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Updated: 24 min 13 sec ago

Straight answers needed on pipeline

2 hours 28 min ago

Consider this scenario. A couple of years before a politician is elected to his current job, he signs a lease agreement worth as much as $1 million with a large private company. Later, the CEO of the company gives the politician a large campaign contribution.

After taking office, the politician is confronted with a thorny regulatory issue in which the private company expresses a strong interest. The CEO of the company asks the politician to intervene, to take his side over that of another large business. The politician appears to do so. When subsequently pressed by reporters, the CEO denies asking the politician to intervene, and representatives for the politician deny linking the CEO’s request to the thorny regulatory issue. Both denials conflict with written evidence to the contrary.

Would this scenario concern you? If I told you that the politician in question was North Carolina Gov. Roy Cooper, the “thorny regulatory issue” was a water-quality permit for the Atlantic Coast Pipeline (ACP), and the company in question was Strata Solar, one of the state’s largest renewable-energy firms, would that heighten or lessen your concern?

The answer to the first question should be yes. This story should concern all North Carolinians. While it may be impossible to wall off fully the exercise of a governor’s power from attempted influence by affected parties who may be either political supporters or opponents, the executive branch should at the very least be transparent and forthright.

But when WBTV reporter Nick Ochsner asked Gov. Cooper whether his administration’s action on the pipeline project was tied in any way to Strata Solar’s dispute with one of the utilities constructing the pipeline, Duke Energy, Cooper said that they were “completely separate issues.”

Really? Ochsner pointed out a text that Cooper’s senior adviser, Ken Eudy, sent to the governor’s general counsel, Will McKinney, on the morning of Jan. 2, 2018. That was the day Cooper was originally scheduled to sign a memorandum of understanding with Duke Energy regarding the pipeline permit.

“Not sure we should sign the ACP agreement unless solar deal works,” Eudy texted. “OK,” McKinney replied. “Don’t disagree.” The “solar deal” in question was a demand by Strata and other solar companies that Duke purchase more power from them, even if it required costly new transformers to handle the load.

The Cooper administration is now claiming the Eudy-McKinney exchange was just a discussion about the messaging of the announcements, not evidence of a connection between the two “separate issues.” This claim becomes implausible in light of a memo drafted a few weeks earlier by Cooper’s Department of Environmental Quality. It lists as one of the options for “ACP mitigation” that Duke Energy would “revisit the use of higher-capacity transformers to allow for more renewable-energy projects to access the grid.” That’s precisely the concession the solar industry wanted — and precisely the issue on which Strata CEO Markus Wilhelm, a Cooper donor in 2016, had personally asked the governor to intervene in personal meetings and an email, according to Ochsner’s reporting.

To put this in its larger context, recall two stories previously broken by my colleagues at Carolina Journal. First, the aforementioned “memorandum of understanding” between Cooper and Duke Energy included a $58 million “mitigation fund” that would have been distributed to renewable-energy or economic-development projects selected by the Cooper administration, rather than being received as state revenue and appropriated by the North Carolina General Assembly as required by the state constitution.

The second fact is that two years before his election as governor, Roy Cooper struck a deal with Wilhelm’s Strata Solar to lease property Cooper and his brother Pell owned in Nash County. Based on market data, Strata’s lease payments over 20 years would likely range between $400,000 and $1.12 million.

Now, let me restate my second question from earlier in the column. If you are a Democrat who supports Cooper, can you honestly say these events wouldn’t trouble you if the governor in question were a Republican?

John Hood (@JohnHoodNC) is chairman of the John Locke Foundation and appears on “NC SPIN,” broadcast statewide Fridays at 7:30 p.m. and Sundays at 12:30 p.m. on UNC-TV.

Categories: Public Policy

Chief justice says rule of law requires setting aside preferences, opinions

Tue, 2019-01-15 04:02

If party labels tell the story, Chief Justice Mark Martin could end up on the losing end of a lot of N.C. Supreme Court decisions this year.

Martin’s remarks during the recent celebration of the court’s 200th anniversary suggest he’s looking forward to a different outcome.

“Alexander Hamilton posited that the judiciary is the least dangerous of the three branches of government,” said Martin, citing the famous American founder’s words in the 78th Federalist Papers essay. “As such, he theorized that the general liberty of the people can never be endangered from that quarter.”

But Hamilton, “like any good lawyer,” added a caveat, “that the judiciary remain truly distinct from both the legislature and the executive,” Martin added. “With this warning in mind, he went on to urge that the courts must declare the sense of the law, and if they should be disposed to exercise will instead of judgment, the consequence would equally be the substitution of their pleasure to that of the legislative body.”

In other words, judges should refrain from acting like legislators.

That doesn’t mean judges always will reach the same conclusions. “Each of us, as unique individuals, and thus as unique jurists, may not always administer the principles of Federalist 78 in the same exact way as other judges,” Martin explained. “The key is that we each strive to do so — that we understand that the judicial office is not a political office. Courts are a co-equal branch but with a different function than the legislative and executive branches.”

“We understand that judges should defer to the other branches on issues of policy as long as constitutional standards are observed,” Martin said. “By assuming a seat on this bench, we lay down our preferences and opinions in joint pursuit of upholding the rule of law.”

“If judges do strive in good faith to observe the principles of Federalist 78, then the courts will in fact be the least dangerous branch,” the chief justice added.

Martin aimed his words at a room full of federal and state judges, along with other lawyers and political leaders, including Democratic Gov. Roy Cooper and Republican Lt. Gov. Dan Forest, potential combatants in the 2020 race for the state Executive Mansion.

But one suspects that the chief justice hoped colleagues sitting to his left and right would take special notice. Martin is now one of just two registered Republicans on the seven-member Supreme Court. His newest colleague, Democrat Anita Earls, donned the black robe this month after decades of displaying her “preferences and opinions” as a lawyer pursuing causes for left-of-center advocacy groups like the Southern Coalition for Social Justice.

Democratic partisans have hoped and their Republican counterparts have feared that a new 5-2 Democratic majority on the high court will lead to a substantial shift in court rulings. They predict a shift toward the political left. That outcome is possible. It’s not guaranteed.

With a 4-3 advantage during the past two years, Democratic justices rarely displayed any evidence of a desire to secure partisan outcomes. Democrats and Republicans split along party lines in just three of 155 rulings handed down in 2017 and 2018. (In a fourth instance, the seven justices agreed on the result of a case while splitting along party lines on the legal reasoning.) Only one of those cases, the Cooper v. Berger ruling on a disputed reworking of the state elections board, involved a political dispute.

In other political cases, the court has acted in ways that worked to partisan Democrats’ disadvantage. In March 2018, a unanimous one-sentence order signed by Democratic Justice Michael Morgan denied a request from Cooper. The Democratic governor wanted the high court to block the Republican-led General Assembly from merging state elections and ethics boards. The Supreme Court refused to go along. (A later trial-court order prompted state lawmakers to reverse the merger anyway.)

In September, the court rebuffed Cooper’s attempt to block two proposed constitutional amendments from appearing on the fall election ballot. Without comment and with no sign of dissent, justices followed the standard appellate process and ultimately endorsed the conclusions of a Superior Court panel.

In December, a unanimous court sided with Republican lawmakers in their fight with Cooper over confirmation of the governor’s Cabinet appointments. Martin wrote for the court — including all four Democrats — in reaffirming the GOP-led General Assembly’s “general power to legislate, which it retains as an arm of the people.”

No one can say with certainty how Earls will influence the court’s direction. Martin, for one, signaled during his Jan. 7 remarks that he hopes justices will continue to “lay down our preferences and opinions.”

“It is often quoted that freedom is a fragile thing and is never more than one generation away from extinction,” the chief justice said. “It is not ours by inheritance and must be fought for and defended constantly by each generation. Our freedoms as Americans are secured by the rule of law, by respect for our Constitution, and by each of us doing our part to promote and support the public good.”

“The members of this court are the ultimate guardians of the rule of law in this state,” Martin added. “It is the responsibility of the members of this court — both now and in the future — to heed Hamilton’s charge, to decide each case as the law requires.”

Follow that guidance, and avoid playing partisan political games, and the Supreme Court will give North Carolinians more reasons to celebrate its accomplishments in another 100 years.

Mitch Kokai is senior political analyst for the John Locke Foundation.

Categories: Public Policy

State regulatory reform is working

Mon, 2019-01-14 01:01

Milton Friedman once observed that “nothing is so permanent as a temporary government program.” To be sure, spending bills or regulations initially sold as limited responses to specific conditions often take on a life of their own. They create constituencies that receive funds or protection from the program and thus have a strong interest in converting the temporary into the permanent.

But these constituencies need not always win. Citizens who desire to control the size and scope of government have some tools at their disposal to defeat the special interests. Some are constitutional, such as spending limitations and referendum requirements for public debt. Others are statutory.

A good example of the latter is North Carolina’s regulatory-sunset law. Enacted in 2013, it subjects every rule on the books to a 10-year lifespan. If the administrative agency responsible for the rule fails to review the regulation within the time allotted, or concludes that its costs exceed any continuing benefits, the regulation goes away.

On the other hand, if the agency concludes that the rule remains relevant and cost-beneficial, it stays in force. If such a rule has attracted public comments over the preceding two years, then it must be go back through the regulatory process for re-adoption.

As of early 2018, some 13,500 rules had been subjected to periodic review by state agencies. Most, 62 percent, were kept in place unchanged. Regulators deemed 26 percent to require a re-adoption process. The remaining 12 percent, about 1,600 outmoded rules, went “poof.”

