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Carolina Journal Radio No. 910: Questions surround key COVID-19 data points

Carolina Journal Radio / Donna Martinez and Mitch Kokai
The Truth Network Radio
October 26, 2020 8:00 am

Carolina Journal Radio No. 910: Questions surround key COVID-19 data points

Carolina Journal Radio / Donna Martinez and Mitch Kokai

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October 26, 2020 8:00 am

Debate about the COVID-19 pandemic has featured plenty of data involving case numbers, deaths, and hospitalizations. Dig into the details, and you learn that the numbers might not be as useful as they first appear. They might even portray a misleading picture. Jon Sanders, John Locke Foundation director of regulatory studies, discusses key aspects of his research into key COVID-19 numbers. Americans are paying much more attention to China these days, largely because of that country’s role in the pandemic. Part of the discussion involves American trade with China. Scott Lincicome, senior fellow in economic studies at the Cato Institute, challenges one popular narrative surrounding trade with China. He shares highlights from his research. One reason voters should pay attention to this year’s N.C. Supreme Court elections involves school choice. A lawsuit challenging the state’s popular Opportunity Scholarship program is heading to a trial court. Most experts expect the case to head eventually to the state Supreme Court, which upheld the scholarships by a 4-3 vote in 2015. Terry Stoops, John Locke Foundation vice president for research and director of education studies, explains why the new lawsuit should raise concerns for school choice supporters. One of the state’s top government watchdogs recently retired. You’ll hear highlights from John Turcotte’s last meeting as head of the General Assembly’s internal Program Evaluation Division. If North Carolina moves forward with Medicaid expansion, ends its ban on collective bargaining, and adopts the types of spending increases Gov. Roy Cooper has proposed in his budget plans, the state budget could grow by 13%. That’s a key finding in a new report from John Locke Foundation Senior Fellow Joseph Coletti. Coletti discusses report and talks about the potential impact for taxpayers if North Carolina pursues ideas popular among Democratic policymakers and political candidates.

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From Cherokee to Kuretuk, from the largest city to the smallest town, and from the statehouse to the schoolhouse, it's Carolina Journal Radio, your weekly news magazine discussing North Carolina's most important public policy events and issues. Next hour, Donna Martinez and I will explore some major issues affecting our state.

Americans are thinking a lot more about China these days, largely because of COVID-19. We'll hear one North Carolina-based expert take on the issue of trade with China. State Supreme Court elections matter.

Why? One reason involves the future of school choice in North Carolina. You'll learn how the high court could play a role in the future of opportunity scholarships. One of North Carolina government's top internal watchdogs retired recently. You'll hear his assessment of the General Assembly's Program Evaluation Division. If North Carolina expands Medicaid, ends its ban on collective bargaining, and follows Governor Roy Cooper's budget ideas, taxpayers will pay the price.

You'll learn how. Those topics are just ahead. First, Donna Martinez joins us with the Carolina Journal headline. Governor Roy Cooper has used emergency powers to shut down North Carolina businesses during the COVID-19 pandemic, and he's instituted all sorts of rules and mandates and prohibitions. But the data upon which the governor based and continues to base his prohibitions is far from clear. In fact, some of it's pretty foggy, as John Locke Foundation researchers have been detailing for months now. John Sanders is director of regulatory studies for the Locke Foundation. He joins us now with a look at what we know, and importantly, what we still don't know. John, welcome back to the show.

Thanks, Donna. Let's talk first about testing and COVID-19 positive cases. The Department of Health and Human Services has a dashboard on their website, and they keep track of the data. We have periodic news conferences from Dr. Mandy Cohen in which she gives us the numbers. But you have been doing a lot of drilling down into the numbers, looking at research and what other states are doing. And you have determined that there's really discrepancies in how different states are defining what a verified case of COVID-19 is.

Help us understand this. Okay, so that gets to what the predominant way of measuring cases is through something called PCR tests. And essentially what they do is they take a sample from someone and they cycle it to detect strands of viral RNA. And each cycle kind of doubles the amount that they've been able to detect from the first cycle. So think about it as if you're doubling your money.

If you've got a little bit of money but you double it over 16 times, you'll suddenly have a lot of money. So if you come in with a sample and you've got an actual infection and you get it cycled, it doesn't take long to discover, oh yeah, this person has the virus. If you have a scrap of viral RNA, it may take a bunch of cycles before it gets big enough to determine it, doubling and doubling and so on. The problem is the way North Carolina and most other states in the U.S. and many other testing services do these tests is well beyond the research scientific consensus for how many cycles it should take. The scientific consensus is 30. The CDC has looked at it and said they weren't able to find really viable virus beyond 33 cycles.

