December 1st, 2016 by Skip
November 18th, 2016 by Skip
Enforcement of the Public Facilities Privacy and Security Act (HB2) S.L.2016-3
I have received inquiries about enforcement of Part I of this law. These inquiries echo media and pundits who completely misunderstand and claim that the law is unenforceable.
Most new laws do not contain within themselves their own enforcement provisions. If they did, the General Statutes would require twice as many volumes on the shelf. Confusion would reign. New laws typically integrate change into existing enforcement provisions.
Federal District Judge Thomas Schroeder rejected the argument of the President of the UNC system, Margaret Spellings, that UNC would not enforce HB2 because it had no enforcement provisions. Judge Schroeder cited four different enforcement mechanisms. (1) second-degree trespass, GS 14 – 159.13. In the case of SMS 196 N.C. App 170 (2009) the Court of Appeals held that a 15 year old boy in the girls locker room was properly adjudicated of second-degree trespass. The label on the door was sufficient notice to him that he should not be there. This is undercut in some school systems by principals (and chancellors) who give permission to students to violate the law. It is probably a good defense to trespass if the person in charge of a facility authorizes a trespass. Judge Schroeder referred to this as “openly defying the law.” (2) the indecent exposure statute, GS 14-190.9(a); (3) the peeping statute GS 14 – 202(a)(d) and (4) university discipline of students who violate federal, state or local law.
In addition to these four enforcement mechanisms which Judge Schroeder mentioned, there are two others: (5) The state building code requires separate restroom facilities for each sex 2012 NC Building Code 101.2 (Intl Code Council, Inc 3d prtg 2014.) (6) I contend that under Title VII it would create a “hostile work environment” for an employer to maintain restroom or locker room facilities that are not differentiated by biological sex. That would be enforced by a claim for damages in civil court.
Representative Paul Stam
Speaker Pro Tempore
November 1st, 2016 by Skip
This online publication is unlike any you have ever seen. It consists of transcripts of many of the debates in the North Carolina House of Representatives from 2009-2016. Some debates in the Senate and some debates in committees are included. I have prefaced each section with my comments for context.
I enjoy primary sources. When an historian or analyst tells me what somebody said, I am not as convinced unless I can actually read or hear the words.
Aside from the public interest in the subjects of these debates there is also a bit of legislative history here from which lawyers might argue legislative intent. For rules on how legislative debate is used in law you might want to see pages 5 – 9 of a law review I authored, 28 Issues in Law and Medicine 3 (2012), entitled “Woman’s Right to Know Act: A Legislative History” and an article that I co-authored with Amy O’Neal entitled “The 2011 Tribal-State Gaming Compact: A 2012 North Carolina Legislative History,” 6 Charlotte Law Review 17 at 20-27 (2015).
It is no surprise that my own debates are featured in this collection and that House debates predominate. Beginning in 2009 House floor debates have been archived electronically on the Internet at www.ncleg.net. For House floor debates we provide links to the audio. Senate debates are recorded but they are not archived on the Internet. House Committee debates are recorded but they are not on the Internet and the recordings are usually discarded after the minutes have been prepared.
These debates cover the waterfront: Budgets, Incentives, Property Rights, Criminal Procedure and the Death Penalty. They include extensive debates on each of the pro-life bills that have been passed since 2011. Since there are always threats to sue over every pro-life measure, see this article for the legal end result on each. I also include parts of the debates on the marriage amendment, SB 2 (magistrate recusal) and HB 2 Privacy and Security Act of 2016.
Opponents of legislation will often say there was little or no debate or that there was no separate vote. In the Opportunity Scholarships litigation, opponents told the Superior Court there had been little debate and no separate recorded votes. The full transcripts of those 2013 debates were ninety-eight pages with four separate recorded votes–two in committee and two on the floor–on the precise issue of Opportunity Scholarships.
Grammar: I did not realize until beginning this project how different grammar and syntax are for oral speeches than when the same thought is written. Few members speak from a written text. After a sentence is begun we often change our mind as to where it is headed. Those sentences are difficult to diagram. I have made grammatical corrections so that the transcripts will be clear and so that those who taught us English in “grammar school” will not be ashamed. These “corrections” have not changed the meaning. Check the audio.
Rep. Paul Stam
North Carolina House of Representatives
Speaker Pro Tem, 2013-2016
House Republican Leader, 2007-2012
Member 1989-90 and 2003-2016
October 26th, 2016 by Skip
Last week CoStar Group announced that it chose to locate a 730-job expansion in Richmond, VA instead of Charlotte, NC. The Charlotte Observer reported on October 28th that the incentives package for Virginia totaled $10.6 million, while North Carolina’s was $9.7 million. CoStar CEO Andrew Florance was quoted in the Washington Post as saying that HB 2 was “more controversy than we want to engage in right now.”
Published articles imply that CoStar’s decision was made primarily because of HB 2. For whatever role HB 2 played in the decision against Charlotte, we offer the following comparison between Charlotte, NC and Richmond, VA. The company has chosen a venue where the actual laws relating to discrimination are no more “protective” of LGBT rights than those currently in effect in Charlotte.
Left-wing groups claim that Religious Freedom Restoration Acts are also discriminatory for legalizing denial of service. Remember Indiana, Mississippi and Arkansas. We do not agree that this claim has any validity. We note that North Carolina has no Religious Freedom Restoration Act. Virginia does: Virginia Code Ann. § 57-2.02 (2009).
For the reasons stated under Legends #5 and #6 of Legends vs. the Truth about HB2, we do not agree that “sexual orientation” or “gender identity” are reasonable categories for special legal rights. But for discussion purposes we offer this comparison of anti-discrimination laws in Charlotte, NC and Richmond, VA.
October 25th, 2016 by Skip
In 2013 the media claimed that SB 353, “Health and Safety Law Changes,” was passed with trickery in the dark of the night. This article refutes those nonsensical claims.
October 17th, 2016 by Skip
Greensboro vs. Four New Locations
A Policy Comparison
“The Breathtaking Hypocrisy of the NCAA” was distributed on September 13th, before the NCAA (and ACC) chose alternative locations for championships. In several cases the boycott of North Carolina resulted in the relocation of championships from Greensboro, NC to other venues where the actual laws relating to discrimination are the same, virtually the same, or even less “protective” of LGBT rights than those in effect in Greensboro. This demonstrates why these sports organizations’ boycotts will have to take on much of the nation.
