CIVITAS REVIEW

VOLUME IX, ISSUE 1 WINTER 2013

GOLDENOPPORTUNITY

Making NC an Island

of Freedom and Prosperity

PLUS:An Exclusive Interviewwith Dr. Arthur Laffer

starts on page 12

At the Conservative Leadership Conference 2013 -

Two Conservative Heroes

Jim DeMint quickly established himself as one of the most principled, effective con-servative leaders in Washington following his election in 2004 as South Carolina’s 55th U.S. senator. He is now president-elect of the Heritage Foundation, one of nation’s greatest bastions of conservative

policies and ideas.

Edwin J. Feulner’s leadership as Presi-dent of The Heritage Foundation has transformed the think tank from a small policy shop into America’s powerhouse of conservative ideas and what the New York Times calls “the Parthenon of the

conservative metropolis.”

At CLC2013 in Raleigh March 1-2, these two titans of the freedom movement will share their visions of where the nation is now, where it is heading, and what we can do to lead it to renewed freedom and prosperity.

visit CLC2013.comcall 919.834.2099

PRESIDENT ’SMESSAGE

IN THIS ISSUE

2 The Conservative Leadership Conference A Lasting Tradition

4 Commentary Making North Carolina the Entrepreneurial State

10 Red Shift GOP Takes Supermajorities in Legislature

15 More Jobs, Bigger Paychecks Study Shows Benefits of Eliminating Income Tax

17 Saving the Future Giving NC More School Choices

20 The Rules of the Game Cutting Red Tape Can Benefit NC

22 Under the Influence Civitas Probe Shows Lobbyist Master-Minding Elections Board Schemes

24 Questions of Responsibility Should 16- and 17-year defendants be treated as juveniles?

26 Gov. Perdue’s Trap Health Care Exchanges in NC

WINTER 2013 1

This will be your last issue of Civitas Review if you have not done one of the following: • Attend a Civitas event • Attend Civitas Training • Donate to Civitas at any level

We thank you for reading and hope you will decide to continue receiving Civitas Review

NOTE TO READERS

6 Golden Opportunity Making NC an Island of Freedom and Prosperity

ON THE

COVER

12 Supplying Prosperity How Tax Reform Can Boost NC An Exclusive Interview with Dr. Laffer

2 CIVITAS REVIEW

The Civitas Institute will be host-ing another great Conservative Lead-ership Conference (CLC) on March 1-2 this year. We continue to confirm outstanding keynote speakers and in-spiring presenters. So far, we have an-nounced that outgoing Heritage Foun-dation President Dr. Ed Feulner and former U.S. Sen. Jim DeMint, who will take over the reins at Heritage, will be appearing. Noted pundit Michelle Malkin will be addressing this year’s conference, in addition to other no-table leaders and media personalities.

Noted state figures appearing in-clude U.S. Rep. Renee Ellmers, state House Speaker Thom Tillis and state Senate President Pro Tem Phil Berger.

Over the past eight years, the CLC has become a great North Carolina tra-

dition, bringing together hundreds of conservative men and women of all ages and from all corners of the state. It has inspired many activists and groups that have made a real difference in policy re-form and the outcome of elections, in-cluding the most recent general election in November.

While keynote addresses from the most prominent conservative leaders in the nation have always been a high-

light of the event, the heart of the con-ference is the training sessions led by policy experts and activists from such organizations as the Civitas Institute, Heritage Foundation, Franklin Center and the Cato Institute.

Oftentimes as conservatives, we care deeply about the principles we hold dear and about the direction of our country as a whole, but are unsure as to how to advocate for real and lasting change. These sessions give great insight on how you can become a conserva-tive leader in your community and in the Old North State. CLC attendees in the past have taken what they’ve learned and applied it in building a grassroots conservative movement here. These ac-tivists supplied much of the energy and enthusiasm that powered the 2010 and 2012 elections.

I encourage you to attend this year’s CLC not just for the great speeches and the chance to engage with the conserva-tive leaders and organizations that have inspired us all throughout the years, but also for the opportunity to build rela-tionships and a community with others in your state who care about the same principles you care about — who want nothing more than for us to grow to-gether as a prosperous and free society.

————Rhett Forman is the Outreach

and Development Assistant at the Civitas Institute.

The Conservative Leadership Conference

A Lasting Tradition

by Rhett Forman

This year’s conference will take place on Friday, March 1 and Saturday, March 2 at the Raleigh Marriott Crabtree Valley hotel. Tickets are available for purchase online at www.CLC2013.com or by phone at 919-834-2099. We hope to see you there!

WINTER 2013 3

The speakers at CLC will provide attendees with an inspiring view of where the nation is heading, and what can be done to bring it back to the Founders’ vision of limited govern-ment and free people.

The present and future leaders of the Heritage Foundation, one of the very most influential conservative or-ganizations, will provide a view of the issues facing the United States. Dr. Edwin Feulner, the current president, is credited with making the foun-dation a force in Washington.

The Foundation’s mission, he said, is “to set the terms of na-tional policy debate. To offer not a lament for a lost America, but positive, practi-cal, free market alter-natives to the failed liberal policies of the old order.” He will bring that perspec-tive to his appearance at CLC.

Former U.S . Sen. Jim DeMint,

of South Carolina, was one of the strongest voices for conservatism on Capitol Hill. For example, the Na-tional Taxpayers Union identified him as the No. 1 senator voting for respon-sible tax and spending policies. He is now president-elect of the Heritage Foundation. As he wrote in an oped re-cently for the Washington Post, “The right ideas have the power to change

the course of America, which is why the place to launch a conservative re-vival is the Heritage Foundation.” He’ll be sharing his vision of how to do that at CLC.

Dr. John Lott is one of the fore-most defenders of the Second Amend-ment in the nation today. His classic book, “More Guns, Less Crime,” is essential for understanding the gun control debate.

Michelle Malkin is a syndicated columnist and Fox News Channel contributor. Her most recent book is “Culture of Corruption: Obama and His Team of Tax Cheats, Crooks, and Cronies.”

Other speakers include Lt. Gov. Dan Forest, commentator and former Congressman Artur Davis, NC Sen-ate President Pro Tem Phil Berger, NC House Speaker Thom Tillis and radio talk-show host Jason Lewis.

CLC Speakers to Inspire NC

Jim DeMint Michelle Malkin Dr. Edwin Feulner

Sen. Phil Berger Artur Davis Lt. Gov. Dan Forest

North Carolina has a once-in-a-cen-tury opportunity to become the lead-ing entrepreneurial state in America. Adopting free-market principles will al-low individuals to use their creative en-ergies and ideas to fulfill the American Dream, while creating an abundance of jobs and economic growth.

