Commentary

Gay prideThe closed-door meeting to discuss the new “religious freedom” bill has been postponed, according to an email sent out by the North Carolina Values Coalition. The organization claims that they received an “overwhelmingly positive” response to the meeting and have had to reschedule out of concern that the facility could not accommodate the crowd.

Unfortunately, postponement of the meeting will be unlikely to slow down the momentum of the “religious freedom” crusade. This morning, Senate leader Phil Berger introduced a “religious freedom” bill allowing magistrates and registers of deeds to be exempt from performing their duties if it violates their religious beliefs.

The bill attempts to be impartial on its face. It allows magistrates and registers of deeds to recuse themselves from their duties if they are asked to perform an act that goes against their religious beliefs but then also prevents them from performing any of their duties for the following six month period. In other words, they won’t be allowed to pick and choose which marriages to perform. The bill adds that there must be a magistrate available to perform marriages for at least ten hours a week over three business days. While all this may seem fair in theory, the reality is that, in many places in North Carolina, finding a magistrate willing to perform same-sex marriages and a register of deeds willing to sign the marriage license under such circumstances could be difficult. Adding to the burden for couples, will be trying to get in during the small window of time three days a week that these officials will be available. The overall result will be that LGBT couples will have a much harder time getting married if this bill is passed—the exact effect that was intended.

The North Carolina Values Coalition has indicated that they plan to seek much broader anti-LGBT legislation, than this bill. On the other side, Equality NC has also indicated that they fear additional legislation that will provide a broader license to discriminate.

The absurdity of the bill itself was pointed out by State Senator Jeff Jackson, during Equality NC’s press conference held today in anticipation of the bill’s introduction and the legislative briefing originally scheduled for this afternoon. As Jackson rightly observed, “In this nation we don’t have to pass any government employees personal religious test in order to receive government service.” Apparently, Senator Berger missed that lesson in civics.

News

Kinston Charter Academy closed its doors back in September 2013 after years of financial mismanagement. Today, the state auditor released a report investigating the school’s financial practices.

The audit reveals allegations of fraud and abuse that took place on the watch of the school’s CEO and Principal, Ozie Hall Jr. Some of the most eyebrow-raising findings include:

School overstated attendance estimate which inflated state funds received by more than $300,000.

School employed Chief Executive Officer/Principal’s (CEO) unqualified relatives, at a cost of $92,500 in the School’s final year.

Despite ultimately owing more than $370,000 in payroll obligations, questionable payments of more than $11,000 were made to the CEO and his wife.

Despite the School’s dire financial situation, the board approved several expenses already paid by cashier’s check and often with limited supporting documentation. These expenses included vacation leave payouts to the CEO and his wife, who was serving as the board chair, and a new laptop computer for the CEO.

Investigators also had trouble verifying Hall’s past experience running a school:

Although the CEO received degrees in education and administration, his background lacked key qualifications for the position as specified in the School’s 2004 charter. He told investigators that he “ran an alternative school” in Wilmington, Delaware from 1986 to 1990. However, the CEO provided no documentation (no information on students, teachers, curriculum, address, hours of instruction) to support that claim. The Delaware Department of Education and Delaware Public Archives could not verify the school’s existence.

And then there’s this finding:

The CEO’s daughter was hired as the School’s academic officer despite a lack of teaching or school administration experience. She received $40,000 in salary during the 2012-13 school year. The CEO said her duties included monitoring lesson plans for elementary school classes and helping with implementation of Common Core standards. The daughter was a recent college graduate with a degree in American Studies. The CEO told us that she had never worked in a school previous to her employment at the School. She replaced the associate principal who had over 20 years of experience in public schools with her most recent job as “an assistant to the Superintendent” according to the CEO.

Reached by phone, Hall, who is now head of Anderson Creek Club Charter School in Harnett County, said the auditor’s report reflects basic incompetence.

“The fact that they couldn’t find it [the Wilmington, DE alternative school] is another reflection of incompetence,” said Hall. “The report contains outright fabrications.”

State Board of Education chair Bill Cobey says the board will be seeking a legislative fix this session to allow them more authority in dealing with financially troubled charter schools.

Click here to read the full report.

Commentary

HisemugWell, that didn’t take long. Senate Bill 3 for the 2015 session is entitled: “AN ACT REPEALING PUBLIC EMPLOYEE PAYROLL DEDUCTION FOR PAYMENTS TO EMPLOYEES ASSOCIATIONS.”

