Defending Democracy, News

The week’s Top Stories on Policy Watch

1. Pat McCrory, at last, makes a stand

North Carolina made history again Monday, the not-so-bad kind.

If you were in earshot of Raleigh Monday, you might have heard: The state’s five living former governors—two Republicans, three Democrats: Jim Martin, Jim Hunt, Mike Easley, Bev Perdue and, strangest of all, Pat McCrory—gathered to denounce a pair of blatant legislative power grabs masquerading as constitutional amendments.

The legislature, in its depressingly partisan march to the ballot box, has finally evoked a moment of bipartisanship from our former governors.

It was a remarkable scene, one appropriately assembled to combat remarkable affronts from the General Assembly. I can’t imagine these five sharing lunch, much less a brawl with the state legislature over two constitutional amendments that both deserve a swift defeat.[Read more…]

2. Meaningless or dangerous? Hunting and fishing constitutional amendment raises huge questions

The highest profile public policy debate in North Carolina in the summer of 2018 revolves around the controversial decision of state legislative leaders to place a package of six constitutional amendments on the November ballot. Just yesterday, all five living former governors of the state held an extraordinary press conference in which they decried two of the amendments as egregious and deceptively labeled power grabs that would fundamentally alter the balance of power in the state for the worse.

Two other amendments in the package have been rightfully blasted for the destructive impact they would have on the fairness and adequacy of funding for core state services (the proposed income tax cap) and the right of hundreds of thousands of residents to vote (the voter ID amendment).

One of the six amendments to receive comparatively less attention in recent weeks, however, is the proposal to establish a constitutional right “to use traditional methods, to hunt, fish, and harvest wildlife.” While many critics have derided the proposal as a blatant attempt to spur voter turnout this fall amongst conservative rural voters, substantive criticism of the amendment has been largely muted, with many critics simply arguing that the amendment is silly and unnecessary because it wouldn’t really change anything.[Read more…] Read more

Commentary

Dallas Woodhouse impeachment threat is an outrage that GOP leaders must disavow

Dallas Woodhouse

North Carolina took another worrisome step into dangerous and uncharted today when state Republican Party executive director Dallas Woodhouse issued a thinly veiled, Trump-like threat at state judges that they could be impeached if they take action to remove the blatantly dishonest and deceitful constitutional amendments that Republican lawmakers are seeking to place on the November ballot.

As Lynn Bonner of Raleigh’s News & Observer reports:

“The state Republican Party executive director raised the possibility that state Supreme Court justices could be impeached if they ruled against legislative leaders in a lawsuit over constitutional amendments.

Dallas Woodhouse made the remarks at an NC Free Enterprise Foundation event Friday. In a later interview with The News & Observer, he said he wasn’t threatening the justices, but is concerned about what would happen if they rule against legislative leaders. ‘It would be an evisceration of separation of powers,’ he said.”

Woodhouse followed up the comments with a rambling post on Facebook in which he seemed to both deny the threat and reiterate it. Meanwhile, former Civitas Institute executive director and longtime conservative operative Francis DeLuca endorsed the impeachment idea in a tweet.

The bottom line: If there is any kind of “constitutional crisis” in North Carolina surrounding the proposed amendments, it is Woodhouse and his allies at the General Assembly who are its authors. It commenced when they rammed through a slate of six ill-conceived and deceptively labeled amendments in just a few hectic days at the end of the 2018 session that could radically reorder North Carolina state government. What’s more, the best way to ease the crisis is for state judges to step in ASAP and derail this silent and underhanded coup d’état. GOP leaders at the General Assembly must disavow Woodhouse’s inflammatory threats immediately.

Commentary, News

Trumponomics: CEO pay surging as average Americans continue to struggle

Not that it comes as any particular surprise in the era of Trump, but there’s a new report out from analysts at the Economic Policy Institute that documents a remarkable new surge in pay for American CEO’s in 2017.

The report finds that:

“…in 2017 the average CEO of the 350 largest firms in the U.S. received $18.9 million in compensation, a 17.6 percent increase over 2016. The typical worker’s compensation remained flat, rising a mere 0.3 percent. The 2017 CEO-to-worker compensation ratio of 312-to-1 was far greater than the 20-to-1 ratio in 1965 and more than five times greater than the 58-to-1 ratio in 1989 (although it was lower than the peak ratio of 344-to-1, reached in 2000). The gap between the compensation of CEOs and other very-high-wage earners is also substantial, with the CEOs in large firms earning 5.5 times as much as the average earner in the top 0.1 percent.”

Analysts attribute part of the surge to cashed-in stock options, but it goes on to note that:

“CEO compensation has grown far faster than stock prices or corporate profits. CEO compensation rose by 979 percent (based on stock options granted) or 1,070 percent (based on stock options realized) between 1978 and 2017. The corresponding 637 percent growth in the stock market (S & P Index) was far lower. Both measures of compensation are substantially greater than the painfully slow 11.2 percent growth in the typical worker’s compensation over the same period and at least three times as fast as the 308 percent growth of wages for the very highest earners, those in the top 0.1 percent.”

