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Carolina Journal Radio No. 895: Audit highlights ‘cracks, potholes, detours’ in N.C. transportation budget

Carolina Journal Radio / Donna Martinez and Mitch Kokai
The Truth Network Radio
July 13, 2020 8:00 am

Carolina Journal Radio No. 895: Audit highlights ‘cracks, potholes, detours’ in N.C. transportation budget

Carolina Journal Radio / Donna Martinez and Mitch Kokai

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July 13, 2020 8:00 am

North Carolina’s state transportation budget is full of “cracks, potholes, and detours.” That’s the conclusion of the John Locke Foundation’s top budget analyst, Senior Fellow Joseph Coletti. He dissects key problems with the state Transportation Department’s budgeting practices. Gov. Roy Cooper recently issued a statewide order for North Carolinians to wear face masks in public. Even if Cooper has the power to issue that order, it presents practical enforcement concerns. Jeanette Doran, president of the N.C. Institute for Constitutional Law, discusses both the order’s questionable enforcement mechanism and legal questions surrounding Cooper’s order. State lawmakers continue to show interest in cleaning up North Carolina’s messy criminal code. Sen. Andy Wells, R-Catawba, recently discussed the latest effort to gather information about crimes created by statutes, regulatory agencies, and local governments. The COVID-19 pandemic has hit North Carolina’s economy hard. Jonathan Williams, chief economist and vice president of the American Legislative Exchange Council, says policymakers can take steps to help reduce the damage. Other policies would make the situation worse. Williams discussed economic challenges linked to COVID-19 during a recent online forum sponsored vy the John Locke Foundation. The pandemic has caused supply and demand shocks in N.C. health care. Jordan Roberts, JLF health care policy analyst, analyzes the impact for hospitals and for medical providers who operate outside hospital settings.

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From Cherokee to current tack and the largest city to the smallest and from the statehouse into the schoolhouse Carolina Journal radio your weekly news magazine discussing North Carolina's most of public policy events and issues welcome to Carolina Journal, radio, luggage, coca during the next hour, Donna Martinez and I will explore some major issues affecting our state governor Roy Cooper's statewide facemask mandate presents legal questions and practical enforcement concerns will discuss both with the constitutional law expert, some state lawmakers continue to pursue criminal law reform. They want to clean up the messy state criminal code to learn about their latest attempt to cope and 19 pandemic is had a major negative impact on the state and national economies will learn about keys to addressing the recovery and will discuss supply and demand shocks in North Carolina healthcare link to the pandemic. Why are some hospitals struggling those topics are just ahead. But first, Donna Martinez joins us and she has the Carolina Journal headline trying to decipher the budget of the North Carolina Department of Transportation and you will likely have a tough time figuring out what's going on and why are the monies coming from and where it's going. Our next guest is an expert at analyzing agency budgets in the wake of a scathing audit of the Department of Transportation by the state auditor Beth Wood how Joe Colletti is helping us understand exactly what's going on with the DOT's budget. Joe is senior fellow here at the John Locke foundation. He's been writing about Joe welcome back to the show. Set the table for us if you would tell us about this audit of DOT from state auditor Beth. What was it was pretty tough. This is the way latest in the number of challenges and reports taking a look at DOT better have not been kind to the department and the auditor found that the department of transportation had overspent by $742 million of what was in and you can't say that it was overbudget because one of the findings was that they really kinda don't have a budget so but they Plan so They Have a Better Cash Flow Plan and When They Looked at the Cash Flow Plan Versus What Was Actually Spent. That Was $742 Million, Which Actually Matched up Really Well with What McKenzie Had Reported Back in September When When There for the First Concerns about What's Going on at DOT and All of This Stems Back to Concerns about How How Much Cash DOT Had Accumulated over Time. The Legislature Wanted Them to Spend That down One of Them to Make More Be Faster with Projects Getting Those out and Offered Some Some Opportunity to Borrow Money to Be Able to Speed That up If They Had a Lower Cash Flow. And Then They Put Cash for under That and All of This Just Kept Compounding Itself into into More Problems so That the DOT Trying to Get the Money to the to Qualify for the Bonds by Having a Lower Lower Amount in Cash Overspent All That Cash 742 Men Dollars, According to the Auditor and and and and and That Was to Be Able to to Get More Projects Outsides Is No Real Here Make My Hair Is a Business, There's No Good Plans Coming in and and and and and They Spent A Lot Of Money Going out and That Was so That They Could Spend Even More Money. That's Rude. Here's the Curious Thing. I Mean I'm I'm Not a Fiscal Expert like like You Are, but I Just Know That I Presume That the State Legislature Which Appropriates Money to State Government and Different Agencies That They Would Say Okay Department Transportation. Here Is the Amount of Money That You Will Receive for the Next Fiscal Year. Operator Agency Repair the Road to Do Your Projects, Etc. but What You're Describing Is so Far from That Town. Why Is DOT so Different. Why Does It Not Operate like That. Yeah, There's Few Reasons for That.