Unfortunately, national policy in recent years under both political par-ties has burdened the economy with innumerable regulations and policy obstacles, retarding our economy and frustrating recovery.

Now is our opportunity to limit government intervention, which has created massive debt, unemployment and the financial bubbles. Consider the following ideas for growth, em-ployment and prosperity:

Highly educated and skilled work- ers are far more important to a sus-tainable economy than short-term business incentives.

Existing economic incentives to a few selected industries mask the most important issue. Unemployment is over 9 percent because too many of our workers do not have 21st cen-tury education and skills. Our first priority must be to correct this issue, using a market approach to educate our youth.

Public education as we know it is failing. We must adopt a free-market education system that pro-duces skilled citizens who are able to compete worldwide. It will also pro-duce virtuous leaders, who will help create technologies, businesses and future jobs.

Our schools must develop stu-dents who are competitive in a com-plex society and worldwide economy, with special emphasis on technology training and online education.

The charter cap has been lifted, which is a good start, but now we need scholarships for all students; parents will make the best choice for

their children based on an abundance of school choices. Traditional public schools must be free from onerous regulations such as tenure and class size restrictions. They must compete with private, parochial and charter schools, or they will perish.

Government regulation frustrates the creative spirit and depletes our financial resources. The second pri-ority must be to eliminate all unnec-essary requirements and regulations, including local privilege licenses.

A review of all major state regula-tions and eliminating all non-sensi-ble and job-killing statutes is a good start. Local governments are an equal part of the problem. Every quarter the Governor and our mayors should announce the regulations that have been eliminated and the resulting positive impact on job creation. North Carolina voters and the nation will take notice.

High taxes are the bane of growth as they deprive entrepreneurs of re-

by Robert L. Luddy

4 CIVITAS REVIEW

Making North Carolina the Entrepreneurial State

sources needed to create jobs. The General Assembly should eliminate all corporate and personal income taxes because entrepreneurs and indi-viduals are the most efficient alloca-tors of scarce resources. This change would attract new capital and tech-nologies and sustain our economic growth for generations.

To achieve lower taxes and a stronger economy, we must downsize state government with a restructured state employee pay and benefit sys-tem more aligned to the market. All corporate incentives and subsidies should be eliminated, which will save tax dollars and allow all business to compete fairly.

Medicaid spending for the poor is threatening to overwhelm state expenses, which will lead to crush-ing future tax burdens for the state. Governor McCrory should join the other Governors and block our state “Obamacare exchange.”

Transportation is critical to growth. The Department of Transportation (DOT) should begin with the low-

hanging fruit, including lengthen-ing turning lanes, modulating traffic lights based on time-of-day needs, and adding toll roads. Our public works and transportation are administrated by a 19th-century political spoils sys-tem. The federal highway fund is dry-ing up and state budgets cannot ful-fill the needs of a growing economy. DOT must allocate scarce resources based on strategic state growth, not political cronyism.

We have a wonderful opportunity here in North Carolina to restore a prosperous economy for our resi-dents, but it is up to us to make sure it becomes a reality.

Our citizens must be well edu-cated with 21st-century skills. We must also grow business and indus-try – not the government – so that every citizen can achieve the America Dream right here in NC.

————Robert L. Luddy is the president of

Raleigh-based CaptiveAire, a member of the Job Creators Alliance, and

Chairman of the Civitas Institute.

Volume IX, Issue 1 Winter 2013

Publisher Editor

Graphic Designer Production

Francis X. De Luca Jim Tynen Tiffany Taylor Chamblee Graphics

Board of Directors

Chairman Members

President

Robert L. Luddy James I. Anthony Jr. H. Kenneth Dickson Jr. Steven B. Long Francis X. De Luca

All opinions expressed are those of the authors and do not necessarily reflect the views of the editors, or the staff and

board, of the Civitas Inistitute.

Letters to the Editor Want to sound off? Respond to an article?

Point out an error? Send us accolades? Write james.tynen@nccivitas.org

or send mail to: Letters to the Editor

Civitas Institute 100 S Harrington Street

Raleigh, NC 27603

Civitas Review readers who want more information between issues

can call 919.834.2099. Ask to receive our weekly e-letters, or you can go to

www.nccivitas.org to sign up for them online.

All non-advertising content published in Civitas Review may be republished as long as appropriate credit is given

and it is published in its entirety. © 2013 by John W. Pope Civitas Institute

CIVITAS REVIEW

“The General Assembly should eliminate all corporate and

personal income taxes because entrepreneurs and individuals

are the most efficient allocators of scarce resources.”

PRESIDENT ’SMESSAGE

Making NC an Island of Freedom and Prosperity

GOLDENOPPORTUNITY

PRESIDENT ’SMESSAGE

by Francis X. De Luca

2013 promises to be a landmark year in North Carolina. It holds a promise of sweeping changes in the relationship between “We the People” and the state to which we delegate the authority to govern. This year may see groundbreaking legislation giving us more freedom

in the way we fund our govern-ment – taxes; in the way we raise our children – education; and in the way government controls our lives and businesses – regulation.

Our development as a state and nation is inexorably linked with the struggle for liberty and free-dom. As we continue to develop a system of laws and government

guided by a constitution, we see the desire for freedom colliding with the need for laws and stability provided by a governing structure. Our political history is the story of how these two forces interact.

America arose out of a yearn-ing for freedom. It has always been about the search for freedom while struggling under rulers who

Making NC an Island of Freedom and Prosperity

GOLDENOPPORTUNITY

8 CIVITAS REVIEW

seemed arbitrary and distant and did not recognize the individual as en-dowed with inalienable rights.

Many settlers came to the new world looking for riches, but many more came looking for freedom. They fled the old world and the tyranny of monarchs. That tyranny denied people the very rights we take for granted today. Many places in the world still do. Tyrants also denied people the opportunity to pur-sue a career or enterprise that would fulfill them or enrich them. Tyrants often confiscated the fruits of the people’s labor with no con-sideration of representation or due process.

When the powers of Europe trampled their most fundamental free-doms, the pilgrims escaped in ships to the new world.

When American set-tlers felt hemmed in by development and gov-ernment crowding in on them, they escaped in wagons to the West.

When the frontiers closed, we continued to follow what we consid-ered our manifest destiny.

Today, however, the world has few places, if any, left for escape. When there is no frontier, government can grow unfettered and there is no place left to run. That is why in our federal system the states are the last remain-ing bastion of freedom: Mobility be-tween states is the last opportunity for Americans to secure their liberties.

