Monday, December 28, 2009

'I thought helicopter was going down'

Readers who closely followed the fight in Washington and Beaufort counties a few years ago over the Navy's flawed plan to place an outlying landing field to train pilots for aircraft carrier landings near an important bird sanctuary will be happy to hear two pieces of good news.

First, Doris Morris, who with a number of other local residents organized the campaign to dissuade the Navy of its wisdom in choosing the Pocosin Lakes National Wildlife Refuge as a landing field site, has been back up to speed after a terrible, life-threatening auto accident. She was a key player in the OLF debate, and among other things made sure that the news media were aware of developments about the site choice, the possibility of bird-aircraft strikes and how the facility would affect some of the richest farmland in the state.

The second piece of good news is that filmmakers Emily and Blake Scott of Washington, N.C. have won dozens of awards with their films about the Lake Mattamuskeet and the Pungo Lakes National Wildlife Refuges.

Doris sent me a copy of Jeff Hampton's Sunday story in the Norfolk Virginian Pilot about their work. Here's a link.

Emily Scott recognized firsthand the danger not only to large waterfowl that winter in the Pocosin Lakes refuge, but also to the aircraft and the pilots and crew if there were a bird strike.

Hampton wrote:
"Meanwhile, in the late fall of 2006, Emily Scott was filming flocks of snow geese when a Navy helicopter hovered just over Pungo Lake. Her film had nothing to do with the airfield battle, she said.
"Suddenly, thousands of geese took flight, nearly enveloping the helicopter.
"'I thought it was going down,'" she said.
"Scott sent that portion of her film to the Pocosin Lakes National Wildlife Refuge manager. She hasn't seen Navy aircraft there since.
"In early 2008, the Navy announced it would not build an airfield in Washington County, but it named five new potential sites - three in Virginia and two in North Carolina, including one each in Gates and Camden counties."

Wednesday, December 16, 2009

2009 not a good year for top incumbents

In yesterday's blog I posted comments by Tom Jensen, analyst at Public Policy Polling, about Democrat Bev Perdue's bad popularity numbers and the mid-year "fumbles" that helped make her among the eight least popular governors in the country.

Today Jensen has bad news for Republican Sen. Richard Burr, who faces reelection in 2010. Like Perdue, Burr has popularity numbers that distinguish him in a negative way, though earlier this year his numbers got better for a while. Now he is among the most vulnerable U.S. senators running next year, Jensen says. Here's his take on Burr:

Richard Burr's poll numbers this month are the worst they've been since June, and it's increasingly clear he's the most vulnerable Republican Senator in the country up for reelection next year.

A poll by the conservative Civitas Institute released yesterday showed Burr trailing a generic Democratic opponent. Our newest survey finds him with just a one point lead, 42-41, against a generic Dem and also finds his approval rating in negative territory at 35/37.

Burr's numbers had been improving through most of the second half of 2009 as the political climate worsened for Democrats nationally. After trailing by three points on the generic ballot in June his position gradually got better to the point where he led by 11 points on that measure in our October survey. Over the last two months though his standing has started to worsen again, as the advantage dropped to seven points in November and now down to just a single point.

Burr's fall is occurring with independents. Where he held generic ballot leads of 20 and 21 points with them on the last two surveys, he has just a 40-36 advantage with them on this month's poll. The conservative Civitas survey actually showed a generic Democrat leading Burr 30-23 with independents.

Burr continues to lead over all of his actual Democratic opponents. Elaine Marshall comes the closest at a 42-37 deficit, her best performance yet in polling against Burr. Kenneth Lewis and Cal Cunningham both match or exceed their strongest numbers so far as well, trailing Burr 43-37 and 45-36 respectively.

None of the Democratic candidates are particularly well known to the state's voters at this point. 81% don't know enough about Cunningham to have an opinion, 80% say the same of Lewis, and 69% do of Marshall. Looking toward the primary 28% of Democrats have a favorable opinion of Marshall to 12% for Cunningham and 10% for Lewis.

To put the current state of the race into perspective, Elizabeth Dole led Kay Hagan 51-39 in a poll we conducted at this same point in the election cycle two years ago.
One thing that continues to hurt is Burr is his relative anonymity across the state. Although the media and pundits have commented repeatedly on the fact that Burr has been more visible than Dole was, only 38% of actual voters share that sentiment to 34% who think that Dole was more visible.