One Is That Most of DOT's Budget Does Not Come from the General Fund. So All the State Money That the Department Of Education Gets Is Not General Fund, Which Is Where the Food Legislature Usually Stops and Is Involved on a Line by Line Basis.

The DOT Gets Money from the Highway Fund and the Highway Trust Fund, Which Are Funded by Gas Taxes, Sales Taxes on Cars Registrations All of Licensing That You Do to Be Able to Drive on the Roads. All That Money Then Goes into the Department Transportation and the New You Pulled out Another Chunk of Money from the Federal Government but Then May Have Kind of Large Pot Pools of Money Bet That Goes into but the Money Actually Gets Spent by the Divisions in Their Seven Divisions across State and so There's There's General Plan That Says Were to Spend Money on the Highways Were to Spend Money on Secondary Roads Were to Do This Were to Do This, but Then the Money Goes to the Agencies to Those Divisions As a Mass MMA Agent and Then Those Divisions Spend That Money on Individual Projects and so When You Take a Look at the State Budget, You End up with Double Counting of All of These Things and so There's Not Really the Same Kind of Oversight from the General Assembly in the First Place and Then the Department Operates in a Different Way and Then They're Doing Road Project Because of Multiple Year Projects They Don't Account for Them in the Same Way That Most of the Operating Budget Cut Gets Accounted for. Even Though It's Obviously Complicated and Unlike Most State Agencies Doesn't the Department Of Transportation Have Internal Auditors or Internal Project Managers Whose Job One Would Presume Is to Watch over the Money What's Going out What's Coming and and and and Presumably Also Sang a Way to Second You Were Working on a Project and Were Running Out Of Cash. Yeah Baby That's One of the Problems It Was Phone Wrist. There's Not Really That They Don't Have the They Don't Have Those Solid Internal Controls Either That There's a Lack of External Control from the General Assembly, but There's Also Lacking Internal Controls That That Was Clear in the Auditor's Recommendations to Because He Auditor Focused All of the Attention on the Chief Engineer Instead of on the Chief Financial Officer.

The Engineer You Can Tell by the Title Is Working on. How Do We Get Projects through Frank and This Bridge This Road Rice to Stand the Test of Time and the Chief Financial Officer. She Fiscal Officer Should Be the One Who's to Say Okay Here's How Much Money Were We Have Power Doing on Plan All in There Just All of Those Controls That You Would Think. Are There Words and It's Been a Long-Standing Problem to Be the Rush to Spend the Money over during 2019 Is What Led to the Way What It What Little Guardrails They Had so Jill You Have Described It Really Well.

In Fact, I Love the Headline on Your Piece Which Efforts by the Way, You Can Read This It John It's Really Good Explanation of This Mass the Budget Being Full of Cracks, Potholes and Detours. So What Do We Do Now Because Clearly, As Taxpayers, and I'm Sure There's There's People within the DOT Agency Itself, Who Were Kind of Embarrassed about This.

What We Do to Go Forward and Rain.

All This and Make Sure They Do Their Job and They Have Them Know How Much Money They Have and They Know When to Stop Spending so There There Have Been Recommendations and That's One of the Things That's Is Being Sorted out Now. One of the Recommendations Was That the off State Budget and Management Have a Have a More Active Role in Overseeing the Department Transportation. The OSB M Said Thank You but No so Budget but They Are Working on. How Do You Provide the Money in a More Reasonable Way and in a More Standard Way Putting Actual Budgets in Place at Department Of Transportation and Then Aligning Those Budgets in an Appropriate Way. So It's in an and Ideally Then You Also Implement the Rest of Those External Controls That You Can Say Here's What Budget Is and to the Question That You Asked Earlier. There's What Your Budget Is. Here's What Your Spending Plan Is, How Are You Doing on Both of Those Jill and Our Remaining Moments Here. What We Do Going Forward When We're Facing a Situation with A Lot of the DOT's Money or At Least Some of It Based on the Gas Tax and We Know That Our Our Vehicles Are Getting More Fuel-Efficient. So Were Buying Fewer Gallons of Gas so That Gas Tax Really Is in a Cover Things like It Use to Go There Looking and Vehicle Mileage Tax and There Is a Pilot That's Starting Soon to Take a Look at That for People to Be Able to Often and Part of It Is What We Just Need to Take a Look at Water the Roads That We Need.

