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NC Budget and Tax Center

Folks interested in economic development policy should check out a new report released by the Budget and Tax Center today.  As discussed in the report, the state needs a fresh approach to creating jobs and growing the economy—an updated economic development strategy that fits the demands and challenges of the 21st century. At the heart of this new approach, the primary goal for the state’s economic development efforts should be achieving growth in median household income.

The fundamental challenge facing North Carolina’s economy in the first decades of the 21st century is how to replace rapidly vanishing jobs in declining manufacturing industries with jobs in growing industries that pay enough to allow workers and their families to make ends meet and achieve middle class prosperity.

To meet this challenge, the state should refocus its economic development goals to not just to promote “growth” for its own sake, but to ensure that as many people and regions as possible benefit from growth.  As a result, North Carolina should adopt an integrated, “all-of-the-above” approach to economic development, one that leverages the state’s existing assets and strategies—such as its top-notch research universities and regional clusters of thriving industries like pharmaceutical manufacturing—to support all types of business growth. This involves the expansion of existing businesses and the creation of new homegrown businesses, alongside strategies for attracting outside businesses to the state.

This involves fostering businesses in industry clusters that are not only expanding, but that also pay high wages and offer good benefits, and to target those efforts to the regions of the state that lagging behind.

Finally, a 21st century strategy requires 21st century ways of measuring whether that strategy is succeeding. As a result, policymakers need to use a broader range of indicators beyond economic growth— including median household income and poverty rates—that reflect changes in the standard of living and the ability of families to prosper in the 21st century.

For more details, see the report.

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Former state Rep. Stephen LaRoque’s sentencing date has been delayed while his attorney renews concerns that juror misconduct in the case prevented the former state lawmaker from receiving a fair trial.

In a federal criminal case that’s been far from typical, the hearing next week in Greenville on a motion for a new trial could offer turn into an eleventh hour  reprieve for LaRoque, a Kinston Republican and onetime member of N.C. House Speaker Thom Tillis’ leadership team.

LaRoque

LaRoque

Senior U.S. District Court Judge Malcolm Howard, who presided over LaRoque’s jury trial this spring, issued an order Monday that LaRoque’s Sept. 12 sentencing be delayed and a hearing for a new trial be held in its place.

LaRoque faced likely prison time for his June conviction on 10 criminal charges related to the theft of $300,000 from two federally-funded economic development non-profits he ran as part of a rural lending program to help struggling businesses.

The former lawmaker maintained his innocence throughout his three-week jury trial this spring, and claimed that the money was not stolen but deferred compensation owed to him through generous contracts he had with the small non-profits. As prosecutors pointed out during the trial, the board of directors of the East Carolina Development Company and Piedmont Development Company consisted solely of LaRoques in recent years – Stephen LaRoque, his wife and brother.

Guilty verdicts on two additional tax fraud charges had already been set aside by Howard after a juror’s admission about looking up the IRS tax rules for individual-owned businesses, a violation of the explicit instructions given to jurors to only consider evidence presented in the courtroom.

LaRoque’s attorney, Joe Cheshire, filed a motion late last week indicating that the juror’s home research affected the entire case, and not just the tax fraud charges.

“If it were not for me conducting this home internet research, the juror would have remained hung on all counts indefinitely,” the juror wrote in an affidavit Cheshire included with his motion.

Also from Cheshire’s motion: Read More

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It was just a couple of weeks ago that the McCrory administration was up in arms and demanding blood as a result of a new and critical audit of the North Carolina Rural Center. Indeed, judging by their statements and actions then and since, you’d have thought the Rural Center had been revealed to be some kind of organized crime outfit.

Of course, the whole thing was a bit of an overreaction. As we noted at the time:

“Troubling as some of the reports from the audit are, the plain truth is that the main accusation is simply that the Center has been doing what Governors and Departments of Commerce of both parties have been doing for decades: promising that amazing job growth and economic development would result from their investments of state funds and then sometimes failing to deliver (or keep good track of whether they delivered).