While policies enacted by the North Carolina General Assembly on taxes, spending, education, and election laws may have attracted more attention, regulatory reform may well be the most important legacy of the state’s conservative governance since 2011. There have been meaningful changes in specific rules or regulatory procedure every single year.

Unfortunately, while Friedman’s observation turns out not to apply to every government program, the effects of special-interest pleading and bureaucratic torpidity remain powerful. Despite the efforts of some state lawmakers and activists, North Carolina has yet to make much headway on occupational licensing, which artificially constricts labor markets and entrepreneurship, and the certificate-of-need law, which artificially constricts consumer choice and competition in medical services.

I hope that state lawmakers return to these two specific regulatory matters, at least, during the 2019 session of the General Assembly. But they should also consider building on the periodic-review-and-sunset system they created in 2013 with more broad-based reforms to North Carolina’s regulatory process.

My John Locke Foundation colleague Jon Sanders has some suggestions along these lines. For example, he recommends North Carolina add a “regulatory throttle” — a requirement that if the estimated costs of proposed state regulations exceed a certain threshold, executive agencies can’t issue them on their own. A vote of the General Assembly would be required.

Sanders also points out that North Carolina is one of only six states lacking formal protections of small business in regulatory proceedings. Agencies should be encouraged to “make common-sense adjustments to small businesses’ regulatory burdens, such as compliance and reporting requirements,” he writes, so small firms aren’t disadvantaged in competition with large companies that can afford teams of specialized compliance officers and attorneys.

State regulations certainly can be necessary to protect public health and safety. When households or businesses act in ways that damage the lives, liberty, and property of others, lawsuits by the affected parties are not always a feasible or sufficient remedy. Provided the health or safety benefits exceed the cost of the rule, government should respond with properly designed regulations.

But as Friedman observed long ago, and everyday experience confirms, those who administer government programs tend to act in ways to ensure the continued existence of those programs. That doesn’t make them villains. It makes them human. Inertia, familiarity, and self-interest influence their behavior, just as they affect us all.

That’s why we need procedural and constitution safeguards against imprudent expenditures, excessive public debts, and perpetual regulations. These policies serve the public interest by maximizing the public’s freedom.

John Hood (@JohnHoodNC) is chairman of the John Locke Foundation and appears on “NC SPIN,” broadcast statewide Fridays at 7:30 p.m. and Sundays at 12:30 p.m. on UNC-TV.

Categories: Public Policy

One way to draw the maps: Just follow the rules 

Fri, 2019-01-11 04:00

Rules are important. Whether it’s a sporting event, a corporate meeting or a board game, rules set the parameters of the interaction. Without rules there’s confusion, uncertainty, ambiguity with participants jockeying for an advantage.  

Nowhere are rules as important as in apportioning districts to ensure fair and equal representation in government. Our state constitution lays out who draws the maps and the guidelines. Even so, nowhere has there been as much controversy and litigation over redistricting than in North Carolina. Historically, the party in control of the General Assembly following the national census uses redistricting to give itself an electoral advantage. This has resulted in many lawsuits for decades. The courts have become rule arbitrators. 

In 2002, the N.C. Supreme Court handed down a historic redistricting decision in Stephenson v. Bartlett, throwing out the gerrymandered maps drawn by Democrats who controlled the General Assembly after the 2000 census. The court determined what the constitution said, and what it didn’t — clarifying the rules for redistricting. 

The N.C. Constitution under Article II empowers the General Assembly, after each decennial consensus as ordered by Congress, to revise and apportion districts. 

Article II, Sections 3 and 5, lay out four requirements that apply to drawing the districts: 

  1. Each state senator and representative represent as nearly as possible an equal number of inhabitants, total in state divided by 50 for Senate district; 120 for House seats. 
  1. Each district must consist of contiguous territory. 
  1. Counties must be kept whole in the formation of districts. 
  1. Once established, the districts remain the same until the next national census is taken each decade. 

Even with these constitutional rules in place, there was enough wiggle room and self-interested intent that Republicans sued Democrats for gaming the system to ensure an advantage in elections. The case is Stephenson v. Bartlett 355 N.C.354, 358-60, 562 SE2nd 377, 381-83 (2002), also known as Stephenson 1. This is the state Supreme Court decision that litigation over the past 16 years has relied on. And that Democrats have sued Republicans over for their alleged efforts in gaming the system. 

Stephenson 1 lays out the fundamental principles in the state’s role in redistricting and establishes the N.C. Supreme Court as the final word on what is constitutional and what isn’t. The court laid out nine clarifying rules that “must be present in any constitutionally valid redistricting plan.” 

  • To comply with federal law, voting right districts have to be drawn first and be consistent with federal law, must not have a retrogressive effect on minority voters, and keep counties whole as much as possible. 
  • To comply with one-man-one-vote principal, population numbers can deviate no more than 5 percent of the ideal number based on consensus count. 
  • Keep counties whole in non-voting rights districts 
  • In non-voting rights districts whose population numbers warrant two or more districts, each district will be single-member districts. 
  • When population warrants combining counties for a cluster, group the minimum number of whole contiguous counties to form one compact district. 
  • The whole county provision must be enforced to the maximum extent possible, with the smallest number of counties per district. 
  • Communities of interest should be considered. 
  • No multi-member districts, unless there’s a compelling governmental interest. 
  • No plan can deviate from these rules unless it’s necessary to comply with federal law.  

Subsequent cases have returned to and insisted on strict compliance with the Stephenson 1 criteria over the years, mandating that in “creating legislative district, counties shall not be divided except to the extent necessary to comply with federal law, including the one-person, one vote principle and the voting rights act.” Districts must be compact, contiguous and keep communities of interest intact. 

Even with the Stephenson 1 criteria clearly laid out, litigation over redistricting continues. North Carolina has more pending litigation in federal courts than any other state by far, currently with three separate cases challenging the state’s 2016 remedial congressional plan.  Common Cause and the N.C. Democratic Party sued in state court on Nov. 13, 2018, asking that legislative districts be re-drawn for the 2020 election. 

The 2019-20 General Assembly will consider many things — reining in the growth of government, fair taxes, reasonable regulations and investments in education and infrastructure, and likely redistricting for the 2020 elections. Luckily, there’s rules for the latter. Follow the rules, and there’s only one way to draw the maps.  

 

 

 

 

 

 

Categories: Public Policy

Land grabs don’t enhance growth

Wed, 2019-01-09 01:01

Over the past eight years, conservative lawmakers have done much to constrain the excesses, expenses, and abuses of governmental power in North Carolina. They have cut taxes, controlled spending, slashed regulations, and increased the cost-effectiveness of services by introducing more choice and competition.

As the size, scope, and cost of government contracted, freedom expanded. Not only have North Carolinians regained more ability to make their own decisions — a worthy goal in itself — but also the expansion of freedom has made our state a more attractive place to live, work, invest, and create jobs.

In the midst of many accomplishments, however, are some missed opportunities. One of them is North Carolina’s failure to reform eminent domain, the power governments enjoy to condemn and purchase private property for public use.

In the aftermath of the 2005 decision in Kelo v. City of New London case, in which the Supreme Court declared it consistent with the property-rights protections of the U.S. Constitution to permit eminent-domain abuses, most states decided to limit or block their governments from condemning land merely to convey it from one private owner to another, as New London had done with Susette Kelo’s “little pink house.”

Advocates of the practice argue that if a prospective private owner — a real-estate developer, let’s say, or a manufacturer — promises a “higher-value” use that will generate higher property taxes per acre, governments should be able to employ eminent domain to convey the land to the new owner. The general public will benefit from the transaction, they argue, and thus condemnation is a permissible tool to make it happen.

Most Americans disagree with this argument, and for good reason. The Takings Clause of the Fifth Amendment states that “private property” shall not “be taken for public use without just compensation.” The plain meaning of “public use” is, well, a use by the public — the placement of a courthouse, school, or street, for example. The public-use concept has also traditionally been applied to “common carriers,” as well, to private firms that operate infrastructure such as railroads, pipelines, and power lines.

While such public uses of acquired property offer the promise of benefitting the general public, lots of purely private uses generate public benefits, as well. Public use is a subset of public benefit, not a synonym for it. It is, and was intended to be, a restrictive concept. The federal judiciary has decided in its infinite folly to refine the terms broadly, removing the restrictions.

To say that the federal government won’t stop states and localities from abusing the property rights of their citizens is not to preclude other remedies. Some states have enacted statutes to constrain the use of eminent domain. Others have amended their constitutions. The best approach is to do both, as exemplified by the excellent property-rights protections adopted by two of our Southeastern peers, Florida and Virginia.

Former Rep. Skip Stam, R-Wake, and other state lawmakers have repeatedly tried to enact eminent-domain reform in North Carolina, including the placement of a constitutional amendment on the ballot. So far, no dice.

Special-interest lobbies say that our state’s economic competitiveness would suffer if localities and the state were forbidden from using, or at least threatening to use, eminent domain to assemble land parcels for business recruitment or urban redevelopment. Otherwise, they say, lone holdouts who refuse reasonable offers will slow or kill economic development projects with significant public benefits.

This claim is empirically testable, since some states acted more quickly than others to reform eminent domain after Kelo and a few haven’t acted at all. In a recent study for Economic Development Quarterly, Washburn University economist Paul Byrne found that limiting the use of eminent domain produced “no adverse effects in terms of state employment and gross state product.” These results “give credence to critics of eminent domain,” Byrne concluded, “who contend that local governments can achieve their economic development goals without relying on eminent domain to compel property transfers to developers.”