The sponsor is Senator Ralph Hise (pictured at left). That would be the same Ralph Hise who was opposed by the State Employees Association of North Carolina (SEANC) in last year’s GOP primary.

Immediately after the election failure, the SEANC folks had this “no hard feelings” observation in one of their newsletters:

“Sometimes we win, as in the case of Erica Smith-Ingram of Senate District 3 who knocked off long-time, incumbent Sen. Clark Jenkins, and sometimes we lose as in the case of state Sen. Ralph Hise or Wake County District Attorney candidate Boz Zellinger. While we disagree on policy, we congratulate all of the winners and look forward to working to promote public services and YOU, the people who provide them, with a well-deserved pay raise and retiree COLA in the near future.”

Apparently, Senator Hise (read more about his interesting career away from Raleigh by clicking here) missed the memo.

NC Budget and Tax Center

A new paper by UC Berkeley economist Danny Yagan provides further evidence that tax breaks that largely benefit the wealthy and profitable corporations are not a remedy for boosting the economy. In 2003, President George W. Bush passed one of the largest cuts ever to a federal capital tax rate – reducing the top tax rate on dividends to 15 percent from 38.6 percent. Using federal IRS data on corporate tax returns, Yagan compared corporations that benefited from this tax cut (C-corporations) to firms that didn’t benefit from the tax cut (S-corporations).

Corporations that got a massive dividend tax cut didn’t make any different choices about things that boost the real economy, the new paper highlights. The massive reduction to the federal dividend tax rate resulted in no meaningful change in corporate investment, net investment, or employee compensation for corporations. What did change following the huge dividend tax cut was an increase in payout to corporate shareholders. Simply put, the tax cut benefited corporate shareholders but not the overall economy.

Some lawmakers and outside groups in North Carolina are pushing to eliminate capital gains from state taxes. Governor McCrory recently announced his desire to eliminate the state’s capital gains tax for what he deems “innovation-related companies”. Either proposal to cut capital gains taxes would overwhelmingly benefit the wealthy at the expense of everyone else in the state, a recently released BTC report highlights. Proponents often claim that eliminating or reducing the capital gains tax rate will increase investment and help boost the economy. However, no apparent cause-and-effect relationship exists between changes in the top capital gains tax rate and savings, investment, or productivity growth. Instead, various analyses highlight how cutting capital gains tax rates have concentrated income at the very top. There is simply no reason to expect this reality to somehow be any different in North Carolina.

Bigger tax breaks for the rich while the state is cutting support for schools and other essential job-creation tools is not a path that promotes economic opportunity and prosperity for all North Carolinians. This new paper serves as yet more evidence that state lawmakers should reject calls to eliminate or cut capital gains taxes and instead work to make sure the wealthiest North Carolinians and profitable corporations pay their fair share.

Commentary

Loretta LynchThe U.S. Senate Judiciary Committee will commence the vetting process for Attorney General nominee Loretta Lynch this morning. This ought to be a proud moment for North Carolinians as Lynch would be the first native of our state to serve in the position. She grew up here and her immediate family still lives in the state.

Unfortunately, at this point, we don’t even know what action North Carolina’s two senators (including Senator Tillis, who serves on the Judiciary Committee) will take on the nomination. Let’s hope they do the right thing. Contact information for Tillis is available here.

Here is some additional information about Lynch and her ties to North Carolina compiled by the good folks at the NAACP Legal Defense Fund. The more you read, the more impressed you will be:

Attorney General Nominee Loretta Lynch Has Extensive Ties to North Carolina

  • Loretta Lynch, the nominee for Attorney General of the United States, is a North Carolina native whose immediate family still lives in the State. Lynch’s experiences growing up in North Carolina during the civil rights movement helped shaped her strong sense of fairness and justice on which she has relied throughout her extraordinary legal career. North Carolinians are extremely proud of her nomination and are eager to see her quickly confirmed by the U.S. Senate.
  • On November 8, President Obama nominated Loretta Lynch to be the 83nd Attorney General of the United States. President Obama described Lynch as “tough, fair and independent.” The Attorney General is considered the nation’s top law enforcement official.
  • Lynch would be the first African American woman to hold the position. Only one other African American, Eric H. Holder, Jr., and one other woman, Janet Reno, have held the office.
  • Importantly for North Carolina, Loretta Lynch would be the first North Carolina native ever to serve as Attorney General in the history of this country. Read More