North Carolina People; Jack Betts, Columnist, The Charlotte Observer

That evening ladies and gentleman well aeration session of the North Carolina General Assembly has gone home. You get all kinds of rage. Just Listen Catherine North Carolina people have turned to one of the wisest and one of the ablest people observing the political scene. Jack Betts before this all of this part of the world and also a columnist for that great newspaper talking with Visa funding for North Carolina people is provided by walk over you helping North Carolina people realize their financial goals since 1879. And by UN CTV members Jack. Now why I ask you to grade it. But what were the highlights of this session. Yes gone home. There were some good things and some bad things.

I think some one of the best things the legislature did is dealing with reforming the way the state regulates lobbyists for the first time we're going to have some real disclosure requirements that are important. On the downside I think that the legislature gave in perhaps to the inevitable in creating a state lottery that many people are going to think will probably solve our education funding problems. And in the short run and in the long run they won't. The budget that was passed does do some good things for education it does address some needs that North Carolina has been struggling with for a while principly in the disadvantaged student funding and low wealth schools. But it probably didn't do enough. And that long running court suit that we've been covering for 11 years now and the Leandro case we'll probably hear more from the judge about that. He's probably going to get judicially impatient.

You know he has a Judge Howard Manning Wake's superior court judge who is supervise the Andrew case ever since former chief justice Burley Mitchell asked him to take it over back in 97 I guess it was after the Supreme Court first ruled that students are entitled to a sound basic education. I think Judge Manning has exhibited real judicial restraint in finding that the state must find a way to provide a competent teacher in every classroom a skilled qualified principal in every school and enough resources in every classroom so that students can get a sound basic education. He has not told the legislature or the executive branch you have to spin X amount of money but he has told executive branch officials and local school officials including Charlotte-Mecklenburg School officials on the carpet to explain themselves to tell him what they plan to do to

bring. Failing high schools for example up to speed and the time will come I think when he really has run out of patience we're not there yet but there will come a time when if the legislature doesn't act to provide all those needs where he may get around to ordering them to spin X amount. You know all the conversations aimed at him now. But isn't it a fact that the Supreme Court made that decision by unanimous vote Michel. There wasn't one there was one dissent in the Mitchell court and that was justice. Or yeah. Who said we ought to go farther and in the the second time the Supreme Court ruled which was 18 months ago pilled almost all of Judge Manning's rulings on what each school must provide it was judge or justice or who wrote that decision for unanimous court saying that you you have to provide

this sound basic education in these three specific ways. Jack it's clear from always seemed these test results never asked that there are marked areas of disadvantage aren't there. They are all cross so there are indeed and it's not just the rural poor counties it's also urban counties that have a large number of students from socio economic backgrounds that traditionally have have not done particularly well and so it's both big school districts and small rural ones and they have different kinds of problems but they all manifest themselves in poor school performance and in Judge Manning has argued repeatedly said it's it's the school in North Hampton County just as much as it is the inner city school in Charlotte Mecklenburg or in Guilford County that needs this kind of help.

The public school form put together a sound basic education plan that calls for the spending of upwards of three hundred million dollars to fully address the Leandra needs and those that bill did not get traction in the legislature. In the most recent court sitting in Raleigh judge Manning observed that if the sound basic education act had passed the legislature he wouldn't even be holding court that day because most of the problems would at least have been addressed for the forseeable future but the legislature didn't come near to that. You mentioned the lottery. This has been looked upon as a means of fueling education. I had a conversation with the commissioner of revenue this week because I wanted to know exactly what we don't know. And as we analyze that low 65 percent of the revenue is set aside immediately for those who play the lottery and the

administration on 8 percent for the operation 7 percent as compensation you're going to pay these people. That leaves 35 percent. Let's take a fictional one billion dollar a year. They've used that that's say three hundred fifty million dollars left. The statute says you take 5 percent of that as a revenue as a reserve fund over here for until it's up to 50 million so that it still lowers the 350. And as he told me in the end actually it's about one hundred sixty million dollars in that theoretical billion dollar a year that would go to educational programs in about one hundred twenty five million twenty eight million would go with construction in 100 counties. So that and a small remainder for this co it's not. It's right at 30 percent. That's available for all three of these purposes not just one. So what I think we need to be sure of what we're talking about here and

this did not get discussed. It paid it back but out everybody knows where I stood. Well you know I think some in the legislature this time looked on the lottery as as an inevitability because North Carolina is surrounded by those other states now South Carolina Georgia Tennessee Virginia have lotteries. There was a concern that a lot of North Carolinians would drive across the border too. To play the lottery Governor Easley bemoaned the fact that so much money was going to South Carolina and in Virginia although I did hear someone observe that you know South Carolina Virginia schools really did need the money. But but I think in in a certain respect that the lottery passed in the end because even those who were staked out against it just wanted to be done with the issue. And I think that was one of the reasons we saw in the Senate where a couple of

