Carolina Journal News Reports
CJ Series

Carolina Cronyism

The John Locke Foundation and Carolina Journal are highlighting state government policies that promote cronyism. Cronyism covers a host of government activities by which an industry or even a single firm or speculator is given favors and support they could not attain in market competition. Examples include regulations helping favored businesses, laws restricting new competitors from entering a market, government-sponsored cartels and monopolies, mandates requiring consumers to buy government-favored products, and tax breaks targeting specific businesses.

(3.30.15) Spirit’s Job Numbers Far Below Expectations
RALEIGH — Although the Spirit AeroSystems facility at the Global TransPark will not receive all the incentives it could have, critics call any purported "savings" beside the point. They say it's impossible to predict how a company will perform, calling into question whether economic incentives really are the key to landing out-of-state companies.

(3.23.15) Occupational Licensing Commission Could Expand Bureaucracy
RALEIGH — A U.S. Supreme Court decision that many opponents of restrictive occupational licensing rules saw as a victory for small-scale entrepreneurs may wind up being a setback, as the General Assembly’s Program Evaluation Division wants to create an Occupational Licensing Commission to supervise licensing agencies and consolidate some of those boards.

(3.17.15) Study: N.C. Renewable Mandate Costs Jobs, Income
RALEIGH — The study by Strata Policy determined that higher costs resulting from North Carolina’s renewable energy use limited the average family’s potential income growth by $3,870, cut electricity purchases by industrial customers by nearly 14 percent, and will continue to penalize commercial consumers, “posing potential threats to the competitiveness of North Carolina's commercial business base.”

(3.16.15) Meadows Bill Would Flag Pro Sports Leagues
RALEIGH — While the NFL may be the best-known entity H.R. 547 would address, U.S. Rep. Mark Meadows, R-11th District, said, “there are dozens of professional sports organizations that enjoy nonprofit status,” including the NHL, PGA, and LPGA. Major League Baseball forfeited its tax-exempt status in 2007, and the NBA never received the nonprofit perk.

(3.12.15) Certificate-Of-Need Reforms Face Tough Test In NCGA
RALEIGH — House Bill 200 would exempt diagnostic centers, ambulatory surgical facilities, gastrointestinal endoscopy rooms, and psychiatric hospitals from certificate-of-need review. A CON is basically a permission slip a provider must receive from the state in a regulatory approval process that is dominated by hospitals that currently provide the services.

(3.11.15) CON Bill Would Limit Reach of Medical Regulators
RALEIGY — If passed, House Bill 200 would exempt diagnostic centers, ambulatory surgical facilities, gastrointestinal endoscopy rooms, and psychiatric hospitals from certificate-of-need review, a state regulation requiring medical facilities to get governmental approval before providing services. It also would prohibit the state medical facilities plan from limiting the number of operating rooms and gastrointestinal endoscopy rooms.

(3.09.15) Quietly, Government Stops Counting ‘Green’ Jobs
RALEIGH — As a candidate for president in 2008, Barack Obama said he would create 5 million green jobs, and in 2009 the U.S. Department of Labor had developed plans to define and count them. Officials in the N.C. Department of Commerce received nearly $1 million allocated by the federal government to survey companies across North Carolina. But the BLS programs measuring green jobs and reporting on green-job activities ended in March 2013.

(3.05.15) Another Way To Fight Eminent Domain Abuse
Placing the courts in charge of takings disputes would go a long way toward ending the use of government condemnation of private property to enrich private parties.

(3.03.15) N.C. Distilleries Seek Beverage Equality
RALEIGH — Distilleries across North Carolina are hoping to follow in the footsteps of the state’s growing winery and craft beer industries, but the law places distilleries at a competitive disadvantage — and they’re asking the General Assembly to pass legislation allowing them to sell small quantities of spirits to visitors.

(2.26.15) N.C. Dental Board Loses Antitrust Challenge
RALEIGH — The 6-3 ruling against the N.C. dental board is hailed by some as a victory for free market enterprise, turning back regulatory overreach. But the dissenting justices warned that the Supreme Court has strayed from precedent in a manner that erodes states’ rights and will cast sweeping confusion nationwide on an array of state regulatory bodies.

(2.23.15) Study: CON Law Limits Medical Access, Boosts Costs
RALEIGH — North Carolina has fewer hospital beds and MRI scanners than other states, and restrains psychiatric services because of a regulatory process that protects legacy health care providers, says a new study from the Mercatus Center at George Mason University in Virginia.