The New York Times wrote an expose on this at the end of August and their experts suggested no more than 30 to maybe 35. What is North Carolina using? North Carolina is using 37, which means we're basically doubling more and more, at least 7 to 10 times what the research consensus is because some of the tests would use 40. Does that mean, John, can we conclude then that when North Carolina counts someone as a positive case, that it could be that some of those folks really are infected and they've got a lot of virus, but there may be some people in that count who have a very, very low level of virus? Absolutely, and that's one of the problems with the test.

The test itself is not a problem, but what it can tell you is a yes-no answer. Do you have viral material? The more it cycles, the less useful that answer is going to be because the other thing it's not telling you is how much viral RNA you've got.

Do you actually have an infection or do you have some viral RNA floating around? One would think, John, that states would at least be consistent since we're comparing, at least in news reporting, we're comparing states against one another for how many cases are active, etc. And the CDC, one would think that states will be following their guidelines.

So kind of what gives here? Well, the states aren't consistent in any of their data during this pandemic, which is one of the frustrating things as a well-meaning researcher and anyone who is just trying to get good information. Because as I mentioned at the top, of course, Governor Cooper and Dr. Cohen, in consultation with the governor, they are making public policy decisions that are impacting 10 million plus North Carolinians based on this kind of data, at least this is one of several data points that they're using. So it behooves us all, doesn't matter your ideology, your politics or anything, it's important that we all understand what those decisions are based on, what those decisions are based on.

Absolutely. And for example, in the New York Times expose, they had a Harvard epidemiologist look at the cases that they knew of. If they cycled them at 30, as opposed to 40, which is what they were doing in Massachusetts, it would have thrown out 85 to 90 percent of their positive cases, which is a very, just a shocking amount. In other studies at other states, Nevada, New York State, it was closer to 63 percent. But still, you're talking about a vast majority of cases that might not actually be infections, which would also explain why we have the phenomena of asymptomatic infections.

Maybe it's because they're not really infections. We just don't know, because even in North Carolina, we don't know how many cycles it took to get to that. And some states will have those data, but North Carolina and many other states apparently do not. John, do we know if Dr. Mandy Cohen or Governor Cooper have been asked about this situation? I have no idea that they have.

I certainly haven't seen any evidence that they've been asked about this, not by media. Well, it's such a critical question for obvious reasons, and your explanation is really helpful. That leads me to the next question, then. One of the other important data points that we follow, and again, that public policy decisions, whether businesses can open or close, whether kids are going back to school or not, is based in part on the number of people who are hospitalized for COVID-19.

Is that data accurate? That's a good question, too. And the DHHS was asked about it, and essentially what they say is they're not making a distinction between someone hospitalized for COVID and someone hospitalized with COVID. For you and I in regular conversation, what you want to know is has this infection gotten to the point where it's put you in the hospital? That's what we worry about. The way it's done for DHHS is if you're put into the hospital because of COVID or if you have gone in for a routine examination or you've been in a car wreck or you're having heart palpitations or whatever, they will test you as part of their clinical assessment. And if you test positive, even though that's not why you're there, you will be counted as a hospitalization with COVID. And then sadly, of course, we do have people who are succumbing to COVID-19. The death data also reported by DHHS, one of the data points that they look at and base policy decisions on. What do we know about the death rate?

Is that accurate? Have those folks that we think have sadly died from COVID-19, is that really the cause? Yeah, it's very difficult with viruses in general to disaggregate whether it's the virus that caused it because the virus can set into motion a whole bunch of other things that will lead to death. And that's what we're concerned about. But we can't tell as if someone was hospitalized and died with COVID as a result of the COVID infection. And there's no way of knowing from this vantage point how many are in either category.

There's just no way of knowing, so I don't know. And this is why all of this work that's being done by John Sanders and other members of the John Locke Foundation research team is so important to every single North Carolinian. Be sure to log on to johnlock.org and check out their analysis.

They are posting regular updates looking into this data. Also over at the locker room, John Sanders is director of regulatory studies. John, thanks for joining us.

Thank you, Tanya. Stay with us. Much more Carolina Journal Radio to come in just a moment. Tired of fake news?