How Do We Spend the Money in the First Place before We Worry about How We Finance It. Joe Colletti, Who Is Senior Fellow Here at the John Lock Foundation Go to John and Read Joe Colletti's Piece Headlined the NC DOT Budget Is Full of Cracks, Potholes and Detours. Just Think, You Stay with Us Much More Carolina Journal Radio to Come in Just a Moment Tired of Fake Names Tired of Reporters with Political Axes to Grind.

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Welcome Back to Carolina Journal Radio I Michiko Got Gov. Roy Cooper Has Ordered Everyone in North Carolina to Wear Facemask Enforcement of That Order Creates Both Practical Problems and Legal Concerns. That's the Conclusion. Our Next Guest Has Reached Jeanette Doran's President and General Counsel of the North Carolina Institute for Constitutional Law Will Go Back to the Program Expanding Me to This Is Pretty Widespread Order from Gov. Cooper, Everyone, with Some Exceptions Has To Wear Facemask, Given Your Role As a Constitutional Lawyer You Look at This and Found Problems of More Than One Type.

Let's First of All, before We Get to the Practical Problems You're Not Even Talking about Whether the Governor Has the Authority to Order People to Wear Facemasks and Whether Facemask Themselves Are Worthy of of Where You You Sorta Set That to the Side. We Assumed for the Sake of Discussion That Facemasks Are Useful. I Think A Lot Of People Figured out These Days That There's Been Some Some Debate about That Government Guidance Has Evolved, but We Also Assumed Just for the Sake of Argument That the Government Has the Authority to Issue a Statewide Mandate That Everyone with Few Exceptions Has To Wear Face and Ask so We Assumed That and Think It's Really Only Enforcement Protocols in His Executive Order. Given Those Assumptions, Which People Could Could Argue with the Given Those Assumptions.

Let's Start First with Practical Problems.

What You See Is Practical Problems with This Order There Quite A Few Actually so There Have Been a Number of Reports across the Country of Violence toward Really Front-Line Workers When They Asked Customers and Patrons to Wear a Mask or Comply with Social Distancing Requirements so What the Governors down As He Has, by Forcing Business As to Be the Ones to You Enforce This Facemask Mandate What Is Done Is He's Required. Businesses Can't Take on What Is Essentially a Law Enforcement Role in That Is a Problem Because Those Are Not Workers Who Are Trained in the Sorts of De-Escalation Tactics That Are Part of Basic Law Enforcement Training so What Can Happen If We Have an 16-year-old Hostess at a Restaurant, Ask a Patron to Put on His Mask and He Lays His Intentions Are Holiday People Are so Incredibly Stressed, Emotionally, Financially Said This Is the Sort of Lightning Rod That Could Create a Huge Physical Altercation under the Sorts of Circumstances and Course Violence Is Never the Answer Depends in the Governor Should Anticipate That This Is Totally Foreseeable That If Your Business Owner You Can Ask Yourself What's My Liability and I Can Get Sued by an Employee Gets Assaulted Going to Get Sued by a Customer Who Perhaps Is Grieved by an Overzealous Employee.

And Then of Course There Are Lots of Privacy and Discrimination Laws That Come in You Gov. To His Credit, Tried to Work around Some of Those Legal Ashes You Alluded to This, but We Should Point out That the Reason That These Are the Practical Concerns Is That Although This Is in Order for Everyone Everywhere Facemask the Order Is Not Contingent on Law Enforcement Stopping an Individual and Charging Them. The Businesses Are the Ones That Other Organizations Are the Ones Who Are Mandated to Carry This out Yes so If You Retrieve the Order. The Order States. Businesses Must Require That Their Customers Were in the Case for Restaurants Patrons Where Facemask When You When One Scrolls down to Page 8 of Executive Order, Which Is Bad News and an Office At Least Eight Pages Yes Yes Indeed When You Get into the Enforcement Section, the Governor Specifically States in Number One near Three.

