RALEIGH – Here’s something for the “will they ever learn?” file.
Some of North Carolina’s most powerful political leaders persuaded taxpayers in 1998 to say yes to a $200 million bond issue to bring natural gas service to corners of the state without it. Now, as Carolina Journal has reported, it seems that virtually all that money has been squandered on a natural-gas line in Northeastern North Carolina that has attracted a pittance of customers and is losing millions of dollars a year. So, the private company that now owns the line – Piedmont Natural Gas – wants all of its customers in the state to pay higher annual gas bills to cover the deficit.
So, who should be learning from this fiasco? Let’s make a list.
First, politicians such as Senate leader Marc Basnight and other advocates of state “investments in economic development” should learn that this is a foolish and wrongheaded waste of time. We don’t elect government officials to engage in speculative business ventures with our money. We shouldn’t expect them to be able to second-guess the market or pick corporate-welfare recipients like money managers pick growth stocks.
Politicians don’t have the requisite information. In fact, if they did, why wouldn’t they resign their government posts and go make some real money? The fact is that these projects are developed to placate political supporters, redistribute income to poorer counties, and offer hope to people in distressed areas. None of these rationales is sufficient. In the last case, what is generated by an unused natural-gas line, a largely flight-less Global TransPark, an immediately outdated North Carolina Information Highway, an unfilled convention center or sports arena, and other such boondoggles is a false hope, a unfulfilled promise that delays real economic adjustment and leads people to make unwise choices about where to live, work, or invest.
Second, the bureaucrats ensconced in state offices and the quasi-private nonprofits funded by the legislature should learn to look over their shoulder. It’s about time some of the charlatans that pose as rural economic development “experts” are revealed as little more than the fixers and flim-flam artists they are. Expect to read more about them here at Carolina Journal. Perhaps a three-strikes-and-you’re-out rule would be helpful, though I think that would still be overly permissive since they prefer to play ball with other people’s equipment.
Third, the taxpayers of North Carolina should learn not to trust what state leaders promise them when it comes time to approve bond referenda. Recent history has not been kind to these promises – as in the case of road bonds not used for roads and higher education bonds sold as not requiring a tax increase and then, well, requiring a tax increase. In the case of the natural gas bonds, if voters had been clearly informed that the money was destined almost entirely for a single corner of the state, in an area where there was unlikely to be any real customer interest, they might well have said no.
Of course, on that score leaders of the political class in Raleigh has already learned their lesson. By using certificates of participation and other new means, they’ve just stopped asking voters for approval in the first place. Now they plan to build whatever they want – with your money. Never let it be said that state government is incapable of imparting a good education, at least to some.
Hood is president of the John Locke Foundation and publisher of Carolina Journal.