Politics in Raleigh

Here’s how politics worked in Raleigh last week.

The State Pension Fund and the State Retiree Health Care Fund are $60 billion in debt.

The problem has been around for years but no one dared tackle it until last week – when Republican Senators heard a bill in committee.

Then the politics started big time.

The next morning the first three words in the News and Observer’s article were: “Ending government pensions…”

Now, consider two facts:

Fact # 1: Under the Senate plan no current state employee’s pension will end or change one iota.

Fact #2: Every new state employee will receive a pension. The new pensions will be different from current pensions – but they’re generous. They’re comparable to the pensions offered by most major corporations.

But somehow in the News and Observer that got translated that into “ending government pensions.”

Worse, the newspaper also reported that state employees will no longer receive health care benefits when they retire. That sounded like hard-hearted Republicans meant to deny a sixty-six-year-old retiree going on Social Security health insurance. But, of course, that’s more political spin.

Right now, a state employee can retire after working for the state for 20 years, and the state will continue to pay for his health insurance. He could retire at fifty and get free health insurance for 15 years – until he applies for Medicare – then gets a free supplement.

The Senate plan is simple: While an employee works for the state he receives state health insurance. And when he no longer works for the state he no longer receives state health insurance. That’s exactly the way most businesses handle health insurance.

The News and Observer didn’t report any of that. And it wasn’t done: It also told its readers that “shutting down the [current] pension plan would cost $350 million.”

The facts?

The State Treasurer’s actuary recommended that the state, to be fiscally responsible, should make a $350 million payment on the Pension Plans $60 billion unfunded liability. That’s not a payment to fund the new plan. It’s a payment on the old plan’s debt.

The News and Observer got the facts wrong.

Equally important: If we don’t switch to a new plan the old plans debt is going to continue to grow every year. So the new plan won’t cost the state money – like the News and Observer reported – it will save money.

For years the State Employees Union and the Teachers Union have lobbied – successfully – for lavish pensions and health care benefits. And the result is plain: A $60 billion debt. That bill will have to be paid. But by passing the Senate’s legislation we can stop piling up more debt.

That doesn’t suit the State Employees Union or the Teachers Union or the News and Observer. But they don’t pay the bills.

So where does that leave us?

When a legislator tells the unions “No” he’s got a fight on his hands. The day after the hearing the Teacher’s Union launched an email and my phones lit up. I listened to one angry teacher’s tirade then, when she stopped, I asked, You do know this bill won’t affect your pension?

She didn’t have a clue.

Which is one more example of how politics works in Raleigh.

Everybody Wins

For years the environmentalists have told everyone who’d listen that buffers are the cure-all to silt in our rivers and lakes. It’s been a mantra.

So, last week, when I pointed out the cure isn’t working – that it’s an example of veneer environmentalism – I didn’t make any friends. In fact one newspaper editor (Taylor Batten) and one politician (Jeff Tarte) promptly called my idea ‘stupid.’

Well, I’d like to invite the editors and politicians to come look at Lake Hickory. Lake Hickory is surrounded by buffers. And it’s full of silt.

This is Horse Ford Creek. Where it meets Lake Hickory it’s so filled with silt you can almost walk across.

Riparian buffers do no harm. They do some good. But a cure? No. At least not in Lake Hickory.

So what went wrong?

No one’s done the real work needed to find the solutions to these problems.

Instead, they simply came up with a political solution: Making “wealthy waterfront landowners” provide buffers. It sounded good. It felt good. But like a lot of political solutions it didn’t work. In Lake Hickory, it was veneer environmentalism.

Here’s a second problem: The politicians targeted one small group of homeowners and said, We’ve got a problem and you’re going to fix it for us. By providing buffers.

Now when the government takes part of someone’s property it usually compensates them. That’s called Property Rights. But that didn’t happen with buffers. The environmentalists (and newspaper editors) will, no doubt, say that’s okay. Because it’s for the public good. But here’s a fact: I know of no other instance where government can take a property owners land without compensating them.

So here’s a suggestion: When government tells someone he or she has to create a buffer, give him a credit on his property taxes on that part of land. And don’t require him to pay property taxes on that land in the future. That compensates the property owner. And, if you like buffers, you’re likely to get you more of them. Everybody wins.

Of course, government won’t like that. It would rather take the owner’s property and not pay them. But, in my book, Property Rights are right up there with Freedom of Speech and Freedom of Religion – they’re principles we need to protect. Even if it does mean being called stupid by a newspaper editor.

Veneer Environmentalism Strikes Again

After I introduced Senate Bill 434 in part – so Hickory could build a riverfront park with a riverwalk – it didn’t take long for the environmental lobby to light up the phones.