Yes, they can. Let’s reform eminent domain.

John Hood (@JohnHoodNC) is chairman of the John Locke Foundation and appears on “NC SPIN,” broadcast statewide Fridays at 7:30 p.m. and Sundays at 12:30 p.m. on UNC-TV.

Categories: Public Policy

Newspaper’s loss offers cautionary tale to activists, advocates

Tue, 2019-01-08 04:02

Journalists aren’t the only ones who should learn a lesson from the Raleigh News & Observer’s recent loss in a multimillion-dollar libel case.

The case offers a warning to other reporters, producers, pundits, activists, and advocates: Be careful not to let your favorite “narrative” blind you as you pursue the truth.

A unanimous three-judge panel of the N.C. Court of Appeals affirmed last month a trial court’s November 2016 ruling against the N&O. The appellate judges’ decision followed years of legal battle connected with a 2010 newspaper series, “Agent’s Secret.” It focused on alleged abuses within the State Bureau of Investigation. Those abuses reportedly led to wrongful criminal convictions.

A key target of that series, SBI firearms analyst Beth Desmond, argued in court that the N&O and reporter Mandy Locke had illegally defamed her.

Because Desmond worked for a government agency, she had to prove that the newspaper did more than commit an honest mistake or engage in careless or sloppy reporting. Legal precedent forced Desmond to prove that the newspaper and Locke perpetrated “actual malice” in maligning her character.

A jury agreed that six separate statements in the series met that high bar. Jurors awarded Desmond more than $9 million, including more than $7.5 million in punitive damages.

To its credit, the News & Observer reported the Appeals Court decision in a prominently placed, 1,100-word article the morning after the ruling. Yet the newspaper’s report omitted some of the most disturbing evidence.

Twenty-two pages into her 56-page opinion in the case, Judge Donna Stroud notes that the reporter Locke first became aware of Desmond’s firearms analysis through a defense attorney, David Sutton. After unsuccessfully seeking a mistrial for a murder defendant, based in part on criticism of Desmond’s work, Sutton disparaged Desmond in communications with the reporter.

As Locke “began to put the story together,” her first draft included a quote from Sutton, the appellate opinion notes. Desmond “just made it up. She made it up because she could, and prosecutors needed her to. It’s just that simple,” according to Locke’s notes.

Desmond later argued in court that Sutton’s quote appeared to have motivated much of Locke’s work on the story. “Plaintiff’s theory was that defendant Locke had decided at this point ‘That’s what she wanted the story to be,’” the court opinion states, “but what she wanted the story to be was simply a contention from a defense attorney — not an impartial source and not an expert.”

“And this accusation — that plaintiff ‘just made it up’ — was perhaps the worst accusation possible against any witness, but particularly an agent of the SBI laboratory whose credibility is paramount when testifying regarding evidence in a murder trial.”

If the accusation were true, Desmond would have “fabricated evidence,” “perjured herself,” and “intentionally or recklessly” helped secure a wrongful conviction, the court opinion continues, “with the logical corollary that the actual murderer would remain free to commit more crimes.”

To write her story, Locke “needed experts in firearms analysis to substantiate Sutton’s claim.” Over the next dozen pages of the court ruling, Stroud documents how Locke tailored various experts’ responses to her questions so they would fit her pre-existing narrative.

Stroud and her fellow appellate judges reached a damning conclusion: “Defendant Locke’s research for the series did not support the proposed premise but ultimately showed that none of the experts defendant Locke consulted would give any opinion based upon the photographs [of bullet fragments], and none of the experts had any personal knowledge of plaintiff’s work and could give any opinion about it.”

Yet the N&O moved forward with the story, even though Locke knew an independent firearm analysis was under way, “and if she waited for the analysis, it was possible that it may confirm that plaintiff’s work was correct, thus eliminating the premise of the entire article.”

The court opinion reminds readers that First Amendment case law gives news outlets “much leeway” in reporting about public figures engaged in matters of public concern. First, there’s the stringent legal standard of “actual malice,” “which is knowledge that the publication was false or a reckless disregard for the truth.” The judges also remind us that reporters enjoy legal protection even when they make reasonable interpretations that turn out to be wrong.

“But there is a limit, and here plaintiff presented substantial and voluminous evidence that defendants exceeded that limit,” the judges conclude.

The N&O and Locke could appeal the decision, but the state Supreme Court faces no obligation to take up a case that secured a unanimous Appeals Court ruling. So the newspaper and Locke could end up paying a substantial price.

The rest of us can learn a lesson for free.

Locke made no mistake when she started looking into alleged misdeeds at the SBI. She made no mistake when she listened to a defense attorney’s concerns about one SBI analyst. She didn’t even make a mistake if she, as the court suggests, adopted that attorney’s accusations as her own theory. That theory helped drive research for her article.

But Locke ran into trouble when conversations with multiple experts failed to back up her theory. She could have adjusted the story — or dropped it — in response to new information. Instead documents linked to the lawsuit suggest Locke twisted the experts’ words to fit her preconceived theory. Evidence “tended to show that the primary objective of defendants was sensationalism rather than truth,” according to the Appeals Court.

Pundits and activists should strive to avoid that type of error. Even if there’s no multimillion-dollar court judgment on the line.

Mitch Kokai is senior political analyst for the John Locke Foundation.

Categories: Public Policy

Get ready for smaller districts

Mon, 2019-01-07 01:01

The average public-school district in the United States enrolls about 3,700 students, according to a recent Governing magazine analysis. In North Carolina, the average school district enrolls more than 12,500 students. Only six other states in the nation exceed North Carolina in this regard (including Hawaii, where all 187,000 students are in a single district).

Although North Carolina politicos and activists normally exhibit a great deal of interest in state education comparisons, most either ignore the fact that we stick out like a sore thumb on school governance or attempt, rather awkwardly, to label it virtue rather than an oddity.

For example, when it comes to the gargantuan districts in Wake (enrolling 159,000 students this school year) and Mecklenburg (146,000), increasing numbers of parents — many residing in suburban communities or hailing from other states where multiple districts per county are the norm — seem skeptical that countywide school governance serves the interests of their children and neighborhoods.

Some are explicitly demanding the creation of smaller, more manageable districts. Others aren’t waiting for policymakers to catch up with their preferences, opting instead for chartered public schools (each of which has its own governance board) or private alternatives if they can swing them.

In the face of these developments, the education establishment offers two defenses: cost and race. Countywide school districts reduce the cost per student for delivering education, the argument goes, while combating re-segregation. Neither argument can withstand close scrutiny, which is why the powers-that-be keep trying to change the subject as quickly as they can.

This strategy isn’t going to work in the long run. It would be wiser to prepare for a future in which North Carolina public schools are organized differently, with multiple districts coexisting in at least a dozen or so of our counties. I believe this future is inevitable.

The efficiency argument for big districts just doesn’t comport with the available evidence. While consolidating sparsely populated rural districts into larger entities probably did exploit economies of scale to reduce operating cost per pupil, there is very little evidence of such benefits when school districts run into the tens of thousands of students.

Moreover, even if construction costs and other expenses are lower at large enrollment scales, the purpose of public schools is to educate students, not merely to house them. While the empirical literature is mixed on the subject of optimal district size, there is a compelling body of evidence suggesting that competition is good for school quality — that the more options families have within a given geographic area, the better those options tend to be.

Debates about competition in education tend to focus on alternatives to public schools, but in this case I’m just talking about having multiple school districts within a metropolitan area rather than just one. One recent study found that, everything else being equal, pupils score lower in states that restrict the number of districts, an effect that “makes school districts less efficient.”

As for race, browbeating recent arrivals from high-scoring states such as Massachusetts (averaging 3,300 students per district) and New Jersey (2,300) for not understanding the need to combat educational disparities by race and income isn’t going to cut it. Disadvantaged students in those states perform very highly by national standards, thank you very much. And even among Southern states, North Carolina’s districts are significantly larger than those in Virginia (9,700), Georgia (9,400), South Carolina (8,800), and Tennessee (7,400).

Here’s a fundamental reality progressives have yet to accept: regardless of how big the district may be, the days of busing larger numbers of kids around according to race- or income-based school assignments are over. Most parents, of all backgrounds, do not support it.

A more constructive approach would be to get ahead of the trend. Subdivide the largest districts thoughtfully, minimizing any disparities, while ensuring that state and local funding formulas send more money to districts with higher rates of poverty or special needs.

Still, I am under no illusions. Prudence is both praiseworthy and rare.

John Hood (@JohnHoodNC) is chairman of the John Locke Foundation and appears on “NC SPIN,” broadcast statewide Fridays at 7:30 p.m. and Sundays at 12:30 p.m. on UNC-TV.

Categories: Public Policy

Words matter, and each carries in its meaning a unique gravity — real and perceived

Fri, 2019-01-04 04:00

Throughout my career in journalism, I’ve tried to make it a point to learn something from all each of my editors, even those I often questioned, or even disliked.

One such editor, who falls into that latter category, sometimes made points that were both salient and eloquent.

Words matter, he once said.

Each and every word has its own meaning, though to many the synonymic difference is imperceptible.

Words matter, in meanings specific to situations and to ideas.

Sunday’s sermon, at my church in Cary, reminded me of that editor’s teachings, that words can be as easily divisive as they can harmonious. Today’s political environment offers daily examples, though, again, the outcome typically leans toward the latter.