Regardless of the present dip in Burr's poll numbers 2010 is still going to be a far better year for Republicans than 2008 was. But because there are a limited number of vulnerable Republican incumbents this seat is likely to be a top priority for national Democrats, and it looks like North Carolina once again will have one of the most competitive races in the country.

This analysis is also available on our blog:

Charlotte lawyer defends judge on inmate releases

Gov. Bev Perdue has been sharply critical of a series of court rulings that may result in the release of some murderers and other inmates sentenced to life in prison back in the 1970s, but a Charlotte attorney serving as president of the N.C. Bar Association says the judges in those cases were doing nothing other than performing their constitutional duty to interpret the law and rule accordingly.

Lawyer John R. Wester, a partner in the firm of Robinson, Bradshaw and Hinson, said the criticism this week of Wake Superior Court Judge Ripley Rand was "unfair and unfounded." Rand -- son of Senate Majority Leader Tony Rand, whom Perdue has named to be chairman of the state Post Release Supervisory and Parole Commission after he steps down at the end of this year from the Senate -- ruled Monday that two life-sentence inmates should be released immediately. The state appealed that decision to the N.C. Court of Appeals, which stayed their release pending a review of Rand's decision. Perdue had called the pending release of prisoners "disgusting" and said she was angry that they were to be freed without supervision.

Wester took a different view. The N.C. Bar Association issued a statement including these comments:

“Criticism regarding Judge Rand in his ruling Monday is unfair and unfounded,” stated NCBA President John Wester in response to comments made by Gov. Bev Perdue. “In the midst of a highly charged situation, Judge Rand has performed his constitutional duty in ordering the release of these inmates.

“Regardless of how one feels personally about this matter, it is the duty of the judicial branch to interpret the statutes of this state as enacted by our legislators and signed into law by our governor. Contrary to the heartfelt opinion of Gov. Perdue, this is exactly how the government and the courts are supposed to work for our people under our constitution.”

To that end, the NCBA reiterates its position that due process continue now that Judge Rand’s ruling has been appealed to the N.C. Court of Appeals.

Rand ordered the release of the inmates because they were convicted under a law that at the time defined life in prison as 80 years. During that time, inmates would be eligible for parole if approved by the state parole commission. Subsequent changes in sentencing laws by the legislature essentially cut sentences for those already in prison by half, and authorized accumulation of good-time and gain-time credits for inmates that would further shorten their sentences. The Perdue administration argued that it never applied those time-off credits to the actual release date of life-sentence inmates convicted under the old law. Such credits applied only to the date inmates would be eligible to go before the parole commission. But Judge Rand ruled that the regulations in place did not make any such distinction, and said the plain language of the rules showed that the administration was in error in failing to apply them to life sentences being served by inmates convicted under the old law.

Tuesday, December 15, 2009

Perdue's 'fumbles' reflected in numbers mired in 20s

As anyone who pays attention to polling already knows, Public Policy Polling in Raleigh is regarded as a Democratic institution, doing a lot of work for Democrats. But they've also noticed that PPP doesn't pull punches for Democrats, either.

Case in point: Gov. Bev Perdue, a Democrat and first woman to be elected either lieutenant governor (serving from 2001-09) and first woman to be governor. Her approval numbers most of this year have been abysmal, falling into the 20s range and staying there. Recent polls have detected a bit of an upswing for Perdue, thought to reflect some public approval of her hard-line stance against the release of life-term inmates convicted in the 1970s or her efforts to jump-start completion of the I-485 Outer Loop in Charlotte.

But PPP analyst Tom Jensen does not find much good in the numbers for Perdue. She's one of the eight "least popular" governors in the country, he notes. He says, "Perdue's fumbles in the middle of the year turned North Carolina voters against her" and her advisers need to do something dramatic to change the way voters view her. Here's his latest analysis:

As Bev Perdue's first year in office comes to a close there's really nothing positive that can be gleaned from her poll numbers.

Her approval rating is mired in the 20s, as it has been for most of the second half of 2009, and voters in the state don't think she's been improving her performance or that it will get any better in 2010.

Perdue's approval comes in at 27% this month, with 53% of voters disapproving of her. After her numbers plummeted between February and May they've remained very consistent, with her approval coming in between 24 and 30% every month since June and her disapproval registering between 49 and 55% each of those months.