Right now – under state law – if a family buys a home on the river or lake, they have to maintain a 50-foot riparian buffer along the river. And, if they want to cut down a tree in the buffer so they can see the lake, well, forget about it.

In addition, when the state tells a family how to use the 50 feet of their property by the river or lake, that’s a ‘taking.’ The state just took part of the family’s property. And it’s a taking without compensation. If the DOT wants to build a road across private property it pays the land owner for a right-of-way. But the Department of Environment pays a homeowner nothing when it takes part of his property for a riparian buffer.

Even worse, the county is still going to send the family a property tax bill on that land. They can’t use it like they want. But they still have to pay property taxes on it.

After I introduced my bill, the first call I got was from a couple in northwest Hickory. They don’t live on a lake. They don’t have a riparian buffer. They believe people who live on lakes should.

But consider this: The couple does have a yard. And when there’s a storm, water runs off their yard, over the curb, into the gutter and down the street into a storm drain that runs into a pipe that empties into a nearby creek.

The water that runs off their yard ends up in the lake, unfiltered.

And that’s one more example of how veneer environmentalism creates false solutions. Saying riparian buffers cure water quality problems sounds good. It feels good. No one has a sacrifice except families who live on rivers or lakes. But it’s a solution based on politics not science.

It’s time to stop playing politics and start identifying the real sources of, say, nutrients in Lake Hickory. And using science to fix the problems. Veneer environmentalism and political solutions won’t do that.


Veneer Environmentalism Strikes

Sometimes in Raleigh a legislator, with the best of intentions, can do a lot of harm.

Here’s one example: I call it veneer environmentalism. Environmentalism that sounds good. And feels good. But creates problems. Because it’s based on politics and not on science.

Back in 1999, a group of legislators said riparian buffers were the solution to water quality problems in rivers and lakes. The idea sounded fine. They meant well. And they passed a law requiring riparian buffers along rivers, including the Catawba River.

But, the other day, I learned a surprising fact: The City of Hickory owns over a hundred acres along Lake Hickory and would like to create a waterfront park with a riverwalk. Now a riverfront park sounds like an environmentally friendly idea. It doesn’t sound like a threat to the river. And the public would benefit. But the State Department of Environment told the city, No, because the riverwalk would have been beside the river in the riparian buffer.

Hickory had just given us an example of how veneer environmentalism creates problems. How it ignores facts. Ignores science. Picks an easy political target. And proclaims victory. But it’s a political rather than a scientific solution.

It’s time to stop playing politics and start identifying the real sources of problems. And using science to fix them. If, in one case, a riparian buffer solves a problem, fine. But, if in another case, it doesn’t solve the problem, well, let’s let Hickory build a riverwalk in a city park.

It’s Time to Say, Enough.

Everybody sees politics through their own eyes. And it can lead to odd things.

Back when Gene Nichol served as Dean of the UNC Law School, he founded the UNC Center for Civil Rights – so naturally when he wrote an op-ed for the News and Observer he praised the Center for championing noble causes.

But if you step back and look closer at the Center’s work over the past decade a different picture emerges – of a group with a partisan political agenda (for instance, opposing charter schools) working hand-in-glove with liberal groups, like the ACLU, filing lawsuits.

Of course, everyone has a right to speak out for their political beliefs. The problem here is, because of the way Dean Nichol set up the Center, its political work is paid for with state money. In addition, every lawsuit it files has the university’s blessing. When the Center goes to court it’s the University of North Carolina going to court.

Former Dean Nichols could have founded his own political group to criticize people (who don’t share his beliefs) for school resegregation and environmental racism and to support Moral Monday protestors. But he didn’t. Instead, he turned part of the UNC Law School into a political group which did all those things – and funded it with state money.

But paying for political advocacy – whether it’s liberal or conservative – with state money is wrong. So now, it’s time to say to the UNC-Center, Enough.

Climbing Out of a Hole

The State Treasurer just dropped a bombshell: He reported that the State Healthcare Plan – the plan that pays for health insurance for teachers, state employees, and retired state employees – is $43 billion in the red.

That’s bad news. But there’s more: The State Pension Plan – for the same workers – is $17.5 billion in the red. Combined, the two plans are $60 billion in debt. That’s called an unfunded liability. Taxpayers will have to pay.

And right now, every day, both plans are piling up more debt. So the first step is to stop digging the hole.

The Senate Pension Committee Chairs have proposed legislation to solve one of these two problems and start on the other. Let’s look at the proposed policy changes.

Current Pension Policy: Right now, after working 28.5 years a state employee can retire and, no matter their age, immediately begin drawing a state pension. That pension is guaranteed. It’s a fixed amount. It doesn’t depend on how much was set aside over the years. Or how much the Pension Fund has earned on its investments in stocks or bonds.