Left-wing groups claim that Religious Freedom Restoration Acts are discriminatory for legalizing denial of service. Remember Indiana, Mississippi and Arkansas. We do not agree that this claim has any validity. But for the NCAA and ACC we note that North Carolina has no Religious Freedom Restoration Act. Both South Carolina and Virginia do: South Carolina Code Ann. § 1-32-40 (1999) & Virginia Code Ann. § 57-2.02 (2009).
The policies of North Carolina are reasonable. Boycotts by the NCAA and the ACC are harmful to athletes (especially women) as was shown in the original “Breathtaking Hypocrisy” article.
The City of Greensboro has now lost several tournaments. As shown in these charts, Greensboro has provisions for non-discrimination in government employment at the state, county and city level that include the categories of sexual orientation and gender identity. These policies are expressly not preempted by HB2. House Bill 2, Section 3.1(c) amended G.S. 143-422.2 to preempt local requirements on employers “except such regulations applicable to personnel employed by that body that are not otherwise in conflict with State law.”
In conclusion: The boycott of North Carolina by the NCAA and the ACC is:
- Unreasonable as shown in Legends vs. the Truth;
- Destructive of Women’s Competitive Sports, as shown in “Breathtaking Hypocrisy;” and
- Misdirected even on its own terms as shown in “The Breathtaking Hypocrisy of the NCAA (and ACC) – Part II.”
September 30th, 2016 by Skip
Planned Parenthood recently posted this video on YouTube ominously claiming that the Governor is stockpiling women’s sonograms in his filing cabinet in Raleigh. The claim is nonsense. See this advisory for the actual facts about the reporting requirements in House Bill 465, “Women and Children’s Protection Act of 2015.”
September 14th, 2016 by Skip
On Tuesday, September 27th I received a very special package in the mail containing my new North Carolina “Choose Life” license plate! It is now proudly displayed on my car. I want to express special thanks to Rep. Mitch Gillespie whose tireless work for so many years made this possible. Planned Parenthood fought it for five years in the courts.
If you would like to get your plate, an application is now available from DMV online. Just search for “Choose Life.” $15 of the fee goes to support Carolina Pregnancy Care Fellowship (CPC). Last year CPC distributed money to 28 different pregnancy support centers around the state and will continue to do so. The new revenue from license plate sales may be used for counseling and other services that meet the physical needs of pregnant women.
Thank you for your support for pregnant women and unborn children in North Carolina!
Rep. Paul Stam
September 9th, 2016 by Skip
Citing a commitment to “fairness and inclusion,” the NCAA announced September 12 that it will move seven championship events out of North Carolina during the 2016-17 school year. The hypocrisy of the NCAA’s “commitment” is breathtaking. The organization selectively boycotts North Carolina for policies it claims are unique to our state-but actually are common throughout the nation-and for daring to disagree with a sweeping federal mandate by the Obama Administration-a mandate that is currently being challenged in court by 24 other states. The NCAA is in violation itself of the civil rights provision of Title IX as interpreted by the Obama Administration. See this analysis for a good look at the facts…
September 8th, 2016 by Skip
For a look at the 1989-1990 Biennium in the North Carolina General Assembly, see this report from my first term in office.
September 2nd, 2016 by Skip
In the 2014-15 budget North Carolina teachers received an average 6.92% pay raise, the largest raise in the country that year. The 2015-16 budget provided a further increase with an average 2.2% pay raise. In the 2016-17 budget teachers received an average 4.7% pay raise which is projected to raise average teacher pay to over $50,000 in North Carolina. This equates to a cumulative average pay raise of about 13.8%. In comparison, the national cost of living for each of those years went up 1.72%, 0.42% and (estimated) 0.84% respectively. From 2013 to 2016 the cumulative increase in cost of living was about 3.02%. When adjustments are made for cost of living between North Carolina and other states, North Carolina is now about 29th in the country in teacher pay.
Now WRAL, the News & Observer and others are trying to deny the obvious – that there was a significant pay raise this year for teachers. Check out this analysis for a look at some of the facts regarding teacher pay under the Republican-controlled Legislature.
September 1st, 2016 by Skip
Teacher compensation packages are a combination of a teacher’s state salary, benefits and local supplements (where applicable). Check out this detailed analysis of teacher compensation in 39 counties across the state.
September 1st, 2016 by Skip
SL 2011-60: Unborn Victims of Violence Act/Ethen’s Law: Creates criminal offenses for acts committed against pregnant women without consent that cause the death or injury of an unborn child.
NOT CHALLENGED IN COURT.
SL 2011-145: Appropriations Act of 2011, Sec. 29.23(a)-(c): Limits state abortion funding in the state health plan. No state funded abortions except in cases of rape, incest, or to save the life of the mother. Previously funding was only limited for welfare abortions on a year-to-year basis.
NOT CHALLENGED IN COURT.
SL 2011-392: Authorize Various Special Plates (Choose Life): Division of Motor Vehicles to issue “Choose Life” plates. The money raised will go to Carolina Pregnancy Care Fellowship. The injunction has been dissolved and license plates are now available online through NC DMV.
CHALLENGED IN COURT BUT UPHELD.
SL 2011-405: Woman’s Right to Know: Requires a 24 hour (now 72 hour) waiting period and the informed consent of a pregnant woman before an abortion may be performed.
CHALLENGED IN COURT. LOST ONE SECTION CONCERNING ULTRASOUND. THE REMAINDER OF THE LAW WAS CHALLENGED BUT UPHELD.
SL 2013-307: Health Curriculum/Preterm Birth: Requires instruction in school health education on preventable causes, including induced abortion, of preterm birth in subsequent pregnancies.
NOT CHALLENGED IN COURT.
SL 2013-360: Appropriations Act of 2013, Sec. 12J.1.(a): Maternal and child health block grants provides $250,000 to the Carolina Pregnancy Care Fellowship (Sec. 12J.1.(a)). Increased to $300,000 in 2014 and continued through 2016-17.
NOT CHALLENGED IN COURT
SL 2013-366: Health and Safety Law Changes: Limits abortion coverage to rape, incest, or to protect the life of the mother under the federal health benefit exchange or insurance offered by a county or city. Prohibits sex selection abortions. The Department of Health and Human Services is directed to amend rules pertaining to abortion clinics. Prohibits abortions if a doctor is not present. Conscience Protection extended to all health care providers, not just doctors and nurses.
NOT CHALLENGED IN COURT
SL 2015-62: Women and Children’s Protection Act of 2015: Changes the 24 hour waiting period to 72 hours for informed consent before an abortion. Protects health care providers who object on moral, ethical or religious grounds in situations not covered in 2013. Increases statistical reporting requirements to the Department of Health and Human Services and enhances clinic standards and inspections. Abortionists must be an OB-GYN or equivalent. Tightens standards for post 20 week abortions.