A PPP analysis of approval polls on Governors last week found that Perdue is one of the eight least popular in the country. Her two fellow newly elected Democratic Governors, Jay Nixon of Missouri and Jack Markell of Delaware, found far superior approval ratings of 42/25 and 40/31 in recent PPP surveys.

Perdue's approval woes were spawned from the legislative session and difficult business of balancing the budget and there had been some speculation that her numbers would approve once that was in the rear view mirror. But only 18% of voters in the state think that Perdue's performance has improved since the legislators went home.

There's likewise little optimism from the state's voters that Perdue will learn from the mistakes of year 1 and do a better job in the second year of her term. Just 32% of voters express the sentiment that Perdue will do a better job in 2010 than she has in 2009 with 44% saying they think she will not and 24% unsure.

Perdue's fumbles in the middle of the year turned North Carolina voters against her, and nothing she's done since has changed their minds. It's pretty clear at this point that piecemeal, incremental changes in the Governor's way of doing business are not going to win the voters back to her. Something needs to change dramatically if she's going to get public opinion about her turned around, and while the exact nature of that is beyond my pay grade her team should be looking for it.

And regardless of how much Perdue might shrug off her poll numbers they do matter. Out of her fellow seven Governors in the 'least popular' club four are not seeking reelection next year and three are currently favored to lose their party's primaries if they do vie for another term. Perdue will likely be facing a choice between those two scenarios a year and a half from now if things have not gotten back on the right track. More immediately a Governor with an approval rating in the 20s doesn't have much political capital to get legislators who have to run for reelection in 2010 to do much of anything she wants if it's risky/controversial during the short session. Vulnerable incumbents are going to jump off her ship before it sinks them too.

It will be interesting to see if anything changes or if Perdue keeps slogging along.

See it all at

Thursday, December 10, 2009

Analyst: Basnight era is over

Analyst: Basnight era is over

Political analyst John Davis, who for years has gauged the business-friendly tendencies of the N.C. General Assembly, says the upcoming retirement from the legislature of Sen. David Hoyle, D-Gaston, is one more sign how much the legislature is changing -- and becoming less business oriented and more liberal.

In a post on his Web site, Davis says:

"On November 17, 2009, with the unanimous election of Sen. Martin Nesbitt (D-Buncombe) as Majority Leader of the North Carolina Senate following the suspicious resignation of long-time Majority Leader and Rules Chairman Sen. Tony Rand (D-Cumberland), the historic era of unparalleled power of Senate President Pro Tempore Marc Basnight came to an end. A new era of Senate and House legislative leadership is beginning, an era led by seasoned urban lawyers with unquestionable liberal credentials.

"The latest signal of change came yesterday, when Sen. David Hoyle (D-Gaston), Vice Chair of Finance and the highest rated ally of business, announced that he would retire after this session. The Senate, for decades a safe harbor for North Carolina business, has gone the way of the House and is now in the hands of liberal lawyers. You can count the number of business owners among Senate Democrats on one hand."

The legislature will change with the rise of more influential liberals, he says:

"Who are these savvy urban liberal political insurgents? They include three very smart lawyers who were elected to the House for the first time nearly three decades ago: Senators Nesbitt and Dan Blue (D-Wake), and House Speaker Joe Hackney (D-Orange), along with fellow attorney and elder statesman Rep. Mickey Michaux (D-Durham), and new rising stars with law degrees like Rep. Jennifer Weiss (D-Wake), Rep. Deborah Ross (D-Wake), and Sen. Dan Clodfelter (D-Mecklenburg). Thus, the new demographic profile of emerging leaders in the North Carolina legislature is liberal urban lawyers."

Davis has been thinking about this at least since Rand announced he would leave, but he said it has been coming for a long time.

"Marc Basnight, Tony Rand and David Hoyle are three of the most dynamic legislative magnets in state history. They wielded their power over the Senate with ruthless efficiency, consolidating power so effectively that they became the most influential political force in the state. However, the little known fact outside the Raleigh beltline is that they were slowly becoming a minority in their majority caucus.