New Policy: Under the proposal, new state employees will be offered a 401 (k) retirement plan – the same kind of plan most major corporations offer. The employee will pay into their 401k, the state will match their payments and, when they retire at the age they choose, the total paid in plus how much the 401k has earned on its investments will determine their pension.

There’s one other major change. Right now, if an employee works for the state for 20 years, the state will pay for his or her health insurance for the rest of his life – whether he continues to work for the state, goes to work for a private business, or retires early (say, at age 50).

Under the new proposal, in the future, new employees will receive state health insurance benefits only during the time they work for the state.

The next step deals with how to pay the Pension Fund’s debt. The entire state budget is $22 billion. So, a $17.5 billion debt cannot be paid overnight. It has to be paid over years. The Pension Committee’s legislation makes a $100 million payment on the Fund’s debt in the first year and begins a process that adds $100 million to that payment each following year. In other words the state will pay $100 this year, $200 million next year, $300 million the third year and, after that, each year the payment will increase by $100 million. That will completely pay the Pension Fund’s debt in 15 years.

None of these changes affect current employees or retirees. Except for making sure the money is there to keep past promises about their retirement.

Digging a hole is easy. But climbing out is hard. And there’s no question this is a tough proposal. But every day the Pension Fund’s debt is growing bigger. And the longer we wait to start climbing out of this hole, the tougher it will be.

Who Ya’ Gonna Call?

I’ve been slimed,” as Bill Murray said to Dan Aykroyd in Ghostbusters.

It happened like this: Lisa Sorg – a writer for Policy Watch – sent an email asking for an interview. Normally, I’d say, Sure. But Policy Watch isn’t a newspaper – it’s the media arm of a coalition of liberal organizations associated with the N.C. Justice Center. This wasn’t going to be a normal press interview. It would to be like talking with the press spokesman for the Democratic Party. So, I passed.

Next, Ms. Sorg wrote her article and reported I’ve sponsored a bill to cut government regulations, including environmental regulations, that will cause floods, pollute streams, and that I’d done it all for a rotten reason: To make two parcels of land I’m selling in Catawba County more valuable.

There’s a lot of politics and pure fiction going on here.

For example, I don’t own the two parcels of land.

One has been owned by the same family for sixty years. Last year, the family asked my company – Prism Real Estate – to help them sell the land. And that property is about to be sold to another family to be their new home. And not one change has been made – or proposed – by anyone that will affect the creek that runs through the property.

The same is true of the other parcel: In fact, this time, since the creek runs along the border of the property the buyer can’t build a bridge or culvert with a road over it across the creek because someone else owns the land on the other side.

Twenty minutes on the Internet would have told Ms. Sorg those facts.

More to the point, polluting the creek wouldn’t make either property more valuable. It would make each less valuable.

Ms. Sorg wrote that “last year the Neuse River experienced the worst flooding in recorded history” and added my bill will “ensure more flooding.” But she forgot to mention the Neuse River flooded due to a hurricane.

The poet Carl Sandberg once said: “If the facts are against you, argue the law. If the law is against you, argue the facts. If the law and the facts are against you, pound the table and yell like hell.”

Ms. Sorg was ‘yelling like hell’ and, I suspect, the reason has a lot to do with politics. Policy Watch and the NC Justice Center and the UNC-Center for Civil Rights are all part of the same coalition of liberal groups and, last week, I criticized the UNC-Center for spending state money to file lawsuits that promote liberal causes.

A few days later Policy Watch started hollering.

Muzzling Liberals?

One of the UNC Board of Governors explained recently UNC-Center for Civil Rights was a political group filing political lawsuits using tax dollars and ought to be stopped. The News and Observer disagreed and wrote an editorial saying the whole idea was ‘preposterous.’

If conservatives set up a Center at UNC-Chapel Hill, staffed it with professors paid by the state, and then the Center worked hand in glove with conservative groups, like the Civitas Institute – attacking Democrats and filing lawsuits to advance conservative causes, Democrats would cry foul. And they’d be right

Now, let’s look at what the UNC-Center for Civil Rights has done.

The UNC-Center says it is not “state funded.” But that’s a red-herring. The UNC-Center is part of UNC-Chapel Hill. It is not an independent corporation or non-profit. It is a state entity. Its funds are state funds.

As the Martin Center for Academic Renewal explained, the UNC-Center’s Chairman and Executive Director of UNC-Center for Civil Rights are professors drawing state salaries. Its other employees are state employees as well. The legislature hasn’t directly appropriated funds to the UNC-Center, but it has received other state funds and support under the control of UNC-Chapel Hill. For example, the Center has stated it uses the resources of the UNC School of Law.

The UNC-Center for Civil Rights has opposed Amendment One, charter schools, school vouchers and supported Moral Monday protestors on its state website and Facebook page.

