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“The double-dealing didn’t end there.”

You may recall that the federal “stimulus” package was supposed to create jobs by spending astronomical amounts of money on so-called “shovel ready” jobs. Some of the money went into projects for alternative energy. John Hood relates how things went down for one of the grant recipients, Sen. Kay Hagan’s family.

Forget the politics and read the story for what it says about big government.

In 2010, a company called JDC Manufacturing applied to the Energy Office for a $250,644 grant to replace light fixtures and gas furnaces and install rooftop solar panels at a 300,000-square-foot building it owned in Reidsville. The total cost of the project, JDC stated, would be $438,627, of which 57 percent would come from the taxpayers and the rest, $187,983, from JDC itself.

The company was owned by Kay Hagan’s husband Chip and two of his brothers. In the application, JDC claimed that the building’s infrastructure was outdated and that current energy costs had “prevented the tenant from growing their business as desired due to the energy operating costs.” Who was this cost-constrained tenant of the JDC building? A company also owned by Hagan family members called Plastic Revolutions, as Carolina Journal’s Don Carrington has reported. Chip Hagan serves on its board.

The double-dealing didn’t end there. In its application, JDC stated that its initial estimate of the cost of installing solar panels on the building were “based on quotes or commercially available prices” but that “the final project design and installation work will undergo an open bid once awardees are notified” about the status of the grant.

The same week that JDC submitted the application, however, Chip Hagan and his son Tilden founded yet another company, Solardyne, later renamed Green State Power. Somehow, this inexperienced company managed to win the contract to install the solar panels on JDC’s building, no doubt through an “open bid.” Interestingly, JDC had included its conflict-of-interest policy in its application for public funding. “Employees are to avoid any conflict of interest, even the appearance of a conflict of interest,” the policy stated. “The appearance of a conflict of interest can cause embarrassment to the company, jeopardizing the credibility of the company. Any conflict of interest, potential conflict of interest, or the appearance of a conflict of interest should be reported to your supervisor immediately.”



Carolina Journal: Hagan Firm Keeps Stimulus Project Savings, Sends None to Taxpayers

Don Carrington continues his investigation into ‘stimulus’ grant money received by Sen. Kay Hagan’s family.

DC Manufacturing, a company co-owned by Democratic U.S. Sen. Kay Hagan’s husband Charles “Chip” Hagan, lowered the total cost of a 2010 stimulus-funded energy project but kept all of the savings, sending none back to taxpayers who had funded the stimulus grant.

The company’s original application stated the total project would cost $438,627, and said JDC would contribute “leveraged funds” amounting to $187,983, or 43 percent of the total. As the project reached completion, however, JDC revised the total budget downward by $114,519 and applied all the savings to its share, keeping all the taxpayer funding.

Also, JDC’s decision to hire Solardyne/Green State Power, a separate company co-owned by Chip Hagan and the Hagans’ son Tilden, to install a portion of the stimulus-funded energy project at the JDC building appears to violate a conflict-of-interest provision that was included as part of the original application for the stimulus grant.

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Proving That Some People Will Do Anything For Power

From the Texas Tribune comes the latest installment in the outrage over Wendy Davis’ approach to trying to win the governorship of Texas. No, her campaign isn’t sorry one bit — the campaign is elated.

The pollster for Democratic gubernatorial candidate Wendy Davis defended her controversial TV ad Sunday, saying it’s working as intended despite widespread criticism that using the image of an empty wheelchair in an attack ad on a disabled candidate was mean-spirited and unfair.

Davis pollster Joel Benenson, who advised Barack Obama in both of his presidential races, said the ad underscored the theme they’ve been hammering on for months: that Republican Attorney General Greg Abbott is an “insider” who sides with the rich and powerful over average Texans.


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N.C. Supreme Court To Decide Opportunity Scholarship Appeal

North Carolina House Speaker Pro Tem Paul “Skip” Stam of Wake County issued the following news release Friday.  For decades Stam has been a champion of providing parents with more freedom to choose where and how their children are educated. To that end, he is also the champion of the Opportunity Scholarship program, which provides low-income parents with an option to send their kids to a private school that better serves their needs. Progressives are using the legal system to try and take away this opportunity.


North Carolina Supreme Court to Decide on Opportunity Scholarship Appeal

Raleigh, NC – Today the North Carolina Supreme Court on its own initiative issued an order stating that it will take responsibility for the appeal of a decision by a Wake County judge regarding the Opportunity Scholarships. The case was pending before the NC Court of Appeals. The NC Supreme Court will now decide the case. All parties should be delighted with this development because the case was ultimately headed for the NC Supreme regardless of the decision by the NC Court of Appeals. This will expedite the decision regarding this appeal case.