20-WEEK PROVISION HAS BEEN CHALLENEGED IN COURT. CASE WAS FILED NOV. 30, 2016. (BRYANT ET AL. V. WOODALL ET AL.)
SL 2015-265: Disposition of Unborn Childrens’ Remains: Prohibits the sale of the remains of an unborn child resulting from an induced abortion. In the case of a miscarriage, the mother may donate the remains for research.
NOT CHALLENGED IN COURT
In addition to these laws passed since Republicans took a majority of both the House and Senate, the courts upheld two other pro-life laws enacted when Republicans had a majority only in the House in 1995:
- In Rosie J. v. N.C. Department of Human Resources, 347 N.C. 247, 491 S.E.2d 535 (1997), the North Carolina Supreme Court held that there was no state constitutional right to state funded abortions. In 1995, the General Assembly restricted eligibility for the state abortion fund to cases where the pregnancy resulted from “cases of rape or incest, or to terminate pregnancies that, in the written opinion of one doctor licensed to practice medicine in North Carolina, endanger the life of the mother.”
- In Manning v. Hunt, 119 F.3d 254 (4th 1997), the Fourth Circuit Court of Appeals sustained the position of that State and the amicus brief submitted by Stam & Danchi PLLC, for North Carolina Right to Life in support of North Carolina’s Parental Consent law.
- Eleven significant Laws.
- Five court challenges.
- One partial loss in the ultrasound section of one law. The ultrasound provision not allowed in North Carolina is almost identical to the Texas Law upheld by the federal courts and in effect since 2011.
- One case just filed that challenges a single provision of the 2015 legislation.
A PDF version of this article is available HERE.
September 1st, 2016 by Skip
Check out this article for an update on the General Assembly’s 2015-2016 Property Legislation.
August 10th, 2016 by Skip
Prayers in the North Carolina House of Representatives – 2015 to 2016
This link takes you to the collected prayers offered in the North Carolina House during the 2015-2016 biennium. The impetus for this project was not spiritual but legal. With the legal reasons for this collection no longer relevant I share them with you as a review of the heartfelt prayers of my colleagues in the North Carolina House. I hope you enjoy them.
With best regards,
August 10th, 2016 by Skip
Rep. Stam recently spoke on Voter ID laws at the Annual American Bar Association Meeting in San Francisco, CA on Saturday, August 6th, 2016. Below is a glimpse of some of the information he provided during his talk.
US Court of Appeals 4th Circuit
Voter ID Brief by Rep. Stam
POLLS and PHOTO ID
A recent poll (April 19, 2016) out of Elon University confirms that North Carolinians “overwhelmingly support” voter ID legislation- 75% support voter ID provisions and 80% think it is fair. The breakdown reveals that 89% of white voters and 68% of African-American voters support voter photo ID while 96% Republicans, 86% unaffiliated voters and 73% Democrats support voter photo ID. Here is the link for the full article and polling data.
Racial polarization means “a consistent relationship between [the] race of the voter and the way in which the voter votes, or to put it differently, where black voters and white voters vote differently.” United States v. Charleston County, 318 F. Supp. 2d 302, 308 (D.S.C. 2002).
A state cannot have racially polarizing laws if by those laws, minority candidates receive more than 50% of the votes.
In 2006, Justice Patricia Timmons-Goodson was elected to the state Supreme Court over a former judge and white male candidate, Eric Levinson. Each candidate was equally qualified.
In 2012, NC Court of Appeals Judge Wanda Bryant, a female African American, won by 56.5% over a white male candidate, Marty McGee. Each candidate was well qualified.
In 2012, Linda Coleman, a female African-American candidate for Lieutenant Governor received 49.92% of the votes. Although she did not win, it was statistically tied.
In 2014, NC Court of Appeals Judge Cheri Beasley, a female African American, won a seat on the State Supreme Court by 5,410 more votes than a white male candidate, Mike Robinson. Each candidate was well qualified.
All of this data is available here: http://results.enr.clarityelections.com/NC/42923/123365/Web01/en/summary.html
In 1986, African American Bill Freeman defeated Paul Stam for the State House in a district which was by memory, about 20% African American.
VOTER ID BILLS IN NORTH CAROLINA BEFORE 2013
*Indicates that the bill did not pass chamber
Sponsors: Allred; (Primary) Barnhart; Blust; Capps; Gorman; Gulley; Hilton; Justus; Mitchell; Moore; Pate; Sauls; Setzer; Walend; K. Williams;
This bill provides a means of identification for all voters parallel to that required of some voters by the Federal Help America Vote Act; to require voters to sign before voting at the polls and at early voting sites; and otherwise to bring North Carolina into compliance with the Help America Vote Act.
Sponsors: Allred; Moore; Current; Hollo; (Primary) LaRoque;
This bill requires that voters provide identification before voting.
Sponsors: Moore; Current; (Primary) Almond; Avila; Barnhart; Blackwood; Blust; Boylan; Brown; Cleveland; Folwell; Frye; Gulley; Hilton; Justus; Killian; Langdon; Neumann; Pate; Setzer; Starnes; Steen; Walend; Wiley;
This bill requires that voters provide identification before voting.
Sponsors: Moore; Current; Stam; Killian; (Primary) Avila; Barnhart; Blackwell; Blackwood; Blust; Boles; Brown; Brubaker; Burr; Burris-Floyd; Cleveland; Daughtry; Dockham; Dollar; Folwell; Frye; Gillespie; Grady; Guice; Gulley; Hilton; Holloway; Howard; Hurley; Johnson; Justice; Justus; Langdon; Lewis; McCormick; McElraft; McGee; Mills; Neumann; Randleman; Rhyne; Sager; Samuelson; Setzer; Starnes; Steen; Stevens; Stiller; Tillis; West; Wiley;
This bill requires that voters provide identification before voting.
Sponsors: Lewis; T. Moore; Killian; (Primary) Avila; Blust; Burr; Cleveland; Cook; Current; Dockham; Dollar; Folwell; Hastings; Hilton; Hollo; Horn; Hurley; Iler; Johnson; Jones; Jordan; Justice; LaRoque; McComas; McCormick; McGee; Moffitt; Randleman; Sager; Setzer; Shepard; Stone; Torbett;
This 2011 bill passed each chamber, but was vetoed by Democrat Governor Perdue. It would have required all eligible voters to present a photo ID before voting. The House failed to override the veto.