"Basnight and his inner circle were business owners who fit the classic mold that distinguished North Carolina from the rest of the South; they were business progressives. Their fatal flaw was the failure to see the value in maintaining their base of business allies by recruiting and helping elect other business Democrats. And so, imperceptibly over time, a liberal coalition of Democrats grew in number and coalesced to create its own magnetic force, a force now greater than that of the leaders."

The upshot, he says, is that the Senate is no longer a friendly place for business:

"Bottom Line: The Senate is no longer a safe harbor for business. Business, like Basnight, is simply outnumbered. Business has also met its match in building relationships with legislators with campaign contributions. Labor unions dumped over $5 million into North Carolina campaigns in 2008. Now you know why Basnight is beginning to tell his friends, “I can’t control my caucus anymore.”

I think Davis has some good points, but I can't remember a time when the legislature hasn't been generally business-friendly -- and my coverage goes back 32 years to 1977 when I first started covering the General Assembly. My guess is that lawmakers will remain open to the entreaties of business and receptive to its proposals, but won't be so quick to give business what it wants as in some sessions in the past.

Wednesday, December 09, 2009

Sen. David Hoyle retiring at end of term

State Sen. David Hoyle, D-Gaston, has announced he will not run for reelection in 2010. In a statement from the office of Senate President Pro Tem Marc Basnight -- Hoyle's roommate in Raleigh -- the nine-term Democratic legislator and cochair of the powerful Senate Finance Committee said:

To every thing there is a season and a time to every purpose! When I complete this term, I will have served 18 years in the North Carolina Senate. Having had the honor and privilege to serve my community and state in every way that has been asked of me, beginning 45 years ago as mayor of Dallas, it is now the time and the season to welcome the next phase of my life.

After much thought, I have made the difficult decision not to seek re-election to the Senate. While I will not seek re-election, please be assured that I will serve the rest of my term with the same diligence, dedication and integrity with which I have served from my first election. Public service has always been a central part of my life and my commitment to our community and our state remains strong.

I sincerely thank my loyal supporters, constituents and family for your faith in me during my Senate service. I am grateful and humbled by the confidence that you placed in me. It has been a high point in my life to be so honored by the voters of my district to serve as your Senator, and I thank you very much for that opportunity.

Second take: Hoyle has been part of the Senate leadership for years, but it now appears that the Senate is about to change in major ways. Longtime Senate Democratic Leader Tony Rand, D-Cumberland, is resigning his office by the end of the year. Replacing him will be Buncombe County Democratic Sen. Martin Nesbitt as majority leader, meaning that power will shift in some ways to the West. Other members of the leadership's old guard may also be leaving. Basnight himself has said he will run for re-election, but longtime observers of the Senate would not be surprised if he, too stepped down.

GOP caucus proposes tax reform, spending principles

Sunday's column on tax reform mentioned the General Assembly's Republican Joint Caucus proposal for tax and spending reforms. The proposal, outlined in a news release under the names of House Republican Leader Skip Stam of Wake, Senate Republican Leader Phil Berger of Rockingham and Joint Caucus Leader Eddie Goodall of Union, follows:

Proposed Principles for Job Creation through Tax and Spending Reform

1. The concept of substantially reducing personal and corporate income tax rates and sales tax rates is good. If that reduction is accomplished by broadening the base in a revenue neutral way, that is the right way to go. But it raises four major issues.

2. Neither the public nor Republicans trust Democrats to keep the rates low. There must be a mechanism to ensure this. Two possibilities:
a) A Constitutional amendment limiting the state sales tax rate at 3% + and the county sales tax rate to an equivalent. The Constitution currently specifies a 10% limit on tax on net income.
b) A Statute that sets out as a Rule of Order, applicable to each House, that an increase in the rate must be separately passed by both Houses and signed by the Governor, and cannot be combined with any other matter unless by a 2/3 vote of each House.

3. The base widening must delete the exemptions and refunds which are in current law for political reasons/not because of true economic considerations.

4. Tax Reform must include spending reform that has passed the House in the past – zero based budgeting, and must include:
a) Procedural reforms must allow “off budget” sources of revenue to be considered as
part of the budget process.
b) The minority party is entitled to proportionate representation on the Budget
Conference Committee.
c) The Governor’s proposed budget must only include the amount of revenue
collected in the prior year (with a recession exception).

5. In determining what is “revenue neutral” the temporary taxes imposed in 2009 shall be treated as if they had expired.

6. We should also look at other reforms that take advantage on behalf of our citizens as federal taxpayers of federal deductibility issues. This could save our citizens $1 billion a year in federal income taxes.