There Number One. He Specifically States Only Businesses and Organizations Will Be Site Number Two. He Specifically States Law Enforcement Is Not Authorized to Issue Citations to Individual Workers, Customers or Patrons for Failing to Wear a Mask Now Number Three. He States That Law Enforcement Can Cite People for Trespassing If the Business Asks the Customer to Leave Neighbor Feast Days to Help but That's Just a Reflection of the Current State of Law on Trespass so He's Put All of the Responsibility for Enforcing the Mask Requirement on Business. We Talked about the Practical Concerns, Let's Turn Now to Some of the Legal Issues As a Person Focuses on Constitutional Law Looked into. Okay Well If the Governor Is Going to Give This Order. What Is the Basis How Can He Go about Doing This Week. We Know the Governors Can't Do Anything They Want to Do What You Find When You Looked into the Basis of the Authority the Governor Has To Issue This Order.

Interestingly, the Order Structured. He Cites at Various Points in the Beginning, Actually for Several Pages at the Beginning of His Executive Order Miscellaneous Statutes May Specifically He Seems to Cite the Emergency Management Act That That Particular Statute That Gives Him Additional Power Steering Declared State of Emergency. Unfortunately When We Get down to the Portion of the Executive Order with the Specific Mandates Things like Capacity Limitations in Facemask Requirements.

There Is Not What a Lawyer Would Refer to You As a Pinpoint Her Specific Site Adjacent to the Direct so We Don't Know for Each of Those Orders Exactly Which of the Statutes Gov. As Is Relying on Pre-Statutory Authority and from a Layman's Perspective, Why Should They Care Doesn't Have the Authority to Just Make up the Laws He Gathers and That Surprises People Because If You Read These Executive Orders. They They Smell and Read and Look Very Much like Legislation That Constitutionally, the Governor Doesn't Get to Legislate Now.

He Does Have Authority to Issue Executive Orders, and during a State of Emergency. We Had Statutes to Give Him Extra Authority but Were Not Clear Which of the Statutes He's Relying on, Which Makes It Difficult to Figure out Whether He Is Exceeding the Scope of What's Called Statutory Authority and There Are Some Instances in Which Things the Gov. Might Want to Do. He Can't Do on His Own. He Needs to Get Input from the Other Elected Statewide Officials Knows the Council Estate Correct.

There Is a Portion of the Additional Powers Statute, It's That There Are Basically Four Parts ABC and T.

So, Part B, Which Really Gives Him a Great Deal of Authority, but It Only Gives Him a Great Deal of Authority If He Seeks Concurrence of the Council of State. Now This Obviously Is of Concern to a Constitutional Lawyer. Why Should This Be of Concern to the Average Voter or Average Resident of North Carolina. I Think We All His As Debtors As Citizens Is As People Committed to Our Community and to Our State. We Hold Government Accountable. We Need to Put Their Feet to the Fire and Asked Them to Show Us What Authority They Have, Because If We Don't Do It Now.

We Can Hand out Potentially in a Dictatorial State. I Don't Think Anybody Wants to Live under Dictatorship Will Be Very Interesting. We Know the One Person Is Going to Be Watching Very Closely, As This Issue Progresses Is Jeanette Doran. She Is President and General Counsel of the North Carolina Institute for Constitutional Law like so Much Going Thank You for Having Me A Lot More on Carolina Journal Radio Just a Moment If You Love Freedom We Got Great News to Share with You Now. You Can Find the Latest News, Views, and Research from Conservative Groups across North Carolina All in One Place North Carolina It's One Stop Shopping for North Carolina's Freedom Movement and North Carolina You'll Find Links to John Locke Foundation Blogs on the Days News Carolina Reporting and Quick Takes Carolina Journal Radio Interviews TV Interviews Featuring CJ Reporters and Locke Foundation Analysts, Opinion Pieces and Reports on Higher Education from the James G. Martin Center for Academic Renewal, Commentary and Polling Data from the Scimitar's Institute and News and Views from the North Carolina Family Policy Council. That's Right, All in One Place North Carolina That's North Carolina Spelled out North Carolina Try It Today. North Carolina Is Changing Not Just Day-To-Day but Outward to Our Minute to Minute and 2nd to 2nd, How Can You Keep up with the Changes, Especially the Ones That Affect You, Your Family, Your Home, Your Job, Make the John Locke Foundation and Carolina Journal Part of Your Social Media Diet on Facebook like the John Locke Foundation like Carolina Journal.