Of course, the bottom line is that this is an obscene situation that demands public policy solutions. As EPI explains:

Regardless of how it is measured, CEO pay continues to be very, very high and has grown far faster in recent decades than typical worker pay. Higher CEO pay does not reflect correspondingly higher output or better firm performance. Exorbitant CEO pay therefore means that the fruits of economic growth are not going to ordinary workers. The growth of CEO and executive compensation overall was a major factor driving the doubling of the income shares of the top 1 percent and top 0.1 percent of U.S. households from 1979 to 2007. Since then, income growth has remained unbalanced. Profits and stock market prices have reached record highs while the wages of most workers have continued to stagnate.

Over the last several decades, CEO pay has grown much faster than profits, the pay of the top 0.1 percent of wage earners, and the wages of college graduates. CEOs are getting more because of their power to set pay, not because they are more productive or have special talents or more education. If CEOs earned less or were taxed more, there would be no adverse impact on output or employment.

How we can solve the problem: Policy solutions that would limit and reduce incentives and the ability of CEOs to extract economic concessions without hurting the economy include the following:

  • Reinstate higher marginal income tax rates at the very top.
  • Set corporate tax rates higher for firms that have higher ratios of CEO-to-worker compensation.
  • Set a cap on compensation and tax anything over the cap.
  • Allow greater use of “say on pay,” which allows a firm’s shareholders to vote on top executives’ compensation.”

Click here to check out the full report.

Courts & the Law, Defending Democracy, News

Gerry Cohen points out veto loophole in judicial constitutional amendment

Gerry Cohen worked for the legislature for decades, and knows a thing or two about constitutional amendments.

He filed an affidavit to a three-judge panel on behalf of the North Carolina NAACP and the Southern Environmental Law Center in its lawsuit over misleading ballot language associated with four constitutional amendments.

While he didn’t speak in court Wednesday — there were no witnesses — his name was mentioned several times throughout, as was his affidavit. In some of the document, he explains his political background and professional experience, and in most of it, he outlines the flaws associated with the ballot language for the four amendments in question: voter photo identification, tax cap and two related to a separation of powers power grab.

Cohen, through the process of naming the issues also highlights a little known part of the judicial vacancy sunshine amendment: a veto loophole. Essentially there is language that indicates a bill recommending or appointing a judge may contain “other matters” that may not be subject to the gubernatorial veto.

Some lawmakers tried to fix the loophole, it was never voted out of a rules committee. Cohen points out in the affidavit that the veto loophole is not mentioned in the ballot question for the judicial vacancy amendment — which would essentially just transfer power from the Governor to the legislature.

Parties to lawsuits over constitutional amendment ballot language are awaiting a decision from the three-judge panel. Ballot printing, which was supposed to begin today, is on pause until Sept. 1 pending an order from the panel or an appellate court.

Read Cohen’s full affidavit below.

Commentary, Defending Democracy

Scathing N&O editorial: Constitutional amendments shouldn’t be “a lie”

One of the best of many powerful editorials to condemn the General Assembly’s absurd constitutional power grab hit the internet this afternoon.

In “The NC ballot shouldn’t be a puzzle. Or a lie.”, the editorial board of  Raleigh’s News & Observer is right on point. After describing the vitally important court challenge that Gov. Cooper and a pair of advocacy groups have brought, the authors offer this outstanding conclusion:

“Voters would be puzzled by these amendment questions at the end of a long ballot, but [House Speaker Tim] Moore and [Senate President Pro Tem Phil] Berger welcome that confusion. They assume a majority of voters will support one change that ends ‘political influence’ on judicial appointments (although it transfers that influence to the legislature) and another that is modestly described as clarifying existing law (even though it greatly weakens the governor and upends the balance of legislative and executive powers).

In court documents, lawyers for Moore and Berger contend that lawmakers can write the ballot wording any way they like. They say: ‘… creation of the language for the ballot is textually granted by the Constitution to the General Assembly. Thus, a semantic debate about the language used for the ballot question is for the halls of the General Assembly, not the briefs and arguments of counsel in Court.’

Even if the wording is confusing or misleading, the defendants’ brief says, voters can dig deeper and determine what the change is really about. ‘Plaintiff does not give voters enough credit,” it says. “Voters can read the text of the proposed amendments and determine the effect for themselves.’

This is Mad Hatter stuff. A ballot question proposing a constitutional amendment shouldn’t be a riddle. Or, even worse, a lie. The judiciary and executive branches and members of the public have a right to demand that amendment questions put before voters be clearly expressed and honest about the impact of the changes proposed.”