(2.02.15) JLF Report Supports Sunset for Historic Preservation Credits
RALEIGH — North Carolina lawmakers made the right decision when they ended state historic preservation tax credits. Those who support government involvement in preservation efforts should look at local grant programs instead. A new John Locke Foundation Spotlight report features those two findings.

(1.29.15) CJ Editorial: Leave the Tax Credit to History
State government should not be in the business of giving special favors to developers in the form of targeted tax credits, for historic preservation or any other purpose.

(1.22.15) Incentive Battle To Be Renewed In Legislature
RALEIGH — Gov. Pat McCrory is championing more incentives money for the tapped-out Job Development Investment Grant program to lure corporate interests to the state, and for lawmakers to enact legislation achieving that goal in the early weeks of the new session. Without more money to wave at potential corporate prospects, North Carolina will not be competitive with other states, McCrory has said.

(1.19.15) McCrory Makes High-Profile Push for Historic Credit
RALEIGH — Spurred on by Gov. Pat McCrory, who has assembled a coalition to restore discontinued historic preservation tax credits, state Cultural Resources Secretary Susan Kluttz on Thursday directed her statewide whistle-stop tour to Eden, home of Senate leader Phil Berger. The push for legislation giving new life to the historic preservation tax credits that were sunset Dec. 31 is expected to be riddled with politics.

(1.12.15) DENR, Commerce Reviewing Stimulus Grants
RALEIGH — Officials at two state agencies are reviewing issues raised by news reports on federal stimulus grants made to a Yancey County resident and to relatives of U.S. Sen. Kay Hagan. Following news stories in various media, in October DENR Secretary John Skvarla and Commerce Secretary Sharon Decker asking state Auditor Beth Wood for help auditing the treatment of all funding from the federal stimulus law that was awarded through the State Energy Office.

(12.31.14) Audit: Opticians Board Needs Major Changes
RALEIGH – A new audit says that the State Board of Opticians is in financial straits and won’t have enough money to continue operating without changes. Tthe licensing board agreed with a recommendation that it seek permission to increase fees while taking issue with the option of merging with another licensing board. Meantime, the John Locke Foundation’s head of regulatory studies questions the necessity of requiring a license to practice optometry.

(12.18.14) Health Care Winners and Losers
Politicians and bureaucrats continue behaving as if they can allocate health care resources better than consumers and providers in the marketplace.

(11.17.14) Revelations Rekindle Concerns in Indian Trail
RALEIGH — A former Indian Trail town planner testified under oath in September that in the early 2000s, town leaders ordered him to commit illegal acts in approving developers’ plans. For years, watchdogs and former elected officials in the Union County township have contended that former town manager John Munn, now deceased, improperly received $400,000 in pay beyond his part-time, $45,000 annual salary.

(10.21.14) Hagans: It’s Worse Than We Thought
Companies owned by Kay Hagan’s husband, their son, and his brothers collected an extra $137,000 in tax credits, and son Tilden Hagan behaved a lot like a project manager on the solar project at a Hagan building.

(10.14.14) Audit: Rural Center Has Failed To Return State Money
RALEIGH — The audit of the Rural Economic Development Center, released Monday, determined that it was impossible to verify interest earnings on some funds because they were comingled in a revenue pool with money that did not bear interest, and records were not kept well enough to distinguish how much came from paid interest and how much was from other revenue sources.

(9.18.14) N.C. State Prof Casts Shadows On Solar Meeting
RALEIGH — N.C. State University professor Herbert Eckerlin told the N.C. Energy Policy Council the sunny stories of solar energy’s benefits are wildly exaggerated, while the higher costs and technological challenges are deliberately downplayed. Eckerlin, who designed and built the NCSU Solar House on the N.C. State campus and founded the North Carolina Solar Center, said “we’re creating millionaires — the investors who benefit from the tax breaks” offered by government.

(8.20.14) House Revolt Crashes Incentives Bill
RALEIGH — Twenty-eight House Republicans bolted party ranks Tuesday, joining 26 Democrats to defeat an economic incentives program that some labeled “corporate welfare.” It was a rebuke to House Speaker Thom Tillis, R-Mecklenburg, Senate leader Phil Berger, R-Rockingham, and Gov. Pat McCrory, all of whom championed the legislation.

(7.17.14) AFPNC Asks Lawmakers To Shift Film Subsidy Spending To Vouchers
RALEIGH — A grass-roots group that backs school choice has asked the state Senate to shift $20 million it targeted for film incentives toward vouchers that would help low-income children attend private schools. Donald Bryson, deputy state director of Americans for Prosperity-North Carolina, said the move could resolve a lingering issue dividing the two chambers of the General Assembly.