It has worked with ACLU, the NAACP, the Reverend William Barber and other liberal groups by filing lawsuits to advance their political agendas.

The UNC-Center’s lawsuit against the Pitt County School Board is an example.

When the school board passed a neighborhood school plan the UNC-Center called it ‘resegregation’ and promptly sued – which led to an odd event: Government lawyers (for the UNC-Center) arguing with government lawyers (paid by Pitt County) in court. Pitt County won the lawsuit, but only after spending $500,000 defending itself. That’s only the cost for one side, so taxpayers lost even more.

The UNC-Center has attacked multiple North Carolina counties. It filed three legal complaints against the Wake County School Board alone. How much did that cost taxpayers?

We also know one other fact: The Center flies the UNC brand like a flag. When it sued Pitt County School Board, it wasn’t a political group (like the ACLU) accusing the school board of ‘resegregating’ its schools. It was the University of North Carolina.

Last week, after a member of the UNC Board of Governors finally said, Enough – the News and Observer said he was trying to ‘muzzle liberals.’

But that’s another red-herring.

Will shutting the UNC Center mean a liberal professor won’t be able to advocate for his, or her, political beliefs? No.

Will closing the Center mean a liberal professor, or political activist, won’t be able to use state tax dollars to support his political beliefs? Yes.

And that’s the real issue. A state entity spending tax dollars on politics.

Last week, four members of the UNC Board of Governors proposed the University stop the UNC-Center’s political lawsuits. Unfortunately, so far, they’ve failed. Other trustees opted to ask the university’s administrators to conduct a ‘study’ instead.

It’s time for the Board of Governors, along with Margaret Spellings and Carol Folt, to openly and promptly address the UNC-Center’s political activity. If they fail to do that – if UNC sweeps the problem under the rug – then it will be time to ask another question: How well is the Board governing the university – and spending the taxpayers’ money?

Better Late Than Never

I admit it looked a little odd. Last week, I filed a bill in 2017 titled: The Regulatory Reform Act of 2016. It was odd. But the reason was simple.

Everything in the bill (except a couple of technical corrections) was in a House or Senate Regulatory Reform bill last year and although these parts were not in dispute, the bill got lost in the scramble at the close of last year’s Session and never passed.

Originally, when I drafted the bill I gave it a different title. But after listening to Cato Institute’s briefing for legislators about Freedom in the 50 States, explaining NC’s need for less regulations, the new name made a valid point.

As Cato pointed out, when it comes to the burden of government regulations and making it easier for working families to earn a living, NC isn’t doing well. We’re doing worse than most other states. And we missed an opportunity to correct that problem last year. Tax reform is important but, alone, it’s not enough. To fuel growth and create more jobs, it’s time to pass regulatory reform. And the reforms were all approved, last year, by both the House and Senate.

No doubt there are those who will say introducing a bill titled The Regulatory Reform Act of 2016 sounds like I’m revisiting past history. But this bill is about the future. When we cut government regulations we’re giving working families – from Newton to New Bern – more freedom.

While it may look awkward for the General Assembly to be passing the Regulatory Reform Act of 2016 in 2017, as my grandmother used to tell me, “Better late than never.”



When the Cato Institute arrived in Raleigh to brief legislators on Freedom in the 50 States, I was hopeful.

My hope faded quickly.

My optimism, I thought, was well founded. After all, over the last 4 years, the NC General Assembly had led the nation in tax reform. NC’s business tax climate ranking by the Tax Foundation had risen dramatically, from 44th to 11th among the 50 states. And, in fact, Cato did give North Carolina high marks on tax freedom.

But freedom is bigger than money.

And, it turns out, in categories like regulatory freedom and the ability to make a living, NC isn’t doing well at all. It still trails most other states. That needs to change. We should continue our work on tax reform but, to fuel more economic growth, it’s time to double down on regulatory reform.

There’s a lot of talk about working across the political aisle – about the left and right working together to make the lives of our citizens better. And hopefully, freedom, and lifting burdens off the backs of working families, is a place where both sides can actually do that. But, to be realistic, there are two roadblocks standing in the way:

One is simple. Overcoming inertia. Sitting in the Senate listening to state agencies, I sometimes wonder how the Latin would read on a second state motto, “We have always done it that way.” Because that’s what you hear over and over: Not it’s the best way. Or the most effective way. But that’s how we’ve always done it.

The other roadblock is even more challenging. Every time a freedom gets trampled by a government regulation or government agency, someone makes money. It may be an increase in state employees’ pensions or benefits, a business that feeds on – or gains an advantage over competitors due to – a new regulation, or simply a new area for the practice of law. Whatever the reason, it’s a hard fact that once the money starts flowing to a special interest it’s hard to cut it off.

Hard or not, for a nation founded on freedom, the result is worth the fight.