Tired of reporters with political axes to grind? Well, you need to be reading Carolina Journal. Honest, uncompromising, old-school journalism you expect and you need. Even better, the monthly Carolina Journal is free to subscribers. Sign up at carolinajournal.com. You'll receive Carolina Journal newspaper in your mailbox each month. Investigations into government spending, revelations about boondoggles, who the powerful leaders are and what they're doing in your name and with your money. We shine the light on it all with the stories and angles other outlets barely cover.

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I'm Mitch Kocai. Americans are focusing a lot more attention on China these days, especially because of that country's role in the COVID-19 pandemic. Part of the conversation involves a re-evaluation of American trade relationships with China. Our next guest has researched the topic and his work challenges a popular narrative about American-Chinese trade.

Scott Lincecum is a senior fellow in economic studies with the libertarian Cato Institute. Welcome to the program. Thanks for having me.

Good to be back. One of the reasons why you put together this piece is this narrative that has grown in at least in recent months, if not years, that the American trade relationship with China has been bad for America. First of all, before you counter it, what is the basis of this narrative?

It seems that you really can't read the newspaper or hear about a new policy proposal without it being in some way oftentimes tied to this narrative. And the idea is that in the late 1990s, the Clinton administration and Congress got together and passed a law, Permanent Normal Trade Relations, essentially allowing China to enter the World Trade Organization. And that, in turn, spurred what we call the China shock, which was a substantial increase in imports of Chinese goods into the United States that, so the studies go, destroyed approximately 2.5 million jobs. Now, that PNTR and China's WTO accession, along with the China shock, is also blamed for fueling the rise of China and China's shift towards liberalism and empire and all of the bad things we hear about the Chinese government doing these days. And again, all of that is tied not to the regime in Beijing, but instead the fingers are pointed back at policymakers several decades ago. Now, you put this to the test in a policy analysis for Cato, labeled testing the China shock, and you find that the story is not quite what this narrative says? No, and there are several misconceptions and really that make the narrative complex, to put it nicely.

Really, the number of flaws in the narrative I just gave collectively proved pretty fatal for the thesis. And the first is just simply the narrative of Permanent Normal Trade Relations and China's WTO accession. It is cast as if the United States flipped the switch and suddenly China joined the WTO.

That's nothing to be forever from the truth. The fact is that China exceeded the WTO for about a 15-year period. There were all sorts of multilateral negotiations, bilateral negotiations between the United States and China. The United States drove the hardest bargain of any of the WTO member countries, and they've made China agree to all sorts of things that no other WTO member had to agree to.

At the same time, PNTR, that vote in Congress, was actually simply the making permanent, something that the United States had been granting on an annual basis for over 20 years. And that was actually done not out of any grand desire or belief that China would suddenly become a liberal democracy, but instead was really a basic, pragmatic decision. Every other WTO member had granted China that status. If the United States hadn't done the same, United States companies would have lost out on the Chinese market. The United States would have lacked a venue, the World Trade Organization, to press its interests. And China still would have risen anyway. And that's, I think, a big point and something that people miss is that counterfactual, that somehow if the United States had denied PNTR, China would not be causing problems today, is simply just – is belied by the facts. The second big problem is economic.

If you actually look at multiple studies that have been published since the original China shock literature, you see a lot of things that really, again, cast doubt on this China shock narrative. The first, and I think the most important, is that China's WTO accession and U.S. economic engagement with China actually brought a ton of benefits for the United States. Of course, there are consumer benefits, whether it's cheap T-shirts or consumer electronics and all of that, estimated to total hundreds of dollars per year per person for the rest of our lives. So it can be a good chunk of money in terms of consumer benefits. But it's not just consumer benefits. There are studies showing really substantial gains for American companies, American manufacturers that ended up importing inputs that they use and of course their workers use to make their own globally competitive products. There's also literature showing that there were substantial pro-competitive effects in terms of innovation in the United States, that many of the jobs we lost in manufacturing we gained back in services or in other types of manufacturing. So you put all of this together and you see that the China shock is really far more complex and more benign than, again, this kind of scary narrative you hear. We're chatting with Scott Linscombe.

He is senior fellow in economic studies with the Libertarian Cato Institute. Some people might hear us and say, wait a minute, it sounds like he doesn't recognize that China is this bad guy. You're not saying that China is this great nation and we should be thankful that we have any relations with them.

