Commentary

Out-of-state activist J. Scott Moody will be making the rounds on Monday in North Carolina to say that expanding Medicaid will hurt our economy.

Moody is from a South Carolina outfit called State Budget Solutions and he travels the country speaking out against policies disfavored by conservatives. His schtick is releasing cut-and-paste reports showing the economic harm done by the programs he opposes.

For example, in 2012 he lit off to New Hampshire to warn that allowing same sex marriage in that state would result in economic devastation and a “demographic winter.” You have to read the entire news article of his visit to capture his arguments in all of their glory, but this is one of my favorite parts:

Also, according to Moody, when same-sex couples adopt, they place the child in a situation where one or both of their parents isn’t their biological parent. However, according to Moody, statistics have shown that a relationship with a stepparent is not the same as a relationship with a biological parent and stepparents tend to not have the same bond or pay the same attention as the biological parent. Moody did not provide charts or actual sources for this claim.

These days Moody is taking a break from attacking adoptive parents and is focusing on Medicaid expansion. Moody has made presentations in several states and published opinion pieces arguing that an expansion of the public sector will crowd out private sector spending. This analysis is about as sophisticated as his arguments that gay marriage will destroy the economy and that stepparents don’t pay attention to their children.

Actual economists have responded to Moody everywhere he has spoken to point out that he is wrong. A good example is from Dr. Sven Wilson at BYU when Moody visited Utah to warn them of the dangers of federal funds flowing to the state. Again, you should read the entire piece but here’s a taste of Wilson’s response:

Many economists argue that spending on Healthy Utah will further expand the economy by generating new jobs and new private spending as the money works its way through the economy. Economists call this effect a multiplier. As a conservative, free-market economist, I think multipliers are generally small. But no serious economist of any political stripe thinks the multiplier is negative, which is what Moody is suggesting.

Imagine someone saying that when tourists spend their money in our state, their purchases end up costing us jobs and hurting our economy. Who would believe that? But that is exactly the argument Moody is making about Healthy Utah.

Luckily, we already have a study on the economic impacts of Medicaid expansion in North Carolina using respected REMI models. That study concludes that expansion will grow our economy, create 43,000 jobs, and provide much needed revenue to county and state budgets. It will also provide affordable coverage to 500,000 North Carolinians and bolster rural health care in the state. States that have already expanded coverage, like Kentucky, are seeing these positive economic predictions realized.

We aren’t seeing the winter Moody predicted in 2012. Instead the economy keeps heating up despite gay marriage sweeping the nation. I suspect we will see similar results as more states expand insurance coverage.

 

Commentary

The H-2B visa program – a program which allows employers to hire foreign workers, mostly from Mexico, to fill seasonal and temporary unskilled jobs in the U.S. — has been in the news lately because a recent federal court decision resulted in a temporary shut-down of the program by the federal Department of Labor (USDOL). Both the migrant workers who fill these jobs and the businesses who regularly use the H-2B program have, understandably, been concerned about the shut-down.

Last year, North Carolina was one of the top 10 states to use H-2B labor with 2,834 positions certified by USDOL. Landscaping is by far the top industry to rely on H-2B labor, but H-2B workers are also very common in North Carolina’s hospitality (as housekeepers) and seafood industries.

As of Wednesday of this week, however, USDOL has been allowed to resume processing H-2B labor certification applications until April 15th. After that, the program will again be at a standstill until USDOL and the Department of Homeland Security (DHS) issue new joint regulations for the program, which they have promised to do by April 30th.

Let’s hope the Obama administration makes use of this new rule-making as an opportunity to address the myriad problems identified in a new Government Accounting Office report  entitled “Increased Protections Needed for Foreign Workers.”  The GAO report found that H-2B workers are regularly subjected to abuses during recruitment, such as being charged exorbitant fees and not being provided accurate information about the job to which they are being recruited.

Sadly, mistreatment of H-2B workers frequently continues once they arrive in the U.S. to start work, as is described in “Picked Apart: The Hidden Struggles of Migrant Worker Women in the Maryland Crab Industry.” According to that report, women migrants are regularly subjected to deplorable working and living conditions, discrimination and harassment and often live in fear of their employers.

USDOL published new rules for the H-2B program in 2012 with strong worker protections which would have addressed many of these problems, but unfortunately, those rules never took effect. USDOL and DHS should now use the 2012 rule as a model to quickly issue new rules which keep the program running and improve the program by including important and needed worker protections. Stay tuned.