Tuesday, December 08, 2009

Readers fire back on tax reform

Sunday's column about tax reform brought several responses, including one from a Charlotte businessman who moved here years ago because of its attractive tax atmosphere and who's about to move his information technology business elsewhere:

I enjoyed your opinion article in the Observer yesterday as this topic has recently touched me and my family in a very personal way.
Your comment: “Their insistence on defining revenue neutral as the amount of money available prior to the 2009 tax hike would do several things. It would indeed rein in spending and make it easier to cut tax rates. But it also would further starve essential services that already show excessive signs of wear, including public schools that have lost good teachers, community colleges where classrooms are overflowing and university campuses that face a rapidly increasing enrollment at a time when GOP leaders would cut state spending even more”.
Only get’s at part of the problem, in my opinion.
In my case, I’ve been living in NC for 26 years. I started and own a successful business that is located here. Because it is successful, I pay a huge amount of state income taxes. Recently, because of the change in the internet affiliate tax and the new income tax surcharge, I had PWC look our NC tax situation compared to other states.
I was astounded by the report they provided to me. That night I went home and said “honey we’re moving”. Now, five weeks later we are relocating to a new state (bought a house, found a business building, etc) and will be out before the end of this year.
In the process, we will no longer be paying any tax—$0.00—to NC. (Individually, by my calculation we were paying the equivalent of 5000 NC workers, maybe more when you add in fees, assessments, etc).
The tax problem isn’t the cost of state-provided services—it is the fact that NC’s tax structure is so extremely progressive that it is reliant on a relatively few tax payers. So the state needs money, they raise taxes and hit this narrow group. So people in the narrow group—who can leave—like me—leave.
I know many other business owners who are also in the process of relocating to new states because NC’s tax policies are so out of whack compared to other states. NC will never raise enough money if it’s policies force business owners to leave the state.
We like North Carolina, it’s a very nice place with good weather, pretty mountains and nice beaches. But from now on, we’ll enjoy the state as a visitor and let someone else pay for all those vital services (most of which we never used).
I don’t know why a state would incentivize a productive citizen like me to go, but that’s the effect of their policies.

And a reader from Wake Forest didn't care for the revenue shortfall reference. David Bednar wrote:
Jack: You could have stopped writing at the second paragraph when you made the stupid comment” a deep revenue shortfall”. The problem with all government entities is not a revenue shortfall but excessive spending.

Monday, December 07, 2009

First snow

I was up in the early hours stoking the woodstove with some twisted black locust we had cut and split last summer when I heard the rain rattling on the tin roof. The forecast had called for a rain-snow mix, and from the sound of it this was all rain. It heralded a wet cold Saturday, not a good day for outside work. I wouldn't be able to cut the brush away from the edge of the north side of the field where we park the rolls of hay in that kind of downpour. Maybe I'd finally get a chance to run that 12-2 cable for a couple 20 amp circuits in the barn. Or sort through a mountain of screws, nuts, washers, carriage bolts and lag screws that were littering every work surface in the shop after trying to fix a broken belly mower mount on a New Holland tractor. Inside work, sounded like, and I crawled back into bed.

Just before false dawn it got quiet and I thought the rain had quit. Maybe it won't be so wet after all, I thought as I rolled out of warm covers to put on the coffee, feed the dog, stoke the fire and and look outside the window. Instead of wet deck planks, I saw a frosting of white as tiny flakes settled out of a cloud. Sadie, our 8-year-old French Brittany Spaniel, came over to peer out the slider. I cracked the door so she could take her morning constitutional but she made a U-turn at five feet out and came right back inside. Not yet, her eyes said soundlessly.

By 7 the frosting had turned to a smooth thin layer; by 9 to a half-inch and by noon to a good old steady snowfall, four inches before it was over, that covered up all the imperfections in a 15-acre hayfield that was last cut in October. It was a wet snow with a falling thermometer, so what came stayed for a long visit, bending the bows of the laurel and rhododendron and covering the top of the mountain with a lovely coat of fresh paint. We walked out to the dirt road a couple of times just to stretch the legs and let Sadie work out the kinks. She was a black-and-white blur against a backdrop of snow, endlessly running her loops out and back and bounding along with the joy that any worthwhile dog shows when the day is still fresh and there's energy to burn.