No, no, definitely not. And in fact, I think it's undeniable that particularly in the last decade, the Chinese government has really taken a turn for the worse and not simply in terms of human rights and trade, but foreign policy, censorship and the rest. But in order to actually address those issues, it's really critical for us to understand what the United States did right and what the United States did wrong in the last 20 years.

And that's really the point of my paper. It grew out of a frustration that American policymakers routinely pointed at a singular event, PNTR, China's WTO accession, and at economic engagement more broadly and said, aha, there is our mistake. So clearly we can solve this by just shutting off trade with China.

And the fact is, that's really just not true. That again, China would have risen in the absence of US economic engagement. And by the way, there are tons of actual policy mistakes that the United States government did in the wake of China's WTO accession. So in other words, in the last 20 years, the World Trade Organization has this rather successful dispute settlement system where countries can bring cases against each other, essentially like a court. And the facts show that China actually has done a decent job in terms of compliance.

Certainly not perfect. No nation is perfect. But when they are pressed on the issue due to reputational issues, and they're valuing the WTO itself, the Chinese government will change their behavior. Unfortunately, the United States has only brought a handful of cases. And even when the United States has won, they didn't actually go further and demand compliance.

That's a problem. Other problems outside of the trade space are, look, we had, for decades, a very uncompetitive corporate tax rate. We have all sorts of labor policies and other regulations that really have stymied American companies and workers. And oh, by the way, we ditched an agreement, the Trans-Pacific Partnership, that was actually designed to help contain China's economic rise and to provide countries like Japan and Vietnam and others another outlet. So they didn't have to depend on China.

They could depend more on the United States. All of those things we ignored. And instead, again, our policymakers point the finger at back 20 years ago at PNTR. One of the major reasons for writing this piece is to say, look, let's not abandon free trade. Policymakers and pundits want to draw broader lessons from the China experience and apply those to other countries as if, well, we got China so wrong. Now we need to be protectionist with countries other than China, or we need to engage in all sorts of mercantilism or industrial policy and the rest. And so that, of course, has multiple problems.

I mean, the first is that China aside, we have tons of experience with protectionism and economic nationalism, and it's routinely shown to impose immense costs on American workers and consumers to fail to achieve its actual objectives. Scott Lincecum, he is a senior fellow in economic studies with the libertarian Cato Institute. Thanks so much for joining us. Oh, my pleasure.

Thanks for having me. And we'll have more on Carolina Journal Radio in just a moment. If you love freedom, we've 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 conservative dot com. It's one stop shopping for North Carolina's freedom movement at North Carolina conservative dot com. You'll find links to John Locke Foundation blogs on the day's news, Carolina Journal dot com, reporting and quicktakes, Carolina Journal radio interviews, TV interviews featuring C.J. 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 Civitas Institute and news and views from the North Carolina Family Policy Council.

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I'm Mitch Kochai. This year's North Carolina judicial elections are important. Why? The John Locke Foundation's education expert, Terry Stoops, offers one reason. He cites a case challenging a popular state program.

This is really worrisome. The North Carolina Association of Educators and others have filed a lawsuit challenging the Opportunity Scholarship Program. And these are $4,200 vouchers for low-income children to be able to attend private school.

It's an extremely popular program. More than 12,000 students were a part of it last year, certainly thousands more this year. And this is being taken to court for the second time. What's worrisome about it this time is that the sitting members of the North Carolina Supreme Court, several of them have expressed their dissatisfaction with the program in the previous lawsuit. And if it gets to the North Carolina Supreme Court, I think many are predicting that the Supreme Court will strike it down. This highlights the importance of the courts, especially with individuals that want to use the courts to try to get their preferred policies advanced when the elected officials will not advance their policies. And so this is just an alternative means of trying to advance their policies. And this is certainly the case with the North Carolina Association of Educators, since the General Assembly became led by Republicans in 2010, have been unable to get inroads in trying to get their preferred policies passed. And one of those preferred policies is limitations on North Carolina school choice programs to try to cap the number of charter schools and charter school students to eliminate private school voucher programs and to try to increase regulations on home schools. So if you can't do it through the deliberative process and the elected process of electing the sufficient number of people to the General Assembly, you go to the courts. And so I think it's critical for people, especially school choice proponents and parents, to understand just how important these judicial races are, because things end up in the courts and there's only so much that the attorneys can do to convince the individuals that are deciding these cases what's in the best interest of kids and what's in the best interest of North Carolinians.