Commentary

MarijuanaThe movement to end marijuana prohibition is slowly and quietly gathering steam in North Carolina — sometimes with surprising champions.

As WRAL.com explains, a large group of activists came to the General Assembly yesterday:

“About 150 people turned out Thursday to lobby state lawmakers to legalize medical marijuana, marking the largest turnout in years. Even supporters of legalization say it’s unlikely to happen this year, but they say momentum is growing.

Tammy Tiffany, who hurt her back in an accident four years ago, uses medical marijuana to manage the pain. She said it gave her her life back from prescription drugs.

‘I don’t want to do the pain pills any more, the opiates, the anti-depressants,’ Tiffany said. ‘It’s a rabbit hole. When you go down, it’s very hard to come back out of, and it can cost you your life.'”

Meanwhile, as an article in the Fayetteville Observer explained, those championing legalization include a growing group of military veterans who are pushing to make the drug legal for pain management.

“The veterans, mostly retired senior noncommissioned officers or officers, have something else in common: They are Republicans.

The Fayetteville veterans are the core of the growing North Carolina Republicans Against Marijuana Prohibition, or N.C. RAMP.”

Yesterday’s lobby day came as at least two significant bills with multiple sponsors now await action in the General Assembly: the “Enact Medical Cannabis Act” and “Medical Marijuana for terminally Ill Patients” proposal. As the Observer article notes, there is also bipartisan legislation in Congress on the subject.

Stay tuned. There may finally be some light at the end of the tunnel on the move to end this important issue.

NC Budget and Tax Center

Policymakers have chosen to reduce state spending in recent budgets and appear poised to continue that approach even despite a recovering economy.   Such small thinking ignores the fundamental role of state budgets in supporting the broader economy and delivering opportunities to communities and families.

The state’s most recent budgets (and current budget proposal from the Governor) break dramatically with our state’s past and put at risk the foundations of a strong economy by spending at historically low levels as a share of the economy. An analysis of data back to 1970 on state spending shows that North Carolina today is dedicating a lower level of our total resources to public services than we did in 1973 (see graph). That year was the start to the 1973-1975 recession characterized by the oil crisis and stagflation, and largely recognized as the end of the post-World War II economic boom. It’s also when computers conducting sophisticated analysis took up entire rooms or buildings, office work had not yet been impacted by the use of personal computers and those that did exist could store just 16 lines of text.BTC - Collective Commitment 1973

Today, North Carolina has passed the fifth year of the official recovery from the Great Recession that started in 2007. For six years in a row state spending has continued to erode and the Governor’s budget would continue that trend.

Looking at state spending as a share of the economy, or total state personal income, is akin to the way in which federal budgets are assessed relative to GDP. Importantly it represents a reflection of our collective commitment to build an economy that works for everyone. Such a measure also provides a way to assess whether we are spending more or less over time while also considering that with economic growth there are more resources available and needed to support the economy.

The evidence is clear on this point: smart state spending is necessary to support positive economic outcomes. Read More

News

The N.C. House of Representatives had its election Thursday for eight members serving four-year terms on the University of North Carolina’s Board of Governors.

House members voted to keep three current members in place for another four years, while bringing on five new members.

Several of the 30 candidates vying for this year’s 16 open slots on the UNC Board of Governors have also been significant contributors to political campaigns, with more than $1 million in contributions coming from the nominees and their immediate family members.

The House appeared to turn away from some of the more significant donors in their election. Raiford Trask III, J. Edgar Broyhill and Hari Nath were all rejected by House members, and had been significant contributors over the last eight years to political campaigns. Trask, Nath and Dick Taylor are all current board members who weren’t reelected.

Those chosen were:

  • Jim Holmes Jr., a Raleigh accountant (currently on board)
  • David Powers, a Winston-Salem government relations executive with Reynolds American (Currently on board)
  • Mary Ann Maxwell, a Goldsboro businesswoman (currently on board)
  • Pearl Burris-Floyd, a former state representative from Gaston County
  • Alex Mitchell, a Durham developer
  • Philip Byers, of Rutherford County, on staff with the charter school group Challenge Foundation
  • Joe Thomas Knott II, a Raleigh attorney
  • Walter Davenport, a Raleigh accountant who previously served on the Board of Governors

 

Davenport is a Democrat, while the other seven appointed by the House are Republicans. Both Davenport and Burris-Floyd are black, while the other six are white.

The Senate made its selections yesterday, and the new members will join the board at the start of the new fiscal year in July.