In the similar vein, a Facebook friend last week posted a question: “For 2019, what’s your ONE word?”

A simple question? Yes. Simple answers? Not so much.

Because each word carries in its meaning a unique gravity, real and perceived.

The year will bring more threats — of lawsuits and retaliation. More political hand-wringing and more ideological spats. More needless insult and rebuke.

Much of this can’t be avoided.

But words matter. They always will. Common, elementary words could mean so much if thoughtfully considered and used as a moral guide.

I’ve looked at that Facebook thread and chosen a few I think are pertinent, especially in a politically tumultuous 2019. No one expounded on their words in the thread, but I wanted to.

I’ve tweaked the narrative with my own words, too, which I think better encompass our polar and tribal political environment. 

Brave: The word, to me, at first conjures images of war and of personal strength while facing sadness and tragedy. “Courage” may be more apt. To remain courageous in all things we do, regardless of our fears and anxieties. To hold fast to ideals and conviction, staying true to our beliefs while thoughtfully and respectfully considering the beliefs and ideas of others. That brings me to the next word.

Respect: Political disagreement and passionate discourse is essential to the health of our republic, but personal insult, spite, and blatant vindictiveness should have no place in that arena. Logic, sound judgment, and persuasive arguments grounded in fact, research and experience should prevail, as opposed to pettiness, meanness, unsubstantiated claims, and unwarranted attacks.

Curiosity: This words plays off the first two. Much of today’s political polarization and reluctance to consider alternate ideas is a general lack of curiosity, a reticence by some to explore disparate ideas and to become more aware, of not only personal convictions but also of the views and opinions of others.

Truthfulness: No explanation needed.

Kindness: This word, which dovetails with “respect,” was my contribution to the group. One can espouse their beliefs while still being cordial and civil. Life, for all of us, isn’t easy. Each day each of us faces a personal struggle. Some of us are grieving, others are anxious — about their jobs, their finances, their children, and on and on. We know something about the lives of our family, friends, colleagues, and neighbors. But not a lot. About strangers, we know nothing.

It’s all a simplistic exercise, but it could be a start. In dangerous world, a world of political antipathy and power mongering, we should choose any path that at least tries to end in civility.

Categories: Public Policy

Solving the trust problem between teachers and parents 

Thu, 2019-01-03 04:00

Teachers and parents, we have a trust problem. Just 36 percent of public school teachers express “complete” or “a lot of” trust in parents, EdChoice’s new “Schooling in America Survey” says. 

What’s eroding trust? One likely culprit: Parental expectations are sky-high. Harried millennial parents want schools to teach skills once considered part of child-rearing. In a new Walton Family Foundation/Echelon Insights survey, millennial parents say schools bear more responsibility than they do not just for academics, but also for teaching kids how to balance a checkbook, set personal goals, build good relationships — even how to change a tire. 

Wow. No teacher has the time or mandate to lead on all that. Teachers assume numerous roles in the classroom. But they aren’t bankers, life coaches, therapists, or mechanics. Nor should parents expect them to act as if they were. 

What’s a first step toward rebuilding relationships? Remember the kids and work to get along. It sounds trite, but optimal outcomes occur when kids are supported by adults working in harmony. Allies on the same side, cooperative teachers and parents can improve everything from academic achievement to conflict resolution, research shows. Of course, trust cuts both ways. But on this, schools should lead. A study from researchers at Ben Gurion University, assessing Israeli schools of choice, found that “parents who feel trusted by the school staff are more inclined to trust and therefore engage in school. This implies that trust, being a component of social capital, is rooted in norms of reciprocity.”  

Where to look for inspiration? Atlanta’s Ron Clark Academy, “a private school with a public mission,” is a model for positive partnership. Founded by teachers, RCA serves 120 mostly low-income students in grades five through eight. The school is small, but its reach is global: RCA has trained 50,000 educators from 50 states and 26 countries; 90 percent are public educators. Academic growth is the stuff of educators’ dreams. Yet RCA’s culture stands out most. Each fall, staff pile into a van, logging 12-hour days to conduct home visits to new families.  

“What we’ve found is that when the parents recognize how dedicated we are to their kids, there’s also a sense of trust that is being established,” says Junior Bernadin, RCA’s dean of Students. 

Parent get-togethers provide input on how to support students. Staff members have even hosted parents in their own homes, says Bernadin. On Parent Day, moms and dads attend school; those failing to suit up for PE class get an F. 

School expectations are clear. Parents are asked to “trust the process,” says Bernadin. Parents sign a contract of obligation, committing to support school policies. They must volunteer 40 hours annually; most give hundreds of hours. During Teacher Appreciation Weeks, parents have catered food, redecorated the school, and brought in massage therapists, says Bernadin. 

What do teachers wish parents knew? “We’re all on the same team. When there are issues, we might not always agree with one another, but we still have the best interests of your child in mind,” says Bernadin, known on campus as the “parent whisperer.” 

Parents should respect teachers’ professional expertise just as they would a doctor or lawyer, says Bernadin. They should ensure communication is effective. Negative or accusatory emails can offend teachers who are working hard to help kids succeed. Conveying concerns is fine, but “the tone in which you have a conversation is really important,” Bernadin adds. 

About those earlier non-academic skills: Schools can help with some. But most are the work of parents — especially the one requiring a lug wrench. 

Kristen Blair is a Chapel Hill-based education writer. 

 

Categories: Public Policy

Democratic govs get failing grades

Wed, 2019-01-02 01:01

Want yet more one signal that American politics has changed markedly in the past decade? Look no further than the annual report card issued by the Cato Institute to grade the fiscal performance of the nation’s state governors.

Cato is a libertarian think tank, so on economic matters you might expect Republican politicians to be more in line with Cato’s policy preferences than Democrats would be (the situation might be different on social issues). And, generally speaking, you’d be right.

But even just 10 years ago, there were quite a few Democratic officeholders whose views on fiscal policy were moderate-to-conservative. Their budgets were constructed to prioritize education and other core programs without committing to reckless spending growth. Some Democratic governors proposed tax cuts to enhance their state’s economic competitiveness while giving residents more freedom to decide for themselves what to do with their money.

Employing both revenue and expenditure variables, Cato analyst Chris Edwards assigned letter grades to each governor. Of the 17 who received As or Bs in 2008, six were Democrats: governors Joe Manchin of West Virginia, Ted Strickland of Ohio, Bill Richardson of New Mexico, Brad Henry of Oklahoma, John Baldacci of Maine, and Phil Bredesen of Tennessee.

In the 2018 report card, however, the 16 governors earning above-average grades were all Republicans, including five with As: Susana Martinez of New Mexico, Henry McMaster of South Carolina, Doug Burgum of North Dakota, Paul LePage of Maine, and Greg Abbott of Texas. Only one Democrat, Steve Bullock of Montana, managed even a C.

Our own Roy Cooper, alas, was one of the six Democrats and two Republicans who received failing grades on the 2018 report card. Cooper deserved it, in my opinion, for the utterly irresponsible budget plan he proposed in 2018. (In fairness, you should know that I also thought the Republican legislature’s 2018-19 budget plan raised spending too much.)

Quite apart from whether you agree with the fiscal-policy preferences that the Cato Institute and I share, however, think for a moment about what these two snapshots in time reveal about the increasing polarization of American politics.

Although political parties can disappoint their hardest-core supporters by going too slowly or straying from their ideological moorings on occasion, it is essential to recognize that the Democratic Party is much more consistently liberal than it used to be, while the Republican Party is much more consistently conservative.

These terms mean different things to different people, I grant you. The term “liberal” has become an umbrella term that describes an alliance of progressives (left on economics and social policy) and communitarians (left on economics but not on social policy) while the term “conservative,” in its modern context, describes an alliance of traditionalists (right on economics and social policy) and libertarians (who often dissent on the latter).

Something like the same coalitions were evident in 2008. But the partisan umbrellas were open a bit wider, capturing a more diverse assortment. On the Democratic side, Joe Manchin is now a U.S. senator and Phil Bredesen tried to become one in 2018. But few up-and-coming Democrats are following in their footsteps.

For one thing, the Democratic politicians who inspire party activists — and who dominate the field of presidential candidates for 2020 — tend to be in Congress, not leading executive branches in state capitals. And to the extent Democratic governors are helping define the party’s current brand, they are fiscal liberals such as Jerry Brown of California (who got a D on the Cato report card), Mark Dayton of Minnesota (D), Tom Wolf of Pennsylvania (F), and Jay Inslee of Washington (F).

The events of the past two years have presented Republicans with big political challenges, no question about it. But to the extent Democrats cede both right and center to Republicans when it comes to economics, both in Washington and in state capitals, they are making a long-term bet that the public wants vastly more government and vastly more taxes to pay for it. Seems risky.

John Hood (@JohnHoodNC) is chairman of the John Locke Foundation and appears on “NC SPIN,” broadcast statewide Fridays at 7:30 p.m. and Sundays at 12:30 p.m. on UNC-TV.

Categories: Public Policy

Evidence ought to shape policy

Mon, 2018-12-31 01:01

As dysfunctional as Congress has become, it does manage to enact some useful bills. One of them, the Evidence-Based Policymaking Act of 2018, was championed by outgoing Republican House Speaker Paul Ryan of Wisconsin and Sen. Patty Murray, D-Washington. It promotes data-sharing and policy evaluation throughout the federal government.

As popular as the concept is across the spectrum, however, we should all have realistic expectations about its application. While few question the value of basing public policy on careful study of solid evidence, human nature is not easily eluded.