Sponsors: Davis; Daniel; Hise (Primary) Brock
This bill, filled by Republican Senators, would have amended G. S. 163-227.2, providing that one-stop voting occur no earlier than the second Thursday (currently, the third Thursday) before the election. Clarifies that a county board of elections may not conduct one-stop voting on any Sunday. Clarifies that a county board of elections may provide for one or more locations offering one-stop voting in the county, provided all sites other than the county board of elections office are open at the same time for voting. Also prohibits the State Board of Elections from approving a plan that provides for one-stop voting sites to be open at different times. Repeals GS 163-82.6A, which allows in-person registration and voting at one-stop sites, and makes conforming changes to various provisions in GS Chapter 163.
Sponsors: Tilman; (primary) Brock; Daniel; Hise; Randleman
This bill, filed by Republican Senators on March 26, 2013, would have repealed in person registration and voting at one-stop sites and established that no earlier than the second Thursday before an election can a person appear in person to request and file an absentee ballot (the current law was no earlier than the third Thursday).
Sponsors: Republicans and Democrats
Enacts new GS 163-166.13 providing that a legally registered voter may certify his or her identity by one of two methods: (1) by signing a voter photo affidavit or by (2) presenting proper photo identification. Proposed subsection (b) provides that a voter photo affidavit is a photograph taken by a designated election official that is signed by the voter to affirm that the voter is in fact the registered voter in whose name the ballot is requested.
August 3rd, 2016 by Skip
The 2016 General Assembly made several changes to the Opportunity Scholarship Program & the Disabilities Grant Program. The new overview of the programs are outlined below in the two presentations.
Opportunity Scholarship Program
Disabilities Grant Program
August 1st, 2016 by Skip
August 1st, 2016 by Skip
July 21st, 2016 by Skip
Read more about their incredible lives by clicking below:
Paul Stam Sr.
Jane Levring Stam
July 16th, 2016 by Skip
Click below to see legislation that Rep. Stam has been involved in this 2015-2016 Biennium.
July 12th, 2016 by Skip
What Could Be Wrong with SB 817 Limiting Income Tax to 5.5%
Representative Paul Stam
The NC GOP platform (Article II) states, “The government should tax only to raise money for its essential functions. We support a thorough review of expenditures each year, and we support a tax payer’s bill of rights.” “Tabor” is the usual acronym for a “Taxpayer Bill of Rights.” A goal I share with proponents of Senate Bill is a mechanism that will restrain state government from overspending.
But does SB817 proposing a constitutional amendment to limit the rate of state income taxation effectuate these principles? Does it expand taxpayer rights or constrict them? And why is it a constitutional amendment?
Let’s See HERE
July 5th, 2016 by Skip
What do these 24 states have in common?
Each of them has filed suit against the United States of America because of President Obama’s bizarre interpretation of the word “sex” in Title VII (employment) and Title IX (education funding) relating to “discrimination.” The first was North Carolina Governor McCrory and Secretary Perry v. USA and U.S. Department of Justice and Senator Berger and Representative Moore v. U.S. Department of Justice, 23 other states have joined the battle. In addition, G.G. v. Gloucester County School Board of Virginia in on appeal in the Supreme Court, whose issue is the same. We now have 24 states plus North Carolina, to total 25.
Be sure to read this newsletter HERE from North Carolina Family Policy Council.
For more information on this issue see Legends 2, 6, 12, 14, 15 in Legends v. the Truth about HB2.
June 6th, 2016 by Skip
The “Bill of Particulars” Refuted
Gene Nichol, a “Distinguished Professor” at UNC Chapel Hill, recapitulated his published rants against the Governor and the General Assembly on June 25, 2016, in The News and Observer. He refers to actions of the Governor and the General Assembly as “insanity,” “tragic,” “cruel and indefensible,” “Foundational un-American,” “stealing,” “Totalitarianism,” “threatening,” “coercion,” “degradation.,” and perjury.” He is quite a wordsmith. His charges are so many that to answer them all would take a book. A sample of his charges will demonstrate his reckless disregard for the facts and the law. Read more HERE.
May 7th, 2016 by Skip
April 26th, 2016 by Skip
Legends vs. the Truth about HB2
By: Rep. Paul Stam, Speaker Pro Tem
The narrative of the mass media is that HB 2, (Session Law 2016 – 3, “Public Facilities Privacy and Security Act”) was a big change, an outrageous overreach which denies rights and is unenforceable. Let’s take these 16 legends one by one and explain the law.
Read it HERE.
April 13th, 2016 by Skip
BY: Senator Andy Wells
Out in the private sector, things change in the blink of an eye – while government struggles to keep up. And, in fact, government doesn’t have much reason to keep up.
A change in technology may offer the opportunity to save money. The private sector jumps at a bargain. For a bureaucrat, saving money may mean a reduction in his department’s budget, fewer government employees, and a loss of power.
But sometimes, outside forces overwhelm even the most cautious bureaucrat – to force a change. Transportation funding is an example. State governments are struggling with a simple fact: Better fuel economy is good news for drivers but means fewer gas tax dollars to build and repair roads.
Some propose toll roads as a solution. But anyone who lives near I-77 north of Charlotte can tell you toll roads also create problems of their own.
So maybe it’s time we looked at changing a few obsolete regulations.
Years ago, when we had to cross a small stream and the size didn’t require a bridge, we used a round pipe or a square pipe called a culvert. Back then we just laid the pipe on the stream bottom knowing the water would rise up to get through then waterfall out the other end.
It was a solution that worked until the environmentalists pointed out it created an environmental problem – by creating barriers for fish and other water creatures who couldn’t safely navigate the smooth concrete bottom, much less, climb the wall at either end.
So the environmentalists proposed a solution called stream mitigation. What that meant was simple: Every time the state blocked a stream with a culvert, it had to go out and find a degraded stream somewhere else and improve it to offset the harm done by the culvert. It’s hard to argue with mitigation as a theory but hard evidence of a benefit is less obvious.
And one thing is certain, mitigation costs a lot of money – almost $800 per linear foot of impacted stream. For a steam crossing requiring a 300-foot culvert, that means mitigation costs of $233,000. That adds up to NC spending over $5 million per year for mitigation. And that’s $5 million that could have been spent to build regular roads instead of toll roads.
Over the last 20 years the private sector found a better way to cross streams. They simply started burying culvert bottoms so that the stream flowed though unchanged. The creek critters could freely move from side to side.
It was a win-win solution and you’d think, surely, the regulators in Raleigh would have responded by not requiring mitigation where better technology could be used.
No. They didn’t. Apparently the regulators still live in 1995.
It gets worse. Mitigation in not just expensive, it’s complicated.