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Don't Wait for the Evening News If It's Happening Now It's Happening Here the John Locke Foundation and Carolina Journal Have You Covered with up to the Second Information like Us on Facebook the John Locke Foundation and Carolina Journal. Follow Us on Twitter at John Locke in the Sea and at Carolina. Journal. Who Knew You Could Shop and Invest in Freedom at the Same Time It Is True Online Shopping Is Now a Great Way to Support the John Locke Foundation Just Shop Using the Amazon Smile Program and Designate the John Mott Foundation to Receive a Portion of Your Purchase Amount That's Right You Shop Amazon Donates Money to Pass the John Locke Foundation. Here's How Long. Time to Amazon smile is the same Amazon you know same products same prices. But here's what's better. Amazon donates 0.5% of the price of your eligible Amazon smile purchases to the John Locke foundation to try it. Be sure to designate us as the nonprofit you want to support. It's that easy. So now not only will you enjoy what you buy.

You also support freedom. Don't forget log on to today by something nice and help defend freedom, help support the John Mott foundation will go back to Carolina Journal radio I Mitch coca North Carolina lawmakers continue work to clean up the states. Criminal code Republican State Sen. Andy Wells recently presented the latest plan Senate Bill 855 is the is the next step in what's been a years long process of dealing with inconsistencies and lack of transparency in the criminal code across the government and local governments. Wells reminded his colleagues that they had tried to turn the task over to a group called the Gen. statutes commission that is not going well, either way they did receive information from some of the counties in some of the cities and some of the agencies but it was in a form that made it impossible for them to access it sorted and get it in a form that they could do with the they noted the poor quality of many of the reports it hindered the commission's ability to accumulate information needed to make this determination and the commission recommends that the Gen. assembly established the criminal code requalification commission. That's the purpose of a proposed new group.

It is a bipartisan commission with the input and participation from stakeholders outside of the general assembly of the working group is current members of the Gen. assembly House-Senate Republican, Democrat, we have worked with the UNC criminal justice innovation lab effectively.

We would be going through a process were UNC school of Government hires attorneys that are expert in criminal code and work through a process to disorder out and catalog over the years. Criminal code at the state agency level at the licensing board level at the county and city level and get all those sorted out in a way that we can all see us nonlawyers can look at him and see the redundancies that we got in a weird word finding some like theft in multiple ways with multiple penalties depend on what you still and there are just inconsistencies and it's impossible for Lehman to know what crime they are committing in the state, they can't go to any one place. They need to go to about 600 places to find out what crimes they may be committing and know what they're doing. I and that's what were trying to do is get this in one place organized and that's a process of the reason for this build big decisions about the criminal code will remain with state lawmakers, the commission can't do anything about it. They can present to a general assembly, the ability to hear some things that we think may be changed, and that general assembly has the ability to make those changes. But at least they'll be in a form a coherent form they can address process that's State Sen. Andy Wells is discussing the latest proposals for cleaning up North Carolina's complicated criminal code trip report Carolina Journal radio in a moment where doubling down on freedom at Carolina Journal radio were proud to bring you stories that impact your life and your wallet. And now get twice as much freedom when you also listen to our podcast headlock available on iTunes headlock is a little bit different. It's a no holds barred discussion that challenges softheaded ideas from the left and the right, like Carolina Journal radio headlock is smart and timely but with headlock you'll hear more about the culture wars get some more humor as well.

We guarantee great information and a good time double down with us. Listen to Carolina Journal radio each week and listen to headlock to remember, you can listen to or subscriber download each week iTunes Carolina Journal radio and headlock just what you need to stay informed and stay entertained both brought to you in the name of freedom by the John Locke foundation of Qubec Carolina Journal radio I Mitch coca. It's no secret that the covert 19 pandemic has throttled the American economy. What can government do what should it do to help get the economy moving again. Jonathan Williams recently address that topic in an online interview with the John Locke foundation Williams's chief economist and vice president at the American legislative exchange Council.