It’s easy to endorse evidence-based policymaking when you assume it will reinforce your existing beliefs, and to assume that your adversaries are the ones whose policies will fail the evidentiary test. To varying degrees, we are all prone to such cognitive temptations as selection bias (noticing and remembering information that fits our preconceived notions or personal interests) and confirmation bias (viewing favorable evidence in the best possible light and contrary evidence in the worst).

While it would be reassuring to assume otherwise, it’s demonstrably clear that motivated reasoning is rampant throughout the political discourse. That doesn’t mean we can’t have informed debates. And it doesn’t mean minds are never changed by solid evidence presented persuasively. But there is nothing automatic about it, because human beings are not automatons.

Over the years, I’ve spotlighted numerous examples of motivated reasoning in action, of what Manhattan Institute fellow Oren Cass has termed “policy-based evidence making.” Although I am politically conservative, I don’t limit my examples to those in which progressives are the transgressors.

For example, conservative policymakers are right to observe that the majority of peer-reviewed academic studies show a statistically significant negative relationship between taxes and economic growth. All other things being equal, economies subjected to higher tax rates tend to grow more slowly than those featuring lower tax rates.

However, conservatives often exaggerate the finding far beyond the preponderance of the evidence. Some assert that tax cuts pay for themselves in the short run by stimulating so much growth that governments collect more revenue at the lower rates than they would have at the higher ones. This is theoretically possible, if the initial tax burden is high enough, but rare. It essentially never happens at the state and local level.

At least issues of tax policy are a bit cloudy and debatable. That’s not the case with regard to one of the most egregious errors made by progressives in North Carolina and other states: defending pay supplements for teachers who obtain graduate degrees.

The evidence on this question is overwhelming: teachers with advanced degrees are not more effective, on average, than teachers with only undergraduate degrees.

Here’s what I mean by overwhelming. By my count, there have been more than 100 peer-reviewed studies published since 1990 testing the relationship between advanced degrees and teacher effectiveness. More than 80 percent found no link. Of the handful of studies finding a positive association, the graduate degree is question was typically in science or math, which represent a very small percentage of the graduate degrees for which teachers have received pay bumps.

If we were all truly committed to allowing evidence to guide our policy decisions, the decision of the North Carolina General Assembly several years ago to eliminate any new supplements for graduate degrees would be widely acclaimed. Instead, Democratic lawmakers, candidates, and activists — not to mention some of the policy’s key beneficiaries, education schools — have continued to demand the policy’s reinstatement.

It is certainly the case that no single study or small group of studies, no matter how well designed, can settle any longstanding dispute. That’s not a realistic model for employing evidence in policymaking. Data do not actually “speak for themselves.” They require interpretation. Few interpreters are free from bias.

The best we can do, I suspect, is to ensure that there is a diversity of interpretation in public policymaking — and to commit to reading all of it, not just results that can be expected to confirm our brilliance.

John Hood (@JohnHoodNC) is chairman of the John Locke Foundation and appears on “NC SPIN,” broadcast statewide Fridays at 7:30 p.m. and Sundays at 12:30 p.m. on UNC-TV.

Categories: Public Policy

Latest N.C. Supreme Court rulings defy pundits’ partisan projections

Fri, 2018-12-28 04:02

Much recent political commentary about North Carolina’s Supreme Court focuses on the 5-2 majority that Democrats will gain in January.

But two of the final decisions the court handed down in 2018 remind us that its decision-making process defies simple partisan calculations. Both decisions were unanimous.

In the first case, Silver v. Halifax County Board of Commissioners, all seven members of the state’s highest court endorsed an opinion clarifying that state government — not a particular county — is “solely responsible for guarding and preserving the right of every child in North Carolina to receive a sound basic education.” The state constitution guarantees that right.

The court rejected arguments put forward by attorneys Mark Dorosin and Elizabeth Haddix, whose names generated statewide publicity last year. The University of North Carolina fired Dorosin and Haddix in 2017 as it shut down the UNC-Chapel Hill law school’s controversial civil rights center. Critics had blasted the center’s ties to left-of-center political causes.

In the Silver case, Dorosin, Haddix, and their plaintiffs wanted state courts to force Halifax County commissioners to increase funding for local schools. None of the state Supreme Court’s current members — four Democrats and three Republicans — endorsed the idea.

“In effect, plaintiffs say county governments would thus be allowed to abandon their fiscal responsibility regarding education with impunity and pass their alleged constitutional duties along to the State,” according to the Supreme Court opinion. “This is not the case. Plaintiffs’ line of reasoning is arguably sound only if one presupposes that counties have such constitutional duties in the first place, and we have determined that they do not.”

It’s worth noting that Justice Barbara Jackson wrote those words. A registered Republican, Jackson lost her re-election bid on Nov. 6. Thus Silver is likely her last written majority opinion for the state’s highest court. Every one of her colleagues endorsed it.

There’s no sign that the case generated any partisan infighting among the justices. The court’s current Democratic majority took no steps to delay a ruling until a fifth Democrat could replace Jackson in January.

Unanimity also characterizes the second opinion worth noting in this space. It’s the latest Cooper v. Berger ruling, part of an ongoing legal battle pitting Democratic Gov. Roy Cooper against Senate leader Phil Berger and his fellow Republican legislative leaders.

In this case, all seven Supreme Court justices agreed that legislators have the power to confirm Cooper’s Cabinet appointments.

The decision included a notable comment on legislative power. “[U]nlike the powers of Congress in the federal model, the General Assembly has the power to legislate on all matters unless the constitution prohibits it from doing so,” according to the unanimous opinion. “Thus, the General Assembly need not identify the constitutional source of its power when it enacts statutes. In fact, in most instances, there will be no particular grant of constitutional authority on which the General Assembly will rely. It will instead rely on its general power to legislate, which it retains as an arm of the people.”

As in the Silver case, a Republican is responsible for these words. Chief Justice Mark Martin wrote them. None of the high court’s four current Democrats dissented.

The unanimous agreement in both Silver and Cooper reminds us that very few state Supreme Court cases have led to divisions along party lines.

Over the past two years, with Democrats holding a 4-3 majority on the state’s highest court, just 13 of 155 cases (8 percent) have yielded 4-3 splits on the results. Just three cases (2 percent) have pitted the court’s four Democrats against its three Republicans. (One caveat: In a March 2018 case, the justices reached unanimity on the result, with the Democrats and Republicans disagreeing about the legal reasoning.)

As both Silver and Cooper demonstrate, the seven justices have been much more likely to reach unanimous conclusions. Over the past year, 77 of 97 cases (79 percent) produced zero dissenting votes. Another seven cases involved a lone dissenter.

Party labels fail to dictate whether justices are likely to reach agreement on a case. It’s true that Martin and fellow Republican Paul Newby have been most likely to agree, in 94 of 96 cases (98 percent). It’s also true that Martin and Democrat Cheri Beasley have been the pair least likely to agree. Yet they still have endorsed the same results in 79 of 96 cases (82 percent).

Meanwhile, Democratic Justice Sam Ervin IV agreed most often this year with the Republican Jackson. He also agreed more often with Newby than with any of his Democratic colleagues.

The three Republican justices wrote 25 of the 62 authored majority opinions, including five of the seven opinions representing 4-3 split decisions. One would hardly expect that volume of Republican writing for the court’s majority if Democratic justices had decided to play partisan games with their rulings.

None of these statistics guarantees that the court’s current collegiality will continue into the new year. Democratic Justice-elect Anita Earls has spent much of her career pursuing left-of-center “social justice” causes. Particularly in the often-litigated redistricting arena, Earls has longstanding ties to partisans fighting Republican legislators’ disputed electoral maps.

But hers is a single vote. Until Earls joins her six new colleagues behind closed doors to debate the merits of particular cases, no one can say for certain how that vote will affect others.

Evidence from the past two years — including the recent Silver and Cooper rulings — suggests the outcome might not match Democratic partisans’ hopes or Republican partisans’ fears.

Mitch Kokai is senior political analyst for the John Locke Foundation.

Categories: Public Policy

Do politicians really want to lead?

Wed, 2018-12-26 01:01

As another year draws to a close, a year of Democratic resurgence in both national and local politics, I offer this challenge to incumbent and newly elected lawmakers alike. Do you really want to be leaders? Or do you just want to be politicians?

A mastery of politics is required to lead effectively, I grant you. No more how high your ideals and how ambitious your goals may be, you have to win elections and cultivate alliances in order to fashion public policy. But only some effective politicians prove to be effective leaders.

In Washington, there is an obvious test of seriousness that, alas, few would-be leaders have been passing lately. Will Congress and the Trump administration do anything of consequence to address the most consequential issue we face, fiscal irresponsibility?

The federal budget is wildly, recklessly out of whack. Its massive annual deficits will add trillions more to the federal debt in the coming years. Democrats blame the tax cuts enacted by the Republican Congress in 2017. It’s certainly the case that the reductions in personal and corporate income taxes, while growth-enhancing, will lead to lower federal revenues that would otherwise have been collected, at least in the near future. I believe the tax cuts should have been fully offset by budget cuts.

But Washington’s fiscal irresponsibility didn’t begin in 2017, and has little do with the nickel-and-dime stuff we usually hear about on cable networks and talk shows. Nearly three-quarters of what the federal government does can be described as transfer payments. It collects revenue from income and payroll taxes and then sends checks either to households (for Social Security, pensions, and welfare) or to health care providers (for Medicare and Medicaid).