To speed up highway projects engineers started going around the need for mitigation by building bridges instead of using culverts.
That did make projects simpler and faster. And much more expensive.
Short span bridges cost twice as much as culverts, last half as long, and add more tens of millions to the taxpayer’s bill.
This has gotten silly. With a little effort, and innovation, we can kill three birds with one stone: We can cut government spending, protect the environment and build more roads.
As always you may click here to read more.
April 13th, 2016 by Skip
Gaming the System: Lottery Ticket Discounting
Read the entire memo here: Lottery Ticket Discounting for Committee April 14
If you heard that one person had won 85-90% of the major-prize-value lottery tickets purchased at a specific convenience store, a red flag would likely go up. If you were then told that this extremely “lucky” person is the owner of that convenience store, another red flag would go up. Every time someone wins any significant-value prize, that person is beating the odds stacked drastically against them. But when one person is winning such a large majority of the significant prizes, there is cause for concern.
Such scenarios are not imaginative, but have actually occurred frequently across the US. In California, there have been several store owners who have been the holders of around 90% of the winning tickets purchased from their stores. Investigators are highly suspicious of this, as these store owners would have had to personally spend millions on tickets to get these sorts of results by chance. An NBC report points to this phenomenon happening nationwide, stating that:
“In Pennsylvania, a Philadelphia retailer cashed eighteen lottery tickets in three months for a total of $45,000. In New Jersey, a retailer cashed 105 lottery tickets for more than $236,000. In New York, another retailer has cashed 120 winning tickets for more than $500,000. In Illinois, we found one store where four employees and five of their relatives cashed a total of 556 winning tickets, for more than $1,600,000.”
If it seems too good to be true, then it likely is. A Dayton, Ohio news source offers an explanation of a practice that could explain why some retailers seem to beat the odds so drastically and win so often:
“In the most obvious form of abuse that the Lottery Commission seeks to curtail, retailers have at times stolen prizes for themselves. In another method, not illegal but against Lottery Commission rules, store employees have at times turned in tickets for the actual winners when the real winners do not want it known that they have won in order to avoid paying child support or other debts. Those individuals can make a small profit by paying a discount for the ticket, allowing the real winner to avoid paying child support, taxes-owed or other debt. The practice is referred to as “discounting” by the lottery commission.”
Other news sources indicate that ticket discounting is a widespread practice, occurring in various states such as New Jersey, Georgia, and North Carolina. This practice of ticket discounting is harmful for two obvious reasons. First, it enables players to avoid paying child-support and taxes. Second, ticket-discounting actually rewards retailers with monetary incentive for helping dishonest players avoid paying debts.
The NC Lottery Commission contractually prohibits ticket discounting. The Commission does investigate instances in which it suspects it is occurring. Sometimes lottery investigators catch the perpetrators and sometimes they do not. But this points to a significant problem in our state: the prohibition is simply contractual. Violators would typically be subject to some sort of temporary suspension from selling lottery tickets. If the Commission so chose, it could permanently prohibit the retailer from selling lottery tickets. This type of enforcement is the common practice across various State lotteries.
The State of Indiana, however, is different:
From the Indiana Code: Discounting Tickets
IC 4-30-13-1 Violation; misdemeanor Sec. 1. A person who knowingly: (1) sells a lottery ticket and is not authorized by the commission or this article to engage in such a sale; (2) sells a lottery ticket to a minor; or (3) sells a lottery ticket at a price other than that established by the commission; commits a Class A misdemeanor. As added by P.L.341-1989(ss), SEC.1.
The State of Indiana has made it a Class A misdemeanor to sell tickets at any rate other than the established one.
There are a couple advantages to Indiana’s system. First, having ticket-discounting specifically classified as a misdemeanor provides further deterrence so retailers will avoid using this practice to make extra money off customers’ winnings. Second, making it a misdemeanor opens up the issue to law-enforcement. The Lottery Commission on its own has been unable to prevent ticket discounting and properly enforce its contractual agreements. Law enforcement agencies have much more resources and investigative personnel. Ticket discounting is a significant problem that compromises the integrity of the NC Lottery and intra-state commerce. This would be a clear and effective first step in addressing the problem. A second possibility is to make the perpetrating ticket retailer secondarily liable for the child support and taxes owed by the original ticket buyer.
 See http://losangeles.cbslocal.com/2014/10/30/cbs-2-investigates-lottery-retailers-cashing-in-at-surprising-rates/
 One owner would’ve had to spend about $2 million on tickets in order to get his reported $304,000 in prizes; and another owner would’ve had to spend about $600,000 in order to bring in their $59,000 in prizes.
 See http://www.nbcnews.com/id/30550956/ns/dateline_nbc-the_hansen_files_with_chris_hansen/t/how-lucky-can-you-get/#.VwUePpwrLIV
 See http://www.daytondailynews.com/news/news/frequent-lottery-wins-defy-odds-prompt-suspicion/nhLnW/
 See https://www.lotterypost.com/news/232537
 See http://www.myajc.com/news/news/state-regional-govt-politics/lottery-overlooked-highly-improbable-win-patterns/nhPr8/
 See attached report
April 7th, 2016 by Skip
I WANT TO HELP PAYPAL
Find a Suitable Place of Service
On March 16, PayPal announced that it would gladly receive $3.6 million from the state of North Carolina to locate a new facility near Charlotte. Then on April 5th, PayPal President & CEO, Dan Schulman, announced that it would not move to North Carolina because of the passage of SL 2016-3. Certainly, this was not because of the bathroom/locker-room situation since the bill did not even apply to private business facilities. PayPal was incensed at the so-called failure of the legislation to include extra special protections for sexual orientation, gender expression and gender identity. Read my response HERE.
March 30th, 2016 by Skip
Raleigh, NC – For the second year in a row, Governor Pat McCrory is proposing as part of his budget to increase funding for Special Needs Scholarships. The Governor is proposing to increase the budget for these scholarships by $5.8M. This will provide funding for approximately 500 new students.
Rep. Paul Stam, Speaker Pro Tempore of the NC House of Representatives, commends the Governor for his leadership in this area. “We have worked closely with the Governor in developing this proposal and will work tirelessly to see that this additional funding is included in the House budget.”
During the long session, the General Assembly appropriated total funding of $4.23M. This year over 830 students have been awarded the scholarship. However, there are over 400 students on the waitlist.
Read it HERE
March 29th, 2016 by Skip
Liberal groups have been claiming that North Carolina schools and universities will lose around $4.5 billion in Title IX funding due to SL 2016-3, Public Facilities Privacy & Security Act. This claim is false.