(7.17.14) Speech-Stifling Ordinance Grants Notable Exemption
Winston-Salem city government has set up new restrictions for door-to-door salesmen, unless they're hawking newspapers.

(7.07.14) Salisbury Sewer Fees Prop Up Broadband
SALISBURY — This spring, Moody’s downgraded Salisbury’s bond rating, citing debts by its Fibrant broadband service. Moody’s notes that Salisbury borrowed $7.6 million from its water and sewer fund to support the Fibrant fiberoptic network. The report also points out that while Salisbury is making 1 percent interest payments on the borrowed funds, it isn’t repaying the principal.

(5.06.14) Feds May Give Muni Broadbands Second Look
RALEIGH — A 2011 North Carolina law placed new limits on city-owned communications service providers. The intent of the measure was to prevent municipalities from building and offering broadband service and using taxpayer subsidies to undercut private competitors. It’s unclear whether a move by the FCC to overrule state law would survive challenges in the courts, but observers are wary.

(4.21.14) Expert: Renewables Add Billions to N.C. Energy Costs
RALEIGH — James Taylor, senior fellow at The Heartland Institute and managing editor of the monthly publication Environment & Climate News, said the limited potential for a North Carolina commercial wind and solar industry does not justify the exorbitant costs of renewable subsidies.

(4.10.14) CJ Editorial: Glitz, Glamour, and Giveaways
The state's tax credit for film production is an egregious form of corporate welfare that drains the state treasury while offering few benefits to North Carolinians.

(4.05.14) Legislative Staff Savages Film-Industry Study Defending Subsidies
RALEIGH — North Carolina loses 54 cents for every dollar it allocates to the state film production credit, and the actual return on investment might be even worse, concluded a memorandum from the General Assembly’s Fiscal Research Division. The Fiscal Research authors noted in several parts of the memo that glaring errors and mistaken assumptions were pointed out prior to publication of the report but were not corrected.

(3.31.14) Impact of Film Industry On N.C. Jobs Unclear
RALEIGH — The 25-percent refundable state tax credit offered to film production companies may be in trouble. New legislation may be drafted to preserve incentives for filmmakers, but it’s not clear how many jobs the industry provides in North Carolina, and whether offering tax credits is a net economic benefit to the state or simply a drain on the treasury.

(3.26.14) Doctors: Red Tape, Regulations Costing Millions
RALEIGH — Taxpayers and patients unnecessarily pay hundreds of millions of dollars in medical costs because of arcane regulations, turf-protective hospitals, and a state regulatory agency that opposes reforms, say physicians seeking legislative relief to open more doctor-owned same-day surgery and diagnostic clinics.

(3.06.14) Broken Economic Development Promises
Local governments are far too willing to believe ridiculous hype and outsized promises from economic developers.

(1.16.14) The Elephant In The Room With The Boeing Deal
As with most economic development campaigns, Boeing's plan to build a plant for its new 777X airliners is a game, with some of what happens being little more than a ruse.

(1.15.14) Duke President: Full Use of Renewables Would Add $100 Million Yearly To Bills
RALEIGH — North Carolina utility customers would face $100 million annual rate increases for 15 years if all renewable energy facilities now under consideration were online and complied fully with a 1978 federal law requiring utilities to buy electricity from those more expensive renewable sources, a utility official says.

(1.09.14) Duke Energy: Renewable Power Has Poor Subsidizing Wealthy
RALEIGH — Affluent North Carolina residents who put solar panels on their rooftops are being subsidized by lower-income customers because of the state’s renewable energy subsidies and regulations, the president of Duke Energy North Carolina told a legislative panel Tuesday.

(12.19.13) Crying Fowl Over Eagle Policy
The Obama administration thinks it's OK to kill federally protected birds if the murder is committed by a wind turbine.

(12.18.13) Energy Debate Needs To Factor In Both Subsidies and Penalties
RALEIGH — The ongoing debate over subsidies for traditional versus renewable energy sources offers an incomplete picture. A new John Locke Foundation Spotlight report urges advocates on both sides of the debate to fill in the gaps by factoring in penalties along with subsidies. Energy subsidies include more than just direct government transfers and tax breaks, said study author Roy Cordato, JLF’s vice president for research and resident scholar.

(11.27.13) Repealing 35-Year-Old State Law Would Help Lower Health Care Costs
RALEIGH — North Carolina can help prevent unnecessary increases in health care costs by repealing a 35-year-old law that has failed to address that goal. A new John Locke Foundation Spotlight report delivers that verdict.

(10.10.13) Clearing the Air On Auto Emissions Inspections
State officials are trying to end an expensive and ineffective program that fails to reduce pollution from cars.