The federal government has promised more outflow than can be financed with the projected inflow. Progressives say they want to make up the difference with massive tax hikes — indeed, most want to expand Social Security, Medicare, Medicaid, and welfare programs even more — while conservatives say they want to control expenditures.

In truth, neither group seems to have the courage of their purported convictions. Few have offered anything approaching a viable plan for balancing the budget. When progressives claim only the “wealthy” will pay for their grandiose schemes and conservatives claim they can bring spending into line by targeting only “waste, fraud, and abuse,” both groups are offering us a governing fantasy, not a governing philosophy. They are being unserious.

Here in North Carolina, the dividing line between politician and leader runs directly through the largest-single function of state government: financing education. Democrats have promised vastly larger expenditures for preschool, elementary, secondary, and higher education than the Republican-led General Assembly has yet appropriated. The money can’t come from borrowing, and the desired amount is too large to be financed by economizing elsewhere in the budget.

Either explicitly or implicitly, Democrats are calling for major tax increases — in the hundreds of millions if not billions of dollars a year. Will Gov. Roy Cooper include them in his upcoming 2019-21 budget proposal? Will Democrats list themselves as sponsors of such a tax hike in the 2019 session? Will the Republicans who have themselves promised much-higher spending levels be willing to sign on, as well?

I expect few such profiles in courage. Rather, I think some will be tempted to construct a kind of collusive settlement in the long-running Leandro litigation that would yield an order by the North Carolina Supreme Court to increase state spending — and, in effect, to raise taxes. This would be a thoroughly political gambit, not an exercise of leadership, and provoke a constitutional crisis.

If they would truly lead, then policymakers of both parties should be looking for mutually agreeable ways to increase the productivity of the tax dollars North Carolinians already pay into education. States such as Florida, Indiana, and Texas have higher-performing school systems as well as tax burdens comparable or even lower than ours. It can be done.

Will serious leaders step forward in 2019?

John Hood (@JohnHoodNC) is chairman of the John Locke Foundation and appears on “NC SPIN,” broadcast statewide Fridays at 7:30 p.m. and Sundays at 12:30 p.m. on UNC-TV.

Categories: Public Policy

Public won’t accept green taxes

Mon, 2018-12-24 01:01

I know that environmental activists don’t want to hear this, but a core component of their preferred strategy for combatting global warming — substantially raising the price of fossil fuels through higher taxes — is not going to happen.

Whatever the public’s views may be about the causes and effects of climate change, most people don’t think gas prices and electric rates are too low. While modest price increases to cover higher production costs, or modestly higher taxes to fund road and bridge construction, may not provoke a massive backlash, the dramatic hikes in prices that environmental groups want to discourage the use of fossil fuels are just politically unsustainable.

Don’t take my word for it. Look at recent events in two left-leaning political constituencies: the state of Washington and the country of France.

In November, even as Washington Democrats were winning most of the competitive races in that state, 56 percent of Washington voters said no to a ballot proposition that would have imposed a carbon tax to combat global warming. The tax would have started at $15 a metric ton and then increased $2 a year until the state’s goals for greenhouse-gas emissions were met.

After a previous carbon-tax scheme failed in 2016, activists had retooled the plan to draw more support. The 2018 initiative exempted some key employers in Washington State, such as paper plants, to mute opposition from labor unions. It promised to spend the proceeds on renewable-energy projects to create jobs. And if the truth be told, as costly as the proposed tax would have been for Washington consumers, it was far lower than the price hike most scholars believe would be necessary truly to shift energy markets away from fossil fuels.

But Washington’s voters said no, anyway. They didn’t judge any environmental benefits that might flow from the carbon tax in the long run to be worth the cost, and they didn’t trust that the resulting revenue would have been spent effectively. The voters were right on both counts.

In France, the recent revolt against green taxes played out not in polling places but on the streets. The “yellow vest” movement began as opposition to higher “green taxes” on gasoline and diesel, with hundreds of thousands ultimately turning out in protests that produced widespread economic disruptions, political disaster for President Emmanuel Macron and his coalition, and even several tragic deaths. In response, Macron has walked back scheduled hikes in motor-fuels taxes and may soon be forced to go further than that.

It is important to understand that in neither case can the opposition be characterized as tea-party conservatives or climate-change skeptics. There aren’t enough such voters in Washington to have defeated the carbon tax multiple times. In France, the yellow-vest protestors are advancing a range of demands, including traditionally left-wing fare such as raising minimum wages and enhancing government pensions.

If activists can’t find the votes to jack up green taxes enough to matter in places such as Washington and France, you can be sure they will fall far short in North Carolina, where public opposition to tax increases of any kind is broader and deeper.

A few weeks ago, Gov. Roy Cooper announced a goal of reducing greenhouse-gas emissions in North Carolina 40 percent by the year 2025. Cooper’s target is quite a bit less than initially meets the eye, since the 40 percent reduction is from the 2005 baseline, not from 2018. Our emissions have already fallen by 25 percent since 2005, so Cooper’s real goal is an additional 15 percent.

While North Carolina has been tipping the scales heavily in favor of renewables, that’s not the main reason emissions have declined. Wind and solar remain a very small part of our energy mix. The big stories are gains in energy efficiency plus a large-scale replacement of coal-fired power plants with electricity from cleaner-burning natural gas.

Activists still dream of carbon taxes and a massive abandonment of fossil fuels. Once they awaken, a realistic conversation may be possible.

John Hood (@JohnHoodNC) is chairman of the John Locke Foundation and appears on “NC SPIN,” broadcast statewide Fridays at 7:30 p.m. and Sundays at 12:30 p.m. on UNC-TV.

Categories: Public Policy

The real winner in the Apple sweepstakes: North Carolina

Fri, 2018-12-21 01:22

Was Apple’s choice of Austin, Texas, over the Research Triangle for its new, $1 billion campus a win or a loss for North Carolina? 

The answer isn’t as obvious as local boosters would have you believe. Sure, the sudden infusion of capital investment and (eventually) high-paying, high-skilled jobs would have been a boon for the immediate area. But there was a price tag, as my John Locke Foundation colleague Jon Sanders noted: massive tax incentives. 

They included: 

  • Refunds of as much as 90 percent of the company’s withholding taxes for new hires for 40 years
  • Tax-funded water, sewer, and rail hookups
  • Local property tax exemptions for 30 years

Offering these massive giveaways wasn’t enough to reel Apple in. The rejection led to a rare joint statement from Gov. Roy Cooper, Senate leader Phil Berger, and House Speaker Tim Moore: 

“We’re on pace to add thousands of good-paying jobs this year with more expected next year. There’s no better place to find a top-tier IT workforce and legislative leaders have worked closely with the administration to attract large employers and technology companies like Apple. We’ll keep doing everything we can to bring more good jobs to North Carolina,” they said. 

By “doing everything we can,” with taxpayer handouts, the state’s leaders are implicitly rejecting the policies which have boosted North Carolina’s standing as one of the nation’s best places to do business — lower taxes at a single rate; streamlined regulations; increased spending on education which rewards improved classroom performance; highway spending intended to move people and products more efficiently; cutting debt and increasing savings. 

In November, Forbes named North Carolina the nation’s No. 1 state for business. We earned that designation even though Apple didn’t come here, Amazon passed us by for its second corporate headquarters, and we still haven’t secured the elusive auto assembly plant. 

Conservative legislative leaders have championed growth-based policies to contrast themselves from the political favoritism and pay-to-play games of previous regimes. 

Embracing policies that instead pick winners and losers with special giveaways undercuts that progress. 

As Sanders points out, 99.6 percent of businesses in North Carolina are small businesses. They stand to gain nothing, and perhaps wind up net losers, if policymakers consciously craft deals to benefit headline-grabbing megacompanies and shift the costs to entrepreneurs who are already here. 

So, if our state is such a boon for businesses, why did Apple go elsewhere? It turns out our incentive package was less important than other advantages Austin had and we didn’t. 

An existing relationship with the company, with more than 5,000 employees already there, certainly gave Austin a leg up. Apple was comfortable with the local culture and clearly liked it enough to make another major investment there. 

It also helped that Austin-area developers had a 130-plus-acre site, which would be perfect for a standalone, expandable corporate campus. The location is close enough to the downtown area to let employees and clients enjoy the city’s amenities, but separate, so that employees won’t have to navigate as much downtown congestion as they might have at an urban campus in the Research Triangle. 

Finally, business executives admit economic incentives aren’t really that important when they’re deciding where to relocate or reinvest. Sanders cited an article from Economic Development Quarterly, in which researchers asked executives from 150 companies that received economic incentives and 465 companies that didn’t to rank factors that mattered to them in determining a region’s business climate. 

Nineteen were named. State and local economic incentives ranked 15th and 16th. (Mass transit ranked even lower — sorry, light-rail fans.) 

Executives are much more swayed by access to skilled labor, a light regulatory and tax burden, a solid university and community college system, housing costs, major airports, and workforce training programs. 

Incentives may make a slight difference at the margins, but a state or region has to get many other policies and practices right before tax-funded handouts gain notice. 

Once our elected officials and economic development boosters figure this out, and insist on improving the factors that really attract and retain businesses and employees, North Carolina can show it doesn’t need to bribe people and entrepreneurs with tax dollars to move here.

Categories: Public Policy

Economic impact studies: How special interests tell public interest stories

Thu, 2018-12-20 04:00

Question 1: When are special interest subsidies not special interest subsidies?

Answer: When the special interests hire consultants to do an economic impact study.

Question 2: How often do economic impact studies show that the special interest subsidy will be good for the economy?

