A Website That Doesn’t Work

Most people understand running a business is hard work. And, after doing it for years, most find it’s worth the sacrifice. That said, it’s maddening when a business is running smoothly and then, after years of hard work, it’s hit with a new tax or regulation – productivity drops and, suddenly, a new struggle starts to comply with a new government mandate.

In January that happened to business across North Carolina, when the State of North Carolina ordered them to file 1099s on-line. No more paper sounded okay. Filing bureaucratic forms on-line makes sense. Properly set up, it’s faster for businesses and reduces manual processing in the tax collector’s office. But hardly anything government does turns out to be simple and this was no exception.

The tax collector’s new 1099 system was not faster or more efficient. It was the opposite. It did not work with popular small business accounting software and businesses could not simply upload their information.

So, now, along with all the other headaches that come with filing tax returns small businessmen, bookkeepers and accountants are pulling their hair out trying to figure out how to file a 1099 online.

In this day and age, setting up a web site is no big feat – so why can’t a state agency with a $271 million budget set up a website that works? Is it an example of government ineptitude? Or could it be that filing 1099s online means the department will need fewer employees – and what government bureaucracy wants that?

The Department of Revenue has given us one more proof of the old saying, ‘More government isn’t the solution – it’s the problem.’

Saving Five Billion Dollars

Leaving buildings vacant, especially in a growing city like Raleigh, is a costly waste. In a private business it would get a property manager fired but not in state government.

Back is 2015, Governor McCrory commissioned a study on state office use by a reputable national firm, CBRE, which found state government uses an average space of 319 feet per employee (FTE). The report continued, “Current commercial and governmental standards average between 175-200 square feet per FTE.” In other words, the state uses about 40% more space per employee than the norm. And the problem may be even worse.

The 319 sq ft per employee number is based on self-reporting by the state agencies. However, since there is no accurate inventory of state space, you have to ask: Did State agencies underreport their space?

According to the CBRE study, the state agencies reported a total of almost 123 million square feet. Reducing that space to the commonly used standard, a 40% reduction, means government is wasting 49 million square feet of unnecessary office space.

What does that mean in dollars? At $100 a square foot it means the state owns, or makes lease payments on, excess space valued at five billion dollars. That’s $5 billion that could be used to pay for schools, law enforcement or infrastructure.

Flooded by Big Storms

There’s nothing like two 500-year storms roaring ashore in eastern NC in two years to get your attention. But, if you stop to think about it, that’s only part of the problem. Because out here in the western part of the state we’ve had our share of usual storms as well. Most of us have seen the destruction up close. And it’s all starting to feel like a bad trend.

So, what do we do?

Unfortunately, what we are doing is typical politics – hyper-partisan activists are lining up on opposite sides and they’re already pointing fingers and calling people on the other side names.

A more sensible solution would be to put the politics aside to discuss what can be done to help people and towns -like Fair Bluff-  that were flooded by both hurricanes. That’s the alternative Duke University Professor of River Science Martin Doyle presented to the General Assembly’ s Joint Committee on Storm-Related River Debris/Damage last month.

Professor Doyle used stories to make his point, saying, “In 2019 North Carolina is as likely to have a flooding or hurricane disaster as we are to win a men’s national college basketball championship.” It’s human nature to believe natural disasters are rare but Professor Doyle put the odds of a major disaster in any given calendar year at 1 in 6.

Right now, after a hurricane, politicians go to work appropriating recovery grants to towns like Fair Bluff. But, then, another hurricane comes along, and history repeats itself and the same towns are flooded again. More floods. And more displaced families. I guess, next, we could discuss spending state tax dollars to build levees or dams to protect those communities but, when you get down to it, none of those suggestions is likely to be a lasting solution. What would work? It’s simple, updating flood maps and encouraging people who live in flood zones to move to higher ground.

A political circus is almost always more entertaining than a real debate about a serious problem. But with lives and property at risk we may want to skip the drama and go to work on a solution.

Shooting at the Wrong Target

After Hurricane Florence, when you read the newspapers, it looked like North Carolina faced an environmental disaster because of flooded hog farm lagoons. But, as it turns out, the media got it wrong. Which isn’t a surprise.

When the NC Department of Environmental Quality gave its report on Hurricane Florence damage to the General Assembly’s Oversight Committee on Agriculture and Natural and Economic Resources, hog farms weren’t the problem by a long shot. There are 3,000 lagoons on hog farms in counties hit by Florence but only a fraction – less than 2% – experienced breaches, flooding or overflows during the hurricane.

At the same time, municipal sewage treatment plants spilled 87 million gallons of waste into creeks, rivers and the Atlantic Ocean, a problem which the media largely ignored.

A whopping 44% of the municipal sewage treatment facilities facilities had problems during the hurricane and what that means is simple: We have to start preparing for the next major storm by focusing our attention on those sewage treatment plants.

