Commentary

Economist: Taxes aren’t nearly as important to business as they’re cracked up to be

The good folks at Higher Education Works have an excellent post this morning that highlights a recent story in the Winston-Salem Journal about the mythology that’s grown up around taxes and “business-friendliness.” This is from the post – “Economist challenges business rankings based on tax cuts”:

A recent report in the Winston-Salem Journal highlighted the work of an Iowa economist who challenges popular business-climate rankings that give disproportionate weight to tax cuts.

State and local taxes don’t have much impact on economic growth, says Peter Fisher, the research director for the Iowa Policy Project who operates www.gradingstates.org. In fact, Fisher contends, “tax cuts can undermine growth if they impede the many public investments that actually play large roles in the prosperity of a state.”

State and local business taxes are not significant determinants of growth – combined, they account for just 1.8% of the cost of doing business, Fisher says, and reduced taxes on business frequently result in cuts to public services that businesses need to thrive.

As the prime example, he points to Kansas, where Gov. Sam Brownback signed a bill in 2012 that slashed income taxes and cut the state budget by 13%. But legislators overrode the governor’s veto this year and enacted a bill that rolled back most of the tax cuts.

“The experiment failed in part because the tax cuts did not produce the promised boost to the state’s economy.  To see how far they fell short, consider that the state of Kansas had not been a laggard before the cuts. From 2001 through 2012, the state had actually grown faster than the U.S. as a whole. But for the four years since the tax cuts took effect, the Kansas economy has grown at just half the rate of the U.S. economy.”

To the extent they result in cuts to investments in education and infrastructure that are required for long-term growth, Fisher says, tax cuts hurt a state.

“As of 2015, the average state was spending 20 percent less per pupil on higher education than it did in 2007-08, leading to rising tuition and reduced access to post-secondary education.  These funding cuts will have harmful long-term consequences for the nation’s growth and prosperity if not reversed,” his site says.

Fisher told the Journal that growth occurs more often in states that emphasize education spending.

“In the long run, (North Carolina) is shooting itself in the foot if it continues to cut business taxes, which are already among the lowest in the country on many measures, at the expense of education, working (sic) training, infrastructure or investments that enhance the quality of life,” he said.

“One thing that is pretty clear from research on state growth over a long period is that states with a more educated workforce have seen greater gain in income,” Fisher said.  “The key to rising incomes and wages is increased productivity.”

Click here to read the story on the Higher Education Works blog.

Commentary

Editorial: Outer Banks blackout reaffirms need for renewable energy

Anyone paying attention already knew that the era of giant fossil fuel consuming power plants is on the way out. Preservation of life on the planet in some form akin to what we know depends on it. But as an editorial in this morning’s edition of Raleigh’s News & Observer reminds us, the transition to a new electric grid that prominently features renewable and widely distributed sources of energy is also makes good sense when it comes to things like reliability too. This is from “Message in Outer Banks power outage — there’s power in renewable energy”:

“The outage at the height of the tourist season is a vivid illustration of why electric grids need to become two-way systems in which power flows out from power plants and flows in from sources of renewable energy. If the Hatteras and Ocracoke islands generated enough of their own electricity through wind and solar power, the impact of losing a connection to the main transmission lines would have been greatly reduced.

Having Outer Banks towns derive their electric power from the very natural forces that make them appealing as resorts may sound like science fiction, but the technology is here. Indeed, Ocracoke is part of a pilot project of the N.C. Electric Membership Corp. and the Tideland Electric Membership Corp. testing a freestanding, battery-powered microgrid that can operate independently of the main grid.

Building up and expanding such technology is only a matter of political will and investment. Consider how many millions of dollars were lost by the shutdown of the lower Outer Banks economy because of the severed transmission lines. An investment on that scale in renewable energy could keep such an extended power interruption from happening again. Harnessing enough renewable energy to power all the Outer Banks may be many years away, but it makes sense to start moving aggressively toward that goal.”

In other words, the current crisis is yet another powerful reminder of the urgent need to battle the fossil fuel industry-funded science deniers and pollution apologists who continue to do all in their power to forestall the essential transition to a sustainable energy future. Let’s hope that several thousand more people have seen the light in recent days.

Commentary

Editorial: Lawmakers should approve emergency funding to address GenX water pollution crisis

There’s a fine new website that’s publishing a steady stream of solid progressive commentaries on North Carolina policy and politics. Carolina Commentary is spearheaded by a team of four veteran North Carolina journalists and aims to “provide commentary that minimizes polarization and promotes a collaborative approach to solving public policy problems.”

So far, they’re off to a good start with a raft of solid essays on an array of current issues.  The most recent editorial was published yesterday on the subject of the Gen X  water pollution crisis that NC Policy Watch environmental reporter Lisa Sorg has been covering. This is from “Time to Fund Our Environmental Watchdog”:

“Governor Roy Cooper has asked the General Assembly during its Aug. 3 special session to approve about $3 million in emergency funding to pay for investigation and regulation of threats to the state’s drinking water. Good for him.

The Wilmington StarNews reported in June that the Chemours plant in Fayetteville was discharging the unregulated contaminant GenX into the Cape Fear River, a water source for New Hanover, Pender, and Brunswick counties. Cooper directed the state Department of Environmental Quality (DEQ) and the state Department of Health and Human Services (DHHS) to investigate. After their intervention, Chemours voluntarily stopped releasing GenX.