With the threat of productive citizens fleeing one state for a freer state, politicians can’t force citizens

to support profligate spending and grandiose projects. Bureaucrats can’t impose arbitrary and capricious rules that restrict the freedom of entrepre-neurs and citizens. Families are free to choose states that are better places to raise children. People can pursue their dreams without red tape getting in the way. In short, citizens are free to avoid political rulers they detest by choosing to settle outside their scope of power.

In the last session, for example, we saw this happen when the legis-lature changed laws governing forced annexation by North Carolina cities. No longer could cities force citizens into the city, control their lives and take money from them to support their free-spending ways. If citizens voluntarily wanted to join the city they were still free to do so – but

forcing people against their will into the city limits was over. The law that ended forced annexation was a blow for freedom.

Much more action will be required to preserve and extend freedom and prosperity. This year we will see an attempt to eliminate the income tax to make North Carolina a haven for freedom lovers seeking escape from overreaching government intrusion.

If done right, tax reform will allow workers to keep more of their mon-ey and instead fund government by how much is spent, rather than by how much is earned.

As Washington raises taxes on all forms of income, North Carolina has an opportunity to go the other way by rewarding work and setting ourselves apart. This issue of Civitas

Sean Donohue Photo / Shutterstock.com

WINTER 2013 9

Review highlights (p. 12-16) the issue of tax reform and the huge benefits it can bring to our state.

Tax reform is not just about money and state finances, it is about personal freedom. It is about you keeping the fruits of your labors. It is about allowing you to decide how to spend your money. It is about lim-iting government. It is about estab-lishing the conditions to allow our

economy in North Carolina to thrive and grow, to produce the jobs sorely needed in our state and to see fam-ily incomes go up instead of down as they have in the last decade.

Although taxes will be one of the important issues tackled this year, education will also be on the agenda. Nothing is more fundamental to our success as a people and government than an educated electorate. The present system is letting students fall

through the cracks, and many of those that complete the system do not have the skills needed in our ever-more complex world.

Education reform (p. 17) will not only involve improving our existing education establishment, it will involve giving families more control over the education of their children. It will give them the ability to pick the setting and instruction that allows their child to flourish. It will end the “one size fits all” structure we currently embrace and turn education into a truly public endeavor — not

just the province of education pro-fessors and bureaucrats as it is today.

Regulatory reform (p. 20) can cut back the red tape that is strangling freedom and enterprise. Overhaul-ing the state’s election system (p. 22) will ensure that power truly resides in the hands of North Carolina citizens, not in the hands of a few bureaucrats and a liberal clique. Finally, fighting the onslaught of Obamacare (p. 26) will leave us free to make our deci-sions about our health.

These reforms will not be easy but nonetheless they need to be done. They need to happen to give all North Carolinians more opportunity and freedom. It will help to make our state an island of freedom and prosperity in a nation that is rapidly heading the other way. We can get this done! All we need to do is display the courage, ingenuity and perseverance to succeed, as Americans and North Carolinians have done throughout history.

————Francis X. De Luca is the President

of the Civitas Institute.

“Many settlers came to the new world looking for riches, but many more came looking for

They fled the old world and the tyranny of monarchs. That tyranny denied people the very rights

we take for granted today.”

but many more came looking for freedom.

10 CIVITAS REVIEW

Conservatives have an unprecedent-ed opportunity for reform in North Carolina now that the Republican Party has, for the first time in the modern his-tory of our state, gained control of all three branches of state government.

The graphic at right makes plain how dominant the GOP has become in the General Assembly. The November election gave Senate Republicans two additional seats, giving that chamber 33 Republicans to 17 Democrats. House Republicans gained nine seats, giving them the super-majority they didn’t have in 2011: 77 Republicans and 43 Democrats. With fellow Republican Pat McCrory becoming governor, and a majority of state Supreme Court jus-tices coming from Republican back-

REDSHIFTGOP Takes Supermajorities

in Legislaturegrounds, the party has a chance to leave a permanent stamp on North Carolina.

To do so, it first must confront three big issues: Voter ID, tax reform, and healthcare.

High on the agenda for incoming lawmakers will be passing a bill requiring voter ID at the polls. Other reforms to the election process are likely. Suggested re-forms include: creating uniform early vot-ing times across the state to decrease con-fusion, reconsideration of early voting on Sunday, and safeguards to prevent fraud during the one-stop registration process.

Another major issue for the upcoming legislative session will be tax reform. North Carolina’s current tax structure has been rated by the Tax Foundation as one of the worst to do business in. The Civitas Insti-tute has released a study on North Caro-lina tax reform in conjunction with econo-

mist Art Laffer calling for elimination of income taxes in NC. (See p. 12-16.) While the exact details of the plan Republican leaders will propose has not been released, GOP leaders, including McCrory, have supported in principle a base-broadening plan that would see the reduction or elimi-nation of income taxes in exchange for in-creases in consumption taxes.

Health care battles will also be prom-inent this session. First, among them will be Gov. McCrory’s decision on whether or not to implement a state based insur-ance exchange. The state will also be re-newing the State Employees Health plan contract, which provides health insur-ance to thousands of state employees and is worth billions of dollars.

————Clark Riemer is a Policy Analyst

at the Civitas Institute.

by Clark Riemer

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Legend =1 Republican Member =1 Democrat Member

A Side-by-Side Comparison

Senate and House Seats

How the Chambers Changed

find out more at carolinatransparency.com

How Tax Reform Can Boost NC

An exclusive interview with Dr. Arthur Laffer

SupplyingProsperity

Distinguished as “The Father of Supply-Side Economics” for his economic acumen and influence in triggering a worldwide tax-cutting movement in the 1980s, Dr. Ar-thur Laffer was a member of President Reagan’s Eco-nomic Policy Advisory Board for both of his terms. Dr. Laffer served as a Distinguished Professor at the Univer-sity of Southern California and at Pepperdine University, and was also a member of the Board of Directors at the latter. Previously, he was a Professor at the Univer-sity of Chicago, and a consultant to Treasury Secretary William Simon, Defense Secretary Don Rumsfeld and Treasury Secretary George Shultz, under whom he was named the first-ever Chief Economist at the Office of Management and Budget.

Dr. Laffer received his BA from Yale University and his MBA and Ph.D. from Stanford University, all in economics.

Civitas Review: You and Stephen Moore (senior economics writer for the Wall Street Journal) recently co-authored a study “Taxes Really Do Matter: Look at the States.” What were some of the major findings of that study?