(9.19.13) Amusement Park Takes Taxpayers For A Ride
Charlotte and Mecklenburg use a creative interpretation of a business incentive plan to give Carowinds a taxpayer subsidy.

(8.23.13) Auditor: State Unlikely To Recover Rural Center Interest Earnings
RALEIGH — State legislators racked their brains trying to come up with ways to recoup $20 million in interest the Rural Economic Development Center had earned — primarily on state tax dollars the center deposited in a private bank account. But state Auditor Beth Wood told a legislative committee it's likely out of luck.

(8.08.13) CJ Editorial: So Long, Rural Center
A scathing state audit and embarrassing media reports led to the sudden demise of a 26-year-old shakedown operation.

(7.17.13) UPDATE: State Audit Slams Rural Center
RALEIGH — State Auditor Beth Wood chided the N.C. Rural Economic Development Center for having unreasonable executive pay for President Billy Ray Hall and its vice presidents, failing to verify job creation and other performance measures for at least five years, and failing to enforce grant reporting requirements diligently.

(7.01.13) N.C. ‘Caveman’ Blogger Wins A Round in Federal Court
RALEIGH — In October, a U.S. District Court judge in Charlotte threw out a lawsuit by Charlotte-area blogger Steve Cooksey, which claimed the North Carolina Board of Dietetics/Nutrition had violated his freedom of speech by censoring his blog about his Paleolithic or “caveman” diet.

(6.18.13) CJ Flashback: Rural Center Under Fire
RALEIGH — The N.C. Rural Economic Development Center faces the most uncertainty since its creation in 1987. But this scrutiny is nothing new: Carolina Journal questioned the value of the giant grantmaking agency to North Carolina taxpayers and businesses 15 years ago — along with its cozy relationship to the politically connected.

(5.02.13) Bill Gutting Renewable Mandate Survives in Senate Committee
RALEIGH — The Senate bill would cap state-mandated utility generation of renewable energy at 3 percent of total use, and eliminate the mandate and its subsidies after 2023. The House alternative would allow the mandate to rise to 12.5 percent and then end in 2021. The support of House Speaker Thom Tillis, R-Mecklenburg, is uncertain.

(4.26.13) Hager Vows Bill Capping Renewable Energy Mandate Remains Alive
RALEIGH — A handful of House Republicans dealt a stunning blow to state Rep. Mike Hager’s bill to phase out slowly North Carolina’s subsidies, tax credits, and purchase mandates propping up renewable energy companies. Six Republicans voted against the Affordable and Reliable Energy Act in Hager’s committee Wednesday, helping to sink it on a 13-18 vote.

(4.03.13) Obamanomics on Steroids: Renewable Energy and Job Creation
Those pushing renewable energy subsidies in North Carolina are using the same faulty logic that propped up the president's failed stimulus plan.

(4.03.13) UPDATED: Bill Freezing Renewable Mandate Squeaks Through First Vote
RALEIGH — After two hours of discussion and comment earlier this afternoon, House Bill 298, a measure freezing the state’s renewable energy portfolio standard, squeaked through a House Commerce subcommittee 11-10. Republicans Tom Murray of Wake County and Ruth Samuelson of Mecklenburg County joining eight Democrats opposing the bill.

(4.02.13) Cut Your Electric Bill: Repeal the Mandate!
A bill moving through the General Assembly would block higher electricity costs that are being imposed on North Carolinians for no good reason.

(4.02.13) New Report Bats Back Claims That Renewable Energy Mandates Create Jobs
RALEIGH — A recent report "claims a great deal, but offers nothing of substance" as it touts thousands of new jobs and other economic benefits linked to North Carolina taxpayers' subsidies for renewable energy. That's the bottom-line conclusion in a new economic analysis prepared for the John Locke Foundation.

(3.28.13) JLF Report Urges Repeal of Costly, Ineffective Renewable Energy Mandate
RALEIGH — North Carolina should repeal its six-year-old renewable-energy mandate. It has raised electricity prices for consumers while failing to meet its original goals. That's the key conclusion in a new John Locke Foundation Spotlight report, which also questions new job-related justifications for the mandate. At the very least, state legislators should cap the mandate at its current level, according to the report. House Bill 298 would address that goal.

(3.26.13) Renewable Energy’s Costly Trade-Offs
It’s hard to argue that forced investments, artificially higher electricity prices, and more hardships for households lead to net benefits for North Carolina.

(3.21.13) Renewable Energy Study Using ‘Job-Years’ Likely Overstates Employment Gains
RALEIGH — A study produced by the renewable energy industry claiming significant employment gains from the adoption of green technologies has come under fire because, in part, it uses the misleading "job-years" statistic to exaggerate the positive impact of a legislative mandate forcing utilities to purchase renewable power.