GenX is in the same fluorochemical family of man-made compounds as C8, which has been linked to cancer. Researchers found in 1999-2000 that 99.7 percent of Americans already had C8 in their blood, exposed through a variety of sources, including Teflon, Scotchgard, and firefighting foam. GenX replaced C8 in 2009 after lawsuits contended that drinking water contaminated with C8 caused cancer. DuPont and its spinoff company Chemours was ordered to pay a $670.7 million settlement for releasing C8 into the air and Ohio River since the 1950s….

For people exposed to the chemical since 1980, when the plant first starting releasing GenX, long-term exposure remains a concern. Dr. Detlef Knappe, one of the authors of the published research that led to the initial StarNews story, told attendees at a June 29 public forum in Wilmington that even at very low levels, GenX and similar compounds could remain in the body and accumulate for a long time especially if people continue to ingest them….

Before the General Assembly approves Cooper’s request, legislators who in June delivered about $1.8 million in budget cuts for 2018-2019 to DEQ will have to perform the political equivalent of turning around an oil tanker in the Cape Fear. But it can be done.

After StarNews reporter Vaughn Hagerty’s first story on GenX in the Cape Fear appeared June 7, a lightning-swift grassroots reaction spread throughout the community. Wilmington Democratic Mayor Bill Saffo and Woody White, Republican chairman of the New Hanover County Board of Commissioners, presented a united front against Chemours. Following Chemours’ disclosure that they were intentionally releasing GenX, White and Saffo emerged from the meeting with a palpable, shared outrage.

They jointly advocated for answers and called for Chemours to stop all discharge. This has occurred and levels of the chemical have dropped below the goal established by NC DHHS.

Legislators have loosened controls on businesses in recent years, in an attempt to stimulate economic growth. But at what cost? Legislators should swiftly approve Cooper’s request.”

Click here to read the entire editorial.

Commentary, HB2, News

Lawyer who defended HB2 now the Trump administration’s top civil rights chief

Another day, another outrage from the Trump administration. This is from a story by Rebekah Entralgo of Think Progress entitled “New civil rights chief at Justice Department has spent his career undermining civil rights”:

Thomas Wheeler, the Assistant Acting Attorney General in charge of the Department of Justice’s (DOJ) division that handles policing, discrimination, and voting rights cases, announced he would be leaving his position after just 6 months.

John Gore, a Republican lawyer in Washington, will serve in the interim until Trump’s nominee for the position, Eric Dreiband, secures a hearing. Gore most notably represented the University of North Carolina system after it was sued by the Obama administration over the state’s HB2 bathroom bill. Gore is a former partner at Jones Day—the law firm from which the Trump administration has pulled at least 14 attorneys from to join the president’s team, including the White House Counsel Don McGahn. According to Election Law Blog, Gore’s now-deleted bio on the Jones Day website stated Gore had been “actively involved in redistricting litigation” in private practice and listed six cases in which he defended state governments accused of violating the Voting Rights Act through gerrymandering. (Emphasis supplied.)

Gore represented Florida Governor Rick Scott in a case over his administration’s attempt to purge the state’s voter rolls of potential noncitizens before the 2012 election. The move disproportionately affected Florida’s Hispanic community, which made up only 13% of the 11.3 million active registered voters in Florida at the time, yet were 58% of those identified as potential noncitizens. A federal appeals court ruled in 2014 the purge was found to have violated the National Voter Registration Act (NVRA), which prevents purging of voter rolls 90 days before an election….

Gore will not permanently maintain the job: Trump nominated Washington labor lawyer Eric Dreiband to serve as assistant attorney general in the civil rights division, but hasn’t yet been confirmed. Dreiband, however, also has a poor record on civil rights, and many activists have already voiced their opposition to Dreiband’s nomination….

Dreiband, also a former Jones Day attorney, has represented a tobacco company in an age discrimination case and Bloomberg in a pregnancy discrimination case. In his most high-profile case, Dreiband defended Abercrombie & Fitch in a Supreme Court case when the clothing retailer was sued for refusing to hire a 17-year-old Muslim woman because her headscarf was in violation of the company’s dress code, a case which Dreiband lost.

Commentary

Editorials blast GOP redistricting dodge

North Carolina Republicans may be doing everything in their power to block and/or delay the enactment of fair and constitutional legislative maps, but no one is fooled by the GOP’s sudden desire to hold lengthy hearings on the matter.

Here’s Raleigh’s News & Observer over the weekend:

With their delays, Republicans are embarrassing themselves and acting against the interest of fair elections, which means their delaying tactics are acting against the interest of North Carolina, that interest being competent, fair representation.

Republicans won the 2010 election and came to power. Why do they seem to believe that although they won fair and square, they cannot maintain power in the same way? If their ideas are as right and popular as they think they are, they should have no hesitation to draw fair districts and stand by their records.

After witnessing Wednesday’s [do-nothing legislative] committee meeting, the leader of N.C. Common Cause who is in the forefront of an effort to develop a nonpartisan-based process for redistricting, wasn’t holding out much hope for a decent plan.

“Cynically, you could say they’ve already got the maps drawn, and this is all a charade,” Bob Phillips said.

Tragically, Phillips’ dark assessment may even be optimistic. If the process remains on its current track, the only winners will be the lawyers who will battle over the next set of bad districts in court.