The North Carolina Court of Appeals previously issued an order that allowed the scholarship money to be disbursed to the 1,878 applicants who accepted Opportunity Scholarships through the Opportunity Scholarship Program. The provision for new applicants for the spring semester of 2015 is still on hold. These parents and students need to know before the end of this year whether they will be able to attend the school that best suits their needs.

We are grateful for the decision. We thank the nearly 300 schools that continue to work with parents to allow students to attend the school of their choice while waiting for the distribution of scholarship money. We remain confident the Opportunity Scholarship program will be permitted to expand, allowing more parents to send their children to the school of their choice.

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7 Counties Want Voters To Raise The Sales Tax Rate

For some government officials, there is a constant effort to expand government and impose higher taxes and fees to pay for it all. Writing today at CarolinaJournal.com, JLF’s Sarah Curry profiles the seven North Carolina counties that are asking voters to raise the sales tax rate by 1/4 cent to pay for bigger government.

While many local governments claim they will collect the tax for a specific purpose, that is not permissible by law. Any revenue generated from the local-option, quarter-cent sales tax is considered general revenue and can be spent on anything in the county’s budget.

County commissioners typically pledge to spend the tax revenue on a specific area of the budget, but there is no legally binding way to ensure that will happen. Rather, each governing board can decide where to spend the money — regardless of the promises made to voters in the referendum campaign.

While knowing the money cannot be earmarked, each of the six counties pushing referendums on the November ballot has listed items that county officials have decided warrant a sales tax increase. Below is each county’s reasoning. But remember: Regardless of what county officials say, there is no guarantee about where the money actually will be spent.



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Rasmussen Moves Senate Race From “Leans Democrat” To “Toss-Up”

The latest survey data from Rasmussen shows Sen. Kay Hagan with 48 percent of the vote, and House Speaker Thom Tillis with 46 percent.

Rasmussen has also moved the race from “Lean Democrat” to “Toss-Up.”

This is the first survey of the race to include “leaners,” those who initially are undecided or prefer a third-party candidate and are asked again to pick between the Republican and the Democrat.

North Carolina now moves from Leans Democrat back to a Toss-Up in the Rasmussen Reports 2014 Senate Balance of Power rankings. Republicans need a net gain of six seats to take control of the Senate, and they’ve long counted on North Carolina to be one of those pickups.

Among the 85% of Tar Heel voters who say they are definitely going to vote in this election, the race is a tie at 48% apiece. But just 67% say they are certain at this point who they will vote for. Among those who are certain of their vote, Tillis leads 57% to 43%, but among those who could still change their minds, Hagan has a better than two-to-one lead – 56% to 25%.


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Do You Believe Teachers Received A Huge Pay Increase?

You should — because it’s true.

Still, over the past few weeks we have been treated to the robotic proclamations from the Left  that North Carolina public school teachers have been ignored by the dastardly fiscal conservatives who were elected to lead the General Assembly. Their spinning continues in spite of the fact that teachers received an average pay hike of 7% — a hike most North Carolinians would jump up and down over .

But today, JLF’s Terry Stoops points out, at sister blog The Locker Room, that we have another piece of black and white evidence that, in fact, the legislature and governor treated teachers very, very well. It comes from the Fiscal Research Division of the General Assembly.

See for yourself right here.

And the next time you hear someone say that teachers are “disrespected” by fiscal reformers, you will have the evidence at your fingertips to show them they’re simply wrong. Keep in mind there are some North Carolinians who simply don’t have accurate information. Others, however, simply spin the truth because they believe it will spur turnout for Democrats in November.

What a shame that some choose to be so cynical.


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Privacy Advocates Win: Durham Finally Destroys Gun Registration Records

Carolina Journal’s Dan Way provides a much anticipated resolution to Durham County’s gun registration file, which advocates for privacy and gun rights have decried. 

Durham County officials on Monday destroyed gun registration documents stemming from a Jim Crow-era statute, ending months of legal uncertainty over ownership of the materials and threats of legal action had the records been preserved.

“I am pleased that we have closed that chapter of Durham’s history,” said state Sen. Mike Woodard, D-Durham, who successfully sponsored repeal legislation in this year’s short legislative session ending the practice of forcing gun owners to register their firearms. It was the only gun registry in North Carolina.

“The gun registry records were destroyed this morning,” Woodard said Monday. “The clerk [of courts] and the Sheriff’s Office got together this morning, and took them out, and shredded them.”