Dr. Laffer: What we find is that the highest tax rates on income really do make a huge difference and so do the corporate taxes. When you look at any taxes – and corpo-rate and personal income taxes in particular — they have very major impact on the economic perfor-mance and prosperity of the state.

We looked at the nine states with zero income tax on earned income and we looked at the nine states with the highest income taxes, and differ-ences in performance were astound-ing. And they are not only astound-ing in the last 10 years, but you can go back 50 years, and the differences are always there. The zero-income tax states way out-perform the high income tax states. Year in, year out across 50 years, never is any 10-year average in favor of the high-income [tax] states.

Not everybody is a big fan of that study, however, including the Insti-tute on Taxation and Economic Poli-cy (ITEP). Critics such as ITEP have challenged your conclusions and in fact have asserted that high-income tax states have outperformed no- and low- income tax states. Could you ad-dress some of that criticism?

Well, I outline it in the study if you want to go through all the specifics,

and address the specific comments they make. The biggest one is they [ITEP] tend to look at things on a per capita basis. But when you have state bound-aries that people can move into and out of states – now, a per capita measure makes sense when making comparisons of countries, where you have restricted movement of people across country boundaries — but that’s not true in

states. What you really want to look at is the aggregates like gross state product, population, employment – those vari-ables – and those are the variables that are invariably in favor of the low-tax states. The other ones (variables) are a mixed bag, because they are an inappro-priate metric for measuring prosperity.

Right – the whole notion of vot-ing with your feet is much easier

between states than it is between countries.

That is a key issue. If you can’t vote with your feet, if people can’t move in or can’t move out, then you will see major differ-ences in per capita num-bers. But when people can vote with their feet, people will leave a state rather than having their income drop.

Given that state gov-ernments need a certain amount of revenue to perform their vital func-tions and services, what would the ideal state tax structure look like?

Let me if I can talk about the level of rev-enues that state govern-ments need. When they all have the same circum-

stances, they all perhaps have roughly the same need for government rev-enues. But when one of them has a circumstance that causes much faster economic growth, their need for gov-ernment spending is greatly reduced by the rapid growth. So the tax code plays into both sides of the equation. If you have the correct tax code in place, you’ll have more rapid growth and

Civitas Review was fortunate enough to interview Dr. Laffer recently. Here is what he had to say about state taxes as they relate to economic performance, what tax reform would mean for North Carolina, and supply- side economics.

Dr.

Arth

ur L

affe

r

WINTER 2013 13

you’ll get less need for government, es-pecially unemployment benefits, wel-fare payments – all of that stuff — and you will create a good revenue-raising source, which is also very important. My guess is what you really want to do is have a low-rate, flat tax in your state that basically functions to raise revenues – that’s it.

Now a sales tax is a good first start. It’s not the end-all, be-all because you often end up with exemptions, but that is a very good start. And those states that rely the most on sales taxes tend to be the states with fastest growth as well – and that is exactly what we would ex-pect to find happening.

It is important not to sever tax pol-icy [from] spending policy, even in a narrow sense. Two states with exactly the same spending criteria – exactly the same welfare programs, the same roads, everything – will have very dif-ferent needs for revenue depending on how they collect their taxes. And that is really critical, no one talks about that.

It makes a huge difference. Pros-perity in the state will reduce the need for government spending a lot. Or at least redirect the government spending to where it is more productive – more output-friendly. For example if you have a state with a bad tax structure and a high unemployment rate, you’ll have to spend on people who are un-employed, and that not only is not productive for the future, it is a prob-lem in the present – because if you pay people not to work, you are going to get more people not working.

What you want to do is make sure the majority of your government spend-ing is on productive, future-growth things like education, like highways, like all that wonderful stuff, rather than on welfare because you need more wel-fare. You’d much rather reduce the need

for welfare and use the funds in a much more productive fashion.

We will likely be seeing legisla-tion in NC to significantly reform the state’s tax code. This would involve eliminating the personal and corpo-rate income taxes and largely replac-ing the revenue by expanding the re-tail sales tax and raising the rate a bit.

Eliminating the loopholes is the single most important thing you can do, and it really is, because you want to make sure people don’t sit there and spend their time trying to find a way around the tax – rather they spend their time trying to produce goods and servic-es and not look for tax loopholes by hir-ing lawyers, accountants and deferred-income specialists – all that garbage.

If North Carolina were to suc-cessfully implement this type of bold tax reform, what would that mean to North Carolinians?

What you have to remember also, when you are talking to the people of North Carolina, that the state govern-ment and even local governments don’t control everything. How the U.S. goes is a very major factor in how the state of North Carolina goes. And the North Carolina legislature and gov-ernor don’t have much control over Washington D.C.

In addition to that, what your neighboring states do is also very im-portant. That having been said, if the legislature (of North Carolina) and governor were to get rid of the state income tax – both personal and cor-porate – and replace it with a sales tax, I think you will see prosperity in North Carolina the likes of which you can’t imagine. And I would be ex-traordinarily optimistic about the state – about jobs, about growth, about output – and also population growth. That is what I think you’re really go-ing to see, and it’s really fun being in prosperity.

Remember that the state doesn’t control everything, but I think that would be a huge difference for the state.

Shifting gears a little bit to big-picture ideas, you have been de-scribed as the “father of supply side economics.” How would you describe for the layman the supply side eco-nomic philosophy?

Let me just say that supply side economics is that people respond to incentives. They like doing things they find attractive, and they are repelled by things they find unattractive. And government policy can change the at-tractiveness of activities. For instance, C O N T I N U E D O N P A G E 2 8

[G]et rid of the state income tax... and replace it with a sales tax, I think you will see prosperity

in North Carolina the likes of which you can’t imagine.

14 CIVITAS REVIEW

WINTER 2013 15

North Carolina was once a growth champion of the national economy – but in recent years it has slumped to the middle of the pack.

Implementing a pro-growth tax reform can help reinvigorate North Carolina’s substantial growth premi-um once again. Both theory and data suggest that state income taxes are the most harmful to state economic growth, and consumption-based taxes least. To that end, legislative leaders have been discussing state tax reform.

In order to evaluate the idea, the Civitas Institute partnered with the consulting firm of Arduin Laffer and Moore Econometrics (ALME) to analyze the idea in the study “More Jobs, Bigger Paychecks.” The study’s conclusion: Replacing the state’s in-come taxes with a more consump-tion-based system will create more

jobs and bigger paychecks for North Carolinians. Some key points from that research:

Comparing the StatesThe key to restoring North Caro-

lina to its former economic strength is increasing the incentive to produce, invest and innovate, by eliminating the personal and corporate income tax burden. This attracts industries and entrepreneurs, which in turn means increased economic growth, income and employment.