So really something that is concerning. We could talk about these in the abstract. We can talk about them as policies. We can talk about the politics of the issues. But when it comes down to it, we're talking about children here. And these children that have received the opportunity scholarship have had their lives changed for the better. And the fact that this lawsuit is threatening to take that away, it's more than disgusting.

It's immoral. And this is why we need to pay more attention as a state to not only what's going on in the legislature, but what's going on in our courts. That's Terry Stoops, vice president and education analyst for the John Locke Foundation.

He's speaking during a recent online forum. We'll return with more Carolina Journal Radio in a moment. We're doubling down on freedom at Carolina Journal Radio.

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Both brought to you in the name of freedom by the John Locke Foundation. Welcome back to Carolina Journal Radio. I'm Mitch Kokay. One of North Carolina government's top watchdogs is stepping down. John Turcotte is retiring from the General Assembly staff after serving as the only director of the legislature's program evaluation division.

Turcotte's last meeting with a program evaluation oversight committee brought tribute from people like Republican State Representative Craig Horne. We truly have been blessed to have you with us. You are undoubtedly, inarguably, a living legend in this business. And I don't mean the legislative business.

I mean the program evaluation business. You're one of the founders of this type of an effort. That's pretty rare air and certainly good for us. We're looking forward to welcoming back from time to time.

Come and visit. Keep us straight. Turcotte had a chance to reflect on his own work at the head of the program evaluation division. First, he brushed away praise for his work. When one person does his or her job and gets paid for it by the taxpayers, that's enough as far as I'm concerned.

I don't need to be given a thank you or anything like that. You expect things to be done and that's what I have done. Turning away from his own contributions, Turcotte focused instead on the institution. He compared North Carolina's program evaluation oversight group to other units across the country. This committee, unlike others across the country, has a very strong role in legislation. It may surprise the committee that in other states, the program evaluators or the legislative auditors make reports, mail them out to the legislature, and at the next meeting of the legislative auditing committee, they may bring one or two up for discussion, but there is no follow up.

There is no follow up. The individual members may introduce legislation or they may do things, but in some states, the program evaluators and the auditors are discouraged from even meeting with legislators. Turcotte turned to an example from his own professional past. When I moved to Florida, I became the first director of OPAGA, which is equivalent to this unit, but it had been the performance audit division of the legislative auditor's office. Those auditors had to file a written report with the state auditor, with the legislative auditor every time they had a contact with the legislator, and they had to get permission to return legislators' phone calls and all that. I just want to let you know how unusual this committee is in the strong role that you have, particularly pursuing legislation, and I'd like to mention that Representative Howard and Fletcher Hartzell, who were chairs at that time, made this a standard practice, that with every report, that legislation be prepared to implement the recommendations, and I just want to let you know how powerful and how strong that activity is, and it's very, very unusual across the country, and I think it gives this committee a lot of strength and a lot of character, and you need to hear that.

And you need to hear that. Why is it so important for program evaluations to lead to proposed reform legislation? The agencies, if you did not do that, if you did not follow through with legislation, the agencies would not take this work as seriously as they do. That's John Turcotte.

He's retiring as director of the North Carolina General Assembly's Program Evaluation Division. In addition to linking evaluations to reform legislation, Turcotte emphasized the importance of maintaining an independent voice. The independence of a function such as this is very important. The committee and the leadership of this legislature has always allowed us to speak freely with the members in these reports. We don't edit or water down these reports in any way. You get our professional opinion. That's not the case in a lot of places. Your committee, many years ago, the committees like this would bring the reports up and go through them line by line and say, I don't like that finding. Let's change that.

Instead of saying fail, let's just say did not. And it's unusual now to do that, but this committee goes even further than that. You receive these reports. You let the staff make presentations to express our opinions and do so without yelling at us. Turcotte mentioned one of the legislatures who had just praised his efforts. Well, he does occasionally.

He takes exception to something that's said, and some of you do, but it's not like it is in other places where staff get pistol whipped if they express an opinion about something. And that independence and ability to come before this committee and to speak freely about our findings and to write our findings in a direct, active way that we do and have the bill drafting division follow through as they have so capably with their legislation is a real, real genuine jewel. And I hope you would continue that and keep that going. What's next for John Turcotte? He's heading to Texas for a while, then on to a permanent home in Mississippi.