Answer: Always.

Economic impact studies have become part of the standard tool kit used by nearly every special interest pleader begging state and local officials to (please, please, please) transfer wealth from workers, entrepreneurs, and taxpayers to themselves. The film industry, sports teams, the renewable energy industry, and many other corporate welfare recipients, pay consultants to tell them not only what they want to hear but, more important, what they want the public to hear; namely how great the subsidies will be for those who are being fleeced.

Sure, those film “incentives” or subsidies for a new football stadium are going to make the film industry or the NFL team owners a lot of money, but pay no attention to that man behind the curtain. What these industries really care about is that they are going to make all of you out there in the community better off. And to prove this, everyone from local politicians to the local media is told to look at those impressive numbers from the industry-paid economic impact study. Thousands of jobs will be created and hundreds of thousands or maybe even millions of dollars will be generated for the community. It’s the proverbial win-win. The beauty of an economic impact study is how it demonstrates that Peter can be robbed to pay Paul and, magically, both Paul and Peter are made better off.

So, here’s the dirty little secret about economic impact studies. They are designed so they can only give one kind of result — positive. The possibility that any subsidy or special project could generate negative results for the economy, i.e., lose jobs, reduce incomes, or shrink GDP, is ruled out by design. I have explained why this is in several other publications. But the more-lengthy arguments that I’ve made elsewhere can be boiled down to one simple point: The studies all assume none of the resources being used — labor, land, steal, electricity, etc. — would be employed in any other productive activities if the subsidized companies or industries weren’t using them.

If a 10-acre plot weren’t being used for a subsidized solar power plant it wouldn’t be used to grow soybeans or sweet potatoes. It would be just lying there idle. And if the workers used to install the solar panels weren’t hired to do that job, they would be in the unemployment lines. These are the kinds of assumptions that are implicit in constructing the studies meant to convince the public that these subsidies are really for their own good.

There are no job losses, no wage reductions, and no GDP losses to calculate and subtract from the gains. So, the question that all of these studies are asking is, How good will the special interest subsidy be for the economy? Not whether it will be good or bad.

The answer to this question comes through all of the ripple effects from the subsidy, sometimes called multiplier or secondary effects. This has to do with how the subsidies work their way through the economy once they’re handed over to the special interest. Again, all of these effects are assumed to be positive for the same reason as discussed above. None of the resources being used would be employed in any other productive activity if it weren’t for the subsidy. How large the total impact ends up being has everything to do with these rippling effects. Often, they are assumed to be 10, 15, or even 20 times the amount of the original subsidy. The bigger the ripple effect, the better off the special interest subsidies are making everyone.

The numbers the typical economic impact study generates have no meaningful economic content. They cannot intelligently inform debates over whether any particular project or subsidy would be worthwhile. As a general rule, the public and politicians should never view economic impact studies as anything more than an attempt by special interests to manipulate public opinion for their own benefit.

Dr. Roy Cordato is resident scholar at the John Locke Foundation.

Categories: Public Policy

Trade views are hard to measure

Wed, 2018-12-19 01:01

There has always been a robust political debate between advocates of free trade and advocates of manipulating the terms of trade to protect special interests. But the partisan affiliations of these two factions have fluctuated over time.

Consider these examples from contemporary politics. As North Carolina-based trade attorney Scott Lincicome pointed out in a recent Cato Institute paper, Republicans expressed mostly positive views about free trade during the presidency of George W. Bush, who pushed for more free-trade agreements, while Democrats expressed mostly negative views, from rank-and-file voters all the way up to presidential hopefuls Barack Obama and Hillary Clinton.

But during Obama’s second term, when he was seeking support for the Trans-Pacific Partnership to expand free trade around the Pacific Rim, “these views flipped,” Lincicome observed, “with Democrats embracing trade and Republicans becoming trade skeptics.”

This isn’t merely an oppositional effect, a pro-trade White House vs. a party out of power. It’s a cuing effect. One of the few political issues about which Donald Trump has been consistent throughout his decades in the public eye is his criticism of free-trade policies. Not coincidentally, Republicans have been more likely than Democrats since the rise of Trump to endorse tariffs — despite the indisputable fact that tariffs are tax increases, not typical GOP fare.

One way you can tell this is a “follow the leader” dynamic, not a fundamental change in values, is that when pollsters ask a series of questions, rather than just one, most GOP-leaning voters seem to support Trump’s tariffs as well as free-trade agreements. They either see no contradiction — believing that the tariffs are merely a negotiating tactic, not a long-term policy choice — or they feel no obligation to reconcile their partisan loyalties with their policy preferences.

That’s not to say there haven’t been more sweeping partisan realignments in the past. During the early decades of the republic, the party we now know as the Democrats — originally named the Republicans, or Democratic-Republicans — tended to defend free trade. They were opposed on the issue first by the Federalists, then by the Whigs, and eventually by the Republicans of the late 19th and early 20th centuries.

Still, each party contained dissenters. Democratic presidents such as Andrew Jackson, James K. Polk, and Grover Cleveland faced off repeatedly with protectionist members of their own party, often from industrial areas where both factory owners and workers sought protection from foreign competitors. At the same time, the Whig and Republican parties contained a fair number of free traders, ranging from agricultural interests and consumer advocates to urban professionals and anti-corruption crusaders.

During the latter decades of the 20th century, however, the Republican Party of Ronald Reagan and his presidential and congressional successors made a clear turn towards free trade (some wearing Adam Smith neckties to their Capitol Hill or West Wing offices just in case the point wasn’t clear) while Democrats with close ties to organized labor became increasingly protectionist.

There has always been an ardently protectionist faction in our politics, an equally committed free-trade faction, and a “malleable middle,” as Lincicome put it, “whose views depend on the political moment.” The latter group mixes generally positive feelings about the benefits of international trade with caution about national sovereignty and suspicion of foreign actors such as China.

The most recent poll of North Carolina voters on the topic, I think, was a High Point University survey in October. Asked whether “in general” they thought “free trade agreements between the U.S. and other countries have been a good thing or a bad thing for the United States,” 54 percent said good, 24 percent said bad, and 23 percent weren’t sure.

But only a third of respondents said they had heard “a lot” about Trump’s tariffs, only 18 percent said they were worried “a lot” about the tariffs costing them money, and most said they had yet to see any impact on their household budgets.

Public opinion about trade is both important and hard to measure. Interpret with care.

John Hood (@JohnHoodNC) is chairman of the John Locke Foundation and appears on “NC SPIN,” broadcast statewide Fridays at 7:30 p.m. and Sundays at 12:30 p.m. on UNC-TV.

Categories: Public Policy

Headline reminds us about critical difference between charter, district schools

Tue, 2018-12-18 04:02

Plans to shutter Raleigh’s Hope Charter Leadership Academy generated a story in the Dec. 11, 2018, edition of the Raleigh News & Observer.

It’s hard to feel good about the following headline: “Charter school closing due to poor performance.”

But this observer has to admit to at least one positive reaction while reading the sad news spelled out in the Dec. 11 edition of the Raleigh News and Observer. While contemplating the story of Hope Charter Leadership Academy’s struggles, I couldn’t help but think: This is what’s supposed to happen to a charter school that underperforms.

The demise of Hope Charter, located near downtown Raleigh, offers a sharp contrast to traditional district schools that fail year after year. In almost every case, those schools continue to operate with no threat of closing. While Hope Charter students and families must seek other educational options, many of their counterparts in failing schools across the state remain stuck with the status quo.

Short of a shutdown, even efforts to shake up operations of a failing district school tend to face an uphill battle. Witness the protracted fights over placing two elementary schools — one in Robeson County and the other in Wayne — in the state’s relatively new Innovative School District. That district targets the state’s worst-performing district schools. It allows them to continue operating under new management.

Imagine the outcry if state or local education officials had recommended an alternative: shuttering those schools completely. It’s safe to say that option would not have proceeded as smoothly as the process that will lead Hope Charter to close its doors.

Charter school advocates often point to good news associated with these publicly funded schools that operate outside the control of traditional school systems. And they have strong evidence on their side.

The John Locke Foundation’s K-12 education expert, Terry Stoops, noted this fall that a higher percentage of charter schools (42 percent) earned A and B grades from the N.C. Department of Public Instruction in 2017-18 than their district school counterparts (35 percent). Charter schools made up 7.8 percent of those higher-grade schools, even though charters represent just 6.6 percent of the more than 2,500 graded public schools statewide.

On the other end of the scale, eight charter schools (5 percent) earned F grades, while 83 (4 percent) of their traditional district school counterparts failed to make the grade. Charters represented 8.8 percent of all failing schools, according to the state’s grading system.

One major difference, of course, is that each failing charter school faces the threat of following Hope Charter’s path to closing. Few, if any, of the dozens of failing district schools are likely to hear any suggestion that they shut down.

The prospect of closing forces struggling charter schools to innovate or disappear.

Innovation remains a realistic option. Ask Richard Vinroot, the former Charlotte mayor and Republican candidate for governor. Vinroot shared with state lawmakers this spring the story of Sugar Creek, the charter school he helped start in Mecklenburg County.

Sugar Creek’s early performance results fell well short of Vinroot’s expectations. He conveyed his concerns to school director Cheryl Turner. “Our numbers were exactly like the poor schools at [Charlotte-Mecklenburg Schools] — no different,” Vinroot said. “We had no gym. No playground. I said, ‘Cheryl, we need to shut this darn thing down. Why are we taking kids in our school who aren’t doing any better than anywhere else? We need to shut it down.’”