Real world illustrations of this the-ory can be seen in the relative econom-ic performance of those states without a corporate income tax compared to all of the other states, and the relative performance of those states without a personal income tax compared to all of the other states:

• The average annual growth rates for those states without a corporate in-

come tax exceeded the growth rate of all other states by 1.0 percentage point between 2002 and 2011;• The average annual growth rates for those states without a personal income tax exceeded the growth rate of all other states by 0.5 percentage points between 2002 and 2011.

In other words, over the last de-cade, those states that did not tax in-come (either corporate or personal) gained a growth advantage vis-à-vis all other states.

More GrowthA proposed consumption-based

tax system currently being discussed by state legislative leaders aims to im-prove the overall economic incentives in North Carolina by transforming the state’s current high-marginal income tax system into a broad-based flat tax on consumption, thereby producing

More Jobs

PAYCHECKSBIGGER

by Brian Balfour

Study Shows Benefits of Eliminating Income Tax

increased incentives to work and pro-duce in the state.

Based on ALME’s analysis, a con-sumption-based tax reform can in-crease North Carolina’s average annu-al rate of personal income growth by 0.38 percent to 0.66 percent. To un-derstand the significance of an accel-erated rate of growth this size, we can examine North Carolina’s economic performance from 2000 to 2011.

North Carolina’s relative personal income growth ranking fell from the 4th fastest in the U.S. between 1981 and 1999 to the 26th fastest in the na-tion between 2000 and 2011. How-ever, had a consumption-based tax reform been implemented in 2000, based on the estimated increase in North Carolina’s average annual rate of personal income growth, North Carolina’s expected average personal income growth would have increased

to between 4.4 percent and 4.7 per-cent, increasing North Carolina’s rela-tive growth rank to between the 18th fastest and the 14th fastest over this time period. In dollar terms, personal income would be between $14.4 bil-lion and $25.0 billion higher in 2011 than the actual 2011 personal income of $347.9 billion without a consump-tion-based tax reform – an income level 4 to 7 percent higher.

More JobsAdditionally, the accelerated income

growth would have created additional job growth. Based on the connection between income growth and employ-ment growth, total employment in 2011 would have been higher by an ad-ditional 217,000 to 378,000 jobs.

————Brian Balfour is the Director of Policy

at the Civitas Institute.

The full report and summaries are available at www.noincometaxnc.org

Arduin, Laffer, & Moore Econometrics explains the benefits of tax reform in “More Jobs, Bigger Paychecks: A Pro-Growth Tax Reform for North Carolina.”

MORE JOBS, BIGGERPAYCHECKS

A Pro-Growth Tax Reform for North Carolina

DECEMBER 2012

Executive Summary

Based on U.S. Census Bureau data showing a median household income in North Carolina of $45,206, assuming a household with two children and the tax filers take the standard deductions and exemptions, the average state income tax bill comes to $2,183. In other words, eliminating the state income tax would create an instant $2,183 pay raise for a typical North Carolina household.

From www.noincometaxnc.org

WINTER 2013 17

SAVINGFUTURETHE

by Bob Luebke

When lawmakers return to work at the end of January they will not only bring themselves but also the hopes and expectations of thousands of North Carolina families looking for meaningful school choice legislation.

Support for school choice among members of the House and Senate is at an all-time high. A new governor who has been friendly towards school choice has also helped to fuel optimism.

The families’ expectations are not without a basis. A recent Friedman Foun-dation-Civitas Institute poll showed that support for school choice is strong and crosses racial, economic and polit-ical divisions. Respondents were asked, “If cost was not a factor and you could send your child to any school, where would you send them?” Only 34 per-cent of North Carolina voters said they

would send their children to tradition-al public schools. Almost two-thirds of respondents (65 percent) said they would choose to educate their children elsewhere. The breakdown on where parents would send their children in-cludes private schools (39 percent), charter schools (15 percent) or home school (11 percent).

The poll also found strong support for school choice options. High percent-ages of voters supported charter schools (65 percent); tax credit scholarships (63 to 65 percent depending on how the question was asked); education savings accounts (56 to 52 percent, depending

on how the question was asked); and school vouchers (57 percent).

Looming over much of the upcom-ing session is the prospect of major tax reform legislation. One option being studied is to eliminate the state income and corporate income tax. Rumors abound as to the scope and viability of such a proposal. Nevertheless, the mere discussion of tax reform is help-ing to shape the larger budget discus-sions as well as influence the direction of school choice legislation.

Last session Representative Paul “Skip” Stam (R-Wake) introduced leg-C O N T I N U E D O N P A G E 1 9

Giving NC More School Choices

Kasey’s Story

Kasey Locke is a bright, beautiful little girl who lives in Arizona. But she faces challenges most kids never will: At age 3, she was diagnosed with autism.

When she started kindergarten at the public school in her neighborhood, Kasey’s parents worked with school of-ficials to incorporate a new learning method, applied behavioral analy-sis (ABA), into her schoolwork. “We were looking for different modes of treatment for her and came upon ap-plied behavioral analysis, and that’s the only treatment that’s been empirically shown to cause improvement,” Kasey’s dad, Jeff, said.

But Kasey’s public school couldn’t incorporate ABA methods into her full school day. Her parents started ABA treatments on the side. Then, when Arizona passed Goldwater Institute-drafted education savings accounts into law in 2011, “it was almost too good to be true” for the Lockes, Jeff said. Now, a portion of Kasey’s state education funding is deposited into an account her parents can use for a wide range of educational services, enabling them to tailor Kasey’s education to her specific needs. Taxpayers also benefit

because the accounts cost less than it would to send her to traditional pub-lic schools. (The family notes that the state funds do not cover the whole tu-ition of the school she attends.)

Jeff says the education savings ac-count has been life-changing for Kasey. She was able to attend Chrysalis Acad-emy, a private school in Tempe, Ariz., that helped her become familiar with ABA tools. “ABA is the primary way that she learns,” he said. “It’s very help-ful to be able to choose a school where ABA concepts are baked into the cake, instead of a broader ‘eclectic’ approach

employed by most public schools, that may or may not utilize ABA.”

Her communication skills improved and she is much less frustrated. “She likes to go to school. She’s a lot hap-pier in the morning. On the car ride [to school] she is more excited,” her dad said.