It’s hard not to wonder: Is the media interested in explaining and solving real problems? Or is it simply interested in writing sensational eye-catching stories – in this case about lagoons – in the hope those stories will get more ‘clicks’ and sell more internet ads?

Direction, Not Intention: Education

At a friend’s suggestion, I watched a recent sermon by Andy Stanley (successful on his own and the son of respected minister Charles Stanley). He made a good point regarding the way we live our lives: Direction, not intention, determines destination.

That same thinking applies to our North Carolina debate on education.

A decade ago in 2008, while the Democrats were running all of state government they increased state funding of education – a lot. Then the economic crash revealed, despite their good intentions, they’d headed in the wrong direction. Those same Democrats then found themselves facing a $2.5 billion budget deficit and another $2.5 billion in unemployment insurance debt to the feds – a $5 billion hole.

The result, for public education, was havoc. In 2009-10, the Democrats, still running state government, had to slash state spending.They eliminated thousands of teaching positions, furloughed educators, and froze pay. Between 2008 and 2010, education spending dropped by 9.1% and teacher pay plummeted from 28thin the country to 41st.

It still wasn’t enough. So, they added a $1 billion sale tax hike on all workers including teachers.

Good intentions were not enough.

These days, all we hear about from Democrats is how great things were in 2008. The two years that followed have vanished. We are left with something like the last frames from the movie, Thelma and Louise.

Under Republicans, since 2012, education spending has moved steadily in the right direction. Five years of teacher pay increases, a $5000 jump in starting salaries to attract young teachers, and average teacher pay over $53,700. Just as important, at the same time, Republicans also put aside $5 billion in reserves – money that can be spent to protect public education from the next economic downturn.

With good intentions, the Democrats decided to spend more and didn’t worry about the consequences of a recession.

The Republicans took a different direction. They increased spending on public schools too – but they also took steps to protect education if the economy hits another rough patch.

As Andy Stanley said, the right direction, not good intentions, determines destination. And the difference between Republican and Democrats, on strengthening public education, is an example.

The Speech

In almost every news article where someone attacks Silent Sam, they describe one event that happened 105 years ago.

It isn’t something that happened at the meeting of the United Daughters of the Confederacy when they decided to build a memorial to honor the soldiers who served the bloodiest war in U.S. history, as soldiers have been honored after every major war. Instead, it’s ‘The Speech’ given by Julian Carr the day he dedicated the statue – and there’s no arguing with the fact Carr gave a hateful speech.

So who was Julian Carr?

During the Civil War, Carr was a private in the Confederate cavalry. After the war he settled in Durham and went into business, making and selling the famous Bull Durham Tobacco. Carr was also a prominent Democrat who, Wikipedia reports, favored women’s right to vote, for which he was praised by Elizabeth Cady Stanton and Susan B. Anthony.

In 1900, when Carr was a delegate the Democratic National Convention, he was one of four people who were nominated to be the Democratic Candidate for Vice President, on the ticket along with William Jennings Bryan.

Carr also donated part of the land Duke University now sits on, and Duke University’s Carr academic building was named for him. So was the town of Carrboro and, today, one of his former mills is the Carr Mill Mall in Carrboro. And just before he died, a decade after he gave ‘The Speech,’ he was honored with an honorary degree by UNC-Chapel Hill.

It’s sort of puzzling. Julian Carr’s legacies – like a town, an academic center, a University – are not controversial at all. But a bronze statue he helped dedicate is a public enemy. Could there be politics at work here? And, if so, where will this kind of politics carry us next? Will there be a movement to remove the words “Tar Heel” from the history books – after all, legend has it that’s part of our Civil War legacy too.

 

Mob Rule

The video’s a shocker: It’s a picture of mob rule. Over in Chapel Hill last night. As policemen stand watching, a gang of protestors tie a rope around the statue and pull it down.

Chancellor Carol Folt has said she’d like to see the ‘Silent Sam’ statue taken down – and that’s what the mob did. UNC has a police department. Chapel Hill has a police department. Orange County has a Sheriff’s Department. But not one policeman tried to stop the mob. You have to wonder, Why?

Last year, in Durham, a mob pulled down another Confederate statue in front of the Durham Courthouse and, then, local government made a bad situation worse: Local leaders did nothing. No one was punished (despite the fact there were videos of the people who tore the statue down). Instead, Democratic political leaders in Durham sent a different message: ‘Destruction of public property is okay if it’s done by the people who think like us.’

Last night in Chapel Hill a mob had its way again. Standing up for law and order sometimes takes tough leadership. But Chancellor Folt, and Governor Cooper’s, vanilla statements in the press today were another wink and nod to the protestors – so I have to ask a blunt question:  Chancellor Folt, why did the UNC policemen, who work for you, stand by and allow a mob to destroy the statue?