He first discussed the federal government's role. Obviously there was going to be something that was going to be done at a federal level to address something of this magnitude of the health and economic crisis. I think one of the things that I often thought through in recent weeks is marketing back to the story are laugher told me that the Ronald Reagan when he was going through one of the challenges of 1980s course was very aware that the inclination of government is always do something new. In some cases pass needed laws and regulations. Sometimes there over-the-top beginning on how to structure course the Reagan's line to a staffers always stuck with me, which is, don't just stand there, go undo something and I think that's really one of the important points from a free-market principal perspective is yesterday to be lots of things in the past could be massive packages at the federal and state and local levels to be lots of things in there that are probably good and some things you know that are probably not good, perhaps lots of things but at the end of the day. Let's look at one of the things that we can do to remove barriers for individuals or businesses for the economy to get back working again and to return some normalcy and livelihood back to hard-working Americans out there across United States and not just always take for granted that his government role to do something new. But what is it that's on the books and we can take away enhance liberty and free market is one of the things that government can undo to unleash entrepreneurs and innovators in the private sector to be able to get us some real answers and solutions to this real challenge that we all face the state government level. William says North Carolina is in a better position than many of its peers. North Carolina's done a lot of wise decision-making in recent years, and it really does point to prudent decision-making is going to help tide you over, and hopefully we can have a pathway to get the economy open to before. Some of these funds start to run grind by yourself enough time where you don't have to raise employer taxes. Let's say on employment or people go without really and I think God sets up a really interesting contrast for the other model states. The states that during record revenue times over the last five or six years due to the strong enduring economic recovery states now that are coming in lobbing their members of Congress as we speak to have a bailout of the states because after a few weeks of going without a normal process.

These states are now finding themselves in dire situation which is exactly what a lot of us from the fiscally responsible perspective have been warning against you. Do not overspend during the good times because whether it's black Swan type like we saw happen which really nobody could proceed coming or the normal correction that was probably good to come anyways with the regular business cycle.

This was going to happen and I think it just exposes the vulnerabilities of states that were probably get during very good times and it highlights I think that prudent policymaking like you see in North Carolina for all to see.

That's Jonathan Williams, chief economist of the American legislative exchange Council. He participated in a recent online forum with the John Locke foundation. Williams looked ahead to the world after the covert, 19 pandemic we need to be looking at a really pathway whether it's federal or state or local. We at least need to have some plans in place and need to be really put out there for the public to comment on it for private sector leaders to comment on and I'm really hard to see comments of the president would include private sector entrepreneurs as well as members of the medical community and economists in this commission that's really important because at the end of the day is not going to be a government bureaucrat that returns a light switch back on and says everything's okay to be innovators not come back and say were safe to operate within the legal bounds we get how do we enhance consumer confidence to get people back into our businesses. There are a saying I'm saying even in the Washington Post this weekend different supermarket chains having ads saying here all the safety measures were coming up with not because government told us we needed to because we want to make you feel safe about coming into our store and shopping. We don't get the American public to a place where they feel safe to come in and go to a restaurant supermarket did on airplane again eventually know this can be a very long road and psychic, involving the private sector early on for people who know how to reopen safely in a way that gives consumers a cop and is to come back is really important in one point, moreover, that I really is important is gotten lost in the headlines of. Certainly, the national mainstream media is the president deserves a lot of credit for not nationalizing stay-at-home orders is always this withering pressure in order for the federal government to take leaders especially times of crisis is resistant that I think very wisely and whether we disagree or agree with the actions of individual governors or mayors or county executives of taken a lease we preserve the principle of federalism to allow these decisions to happen at the state and local level. That's so important as we can read here in opening of the economy.

It's got happen in the lower risk areas and spots around the country that haven't been affected, blood not a one-size-fits-all solution and that's exactly what the founders were getting at when he came up with these ideas of 50 laboratories of democracy about the impact of all the new government spending on the federal debt is that the big question, and I would say it's $1 trillion question but that would be for underselling how big of an issue this is that in back to see some reports national debt clock.