After starting at Chrysalis, Kasey visited her speech therapist, who hadn’t seen Kasey in several months. Her therapist was “amazed” with Kasey’s progress and asked whether she was attending a different school. Accord-ing to her therapist, “Kasey was a lot calmer and followed directions better.”

In early 2012, the program with-stood its first legal challenge. The is-sue is now before the Arizona Court of Appeals. Supporters of school choice should hope the education savings accounts prevail, and that Arizona’s school choice program becomes a bea-con for ESAs in other states, including North Carolina.

————The Phoenix, Ariz.-based Goldwater

Institute’s mission is to advance freedom and protect the Constitution.

Goldwater InstituteFrom the

School Choice Helps Autistic Arizona Girl

Je f f and Rebecca Locke a t home wi th the i r chi ldren Keven and Kasey ( r ight ) .

C O N T I N U E D F R O M P A G E 1 7

islation (HB 1104) to create the Educa-tion Opportunity Tax Credit Scholar-ship. Although the bill enjoyed strong support from conservatives and school choice proponents it never got out of committee. Speculation is rampant as to why. Suffice it to say the prospect of tax reform legislation didn’t help, since it would nullify the needed tax credits. That possibility makes it un-likely that the same bill would be introduced again.

The likelihood of major tax reform makes other changes likely. For ex-ample, there may be more support for some form of straight scholarship grant.

In assessing prospects for passing meaningful school choice legislation in the upcoming session, House Speaker Pro Tem Paul Stam (R-Wake) said, “I am optimistic that significant progress will be made in empowering parents to choose the best school for their child. The Friedman-Civitas survey shows huge pent-up demand for private edu-cation. This is consistent from what I hear from many parents and students. Of course, parents also want more choice in public education.”

Timing is everything. Opponents will treat such legislation as a voucher. Still, supporters should be encouraged. Voucher is no longer a toxic word in North Carolina politics. In the last Fried-man-Civitas Poll 57 percent of respon-dents favored school vouchers. Earlier Civitas polls had the percentage of those supporting vouchers in the low fifties.

If North Carolina chooses to in-troduce scholarship grant legisla-tion, a variety of concerns will need to be addressed. These include: Who would be eligible? How much will the scholarship be worth? Will voucher amounts be the same or vary by grade level? Who will administer the pro-

gram? Will the acceptance of scholar-ship funding require state regulation of schools? What sort of evaluation or auditing will be required?

Another school choice option vying for legislative support is the Education Savings Account.

Arizona is the first and only state so far that has enacted Education Savings Accounts. The Arizona law created Empowerment Scholarship Accounts (ESAs). The accounts are administered by the state and yet are under the con-trol of parents. Approximately 90 per-cent of the state per pupil funding is deposited into the accounts of eligible students. Under the law, families can remove a child from an Arizona pub-lic school and use ESA funds to edu-cate him or her in a private or online school, or in a home school setting. Under the original legislation only special needs students were eligible for ESAs. The legislation has since been

expanded to include students in failing schools, children in foster homes and children of active military personnel.

Money from ESA accounts can be spent on tuition, books, tutoring or other educational expenses. Moreover, money that isn’t spent in high school can be used for college expenses.

ESAs are different from individual vouchers in that parents can choose how the money is spent on a wide va-riety of uses. In contrast, a voucher is a state payment for a specific, defined service. Moreover, since parents con-trol the ESA, there is a built-in incen-tive to be more cost-conscious.

Other education topics likely to be addressed in the upcoming session in-clude the operation of virtual schools, teacher quality, and ensuring third-grade students are reading at grade level.

————Bob Luebke is the Senior Policy Analyst

at the Civitas Institute.

WINTER 2013 19

Governor Pat McCrory has begun making appointments to his adminis-tration, including high-profile positions such as cabinet secretaries. That, how-ever, is only the start of his work.

He also has a host of other impor-tant appointments coming up in the first year of his term — to boards and commissions. There are hundreds of such boards, and they often have a ma-

jor impact on daily life in North Caro-lina. The unelected members of the boards often make the rules by which laws passed by the General Assembly are implemented. Complaints have been heard in the past about how some commissions changed the intent of the laws with those rules.

Though much attention has been focused on what Republican control of the General Assembly and the gov-ernor’s office might mean, significant

changes on these boards will affect a host of regulations for years to come. If the GOP wants to have a lasting legacy in North Carolina, McCrory will need to make the right changes on this host of boards.

Consider some of the most impor-tant ones. A prime example is the Child Care Commission. In 2010 the legis-lature recommended members of that commission consider allowing parents to opt out of school nutrition standards

by Matt Willoughby

20 CIVITAS REVIEW

THE RULES OF THE

GAMEG

ov. P

at M

cCro

ry

so the parents would have a say in what their children purchased or what they brought from home. The commission voted to ignore that suggestion.

That resulted in the infamous “chicken nuggets” incident at a Hoke County elementary school. A teacher, following the policy, inspected a child’s homemade lunch and decided it was not up to nutrition standards although it had a turkey sandwich and fruit. The child was given milk and chicken nug-gets from the school cafeteria. That ig-nited a nationwide protest. Last year the General Assembly ordered the Child Care Commission to allow parents to opt out of the nutrition standards and it finally did. If that’s a glaring example of how commissions affect citizens, there are uncounted other instances in which these appointed officials have an impact on citizens’ well-being.

One of the most important moves McCrory will make is to name a new

State Board of Elections by end of June. There are three Democrats and two Republicans now, but that would be reversed with McCrory’s picks. The new members would then decide if they want to change the staff, includ-ing long-time director Gary Bartlett. (See p. 22 of Civitas Review for more about what the board has been up to.)

A current Republican member of the Board of Elections, Charles Winfree, says the new board will also change who runs the local county boards of elections so those would be run by Republicans.

Winfree said he favors some chang-es in state law which the new board should suggest. “My opinion is voter ID is something that would be helpful to have and might eliminate concerns about voter fraud,” he said. He said he would probably want to keep early voting but would take another look at same-day voter registration.

The new Governor would also name a new majority to the State Board of Transportation. There are 19 members but terms for 10 will expire next year.

The State Board of Education will also see changes. A Republican Lieu-tenant Governor replaces a Democrat as a member. The terms of three mem-bers expired but the General Assembly didn’t act on Gov. Beverly Perdue’s ap-pointments. McCrory will pick those replacements plus three more, giving him a new majority by summer.

The new governor will have nu-merous other chances to change the makeup of boards and commissions. Whether he takes advantage of this opportunity may play a major role in whether his administration will truly change North Carolina.

————Matt Willoughby covered state news

for the Civitas Institute in 2012.