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“the rhetoric was a far cry from the reality”

Spinning by supporters of the Big Education status quo in our state just never seems to stop. Despite facts that show their rhetoric to be pure political spin, they go on and on. Take, for example, the refrain about the devastation that would occur to the Department of Public Instruction as part of legislative reformers’ actions to make government more efficient and accountable. John Locke Foundation Director of Research and Education Studies, Dr. Terry Stoops, writes about it here.

After state legislators approved a ten percent reduction to the N.C. Department of Public Instruction’s (DPI) $70 million budget, state education officials and their boosters sounded the alarm.

In an exclusive interview with N.C. Policy Watch, Superintendent of Public Instruction June Atkinson claimed that N.C. DPI has been “extremely efficient with taxpayer dollars” and outlined some of the recent successes spearheaded by the agency that she directs. One liberal commentator took it way further (as he is paid to do) and declared that the cut was part of a “long-term war on public education waged by people committed to privatizing the single most important function of state government.” That is a bizarre claim given that the “people” he references increased the public education budget by $1 billion over the last four years.

Anyway, to meet the legislative requirement, Superintendent Atkinson said that she planned to eliminate 54 of 450 state-funded staff positions. True to her word, she eliminated 53.5 full-time equivalent (FTE) positions. Around 90 percent of those FTEs were vacant positions (See Facts and Stats below).

Specifically, Atkinson chucked 47.9 full-time equivalents (FTE) — all of them vacant positions in residential schools and various departments — and funded 0.6 FTEs using other sources. The $3.2 million saved from jettisoning vacant positions is the largest share of the total $5 million reduction.

In addition, Atkinson saved nearly $580,500 by eliminating 5 FTEs currently filled. One of these positions belongs to District and School Transformation director Pat Ashley, who (I am told) plans to retire soon. The status of the other four is not known.

The final $1.3 million came from reducing contract services and departmental operations. N.C. DPI will save $600,000 by dropping contracts for superintendent coaches, $50,000 for the state’s school report card website, and $50,000 for curriculum “training and support.” Another $571,000 will come from reductions in travel, computers, and printing for agency staff.

Any negative or positive effects of these cuts on our public school districts will not be known for some time. It does not appear, however, that these cuts will paralyze N.C. DPI or “undermine the General Assembly’s own directives,” as one agency-produced document warned. In fact, the rhetoric was a far cry from the reality, a fact that may encourage legislative leaders to mandate further reductions to the N.C. DPI budget next year.

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Makes No Sense, So Let’s Stop Doing It

Considering all the talk about the need to lower health care costs, one would think there would be more serious discussion about the state law that impedes the  very competition that leads to lower costs. It’s called “Certificate of Need” and it’s commonly referred to as the state’ “CON” law. In short, when a hospital or doctor group wants to add beds or an MRI machine, for example, they must gain approval from the state, which decides if the beds/machine is really “needed.” That, of course, turns the marketplace on its head. CON law dates back to the 1970s, as JLF’s Katherine Restrepo explains here.

History reveals Congress’s intent behind enacting certificate of need (CON) laws under the federal Health Planning Resources Development Act in 1974. The goal was to cut down on health care inflation. At that time, reimbursements for services were based on the cost of production, or a cost-plus system. Providers therefore had strong incentives to build and expand the capacity of health facilities, knowing they wouldn’t have to assess patient demand.

Yet once the reimbursement system shifted to fee-for-service, the feds repealed the CON mandate in 1987. Fifteen states have since scrapped their CON programs, while the severity of the oversight and approval process for the provision of health services in the remaining states varies.

Those in favor of keeping CON intact claim that this law prevents duplicative services and underuse of facilities, both of which arguably inflate health care costs. Central planning is therefore necessary to determine which regions of the state have sufficient demand — a “need” — for certain medical commodities.

But the central planners are wrong. North Carolina regulates 25 different services.

Granted, the program did undergo some reform in 2005, which allowed gastroenterologists to perform colonoscopies in their own endoscopy units. As a result, the state saved roughly $225 million in Medicare payments within six years, since procedures performed in such free-standing facilities are reimbursed at a lesser rate than full service hospitals.

Combined with lower payment from Medicare and private insurers, an increase in the supply of services creates competition and puts downward pressure on healthcare costs. Since relaxing these regulations, 56 new units have sprung up throughout North Carolina.

It is clear that if we want to lower costs, we must infuse the health care system with competition. It is well past time for North Carolina to join the states that have repealed this impediment.

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