Two Cities,” a 10-minute video produced by the Reason Foundation, contrasts Anaheim’s success with Los Angeles’s abusive use of eminent domain for redevelopment; it is viewable at http://reason.tv/video/show/58.html.

Key facts:

• When adjusted for pension contributions, teacher experience, and cost of living, North Carolina’s adjusted teacher compensation is $55,731, which is $5,401 higher than the U.S. adjusted average compensation and $4,811 higher than the U.S. adjusted median.
• In a comparison of Southern Regional Education Board (SREB) states, North Carolina’s adjusted teacher compensation is $3,683 higher than the SREB average and $4,679 higher than the SREB median compensation.
• Despite Governor Easley’s effort to increase teacher pay to the nominal national average, there is no evidence that reaching a predetermined salary level will produce a significant increase in teacher recruitment and retention or student performance.