opponents of the lotteries Senator John Garwood and sinter Senator Brown from slew County who were opponents of the lottery did not show up in that last little session and were not there to vote against it and in fact did not seek a senatorial courtesy called a pair which would have allowed their positions to be announced with a Democrat who was a supporter. But the votes wouldn't count. That's really why it passed and I think both Senator Garwood and Senator Brown probably just relieved to have this issue off the table I know Governor Mike Easley who has promoted the lottery for five years and is the principal reason why we have it since he's the first governor in North Carolina to advocate a lottery is glad to have that monkey off his back and I think that's true of everybody who's worried I'm with you. But I'm sure it isn't going to realize that money though that everybody

thought will have to reckon with it someday soon will is not going to solve our problems it may help provide some money for funding but you know a number of people have pointed out this unsettling fact that our lottery is not bound to go in any kind of lockbox the law requires that that money go for education but in point of fact unless the legislature takes some additional step. It can use lottery funds for any purpose just as it sometimes uses money from how a fund for general operating or from the golden leaf fund that the legislature has considerable power unless unless the legislature approves and since to the people the proposed constitutional amendment that mandates that all the net revenues go to education. It's no telling where that money will go will wind up. And even if that passes I'm sorry to say there's nothing to keep a future legislature from reducing general fund spending on

education so we don't know how all this is going to work out but looking at the looking at the experience of other states we can probably should be prepared for the lottery providing somewhat less of a boon for education than even its strongest opponents. While the first lessons I learned in university administration was if the legislature. Has all kinds of mandates about the university but he could always raise or seek estimates and you have to figure out how to get it there. So there goes to ation. What we do about lobbying. Well after a long session of back and forth over whether to cap the amount of money that lobbyists can spend on lobbying I think that the house principally. With with good work by Representative Joe Hackney from from Orange County came up with with a really

good bill that does not put a cap on spending but does require a lobbyist to report everything on a frequent basis when the legislature is in session. The bill will also require that those who lobby the executive branch to also register and make disclosure make full public disclosure of what they spend to lobby the executive branch this is a fundamental change for North Carolina which has. Which has had a lot of that sounded pretty good on the books for a long time but which allowed lobbyists who entertain legislators but didn't talk about specific legislation to excrete having to say what if anything they spent. And you know it's it's really not so much a matter of lobbyist spending a lot of money to buy legislative votes it's the appearance here that somebody might have been doing that that that I think shook

people's faith in their own government. And that kind of undermined public trust and I think this full disclosure law will let people see what lobbyist spin and in a lot of cases it's it's it's either nothing or or not much or not something that would alarm you but it will tell folks who's going on a golf trip or getting tickets to an athletic or some concert. Does this mean it will be an annual accounting. It will be a legislative year as well as the ledgers there will be periodic reports required throughout the year not just in an annual one so that whenever there is of a reporting period you can find out what was spent during that period and who was spending and on whom. And I think that that kind of disclosure just like in. Political election campaigns is really the fundamental safeguard that the public can have with

with that kind of information. People can make their own judgments about how their legislator worse or performing in and who's willing to be entertained and what the consequences of that might be. That's a very positive piece of legislation. Good work there. I thought it was it was a long time coming and I think credit really should go to Secretary of State Elaine Marshall who couple years ago got this on the agenda by appointing a commission and asking a former U.N. see School of Law dean Jeane Nicol who is now president of course the College of William and Mary do and you know Jane you know to chair that and that commission came out with some really strong recommendations the bill that we wound up with the new law that we wound up with does not exactly mirror those recommendations but I think they they mirror the spirit of what those recommendations were after which was to bring about some increased public trust in their elected

representatives and I think this this holds the prospect of doing that. Jack in talking with Associate last week he expressed a great deal of concern about the revenue situation in the state and the growing indebtedness of the state. We haven't looked at the tax structure of North Carolina seriously since 1931. Here we are the 21st century with the cestus we're operating on a 70 years old. And what we do is patchwork as you well know. Now why is it we won't face up to the question of studying the tax structure and tell the people the truth about what we're doing. That's a vexing question and I do not know the answer I think part of it is political fear that the public will sit still for it but I I think the more important answer is that we haven't had a strong leadership that's

necessary to to to make the public understand what the consequences are. You've seen the same figures I have on how the tax burden has shifted over the years. You've seen the figures on how our our debt has grown and our our our debt service alone is getting to a figure that that really kind of takes the breath away. And if we don't engage in that. Fundamental tax reform that we so badly need we are going to come to a crashing spot against the wall because our budget has some built in structural problems that simply cannot be solved by the endless tinkering with the engine of that 1931 chassis. You talk about to make your point. He gave me some figures the other day 1984 85 individual income paid forty six percent for the general fund revenues in the

six years that follow that figure went from forty six to fifty four point three percent loading on the individual. The lottery is going to be a regressive tax that will add on to that if you play the lottery you pay more. The other side of that is that the corporate tax structure as he reported 84 was its share was 20 percent but that's a drop of eight point eight percent. It shows you the shift you're talking about. And then the debt question which worries him enormously is that next year in year 0 6 0 7 that payment is going to be six hundred sixty million dollars that this debt serves. That's on her in the house. So it seems to me that we've got to get into this revenue question right now. We've got to really be in a real crisis. We do have to do that. And you know when when Governor Easley first got into office I had high hopes that the state would move in that direction. Governor Easley