WINTER 2013 21

Cutting Red Tape Can Benefit NC

22 CIVITAS REVIEW

Imagine that a Civitas investigation had revealed one of the following sce-narios. Which would be the worst?

1. A registered lobbyist strongly in-fluences the workings of a state office.2. A state agency takes orders from the head of an activist group.3. State employees use state resources in a partisan attack on legislators.

4. A government agency tries to keep dubious actions hidden from the public.5. Questionable actions are regularly taken by the agency that oversees the foundation of democracy: fair and honest elections.

Here’s what’s really bad about these situations: all of the above have tak-en place at the North Carolina State Board of Elections, a Civitas investiga-tion has found.

This underlines the urgent need for sweeping and fundamental changes in North Carolina’s elections bureaucracy.

The North Carolina State Board of Election (SBE) is really two different organizations. To the public it is the slate of the governor’s political appoin-tees who represent the two major par-ties in North Carolina. More impor-tantly, it is the bureaucratic staff that dominates both the election machinery

UNDER

INFLUENCEthe

Civitas Probe Shows Lobbyist Master-Minding Elections Board Schemes

by Susan Myrick

The State Board o f Elec t ions ta lk s to Direc tor Gar y Bar t l e t t ( r ight ) .

and increasingly the way campaigns are conducted in North Carolina.

For the past 20 years, the current SBE bureaucratic staff has been re-sponsible for the implementation of, and in many cases, was the motivat-ing force behind the liberalization of North Carolina’s election laws and processes. Some of the changes in-clude: relaxation of voter registration laws with the implementation of the National Voter Regis-tration Act (NVRA) in 1995, registration of 16- and 17-year olds, intro-duction of early voting, and also of same-day reg-istration. Previous Civitas research has shown that many of these changes have created chaos in the elections process, casting doubt on how fair and honest voting is in the Tar Heel State.

Perhaps with the change in the majority in the legislature, it became apparent that the SBE was misusing its power as an administrative body. This led Civitas to use the public records law to request information to piece together how deci-sions were made and ac-tions taken by the staff of the SBE. What we have found is a clearly partisan decision-making pro-cess that was heavily influenced, and in some cases directed, by a registered lobbyist for a liberal special interest group – Bob Hall.

In the first article of what promises to be a series, the Civitas study revealed how Hall, Director of the liberal advo-cacy group Democracy North Caroli-

na, is a behind-the-scenes driving force at the State Board of Elections (SBE) – even to mapping out partisan attacks on Republican legislators to the extent that it is hard to tell where the SBE ends and Democracy NC begins.

In 2012 Hall led an attack on Republican legislators over a budget issue. In planning the lobbying cam-paign, Hall coordinated with SBE Director Gary Bartlett and board staff

on tactics and information. Although the actual planning of the legislative campaign began in earnest in January 2012, the public campaign and coor-dination started in 2011 with emails to and from Hall and the Board of Elections.

Through the public records re-quest, the Civitas Institute is in pos-session of a memo from lobbyist Hall to Bartlett that contains two direct partisan mentions, one compliment-ing the 2008 Democratic-controlled legislature and the other critical of the Republican leaders in the current General Assembly. The memo was to be used in a press release. And to make it clear that staff had no doubt

that this was a parti-san effort, the memo itself contained strat-egy language at the bot-tom of the memo that includes the following partisan items:

• Media/Editorials: … exposes the selfish parti-san agenda of Republi-cans; fits into the larger story of voter suppres-sion, etc.• We win even if we lose: Even if we don’t get the money, this fight hits the GOP where they are most vulner-able to voter anger over appearing to suppress voting; it will help with the ID fight.

In the end, SBE staff edited Hall’s memo and returned it to him three day later.

To summarize, lobbyist Bob Hall and SBE Director Gary Bartlett con-spired on a strategy to boost funding for Bartlett’s agency and directly attack the Republican legislature. All of this was done at the direction of Hall withC O N T I N U E D O N P A G E 2 8

INFLUENCE

To find out more about this Civitas Institute investigation, go to: www.nccivitas.org/sbe-whosincharge

“What we have found is a clearly partisan

decision-making process that was heavily influenced, and in some cases directed,

by a registered lobbyist for a liberal special

interest group.”

WINTER 2013 23

24 CIVITAS REVIEW

A big milestone of every teenager’s life comes when he or she turns 16. It is the day that many parents are anx-ious about the responsibilities that their child is about to take on. But what most people don’t realize is that there is another responsibility the teenager will take on that day. When teenagers turn 16 in North Carolina, they now are treated as adults if they are charged with a crime. The North Carolina General Assembly has been pondering whether some 16- and 17-year-olds should be treated instead as juveniles in the court system. When we give young people a responsibility as big as driving,

shouldn’t we also treat them as adults in our court system?

That’s the question some legislators are raising again for this. This question has been posed before but has not been successfully answered. There were three committee meetings in 2012 to discuss some of the issues. The same bill is on the table again for the 2013 long session. The Legislative Research Committee (LRC) has a big task ahead of them in researching recommendations for a bill on the age of juvenile offend-ers. This “Raise the Age” bill has not been successful in the past, partly because of questions about the fair-

ness, cost and effectiveness of put-ting older offenders into the juvenile justice system. The committee’s re-cent deliberations have now raised five

Should 16- and 17-year defendants be treated as juveniles?

by Angela Hight

Questions of Responsibility

WINTER 2013 25

Should 16- and 17-year defendants be treated as juveniles?

Questions of Responsibility

more questions to be researched by the LRC. Each new question makes

one wonder why we need to change the law in the first place.

The newest issues are: 1. Should there be a staggered period of time to implement the bill if it is passed, or should the bill incorporate all 16- and 17-year-olds into the juve-nile justice system at one time?2. Should A1 misdemeanors (the most serious crimes) be differentiated from lesser misdemeanors?3. What should happen when a 16- or 17-year-old is originally charged with a felony but charges are reduced for some reason to a misdemeanor?

4. Should the procedure for process-ing 16- and 17-year-old suspects when they are arrested be the same as the process for adults? 5. Should the bill only apply to first-time offenders?

When looking at the questions, we must also consider the role of con-sequences. When a teenager is given responsibility and doesn’t follow through, shouldn’t there be a conse-quence to his or her action instead

of overlooking it? This responsibility is what we hand over to our children when they take the keys to the car af-ter they get a driver’s license. At that same age, when they commit a crime, shouldn’t they also be accorded the re-sponsibility for obeying the law – and suffer the consequences when they break it?