The snow gave up its ghosts around dusk when it thinned, bucked, coughed and stopped. An hour later the clouds parted and a cold luminescence lit up the landscape, giving these old hills an eerie specter until the wind began to pick up, blowing snow devils around like little white upside-down tornadoes. We threw more locust on the fire and poured a wee dram, and wondered briefly and idly if we might be able to salvage a snowed-in call to the office out of this lovely gift of late fall in the Blue Ridge.

Friday, December 04, 2009

Lessons from an old newspaperman

Ed Hodges' death the other day caught me by surprise. He was only 90 and I thought he was off somewhere getting ready to cover a presidential trip to Copenhagen or something. He had been covering life in North Carolina -- and for a time flying with presidents -- for so long for the Durham Herald-Sun that even his retirement years ago just didn't sound right.

A native of Tarboro, Ed was an exemplar of the citizen soldier. His college career in Chapel Hill was interrupted by World War II, where he wound up flying all kinds of airplanes including those giant cargo craft "over the hump" of the Himalaya ferrying supplies and equipment to Army Air Corp bases in China and keeping Chiang Kai-Shek in the war.

After the war Ed worked for a while at the Stanly Press in Albemarle before winding up at the Durham Morning Herald, later the Herald-Sun, as an editor and columnist. I ran into him in 1968 as a greenhorn intern at the Herald, trying to get some course credit and some experience covering the news. There were great mentors at the Herald: Cornelia Olive, now the mayor of Sanford, who taught me how to work sources and advised me always to get a decent dinner when you're on the night shift; Chuck Barbour, who taught me to always stay on the in with the outs when you're covering politics; and city editor Jim Carr, who taught me you need a good sense of humor in this business because nobody goes into it for the money. And there was Ed Hodges, whose graceful writing about ordinary folks as well as the high and mighty was a big draw for readers.

Ed taught me a couple other lessons. One of them was to be careful what you say because somebody might put it in the paper. The other was never waste an anecdote. Keep it with you because one day you might need it for a column.

I learned a lot that semester of spring 1968, but on my last night not much was happening. About an hour before my shift end, I rolled a piece of copy paper into an old typewriter and amused myself by dashing off a yarn about my "retirement" from the Herald at the ripe old age of 21. Written in classic AP style, the second graf noted that Betts had "distinguished himself in a brief career with the Herald by garnering four bylines, 2,346 rewrites and a short article about a student demonstration on the state page….. While he was on the Herald staff, Betts was paid nothing and produced a corresponding quantity and quality of work."

The piece went on to note that after graduation in May, Betts was moving on to his hometown Greensboro Daily News "where he will be paid something, according to an unreliable source. In all probability they will make a copy boy out of him, or give him a small paper route, depending on how well he scores on personnel tests." And so on. I figured once everybody got a two-second chuckle out of it, the piece would hit the trash can where it belonged.

A few weeks later I showed up for my first day the Greensboro paper, where I was to start as a copy editor for $115 a week plus a $4 a week differential for working the night shift. When I walked in the door, my new boss looked up and drawled, "Nice retirement column" as he pointed toward the bulletin board. There hung my retirement column -- reprinted in Ed Hodges' "Folks Around Here" column a few days earlier in the Herald.

I expect I blushed beet red. Fortunately, there were no openings for a copy boy or a carrier that day, so I got to keep the new job on the copy desk. But Ed Hodges' lesson stuck with me. Never waste an anecdote. He used my "retirement" column for a column of his own 41 years ago, and now, so have I.

Thursday, December 03, 2009

Charlotte lawyer's views on Loop financing plan

State Treasurer Janet Cowell's office relied in part on an opinion by Charlotte bond attorney Steve Cordell of the firm McGuire Woods that a statute allowing for design-build-finance projects such as Gov. Bev Perdue wants to use to complete the Outer Loop can't be done the way her administration plans. The state would have to contract for the program, which involves having contractors front $50 million of the $340 million cost of the project, though a public private partnership, Cordell said.