I'm looking forward. I've been working full-time since 1970, and I took Edgar Starnes' advice. You know, Edgar Starnes, he told me, he said, don't stick around too long. We had a discussion about state automobiles, and we had made a recommendation years ago that the state fleet rotate at 100,000 miles. Edgar said, well, now you can run one of these cars up to 175, 200, 200,000 miles. So unfortunately, I took his advice and hung around here a little longer, hoping I could get some more mileage.

So I probably would have left earlier. But it's been a genuine pleasure to work with all of you collectively and individually. And I might add, the state auditor, that involvement of the state auditor that's always occurred, that too is unusual, and you should continue that. We have a fine state auditor, and the system that we have is a good one. And it's good for the taxpayers. And thank you very much, Mr. Chairman, members of the committee.

That chairman, Representative Craig Horn, offered more words of praise for John Turcotte and his program evaluation division. Through your efforts, you are a trailblazer, no question about it. You've set the pace. You will be discussed and probably cussed time and time again, probably have been. But that goes with the territory of what you do. If one of us is on the right side of one of your research projects, we love you. If we're on the wrong side, we don't want anything to do with you. That's part of the deal. But I just personally, and I feel confident on behalf of the members, the members of this committee, the members writ large across the General Assembly, we and all the people in this state owe you a great deal of gratitude.

We really do. You've led the way with integrity and earnestness. And you have unquestionably saved this state, a taxpayer to the state, millions and millions of dollars. Craig Horn is retiring from the General Assembly at the end of the year.

He'll no longer help to lead the legislature's program evaluation oversight group. Horn offered some encouragement to those who will continue the work in the years ahead. There's no question that there's so much for us to be proud of what we're accomplishing, what we're doing. The naysayers will be the naysayers there.

No matter what you do, we're all going to have rocks thrown at us, et cetera. But openness and transparency has been the hallmark of PED and this committee, how we do our work. It's been a pleasure and certainly a source of pride for me as well to work with the committee and particularly, John, to work with you in the few years that we've had that opportunity. That's Republican State Representative Craig Horn, co-chairman of an oversight committee that works with the General Assembly's program evaluation division.

Horn praised the work of John Turcotte, who's retiring from his job as director of that division. We'll return with more Carolina Journal Radio in a moment. Real influence.

You either have it or you don't. And at the John Locke 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.

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I'm Donna Martinez. Since the Great Recession, the North Carolina General Assembly has kept spending growth at or below the rate of population plus inflation. That's really important. And by doing so, state legislators, led by the Republican majorities in both chambers, protected North Carolinians purchases and paychecks from tax hikes. A new research paper authored by my next guest, the John Locke Foundation's senior fellow, Joe Coletti, looks at North Carolina's pathway on fiscal issues, compares us with two other states approach and charts, of course, for us for 2021 and beyond. Joe, welcome back to the show. Nice to talk with you. Glad to be here.

Thanks. COVID-19 has devastated the fiscal situation in a number of states in the country, but not really so with North Carolina. And there's a reason and you detail that in your new paper, Big Government, Big Price Tag. Tell us about North Carolina. North Carolina has been fortunate for the last 10 years since 2011. As the state came out of recession, the Republican General Assembly has kept spending to that level of of inflation and population growth, which means that on a read, adjusting for inflation, you and I aren't paying any more than we were 10 years ago for state government, which means that because we're not paying more, but our incomes are going up, we have more available to take care of our own needs. And at the state level, by not spending that much and as the economy has grown, the state now has has had more money, which has allowed the government to provide tax cuts and to set aside money in savings to that helped us get through to hurricanes, to major hurricanes, and still have a billion dollars left over a billion dollars left coming into the pandemic. In addition to that, because they added a feature of the budget which prevents government shutdowns, the governor's veto and the stalemate between the governor and the General Assembly over the past year has resulted in additional savings that allowed the state to be able to get through the recession, to get through the pandemic so far, without any furloughs, without any tax increases, without significant pain that we've seen in previous recessions after the state had expended money beyond that inflation and population rate. So the state's in really... No state's in really good shape, but North Carolina is in much better shape than just about any place else in the country. Joe, in your paper, you really emphasized that it is so important for policymakers in every state, but particularly here in North Carolina, because we've seen it, for them to focus on reining in that spending growth that some other states have really focused on tax rates and cutting taxes first, but that spending component is so critical. Now, here in North Carolina, we actually did both. We reined in spending growth and we also made sure that North Carolinians kept more of what they earned. So we're in a very unique position of essentially coming up with the right recipe.