 

Environmental Justice Run Amok

Environmental Justice is the new hot catchphrase for the left. Al Gore just visited NC, opining about Environmental Justice, and Governor Cooper has appointed a whole new committee to advise him about it too.

What exactly does Environmental Justice look like? That’s not yet clear. But we have seen a preview. In July, in a Wake County courtroom, a jury recently awarded five homeowners and one additional occupant $473.5 million for their claim of distress due to living next to a hog farm in Pender County.

What we know about this trial is limited. Because the federal Judge hearing the case, a Democrat appointed by Jimmy Carter, took the unusual step of issuing a gag order. As a result, most of the people who know what went on in the courtroom can’t talk about it, and the media is happy to simply run with the Environmental Justice theme without exploring the more complex issues. (Compare the press’s reaction to Judge Earl Britt’s gag order to the way newspapers react to state government denying an open records request, which leads to howls of outrage.)

Since no one will talk, even to a Senate Agriculture Chairman trying to stay informed, I looked at the Pender County GIS web site and learned a few facts:

The farm (in the lawsuit) has three hog houses which are visible from Piney Woods Road across a very large, very green field. The farm has existed since at least 1998, over twenty years.

The six plaintiffs all live along Piney Woods Road. The tax value of their combined homes and property is $267,662 – so the jury awarded them 1700 times the amount of their total real estate value.

One of the plaintiffs bought a house beside the longtime farm field in January 2015 for $50,000. Three years after he spent $50,000 the jury awarded him $20 million dollars. Does that make sense?

The plaintiffs get a pile of money, the trial lawyers who filed the lawsuits get a pile of money, and liberal politicians get to grandstand about Environmental Justice. But what happens to the farmers, employees, contractors, retailers, and families who depend on raising hogs to make a living? I’m afraid they’re in for a hard time.

$20 million is a good return on a $50,000 investment. But is it justice? Or justice run amok.

Too Much Government – Real Estate

Liberals believe more government is always better. They think that if a little government helps people, more government can help people even more.

Conservatives believe in less government. They believe that too much government creates problems and causes harm.
So, who’s right?

In bustling downtown Raleigh, where real estate can fetch millions of dollars per acre, a tiny rundown building sits near the historic Capital Building.

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Although it has no official use, someone with the Secretary of State’s office, which is next door, described it to me this way:

“This building is severely run down, always trashed,  is regularly used as an area where the homeless sleep or go to the bathroom and constantly smells of urine.

Some of these folks are struggling with mental health and drug related issues. It creates a very intimidating situation for customers coming to create businesses or facilitate legal registrations or filings with the state.”

 

 

 

 

 

 

In other words, this dilapidated building is causing a problem for people doing official business next door at the Office of the NC Secretary of State.

Which gets us back to government solving problems.

The rundown building/homeless hotel/public restroom is owned by the State of North Carolina.

You would think being less than a block from the Governor’s office would motivate someone in state government to fix the problem. But years of complaints, to administrations of both parties, have changed nothing.

Government not only didn’t fix the problem – it created the problem. Chalk one up for the conservatives.

Too Much Government – The Executive Helicopter

We hear a lot of hollering from Democrats about the General Assembly encroaching on the powers of Governor Cooper. But, often, this debate touches on a fundamental difference between Republicans and Democrats: Which is better, more government or less government?

The Program Evaluation Division of the General Assembly is the closest thing we have in Raleigh to the Fed’s General Accounting Office. Its studies of various facets of state government tells us when something is amiss.

Back in 2010, PED recommended eliminating 25 state-owned aircraft to reduce the $10.8 million that taxpayers were spending on operations – including 89 people – because most of the aircraft were grossly underutilized.

When it was published, that PED report got some attention but, after two years passed, state government had managed to eliminate only 19 of the aircraft.

Now if Rolls Royce made a helicopter it would look like the state’s Sikorsky S-76C executive helicopter. And who wants to sell their Rolls Royce? The Sikorsky helicopter – for which taxpayers paid $6.8 million and which costs $8,553 per hour to operate – was one of the aircraft the state kept.

How much was the state using its Rolls Royce? It used it for 8 days of flight time in a year – for a cost of $564,000. But that’s not the only cost. A helicopter, like your car, is a depreciating asset. It loses value ever year. Add in opportunity costs (what else could we do with the money) and that’s another $200,000 a year.

Four years after the PED report in 2014, the General Assembly told then Governor McCrory: Sell the ‘Rolls’. They posted it on eBay and turned down an offer for $1.5 million.

Now, at last, after eight years of bureaucratic dithering, the state finally sold the helicopter for $1.75 million. But in the meantime, they spent $1.4 million to maintain it. Taxpayers netted $350,000 now versus the $1.5 million on the table four years earlier.

Liberals want more government. Conservatives want less government. And when it comes to state helicopters, conservatives seem to have a point.