In a document released by the treasurer's office this afternoon, Cordell wrote Nov. 24 that:

"... we think that (39) authorizes the NC Department of Transportation (“DOT”) to enter into partnership agreements with the NC Turnpike Authority, private entities and authorized political subdivisions, pursuant to which the partners agree as to how they will collectively undertake to finance the various costs delineated in (39). The statutory language only expressly authorizes DOT to enter into and act through a partnership agreement with one or more of the referenced partners with regard to the financing of the referenced costs. We note that the statutory language of the related provision (12a) only expressly authorizes DOT’s Board to approve such partnership agreements. Accordingly, we do not think the statute authorizes DOT to unilaterally finance the referenced costs."

The Nov. 24 memo is dated weeks after Cordell briefed treasury department officials about problems he saw with the proposal, unveiled by Perdue in Charlotte on Nov. 9. The treasurer's office tried to reach DOT officials for about a week before her announcement, but did not e-mail DOT with its specific concerns, perhaps because the treasurer's office did not know until the morning of Nov. 9 that Perdue would announce her proposal that day.

Cordell also said in his memo that he did not believe the statute granted DOT the power to borrow money. DOT has said the program should not be interpreted as increasing the state's debt because there are no bonds involved and the arrangement does not pledge the state to repay the money. But the deal does contemplate that the state would repay the $50 million over 10 years.

Cordell wrote, "...if the repayment arrangement between DOT and a contractor entered into pursuant to DOT’s “Design/Build/Finance” program was ultimately determined to constitute a borrowing of money by DOT, we do not think that (39) can be relied on as the source of that borrowing authority. "

If the courts found an unauthorized exercise of borrowing power, he noted, they likely would find the arrangement void.

Perdue said earlier this week she wanted to move ahead on the design-build-finance plan and was confident that DOT has authority to proceed under the statutes. In proposing the financing plan, her administration told the treasurer's office it didn't have to have the treasurer's approval but would prefer to have it. But unless the governor and the treasurer and attorney general put their heads together to figure a way out of this disagreement, it appears the state would be proceeding without the support of an important constitutional officer.

Wednesday, December 02, 2009

More trouble for Dems

N.C. Senate Majority Leader Tony Rand, a Democrat who plans to step down from his post by the end of the year to become Gov. Bev Perdue's chairman of the N.C. Post-Release Supervision and Parole Commission, has been accused of engaging in insider trading in a business where he is chairman of the board, N&O business writer Alan Wolf reports.

A lot of speculation around Raleigh has concerned why Rand would step down now. One theory was that he had had enough of the Senate and wanted out. The latest news story will spark more speculation, of course. It's all "hogwash," Rand told the N&O.

One ironic link: The company whose board he chairs was a spinoff of Sirchie Finger Print Laboratories, a business begun by former state Sen. John Carrington, a Republican who ran into trouble with the feds over some illegal exports of law enforcement equipment to China. He paid a fine and served a year on probation in that case.

Wolf writes on the N&O Web site:

In a complaint filed with the U.S. Department of Labor, Paul Feldman, who claims he was illegally fired as president of Law Enforcement Associates in August, alleges that Rand had a scheme to profit from manipulating the value of LEA stock.

Rand, the Fayetteville Democrat who plans to step down from the state Senate this month, has been chairman of LEA's board since 2003. The company, which makes security and surveillance equipment, was spun off in 2001 from Sirchie Finger Print Laboratories, a Franklin County company started by former state Sen. John Carrington.

In his complaint, Feldman also alleges that Rand told another LEA executive that he previously had traded the stock of Raleigh-based First Citizens Bank based on inside information he had gotten from former president Frank Holding. Rand said that he "planned to do the same to LEA stock," Feldman wrote.
Rand called the charges "insane" and "hogwash."

"He's a disgruntled ex-employee," Rand said Wednesday in a phone interview. "I'm embarrassed that Frank Holding has even been mentioned in this mess. But I guess that is part of it, when you are in business and in politics. People think you are fair game and maybe you are."

Quick change at Wake ed board

For those who have kept an eye on how Charlotte Mecklenburg Schools have changed since a 1999 federal court decision altered CMS' race-based school assignment policy, the recent Wake County Board of Education election resonated with the same concerns. Many Wake County parents have been unhappy with school assignment policies and have been seeking more neighborhood schools. Opponents of the Wake County diversity policy, which sought to balance school assignments on socio-economic levels, won a 5-4 majority on the board in the fall election and wasted no time getting on with their change agenda in Tuesday's first meeting.