As Vinroot recounted during his April legislative presentation, Turner asked for another year to find a way to boost the school’s performance. Two decades later, a school that started with about a quarter of its students meeting grade-level proficiency boosted that total to 60 percent.

In 2016-17, Sugar Creek’s African-American students scored 12 points higher on standardized tests than their CMS peers and 19 points higher than African-American students statewide. Sugar Creek’s Hispanic students scored 19 points higher than those in the surrounding school district and 21 points higher than the statewide average. Among all economically disadvantaged students, Sugar Creek topped CMS by 18 points and the statewide average by 21.

The school eventually expanded into high school grades. All 30 members of its first graduating class were expected to go on to college. As the school compiled these achievements, 94 percent of Sugar Creek students qualified for free or reduced-price lunches, Vinroot said.

It would be great to see repeat performances of Sugar Creek’s success story. State leaders would be wise to give new charter schools sufficient time to mirror Turner’s impressive turnaround.

But some charter schools won’t make it. Those that can’t find the key to success should shut down. Just as the top-performing charters offer examples for other schools to emulate, the shuttered charters should provide evidence of education approaches to avoid in the future.

Yes, it’s sad to read about a “Charter school closing due to poor performance.” But that’s a better headline to see than “Charter school lingers on despite repeated poor performance.”

Mitch Kokai is senior political analyst for the John Locke Foundation.

Categories: Public Policy

Fraud claims should trouble conservatives

Mon, 2018-12-17 01:01

While the term “whataboutism” may be relatively new — coined within the last few decades, and newly prominent in the age of Donald Trump — the logical fallacy it denotes is as ancient as politics itself.

The rhetorical trick goes something like this. A political leader or group is accused of doing something wrong. In response, a defender tries to change the subject. “You say President Trump lies,” for example, “but what about when President Obama said that under the Affordable Care Act, people could keep their health plans if they wanted? He wasn’t telling the truth, and you didn’t go after him!”

As it happens, Obama wasn’t telling the truth about that, as he and anyone else involved in health policy must surely have known. I lost my own health plan because of the Affordable Care Act.

But that example does not establish a defense of Trump’s dishonesty. In fact, to grant that it is wrong in principle for politicians to tell falsehoods is obviously to strengthen the case against any particular politician telling falsehoods, not to weaken it.

Indeed, whataboutism is formally known as tu quoque (“you also” in Latin), the appeal to hypocrisy. Hypocrites may deserve all sorts of scorn. But their inconsistency doesn’t disprove the value of the ethical standard they are violating. It’s a separate infraction, one might say.

Consider the election-fraud allegations in North Carolina’s 9th Congressional District. Operatives working for the campaign of Republican Mark Harris allegedly went beyond the legal distribution and collection of absentee-ballot requests and illegally “harvested” the absentee ballots themselves, opening up the possibility that the ballots were tampered with or discarded in ways that benefited Harris.

Republicans have variously responded by pointing out that there are also credible allegations of ballot harvesting and other questionable tactics by Democratic operatives in Bladen County this year; that the key Harris contractor in question, McCrae Dowless, had also done absentee-ballot work for Democrats in recent election cycles; that his 2018 tactics may have been motivated by a broad perception that previous Democratic election fraud had never been seriously investigated, much less punished; and that Democrats in states such as California have actually fought to legalize and expand the use of ballot harvesting, which they used to great effect in defeating Republicans in 2018.

These are all correct statements, as far as I can tell. If made to provide context, and to challenge the absurd overstatements and “guilt by association” claims made against all North Carolina Republicans in the aftermath of the 9th District fiasco, they are warranted. But to the extent these claims have devolved into whataboutism, they fail. If Dowless did what is alleged, and Harris exercised poor judgment at the very least in hiring and incentivizing the Dowless crew, then they deserve what may be coming to them. That others may also deserve criticism or consequences for their own choices doesn’t change that.

If it is to stand for anything at all other than short-term electoral victories or “owning the libs,” the conservative movement must stand for standards, for the rule of law as well as for rules that may be tacit and lack the force of law yet make it possible for people with differing interests, values, and political beliefs to coexist in relative peace and security.

It’s not easy to defend rules when they feel inconvenient, delay immediate gratification, or provoke hypocrisy. The Silent Sam controversy at UNC-Chapel Hill is a case in point. Wherever you think the statue should ultimately reside, do you really want to live in a society where people think they can take the law into their own hands if they conclude that following the rules will not immediately get them what they want?

If you believe that the “other side” is being unreasonable or hypocritical, by all means call them out. But don’t lapse into whataboutism. Don’t let explanations become excuses. And don’t call people chumps for following the rules — particularly if your goal is to advance conservatism.

John Hood (@JohnHoodNC) is chairman of the John Locke Foundation and appears on “NC SPIN,” broadcast statewide Fridays at 7:30 p.m. and Sundays at 12:30 p.m. on UNC-TV.

Categories: Public Policy

Why incentives’ sway didn’t bring Apple our way

Fri, 2018-12-14 01:49

Apple surprised the business world Thursday with an announcement it was investing $1 billion in a new campus in Austin, Texas. The announcement also included news of new sites in Seattle, San Diego, and Culver City, California, and expansions in Pittsburgh, New York, and Boulder, Colorado.

It also dashed hopes in Raleigh and the Research Triangle Park of securing the new campus, although expansion here is still possible. Which is just as well, since state and local leaders had already promised away the net benefits and then some of having a major Apple operation here.

Without such an exorbitant incentives package, a new Apple campus here would have been a net positive for the area. Usually growth more than pays for itself, which is why community boosters and leaders have always wanted growing, vibrant communities. But North Carolina’s “transformative” corporate welfare is such that it would’ve made the growing pains from the Apple project — paying for more needs in schools, roads, housing, police and fire protection, labor, etc. — fall on current residents and businesses, not also the newcomer.

Further, as attested to by the Amazon and Apple decisions, having super-mega-incentives in place for “transformative” projects is unnecessary. Economic research suggests that big corporation relocations are made for long-term business reasons, not predicated on government incentives, which tend to be much less actual incentive than mere cherry on top. This means Apple chose Austin instead of Raleigh or RTP for business reasons, not for lack of incentives.

Does that mean Raleigh, RTP, or North Carolina at large is not attractive to business? Cut to the chase: North Carolina lost again, so does that mean we’re losers?

Not in the slightest. Losing out two huge, headline-hungry big corporations’ projects is no more an indicator of the overall health of the state’s economy than would be capturing those projects with monster incentives. Don’t forget: 99.6 percent of businesses in North Carolina are small businesses. What are we doing in terms of incentivizing them to relocate here, expand, and grow?

To incentivize the 0.4 percent here, we have to adopt economic development policies at the expense of the 99.6 percent. If we want to chase everyone, then we should adopt economic growth policies.

The difference is essentially who gets to control private resources: the state reallocating them to a favored few (“economic development”), or the owners of those resources given greater freedom (via lighter tax and regulatory burdens) to direct them to areas they perceive as the most profitable.

Recent (and baffling) incentives expansions aside, in the last decade, North Carolina policymakers have adopted economic growth policies. We’ve witnessed impressive results from it. We’ve achieved the kind of economy any state wants to have. North Carolina’s leaders cut taxes, spending, and red tape, and now North Carolina is hailed by the Tax Foundation as a national model for tax reform. Last month Forbes named North Carolina the No. 1 state for business.

Even executives at corporations taking incentives from the State of North Carolina can think of many, many other factors they’d rather see before targeted incentives. According to research published in 2015 in Economic Development Quarterly, those include skilled labor, low regulations, low taxes, low costs of living, and good transportation infrastructure.

Researchers G. Jason Jolley, Mandee Foushee Lancaster, and Jiang Gao, surveyed executives from 150 companies that received economic development incentives from North Carolina and 465 companies that did not. Among other things, they found that out of a list of 19 important factors for North Carolina’s business climate, both groups of executives ranked state and local economic development tax incentives 15th and 16th. The only things they found less important than tax incentives were being able to access low-cost labor, mass transit infrastructure, and availability of unskilled labor.

Put another way, asked how important tax incentives were, North Carolina business executives said they could name 14 things more important to the state’s business climate:

  1. skilled labor
  2. state regulatory burden
  3. state corporate tax rate
  4. local property tax rates
  5. community colleges
  6. state personal income tax rate
  7. highways
  8. information technology infrastructure
  9. four-year colleges and universities
  10. housing costs
  11. environmental regulations
  12. land prices
  13. workforce training programs
  14. major airports

As if to drive home the point, executives of incentivized companies were asked which was better, for North Carolina to give “select incentives to certain businesses” or to “reduce taxes affecting business taxpayers and their owners.” Only one out of five (21.7 percent) said select incentives were better.

Twin disappointments from Amazon and Apple should not tempt state and local policymakers to draw the wrong conclusion, that we still didn’t offer enough by way of government tax incentives and other special treatment. Instead, they should renew interest into what would make relocation, expansion, and growth here a good business decision for them as well as the 99.6 percent of smaller businesses, the unsung heroes of the state’s economy who create jobs and fill tax coffers without fanfare.

Sometimes that means refocusing on empirically sound policies which help ensure skilled labor, low regulations, low taxes, low costs of living, and good transportation infrastructure. Sometimes it means simply understanding you win some, you lose some.

But it never means sparing no expense to “win” the few — and lose the unsung.

Jon Sanders (@jonpsanders) is director of regulatory studies at the John Locke Foundation.

Categories: Public Policy

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