appointed a couple good commissions to look at closing tax loopholes he appointed the governor's commission on tax modernization with Tom Ross Smith Riddle's foundation chairing it. They did some excellent work and among the things they recommended was that the state undertake some fundamental tax reform and possibly. Expand the tax base to a point that it could reduce for example the high sales taxes I think those figures you were citing a little while ago also show that the sales tax portion of the state's revenues is increasing dramatically. That's also a tax that individuals have tried to pay so their share of the burden is is really just Thomas skyrocketed lately. And House Speaker Jim Black appointed a commission that you're very familiar with like you spoke to it at number 10 probably served

on it as I recall dealing with tax reform but the impetus for those that effort kind of fizzled and we were allowed white guy. Yeah. You know we did. And I think that was because. The leadership of the state concluded that while people were willing to get rid of some taxes there was very little enthusiasm for for bringing a new tax system that would replace it. And while nobody really enjoys creating new taxes I think what North Carolina really needs is is a motivated leadership that can make folks understand what the stakes are here and that if we don't go to some sort of comprehensive tax reform we will simply be unable to provide the basic services that the state is most responsible for education and public safety not the not the frills that we often think. Tax reform would

would would finance we're talking you know schools and universities and community colleges things that are just absolutely essential to the to the well-being of the state plus public safety and that and good roads. For example 1 years grace it looks like according to this figure how would you go from 400 million to 660 million in one year. Debt service that's a bike that nobody has to pay it up to now. Well you know State Treasurer Richard Moore has suggested that North Carolina needs to prioritize its spending to get a better grip on what we are going to spend and also to take better account of of where our debt level rises so we can make judgments about future indebtedness. He's argued that we're about at the point that we can handle and after that it gets pretty dicey. Some would say we're already there. Let's look at another dimension here. I think it's fewer than 15 counties now have more than half the population of North Carolina in

that movement. We've taken over 2 million acres out of the watershed of counties like Mecklenburg and what all good and the basin of the Neuse River in the basin of all the water sources now. Have we done enough in thinking about purity of water and purity of air. Our ozone ratings are the worst in this whole region of the United States apparently. I thought the Clean Water Management Act in that smokestack Well those are good laws right now. We really made progress did this session keep that momentum in in the in the area of clean water. This session really did a good job. It fully funded the clean water management trust fund for the first time in several years. I've been in a lot of money that's 100 million dollars a year and what that buys is from the far western mountains and down to our coast this provides

funding which can be used in combination with local and private and federal funding leveraged to set aside buffers to buy land surrounding water supplies and it's really a visionary way to take care of. Of arse are surface waters and and ground water supplies all across North Carolina and they really do. I think some some good work they have a lot of good programs at work. Open the Dupont Farai stand is Far East is. Is it Cape Lookout area where they are restoring a wetlands as part of a huge project to try to bring back the oyster reefs that were once so plentiful in North Carolina. I think those are doing a good job we've been lucky on the air just lately we have not had the severe weather related bad air days this

year had that we had earlier and and we were just fortunate to to have that and I think another reason that I or generally has been good lately is that the state has adopted some tough standards including for example of the clean smokestacks act of a 2002 so were we caught a break come clean air we're doing we're going in the right direction I think called clean water we probably ought to step up the preservation of land if we can do it but that's an awfully expensive project to undertake when there are other needs such as education. But we run completely out of time. This question as you look at the state and you've been doing this for your professional life. What about the attitude in North Carolina today are that it. We don't fund the progress board it's not telling us what the future should be. We haven't faced tax reform the way we should. We've done a lot of good things but these

are fundamental things that really have a lot say about the future. You comfortable with what you see. Well I'm an optimist. And North Carolina his you know him through some very troubling periods earlier in the 30s the economic depression in the post-war years how are we going to grow in the late 50s and 60s how are we going to deal with with civil rights enough. I feel like right now we're in a period where we're beginning to understand how badly we need the kind of leadership that brought about the great advances for instance in the 70s and 80s with our investments in education and in the Research Triangle area and the broad advances those brought us. And I'm hopeful that the leadership will rise to the to the occasion. We're still looking for that. We've met crises before but I think you dead right jackets. In times like these people begin to understand long

range. And this is I hear you saying this it's an opportunity. It really is. It really is. Why did you want to give it a reading a B plus a B minus and not aware that you said oh you said it bad about normal you know I'm still working on that report myself there was some as usual there were some good things. As usual some bad things. The fact that the budget does concentrate some spending on education I think is is generally good. Thank you for taking some time out to come and sit with me it's always a real Joy good to be with you again. Great to see you Jack a disease or friends I hope you've learned a real civics lesson listening to this analysis of what our representatives and senators have just done in the city of Raleigh. Until next week then good night funding for North Carolina people is provided by walkover helping North Carolina people realize their financial goals since be 279 and by UN

CTV members.