Title IX ensures that “no person in the United States shall, on the basis of sex, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any education program or activity receiving Federal financial assistance.”20 U.S.C. §1681(a).
Under current law, neither states nor school districts will lose Title IX funding for enacting laws and policies that require students to use the restrooms and locker rooms of their biological sex. Find out why HERE.
March 17th, 2016 by Skip
Liberal groups have been circulating the claim that SL 2016-3, Public Facilities Privacy & Security Act, discriminates against Veterans. CLICK HERE to see a list of benefits, protections, or preferences that the State and federal government offers for active military and veterans.
March 9th, 2016 by Skip
Below is a letter that I sent out to the Joint Legislative Oversight Committee on the NC Lottery following the March 10th committee meeting.
Dear Colleagues of the Joint Legislative Oversight Committee on the NC Lottery,
Thank you for allowing me the opportunity to address the Lottery Committee on March 10th. I sincerely appreciate the 10 minutes you afforded me and hope that you will not mind a few follow-ups to points that Ms. Garland made after my presentation. You will recall that Rep. Dollar was not allowed to ask me to respond to her rebuttal.
Read my response HERE.
February 11th, 2016 by Skip
Deceptive Advertising in the North Carolina Education Lottery
By: Representative Paul Stam
Speaker Pro Tem
March 10, 2016
Table of Contents:
“No Advertising may be Misleading, Deceptive…”
“Fools will play the lottery and now if we can attract more fools to play the lottery and they choose that, I’m not sticking a gun to their head.”NCGS § 18C-114 Powers and duties of the Commission
8 Little Rules the House had to Break to Pass a Lottery
Deception in the NC Education Lottery
8 pages previously presented to members of the Lottery Oversight Committee on February 11, 2016, featuring Powerball and its advertisements
Memo by the Fiscal Research Division addressing the Powerball jackpot of January 2016.
Memorandum from Rep. Stam on October 24, 2014, “New Lottery Ad is Extremely Misleading: “All or Nothing.”
Exhibits of the “All or Nothing” logo and advertisement
“What is N.C. after? Bucks, bucks, bucks!” Charlotte Observer, May 27, 2011
Advertisement revealing the top prize of $200,000 with the odds of winning at 1 in 3.9.
Letter to Senators Brown, Harrington, Hunt and B. Jackson on July 14, 2014 concerning SB 744/Lottery Advertising Component
Specifically responding to statements from the transcript of the Senate hearing on June 12, 2014.
Transcript of the Senate Appropriations Committee Meeting on the Lottery on June 12, 2014
Selling Hope State Lotteries in America, by Charles Clotfelter & Philip Cook
Do Lotteries Hurt the Poor? Well, Yes and No By: Charles Clotfelter
Transcription of the National Gambling Impact Study Commission Meeting, March 19, 1999.
Duke Professors’ contact information
Honest Lottery Act
House Bill 156 (Second Edition) and Fiscal Note
Memorandum from Dylan Finch (Legislative Intern) to Representative Paul Stam on December 3, 2013 concerning “An examination of Lottery Funding and Sales for Six Counties in North Carolina.”
Memorandum from Brian Miller (Legislative Intern) to Representative Paul Stam on February 24, 2016 “Lottery Corruption” concerning Eddie Tipton.
Memorandum from Brian Miller (Legislative Intern) to Representative Paul Stam on February 24, 2016 concerning “NC Lottery: A Case of Subtle but Sure Injustice”- picking a winner before paying for the ticket.
Attached Report: Investigation by NCEL
Click HERE to see a condensed version of the handout.
January 1st, 2016 by Skip
Thursday, February 11, 2016, the Staff of the Lottery Commission made a pitch to the Joint Legislative Oversight Committee on the North Carolina State Lottery to increase lottery advertisement in an effort to increase profits payable to the State. Please see HERE and HERE for some of the negative consequences of this action.
For further information, please contact Rep. Paul Stam at 919.362.8873.
Lottery Officials Talk State Proceeds via Time Warner Cable RALEIGH — Lottery numbers in North Carolina continue to be on the rise. Last year contributing over $520 million into education in the state. But when compared to neighboring states, North Carolina makes substantially less in profits per capita.
“I am determined from North Carolina, to hit these numbers,” says Alice Garland, executive director of the NC Education Lottery. “I mean Virginia is 26 years old, they are older than Georgia. I am determined we are going to hit these numbers way before Georgia and Virginia did.”
Lawmakers questioned the reason for the lower proceeds.
“When I go down to Virginia, I notice that they are substantially higher in their advertising and produce a pretty significant difference in their operating profits,” says Sen. Rick Gunn, a Alamance County Republican.
Lottery officials say advertising does have a lot to do with sales.
“A lot of that goes to marketing, our budget’s restrictive and what we can say in our ads is restrictive,” says Garland.
“They would get more people to gamble,” says Rep. Paul Stam, the House Speaker Pro-tem. “But why do you want to hoo-doo your own citizens?”
But some lottery opponents say they believe lottery advertising is deceptive, and that is what should be changed not how much money is given toward.
“You could have a lottery that’s honest and bring in about 400 million a year,” says Stam. “Or you could have a lottery that is dishonest and bring in about 500 million. So why not just bring in the 400 million.”
Meanwhile, lottery proceeds are likely to be on the rise again this year. That is following the record jackpot for Powerball earlier this year, which already exceeded proceed expectations from that game, as well as how much is contributed to the education fund.
May 6th, 2014 by Skip
What Could Possibly Be Wrong With a “Taxpayer Protection Act?” (SB 607)
Representative Paul Stam
The 2015 NC GOP platform (Article II) states, “The government should tax only to raise money for its essential functions. We support a thorough review of expenditures each year, and we support a tax payer’s bill of rights.” “Tabor” is the usual acronym for this type of bill, meaning a “Taxpayer Bill of Rights.” A goal I share with proponents of SB 607 is a mechanism that will restrain state government from overspending.
But does SB 607 “Taxpayer Protection Act,” a constitutional Amendment proposed by the Senate in 2015, embody these principles? Does it expand taxpayer rights or constrict them? And why is it a constitutional amendment?
Read more HERE
September 11th, 2007 by Skip
The Logic of Toll Roads
May 6, 2014
Representative Paul Stam
“Good tax policy decrees that wherever possible a fee for a service should be assessed against those who directly benefit from that service.”
Radio Address to the Nation on Proposed Legislation for a Highway and Bridge Repair Program
November 27, 1982 (The President spoke at 9:06 a.m. from Rancho del Cielo, his ranch near Santa Barbara, Calif.)
The Toll Road program is an important tool to be included in the measures for building public infrastructure.