I looked at happen look at it last night and were $24 trillion range and believe it just seem like we just hit 23 trillion in national debt. Now we just added a couple trillion two based on the recent packages coming out of Capitol Hill and it's absolutely right. Think once we get through this election season when everybody's just focused on reelection and spending more rightly so. In many cases on some of the health issues and how to respond to this really once in a generation once-in-a-lifetime threat that we face the economy and public health systems. That being said, how do we reevaluate pick up the pieces when this is behind us and have a real plan in place not just reopen the economy which is the first piece of this. But then once we have the economy going. How do we address this massive burden that we've accumulated on top of what was a big burden and we talk about the states that acted responsibly during some very good market conditions over the last five or six years, especially at the federal debt is continued to enhance regardless of who's in power in Washington DC. It's on Morelos autopilot. Unfortunately, based on the way the budget rules are crafted in Washington and I think of the president and his budget this year just before all this hit with the pandemic really outline some good steps to start to reduce the budget terms of the debt and also look at things like fiscal rules that have been so important in the state-level things like Colorado's taxpayer Bill of Rights to limit the growth of government do something reasonable such as a private sector limited population inflation. Clearly, the federal government does not even attempt to balance the budget. In many cases where it's a requirement at the state level United mountains of new debt.

In some cases, some of that is very important. Programmatic things right now, but does not get away from the point that we are mortgaging our future when it comes to the national economy national fiscal health. If we don't begin to immediately address the big financial debt problem that we face, we must absolutely tackle fiscal responsibility and the national debt. When my favorite economist Thomas Olson perfectly, which is the first law of economics is we have a scarcity of resources.

However, the first law of politics is to ignore the first law of economics and we have a real problem when we think we can just continue to rack up bills on the federal credit card that clearly is not sustainable. We absolutely must tackle fiscal responsibility once were. Through this, that's Jonathan Williams of Alec the American legislative exchange Council speaking recently to the John Locke foundation will return with more Carolina journal radio in a moment real influence. You either have it or you don't and at the John Mott foundation we have it, you'll find our guiding principles in many of the freedom forward reforms of the past decade here in North Carolina. So while others talk or complain or name call. We provide research solutions and hope our team analyzes the pressing issues of the day jobs, healthcare, education, and more. We look for effective ways to give you more freedom, more options, more control over your life. Our goal is to transform North Carolina into a growing, thriving economic powerhouse, the envy of every other state. Our research is how policymakers make decisions that ensure you keep more of what you earn. Expand your choice of schools for your kids. Widen your job opportunities improve your access to doctors. The recipe for stability and a bright future for truth for freedom for the future of North Carolina. We are the John Locke foundation.

Welcome back to Carolina journal radio I'm Donna Martinez, 19 has had a huge impact on the healthcare industry. We all know that but it's not just because hospitals and doctors and nurses have been focused on caring covert, 19 patients, the John Locke foundation's healthcare policy analyst Jordan Roberts is taken a look at what he calls the supply and demand shocks on both hospitals and doctors and other practitioners and is also looking at what it could mean for each of us in a post covert, 19 world. Jordan joined Tina to give us a sense of where were heading. Jordan walked back to the show government. So in terms of hospitals we've heard so much media coverage of do we have enough hospital beds. Do we have enough intensive care beds do we have enough ventilators and first responders out there trying to care for people who unfortunately have been stricken with covert, 19 but you took a look at something a little bit different, a little bit time I'm more of 30,000 foot approach, so to speak. What you find right so you know what we have to remember here is that covert can affect different parts of the country in different ways. But when we look at the data nationally.

What we see is that there was a decline in revenue and of discharges among hospitals across the whole country in the studies that I looked at looks at the month of March and this year compared to last year to try to get this data and what they found was there is consistent decline in revenue and utilization but was most profound in the third week of March.

Right when all the state home orders and you know what, really, when people started to take this thing is seriously utilized as we are now and so that's will receive this initial shock of just complete note devastating drop in utilization and in revenue for these hospitals that seems to me that the lease for me. It's counterintuitive because I'm thinking all right our hospitals are inundated with with covert, 19 patients, but you're saying utilization was actually down. Karen revenue was down. How's that possible well like I said he knows could affect different parts of the country in different ways, but nationally we look across whole. It was down.

So while some more hotspots hotspot areas would have you know a much different experience there hospital they may be filled out, but no hospitals, just hundred miles away may not have that same experience. So you're just trying to get up a picture of the entire country nationally utilization and our revenue was down for for large hospitals. Hopefully of course we will make it through and see a decline in cases and dance and some that were already seeing light.