(2.18.13) Renewable Energy Mandates Face Scrutiny From GOP Lawmakers
RALEIGH — Interest is coalescing around legislation that would repeal a law forcing energy companies to buy increasingly larger volumes of costly, tax-subsidized, renewable energy. Rep. Mike Hager, R-Rutherford, is drafting language for a bill as Gov. Pat McCrory pushes for offshore wind farms — a form of renewable energy — and endorsing an “all-of-the-above” approach to energy.

(2.07.13) CJ Editoral: License To Stifle
Many licensing rules are little more than a protection racket, allowing existing practitioners to block would-be competitors from offering their services. Time to clean house.

(1.10.13) Negotiating Poorly With The Big Cat
City and county governments can benefit from applying some basic business practices to how they operate.

(12.13.12) Rethinking A Misguided Mandate
North Carolina and its citizens reap no benefits from a costly scheme to prop up inefficient forms of renewable energy.

(12.13.12) A Victory Against Unwarranted Regulation
Too many state licensing rules are about nothing more than "naked transfers of wealth."

(12.04.12) Food Trucks Still Not Free of Restaurant Ties
RALEIGH — Five months after state lawmakers passed a law freeing food truck owners from a regulation that required them to rent space in a restaurant or commissary, no food truck operator has taken advantage of it. The Mobile Food Vendors Association said most don’t know about the new law, and the few who do have been thwarted by their local health departments.

(11.16.12) The FTC Witchhunt Against Google and Entrepreneurial Success
Google holds no monopoly on search engine activity. It has succeeded by innovating and outperforming its competitors.

(10.23.12) Raleigh Considers Allowing More Food Trucks
RALEIGH — Since Raleigh legalized food trucks a year ago, 18 have been permitted to operate in 11 locations. After receiving only positive feedback about the roaming restaurants, city council now is considering opening up a few more places for them to park.

(10.17.12) Nutrition Board Casts Net Far Beyond Paleo-Diet Blogger
RALEIGH — The N.C. Board of Dietetics/Nutrition has investigated nearly 50 people or organizations over the past five years, including athletic trainers, a nurse, a pharmacist, a spa, and even Duke Integrative Medicine, according to a document provided to Carolina Journal.

(10.11.12) Paleo Diet Blogger Loses Round One of Free Speech Case
RALEIGH — A federal judge has thrown out Paleo-diet blogger Steve Cooksey’s lawsuit against the North Carolina state agency he claims censored his blog and violated his freedom of speech. U.S. District Court Judge Max Coburn said Cooksey has no grounds to sue because he has not been injured yet.

(9.10.12) Lawmakers Ease Regulations on Food Trucks
RALEIGH — Until now, the “commissary rule” had forced food truck operators either to rent space in brick and mortar restaurants or commissaries or to buy their own restaurant-quality kitchens to serve as home bases for their mobile businesses. For many would-be entrepreneurs, the commissary rule is an impossible hurdle to jump.

(8.31.12) Coastal Wind Projects Come Under Fire
RALEIGH — Among the obstacles facing the Pantego project in Beaufort County are the potential for a Mitt Romney victory in the November presidential election, conflicts with military aviation training, and the prospect that the wind turbines will cause the death of too many birds.

(8.28.12) Paleo-Diet Blogger Expects to Lose First Round of Free Speech Lawsuit
RALEIGH — In an order dated Aug. 7, U.S. District Court Judge Max Coburn denied Steve Cooksey’s request for a preliminary injunction against the North Carolina Board of Dietetics/Nutrition, which Cooksey claims is stopping him from giving nutritional advice on his blog,

(7.19.12) N.C. Film Incentives Help Government-Favored Groups, Keep Taxes Higher For Others
RALEIGH — Less than a month after North Carolina legislators approved more money for the state’s film tax incentives program, a new John Locke Foundation Spotlight Report pans film incentives as a clear example of cronyism. Another newly released Policy Report helps launch a series titled “Carolina Cronyism.”

(5.31.12) Paleo Diet Blogger Sues State for Violating Free Speech
RALEIGH — The Institute for Justice will represent Charlotte-area blogger Steve Cooksey, who was told by the North Carolina Board of Dietetics/Nutrition that it was against the law for him to give dietary advice without a state license.

(7.10.07) JLF: Energy Mandates Ignore Customer Demands
RALEIGH — New energy mandates could drive up North Carolina’s regionally high electricity rates, even though consumers have shown little interest in paying more for renewable energy sources, a John Locke Foundation Spotlight report says.