Use of Toll Roads can greatly accelerate the implementation of crucial projects. In the case of 540 in western Wake County it has been estimated that this project was able to be constructed some 20-25 years earlier than it would have been if it followed traditional funding/construction processes.
With the 540 Toll Road in place existing motorists have been provided with an excellent alternative for reaching the RTP, Durham, RDU Airport and eastern NC in far less time and with much greater ease. Future residents will also be able to enjoy the benefits of this facility immediately upon their arrival.
Traditionally roads have been provided or improved on the basis of existing traffic volumes following the axiom of “Once we have a clear need through severely over loaded facilities we will either widen existing facilities or construct new ones.”
In the 1940’s Governor Kerr Scott implemented his “farm to market” road improvement program to get farmers out of the mud with paved roads allowing them to move their products to market more quickly and safely. North Carolina quickly became a national leader in paved roads networking across the state. As a result North Carolina became nationally known as “The Good Roads State.”
Toll Roads give us the flexibility of following a new axiom which is “ Since we can clearly project the unquestionable need for improvements let’s go ahead and get it in place so it is there before we have a catastrophic failure of the existing , limited, facilities.”
Along with improving mobility (the ability to move safely and efficiently from point A to Point B and back again) having alternative routes in place also helps to meet our requirements to reduce air pollution from vehicle emissions.
Our region has long been under an air quality improvement mandate from the EPA. Air quality monitoring stations were installed by the federal /and or state agencies at some of the longest standing, highly congested intersections or stretches of roadway, in the region (Crabtree Valley to name one). At these locations during rush hours or heavy shopping times, motorists would sit with the engines idling as they inched their way through multiple cycles of signals to eventually clear the intersection or congested stretch of roadway. With all of these idling engines and no viable alternative routes for those who were simply trying to get through the area to some other destination, air quality would drop drastically as the localized air mass became saturated with engine exhaust. Even with the addition of buses to reduce the number of idling vehicles there was no significant improvement as few people chose to use the bus. Further, the region’s steady population growth added new drivers to the mix at a rate that far outstripped any advantage gained by the limited number of people who chose the transit option.
The only reliable fallback that we could take has been to expand and add new roadway facilities to provide much needed alternatives and keep vehicles moving so that no single area would be subjected to the long periods of inching vehicles with idling engines that would severely impair the air quality at that given location. Given limited state and federal funding that might provide for a few improvements over a 7 to 10 year time period, local governments have been confronted with having to build new roads completely on their own. This has required approval of bonds by the voters within the respective community, or a tax increase, or both. Even so, our communities still find themselves with the need to improve or construct even more roads.
Even with paying the tolls, most motorists’ save both money and time. For example, prior to the connection of 540 from the NC 55 Holly Springs By-pass to NC 55 at Research Triangle Park (RTP) residents in the Holly Springs, Fuquay Varina, Southwesternmost Wake County and from neighboring areas like Angier or Lillington had the choice of either following NC 55 Bypass and NC 55 through downtown Apex and continuing on NC 55 to reach RTP at NC 55; or, working their way through back roads (Holly Springs New Hill Road to New Hill Olive Chapel Road) out of Holly Springs to reach NC 751 then O’Kelly Chapel Road and eventually NC 55 at the RTP.
Their first choice through downtown Apex could require usually at least 30 minutes, and sometimes an hour, just to negotiate the roughly 4 miles from the intersection of the NC 55 By-pass and old NC 55 north of Holly Springs to the intersection of NC 55 and US 64 north of Apex. From there they still needed to negotiate another 6.5 miles and 9 traffic signals at a maximum speed limit of 50 miles per hour (mph) to reach the intersection of NC 55 and 540 at the RTP. It could take 15 minutes or more to negotiate this last 6.5 miles. Following this route one could have a total commuting time of anywhere from 45 minutes to an hour and 15 minutes!!
Now, by getting on 540 at the interchange with the NC 55 By-pass in Holly Springs one can reach the same location at RTP on NC 55 (540 NC 55 intersection) by travelling 13 miles at 70 mph in about 12 minutes. There is a huge fuel savings by negotiating essentially the same distance with the engine running time reduced by anywhere from 30 minutes to an hour or more!!
The back road route is over 24 miles in length (one way) and in the best of times it would require at least 35 minutes. In rush hour traffic it would take between 45 minutes and an hour. People who used this route said they knew it was significantly longer but they seemed to continuously move (a big psychological plus) and they reached their ultimate destination often in the same, or less, time than it would take to follow NC 55 back through downtown Apex.
If the logic of the 540 toll road saving both time and money even with the payment of the tolls is proven, then the facility is not punitive to those who use it. If the logic is proven that the toll road saves money by reducing fuel costs even after the tolls are accounted for then the facility cannot be discriminatory as the benefit is there for all. Further, if one’s personal time were valued at $10 an hour a reduction in commute time by at least 15 minutes each way is a $5 benefit. If the commute is reduced by 30 minutes each way there is a $10 realization in time. That is much more than the toll.
Responses to Specific Points
Recently Raised by
North Carolina Citizens Against Toll Roads
Are Toll roads punitive;
At 18.4 cents per gallon, the federal gas tax was last raised in 1993. Since then, it has lost nearly 40 percent of its purchasing power. The gas tax would need to be raised to nearly 30 cents per gallon to give it the purchasing power it had in 1993.
Similarly, while the North Carolina state gas tax is a combination of a flat rate plus a variable rate based on wholesale prices (capped since 2012), North Carolina has seen the power of its highway construction dollars decline 52% between 2002-2013. This reduction of purchasing power at both the federal and state levels creates challenges to funding our infrastructure systems now and in the future.
The use of tolls is a central component to this nation’s transportation funding system. Tolls establish a direct connection between the use of the road and payment for that use. For too long, motorists have falsely believed our roads are free. Our highways are not free nor have they ever been. However, it’s easy to see why that misperception persists. There is no direct link between paying the fuel tax and using the roads it funds. Tolling re-establishes that connection.
There are no free roads. There are only toll roads and tax supported roads. A toll is a user fee, not a tax. You only pay for a toll road when you use it. Every road needs maintenance and reconstruction, and that costs money. No road is ever fully paid for. A road, just like a home, requires ongoing upkeep and maintenance. Tolls provide a sustainable source of revenue for ongoing road maintenance and improvement.