Once we get through this. Tell us what you believe will be the impact overall on people who are trying to access hospitals and and doctors and in the system itself. Yeah so you know what I think about is some of the smaller rural hospitals across the country and in North Carolina where you know they were told to cancel elective surgeries and all they are you know potential patients in the area were told to stay home and not go access care and leader situations like that, they really didn't see an influx of huge patient of a lot of covert 19 cases and therefore they had a much different experience than say a hospital in New York City and so you know what that does is they were know may not have had to cancel all those elective procedures and lost out on a ton of valuable revenue in the Met puts them depending on what kind of federal a big from the cares actor things like that puts them in a really really in a precarious spot going forward. And so what we see a lot is healthcare already has a merger and acquisition issue with large hospitals buying up specialty practices smaller hospitals merging among themselves and when that happens. Patients usually end up paying higher prices and quality can be can be worse in these hospital systems, and so as more and more hospitals. Small hospitals lose revenue because of some of the decisions made. Try to react to the covert pandemic. They may be, is more susceptible to be bought out by large hospitals and that we could see even further consolidation.

Because of this, and that's a real issue for patients and all of us to pay for these higher healthcare prices. What a sad irony that is because essentially cleared the decks when it came to hospitals that everybody unless it's an emergency stay away that a deal with with the pandemic. But the reality of that is that hospital has to make money doctors and medical professionals have to make money are they potentially looking at a bunch of pent up demand for things that were emergencies him he could that help them once. Once people get the okay and go back to the hospital is a possibility but you know what I said in the papers. You know this is looking at March and April which reviewed to the family right and so will have to look at the data and you know this can be studied for a long time. The effect but I think it's very likely that you know is hospitals open back up there will be a lot of pent-up demand.

But you know about my coincide with more covert cases in the areas we just don't know how it's going to how it's gonna play out, but you know it's it could be devastating for a lot of the smaller practices. I have a couple of registered nurses in my extended family in another part of the country and I was shocked, frankly, to find out that Tim both of them at different points in the last several months were essentially laid off right because, as as my niece told me my part of the hospital really isn't functioning anymore and I don't think people understand that now it's it's an interesting religious you know counterintuitive paradox that you know we clear out all the space but he knows in places where there wasn't a huge influx of covert patients. They were waiting off the very healthcare the frontline healthcare workers that we are placing so hard to protect us from this virus so I is that it plays out different in different parts of the country but it's really good.

Sometimes it's counterintuitive to think about the effect that it's out in certain areas. Some folks may not realize that their doctor may be actually a small business owner may own a practice, and maybe it's one Dr. three doctors etc. they have a small staff and so that's a business that they are in. And if they have essentially been put out of business because of covert, 19 then you kind of wonder what the future is. I guess that that ties into your argument about consolidation and writings just gonna be kind of wrapped up into giant hospital systems right to receive the same date you these other specialty practices like pediatric care, orthopedic surgeons, oral surgeons, dermatologists, some of these these practices that tend to be more independent and have been independent from large hospital change in the past in March and April. They saw declines of 7080% of revenue and 70. 80% of utilization. That is just incredible hits of their business, but also something else I talk about in the pieces was so much so much less utilization by can have serious implications for health outcomes and the futures things like primary care and orthopedics, oral surgeons, things like this where patient would go in to get an ailment, something treated that they pushoff it might be even more expensive and more be worse for their health in the future so that's another reason like you said, there may be more pent-up demand, but it could be that all these procedures that we put off may end up costing a lot more.

So while we are more demand were also spending a lot more on healthcare when we may not have had. I've had to do with all these closures and with such steep drop in utilization so you looked at data comparing again March and March and April of this year to date of last year corrects right and so there's gotta be just such a huge differential and what and what down hospitals were were dealing with a year ago. I mean talk about how the world is changed.

That's why this is such a fascinating piece. Actually two pieces, one focused on the impact on hospitals. The other focused on the impact of doctors and other medical professionals.

You can find it at John lock.for both pieces are posted there written by our guest Jordan Roberts who is the John Locke foundation's healthcare policy analyst Jordan think that's all the time we have for Carolina journal radio this week. Thank you for listening on behalf of my cohost Michiko guy Donna Martinez hope you join us again next week for another edition of Carolina journal radio Carolina journal radio is a program of the job on to learn more about the John Locke foundation donations support programs like Carolina journal radio send email to development John Locke done call 166 JL left 166-553-4636 Carolina journal radio is the John line foundation, Carolina's free-market think tank and Carolina broadcasting system, Inc. all opinions expressed on this program are so clearly reflect the station. For more information about the show. Other programs and services of the foundation's online toll-free at 866 JL would like to thank our wonderful radio affiliates across Carolina and our sponsors. Carolina journal radio. Thank you for listening.

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