That’s not to say we shouldn’t reform the Center, but to simply ax it overnight as State Budget Director Art Pope has apparently decided to do smacks of something more than simple good budgeting practices — namely a partisan effort by Pope and his cronies to punish a group that they’ve always hated, mostly because of their perception that it has always been staffed predominately by Democrats and maintained close ties to Democratic politicians.”

Now flash forward to today and the release of a new audit — also from the State Auditor. This one, however, is not directed at a group hated by some for its historic ties to Democrats, but at the Department of Commerce itself. Read More

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For years, North Carolina progressives have frequently been critical of what might properly be described as the state’s “good ol’ boy economic development establishment.” This skeptical attitude — which has been constant under both Democratic and Republican leadership — was/is born of the rightful perception that too much of the money the state spends in this area (be it on tax breaks and loopholes for corporations, direct handouts to businesses by various governors and their Departments of Commerce or on nonprofit economic development agencies) is subject to favoritism and lack of rigor when it comes to demanding real results. 

Given this backdrop, the recent attention on the North Carolina Rural Center is not unwelcome. The recent examination of the Center by the state Auditor provides strong evidence that the Center had many “good ol’ boy” tendencies and didn’t always get all the bang for its buck that would have been desirable (and that it probably led many to believe it was actually generating). In addition, the compensation package for the Executive Director was way too high. 

 All that said, this morning’s editorial in Raleigh’s News & Observer is absolutely right about the need to avoid rash action on the Center’s future. As the editorial puts it: Read More

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There has been a flurry of sealed filings over the last two weeks in the criminal case for former state Rep. Stephen LaRoque, a Kinston lawmaker convicted of stealing federal money from economic development groups.

The court documents for LaRoque’s case shows that both assistant U.S. Attorney Dennis Duffy and, LaRoque’ defense attorney Joe Cheshire have filed sealed motions and documents, the contents of which are unknown.

LaRoque, a former lawmaker from Kinston, was convicted June 7 on a dozen charges related to $300,000 he took from two economic development groups he ran that were funded by the U.S. Department of Agriculture to provide loans to businesses in struggling rural areas. (Click here for more background on the case and trial.) The criminal case stemmed from an N.C. Policy Watch investigation into how LaRoque managed the non-profits.

LaRoque

LaRoque

The first sealed entry in LaRoque’s case came in the form of a “Proposed sealed document” from federal prosecutors on June 12, and then responses followed from LaRoque’s attorneys. In all, there have been more than 20 entries on the case’s docket referring to sealed motions, sealed responses to motions, sealed memorandums and sealed orders from June 12 through Wednesday.

There was also a closed hearing in front of Senior U.S. District Court Judge Malcolm Howard on June 19, the transcript of which is – you guessed it — sealed.

It’s a bit of a departure from how most criminal cases get handled din federal courts.

Courts proceedings, filings and the like are almost always public, and documents are only sealed if lawyers can convince a federal judge that there is sensitive enough information to justify keeping it from the public’s eyes, said Richard Myers, a, University of North Carolina law professor with expertise in the corruptions, white-collar crime and federal criminal law.

Myers said there’s a number of possibilities that the document are being kept under seal, from references to sensitive financial information that could be involved in determining restitution or damages in the case to issues concerning confidential information being used in an ongoing criminal cases where public disclosure could jeopardize an investigation.

“Sometimes it has to do with financial information or if it’s coming from confidential sources that might affect other cases,” Myers said. “It is rare to have multiple filings and a closed hearing.”

LaRoque’s attorneys did publicly file motions last week for a new trial and motions to acquit on the 12 counts the jury convicted him on.

During the trial, jurors heard different accounts from board members and other witnesses about whether or not he had an existing contract that entitled him to three percent of the non-profit’s total assets. LaRoque’s attorney argued he did have a contract, while prosecutors argued he didn’t.