It is a common misconception that the Interstates are “already paid for.” Infrastructure of all kinds needs routine maintenance, upgrading and eventual replacement. Though it cost $129 billion to construct, it will cost nearly $2.5 trillion over the next 50 years to rebuild the interstate system, largely at state expense. States are looking for new, sustainable revenue streams to support their highways, especially the Interstate highways. A growing number of states are exploring (or revisiting) the benefits of tolling as part of the options for renovating and upgrading their roadways.
Tolls are voluntary user fees. Drivers can choose to pay tolls or take alternative routes, whereas taxes are mandatory and charged to everyone. Yes, customers of toll facilities also pay taxes, but the taxes are used to fund non-toll roads. Since toll roads are primarily self-financed and do not rely on taxes, the customer is not paying twice for the facility. In fact, without tolls, taxes would be higher.
Do Toll roads discriminate;
Tolls are a fair and precise way to pay for transportation facilities because there is a clear and direct link between use of the facility and payment for that use.
A toll is a user fee, not a tax. If you don’t use the facility, you don’t pay for it. You only pay a toll when you choose to drive on a toll road for a higher level of convenience, reliability or safety.
Many surveys have shown that drivers of all income levels use tolled facilities and support having the option to use high-quality toll roads. A well-designed pricing plan can be less burdensome to low-income citizens than systems that are based on regressive taxes, such as car registration fees, sales taxes and the gasoline tax.
Do Toll roads alleviate traffic congestion;
Tolls provide money today for projects that can be built in the near future and meet demand for decades to come.
Tolls provide a dedicated and predictable revenue stream that allows toll operators to program capacity improvements as they are needed.
Today, most toll roads, bridges, and tunnels collect tolls electronically, which eliminates the need to stop and pay tolls at a traditional toll plaza.
Toll roads are generally safer than non-tolled roads due to better maintenance, pavement, and technology. Toll operators employ state-of-the-art technology to monitor road conditions and have a financial incentive to keep their roads running as safely and smoothly as possible.
Toll roads tend to be less congested than tax-funded roads, where unrestricted access often leads to congestion. Toll roads also lead to time savings and congestion relief on nearby roadways by increasing the total road capacity available. Moreover, most toll operators are eliminating toll plazas and expanding their high-speed, automated tolling options. Most new facilities are being built as cashless systems, with no stopping or slowing down to pay a toll.
Do Toll roads cost $1.9 million more per mile to build;
Capital costs for the Triangle Expressway included:
- Roadside Toll Collection System (RTCS) – $11.98M
- Electronic Toll Collection System (ETCS) – $2.77M
- Initial Transponder Purchase – $3.59M
- Intelligent Transportation System (ITS) – $6.05M
- Back Office System (BOS) – $3.57M
- Consultants – $7.61M
Including only the RTCS, ETCS,and 60% of the Consultant Labor ($19.32M) which accounts for roadside toll equipment costs specific to the Triangle Expressway (18.8 miles), the roadside toll technology cost is $1.03M/Mile. These project costs were included in the overall project cost and plan of finance.
As of March 31, 2014, the Triangle Expressway has delivered $24,180,503.56 in actual revenue. This is 22% above projections, project to date.
March 2nd, 2007 by Skip
HB 4 (Extra Session 2007)
PAUL STAM’S SPEECH – GOOD YEAR INCENTIVES
September 11, 2007 – edited for clarity
I opposed the $40 million bill (HB 1761 and vetoed by the Governor) and I certainly oppose this $60 million bill and I would like to give a few of my reasons.
First of all there are no additional safeguards in the bill to speak of. All of the safeguards talked about can be imposed by the Governor’s Economic Investment Committee as part of the contract.
Secondly, the underlying argument here for most of the proponents is that people will suffer if we don’t pass the bill. Of course they can’t know that because that is an unknowable, and a predicate to that assumption is that this bill is actually enough to change the behavior of these firms and corporations. Within a reasonable degree of certainty (maybe 99%) we know that is not true for a couple of reasons:
First reason, Firestone. We were told in committee that a couple of years ago Firestone was turned down for this type of grant and they made the investment anyway. The bill is retroactive to pick up the investments they have already made of $60 million. How a grant to Firestone can possibly induce an investment that is already in the ground just boggles the imagination. I don’t fault the people from Wilson who got Firestone in the bill because Firestone was being treated unfairly, as are all other businesses in this state that are being treated unfairly by the resulting bill. Read full speech.
February 19th, 2003 by Skip
Lawyers Group Proposes Innovative Incentive Program
March 2, 2007
The Lawyers Improvement Association of Beltline Legal Experts proposed a new economic development tool for the state. It is guaranteed to boost the economy by creating and retaining high paying jobs.
First, a little background: Historically North Carolina had the fewest attorneys per capita of any state in the nation. But a strong and vibrant legal community is absolutely necessary to the 21st century litigation economy. In December, 2003 the General Assembly spent $214 million (or $214,000 per job) to induce Merck to bring 200 jobs to the distressed areas of Treyburn in Durham and for RJR to bring 800 jobs to distressed areas of Winston-Salem (after RJR had just laid off 2,500 workers). That deal was criticized by some Neanderthal Troglodytes who were unenlightened as to modern American business practices. Now we realize that this incentive package for RJR/Merck in December should have been twice as rich when we found out that RJR reduced its tobacco buy by 50% for 2004. And just last month Google responded to our states offer of $260 million to place 210 wonderful jobs in Caldwell County (only $1,200,000 per job – a steal at half the price). Apparently, the more we spend on each job the better the economy will be. Read the full proposal.
Targeted Business Incentives are Not Good Public Policy
by Paul Stam and Tom Vass
February 19, 2003
Targeted state incentives do not provide a net economic gain. Incentives merely redistribute jobs and investment from one business to another and from one region to another. Price adjustments in free competitive markets lead to maximum efficiency in the use of resources and maximum benefit for all. Targeted incentives destroy the efficiency of the free market by favoring inefficient businesses while disfavoring efficient ones. Once this process of incentive price subsidy begins a number of perverse market consequences result:
One, the subsidy distorts the rate of return that businesses use to judge the profitability of investment alternatives.
Two, the subsidy is designed to create “more jobs”; however, the subsidy will act to squeeze more socially beneficial investments out of the market if incentives are continued into periods of relatively full employment.
Three, this type of public intervention in the economy is self-defeating for creating the conditions of self-renewing profit reinvestment into the local economy. Rather than creating private capital market mechanisms for investing, the public dollars become the mechanism for making capital investments.
Four, political favoritism is an inherent byproduct of targeted incentives. The power to give the incentive is the same as the power to deny a similar incentive to someone else.
Fifth, tax incentives given to outside companies place North Carolina companies at a competitive disadvantage, both in terms of selling goods, and gaining access to capital. Read Full Article