As N&O reporters Thomas Goldsmith and Keung Hui report here, the new majority replaced the board chairman and put a number of items on the immediate action agenda -- including an end to a controversial Wednesday afternoon early-release policy that many parents and caregivers found disruptive, and targeting the diversity policy for change in 2010. The state NAACP has threatened a lawsuit to limit how much change the new board can bring about. The group Tuesday charged in a complaint with the U.S. Department of Justice that Wayne County had in effect changed its schools back to a racially segregated system.

It's a reminder, if anyone needed one, that elections are important and that local elections are critically important. They can change everything, for better or worse.


Tuesday, December 01, 2009

Outer Loop loopiness

The Perdue administration's plan for financing completion of the Interstate 485 Outer Loop may be the ticket to getting that project underway and finishing it years ahead of time, but two state agencies say their reaction is a little bit different from initial reports. I asked the Department of Justice, headed by Attorney General Roy Cooper, for copies of any documents they had approving the design-build-finance plan that would have contractors fronting some $50 million of the $340 million that would be required to built the project. Julia White, Cooper's senior policy advisor, said it was inaccurate to say that the department had approved the financing plan. "We have not seen a specific proposal," she said. The department had discussed the concept of design-build-finance projects as contemplated under state law and how that would work. But she as to approval of a specific plan, she said, "We haven't said any such thing. There isn't any such thing." And she said, "We haven't been asked for an opinion."
Ted Vaden, spokesman for the Department of Transportation, said the department was confident it has authority under the statute, G.S. 136-18(39) and that Beth McKay of the Justice Department had assured DOT of that. But I also spoke with Deputy Attorney General Grayson Kelly, who said, "We have been put in an awkward position" because it had not seen a detailed proposal that might allow the department to consider all facets of the plan and render an opinion. DOT, he noted, was still in the process of getting information from contractors and others in developing a proposal. But at this stage, he said, "There is no 'it'."

Meanwhile, State Treasurer Janet Cowell's office released a thick stack of e-mails reflecting her department's internal debate about the plan, which one department official called "wild" when he first heard of it. The department began considering the plan on Oct. 12 and apparently had questions from the outset. On Oct. 30, the Treasurer's Department asked Steve Cordell, a lawyer at the law firm of McGuire Woods, whether the statute allowed the department to use the design-build-finance statute to help pay for the Outer Loop. The department did not release a document directly from Cordell, but on Nov. 4, Deputy Treasurer Vance Holloman e-mailed the treasurer that "We spoke with Steve Cordell this morning. He does not believe that G.S. 136-18 (39) gives DOT the authority to enter into a financing contract with a contractor. He believes that Statute would give a partnership that is a legally separate entity from the state the authority to enter into a financing as permitted by law. So DOT's idea of paying interest and principal over 10 years is not permitted by GS."

But the department had trouble lining up a time to talk with DOT official Mark Foster about its Nov. 4 determination until the last minute. It had sought a phone call with the department on Nov. 5 but Foster was out of town until Nov. 6, and a meeting was scheduled for Monday Nov. 9. But the department learned ("Yikes," one official said in an e-mail) in a brief news item on Nov. 9 that Perdue was holding a press conference in Mecklenburg County that morning, and Holloman finally spoke with Foster that same morning.

In an e-mail late that morning, Holloman wrote that the Perdue administration could get the $50 million it needs from toll road projects that would be delayed over a two-year period. "If they will take that money during the 2 years and pay the contractor as the work is being done they could avoid the financing issue. However, they do not want to say this publically (sic) since that makes it appear that funds are being taken from toll road projects when these projects are just delays."

The e-mails show that Mecklenburg Democratic Sen. Dan Clodfelter was working on the Outer Loop solution. Anthony Solari, director of government affairs for the Treasurer's Office, wrote Holloman that same morning that Clodfelter, "based on the conversation he had with Janet (Treasurer Janet Cowell), went ahead and told the Gov. it could be worked out. We were careful to tell him that the best option was to use the turnpike money that was not going to be used during the next couple of years. We also mentioned, if I can recall correctly, that the idea that they could go ahead and contract with the private company outside of the debt study was unacceptable to us."

"My feeling is that if they can finance this within the guidelines you set out for them, o.k. But if they try to do it under questionable authority or outside of the manner you think best, we should jump on it right away."