————Angela Hight is a Policy Analyst

at the Civitas Institute.

Go to www.nccivitas.org for more information on this and other topics in Civitas Review.

26 CIVITAS REVIEW

Former Gov. Bev Perdue has set an Obamacare trap for her successor, Re-publican Pat McCrory. One of his top priorities must be to avoid it.

Just after the November election, Perdue announced that North Carolina would institute a hybrid state-federal health care insurance exchange in order to fulfill requirements under the Patient Protection and Affordable Care Act (a.k.a. Obamacare). The announcement showed all the classic hallmarks of the peculiar brand of politics practiced by Perdue: choosing an obscure policy pro-posal that pleased neither the right nor the left, while trying to burnish her po-litical legacy and attempting to bind her Republican successor to a liberal policy.

The health care insurance exchanges are one of the centerpieces of Obam-acare. Exchanges will act as a salesman of last resort for those who do not other-wise have insurance. Under the Afford-able Care Act, states have three options:

1. Set up their own exchanges.2. Opt out of setting up their own exchanges and instead allow the U.S.

Department of Health and Human Services to set one up for them.3. Set up a partnership exchange be-tween the state and federal government.

Perdue is trying to force North Carolina into that last option. As of December, only six other states have chosen to implement a hybrid exchange. Compare that with the 30 states that have opted-out of state-based exchanges altogether. While much ink has been spilled on the issue of opting-out versus opting-in to state-based exchanges, very little has been written on partnership exchanges. A major reason for this is that the Obama Administration’s Department of Health and Human Services has been very reticent in explaining how these part-nership exchanges will work.

Worst Case ScenarioWhat information there is about

partnership exchanges should give state leaders pause. According to health care policy expert Nicole Fisher, under partnership exchanges, “The states are actually more of a façade, whereby the consumers (individuals and employ-ers) merely interact with the state. The federal government, on the other hand,

will essentially perform all functions of exchange management except custom-er service and plan management.”

This represents a worst-case policy scenario in which the state, as the face of the exchange, is forced to bear the PR consequences if federal management of the exchange functions more like the Post Office than Fed Ex. It is certain that the DHHS faces huge implementation hurdles of setting up federal or partner-ship exchanges in other states.

Perdue is undoubtedly attempting to bind incoming Gov. Pat McCrory’s hands with her sunset announcement of a partnership exchange. Her thinking probably is this: With the announcement already made, and wheels set in motion, it will be easier for the new Governor to bow to a fait accompli than to change directions. However, due to the delayed nature of the declaration, very little has been done in the way of implementation of the exchanges between November and December 2012. This gives McCrory a window of opportunity.

Instead of giving in to the ploy, he should act quickly to reverse course and opt out of any state involvement with

GOV. PERDUE’Sby Clark Riemer

WINTER 2013 27

GOV. PERDUE’S TRAPHealth Care

Exchanges in NC

exchanges under the Affordable Care Act. Refusing to implement health care exchanges is one of the most ef-fective ways the states can fight against Obamacare. The pressure on DHHS to implement federal exchanges in a large number of states will have high costs in both manpower and dollars. Many be-lieve that the unexpected large burden will either delay Obamacare’s imple-mentation, or cause it to collapse.

ACA advocates suggest that the exchanges will allow the state more control. However, as DHHS must certify all exchanges, the federal agency’s regulatory clout ensures that state control will remain only illusory. Further, and perhaps more impor-tantly, opting out of the health care exchanges entirely puts both the bur-den and responsibility of setting up the exchanges squarely back on the

federal government that initiated the mandate. Ultimately, refusing the ex-change is the loudest and most effec-tive way North Carolina can say that we don’t want the Affordable Care Act forced on our citizens and state – and possibly clear the ground for a better alternative.

————Clark Riemer is a Policy Analyst

at the Civitas Institute.

photo

28 CIVITAS REVIEW

C O N T I N U E D F R O M P A G E 1 4

if you tax an activity you are going to make it less attractive, obviously, and people will do less of it. In the same way, if you subsidize an activity you’re going to make that activity more at-tractive and people will do more of it. In this light, it makes no sense why we tax work output and employment, and why we subsidize non-work, leisure and unemployment.

If you tax people who work, and pay people who don’t work, don’t be surprised if you find a lot of people not working.

It’s just incentives. We tax cigarettes to get people to stop smoking, we fine speeders to stop them from speeding, and yet then we tax the most success-ful people at very high rates and think that they won’t stop working. It doesn’t make any sense.

You mentioned the ITEP study be-fore – how are you going to tax a state into prosperity? If that’s not about the dumbest thing I ever heard …. I’d have to hear something dumber.

No one ever spends themselves into wealth – it’s silly! Every 7-year-old knows that’s ridiculous!

Sometimes it takes a PhD in eco-nomics not to be able to understand the obvious. I think the average North Carolinian knows more about econom-ics than the top professors at Harvard.

That’s right – so much of econom-ics is just common sense. Dr. Laffer, thank you so much for your time.

————This interview was conducted by

Brian Balfour, Director of Policy and Operations at the Civitas Institute.

SupplyingProsperity

C O N T I N U E D F R O M P A G E 2 3

SBE staff assistance and with Bartlett the conduit.

The legislative fight over the HAVA (Help America Vote Act) funds actu-ally happened later in 2012 after the legislature convened in May. The HAVA fight played out as the budget was being crafted; Hall led the attack and the SBE played a supporting role. Fortunately, sound budgetary policy won the day and despite the gloomy predictions of Hall and his allies the 2012 election went smoothly without the additional money.

The collaboration between Hall and the SBE raises serious questions about who really runs North Carolina’s election system: Officials representing the people, or unelected liberal special-interest lob-byists working out of the public’s sight? As you can imagine, the story does not

end with this one outrageous example. As bad as this illustration of government gone mad is, there is much more. Civitas has committed to a series of articles that will shine light on the SBE – an unre-strained government agency, responsible for North Carolina’s elections.

There is good news, however: fun-damental changes in elections can happen sooner rather than later. The new Governor is required to appoint a “new” State Board of Elections in May 2013 and within a few weeks the new board is required to hire a Director. It is up to the new Governor to take bold steps in the direction of sound elec-tions. His appointments to the SBE will be the first step in true election re-form in North Carolina, which is badly needed to restore integrity and protect the right of the people to participate in fair and transparent elections.

————Susan Myrick is the Elections Analyst

for the Civitas Institute.

UNDER theINFLUENCE

Highlights Voting Problems

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Obama and His Team of Tax Cheats, Crooks, and Cronies.”

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