Yeah. We've seen in Kansas earlier this decade and we saw over the past 50 years of tax revolts starting in California with Proposition 13, which limited the property tax increases in that state. When legislators and others focus first on taxes without addressing the spending question, then the spending continues and eventually the taxes have to go back up.

And at the federal level, we see that it just results in debts and deficit. But North Carolina, by focusing first on that spending question, the taxes are able to follow spending down instead of trying to force the conversation, which is really hard to make happen right. So that's the California situation and we all remember that, or at least some of us of a certain age remember that. The state of Colorado is an interesting case as well. What can we learn from how Colorado approached this?

Right. Colorado tried a similar tactic as California, first focusing on local property taxes and how do you keep those low for residents. But in 1992, after a number of tries, the state voters in Colorado approved the Taxpayers Bill of Rights, which limited spending and revenue growth to the rate of population inflation and allowed voters to have a say in any future tax increases and ability to spend above that level.

And as a result, Colorado has had lower spending, has had lower taxes and continues to grow at a faster rate than North Carolina in population and in the economy. So Joe, looking forward, how do we ensure that North Carolina keeps to this successful recipe, as I put it, of reining in the spending growth, making sure people who are out there working, earning a living, that they keep as much as they can, just paying taxes to provide core services that we all help fund as North Carolinians. How do we stick to that track when you've got some folks who are saying, no, we need to be spending more money. People aren't paying their fair share in taxes.

And so that all looms out there. What do we do? What's allowed us to keep it so far is by voting for the people who have had that initiative and have that desire to keep spending low. We've taken a look at the Taxpayers Bill of Rights and the paper focuses on, can you put this into the Constitution? And that's where from academic research and from the experience in Colorado suggests that a constitutional amendment for a tax expenditure limit similar to the Taxpayers Bill of Rights is the best way to be able to continue reining in spending and to make sure that it's not a question of who's in charge, but of the processes in place.

North Carolina has a number of things that have kept spending within reason over the course of years, have kept debt in check. Colorado, we've seen that regardless of what people want with spending, they've had, because of the Taxpayers Bill of Rights, they've had that institution in place and people have not gone too crazy when in power over there. So instead of just kind of voting for certain people and rolling the dice as to who becomes in charge of the General Assembly or who is elected governor, and then they can change the laws, they can raise spending, et cetera, if they've got the votes. Rather than kind of banking on that, go ahead and put it into the state constitution so it doesn't matter who's in charge.

Right. And in Colorado, people are still the key provisions of that, the voting on tax increases and the low spending have remained popular. And so if you have it in the Constitution, they can't just not say, notwithstanding what we said before, it's written there, it's in the Constitution and the legislature can't go against that. Joe, what is so important here, I think, about your paper, it is the third in the series of really a focus of the JLF research team on big government and big price tag.

It's really important because it's more than a theoretical discussion. We actually have current state legislators, they happen to be Democrats, who are proposing ideas that would increase spending. Some of it relates to expanding Medicaid in North Carolina. There's also legislators who want to repeal our state's ban on collective bargaining for public sector unions. That's big costs right there. Huge costs and both of those papers have documented just how much that is and how much it's been understated when people have advocated for those things. And so that's where the taxpayer bill of rights and tax expenditure limit becomes extremely valuable. Joe Coletti is the author of the third paper in this series, Big Government, Big Price Tag.

And that's all the time we have for the show this week. Thank you for listening. On behalf of Mitch Kokai, I'm Donna Martinez. Join us again next week for more Carolina Journal Radio. Carolina Journal Radio is a program of the John Locke Foundation. To learn more about the John Locke Foundation, including donations that support programs like Carolina Journal Radio, send email to development at johnlock.org or call 1-866-JLF-INFO.

That's 1-866-553-4636. Carolina Journal Radio is a co-production of the John Locke Foundation, North Carolina's free market think tank and Carolina Broadcasting System, Incorporated. All opinions expressed on this program are solely those of the participants and do not necessarily reflect the opinions of advertisers or the station. For more information about the show or other programs and services of the John Locke Foundation, visit johnlock.org or call us toll free at 1-866-JLF-INFO. We'd like to thank our wonderful radio affiliates across North Carolina and our sponsors. From all of us at Carolina Journal Radio, thank you for listening and please join us again next week.
Whisper: medium.en / 2024-02-01 17:15:22 / 2024-02-01 17:32:09 / 17

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