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Carolina Journal Radio No. 832: Reformers would reduce, eliminate certificate-of-need rules

Carolina Journal Radio / Donna Martinez and Mitch Kokai
The Truth Network Radio
April 29, 2019 8:00 am

Carolina Journal Radio No. 832: Reformers would reduce, eliminate certificate-of-need rules

Carolina Journal Radio / Donna Martinez and Mitch Kokai

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April 29, 2019 8:00 am

Health care providers in North Carolina need a government permission slip called a certificate of need before they can add hospital beds, build new facilities, or purchase major pieces of equipment. Health care reforms say scrapping CON requirements would boost health care innovation in this state. Jordan Roberts, John Locke Foundation health policy analyst, discusses legislative efforts to scale back or eliminate state CON restrictions. Reformers have been targeting the formula North Carolina uses to fund public schools across the state. Aaron Smith, education policy analyst for the libertarian Reason Foundation, has been watching the debate with interest. Smith explains some of the problems with North Carolina’s current system. He explains how reform could lead to better outcomes for students. The shooting death of a state Highway Patrol trooper in Columbus County last year has prompted action at the N.C. General Assembly. Lawmakers say Conner’s Law would step up the penalty for people who use a weapon when assaulting a law enforcement officer. Lawmakers are also pursuing new legislation that would make it easier to charge a drug dealer when an illegal dug transaction leads to death. Dubbed death by distribution, the new crime would enable prosecutors to charge a deal with a crime other than murder or manslaughter. Policymakers continue to push for increased government involvement in providing broadband services. Jon Sanders, John Locke Foundation director of regulatory studies, explains why these government broadband schemes are misguided. Sanders says they can prove especially costly for taxpayers, even those who never use the service.

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From Cherokee to current attack from 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 public policy events and issues welcome to Carolina Journal radio I Michiko got during the next hour, Donna Martinez and I will explore some major issues affecting our state reformers hope North Carolina will change the formula it uses to fund public schools across the state. Learn why the shooting death of a North Carolina state trooper last year is prompting new action at the Gen. assembly. You hear the provisions of the proposed Connors law. It could be hard to prosecute a drug dealer. When an illegal drug sale leads directly to death in North Carolina to learn about legislation designed to tackle that problem and you learn why it makes sense for government to stay out of the business of providing broadband service.

Previous government efforts to provide broadband of turn out to be ineffectual and costly those topics are just ahead. But first, Donna Martinez joins us. She has the Carolina Journal headline for years now.

The John Locke foundation has urged North Carolina legislators to jettison one of the states most outdated laws were talking about what's called certificate of need to law or some people just call it con law in the con law statute. It says that if hospitals or groups of doctors want to expand their facilities say Addie has surgery center. They have to go to the state of North Carolina to apply for and receive permission while now a bipartisan group of health policy scholars also is saying it's time to end North Carolina's con laws.

Jordan Roberts is the Locke foundation's healthcare policy analyst. He's here to explain exactly what's going on Jordan.

Welcome back to the program. Thank you going to be here so we can a lot about lowering costs.

The need to do that. We talk about the need to expand access to healthcare services.

That's really the rallying cry. So tell us how the certificate of need laws impede those goals so certificate in the laws when they were implemented back in the 70s. Their goal is to limit the supply of healthcare so there wasn't, duplicative services or an overabundance of healthcare in an area so it would require government permission slip for any expansion of healthcare services and what that does is it artificially limits the supply of healthcare in a given area, and when you limit the supplies you limit competition and that raises artificially high prices and gives the current incumbent market actors way more power to set prices the way they they see fit. And that leads to higher costs for everyone in the market. North Carolina has been operating with the certificate of need laws for a number of years now and since the research clearly shows what occurs is you just described why we still have these laws where we operating this way. Well, you know, the North Carolina healthcare Association has a large stake in keeping these laws in place because you know they feel is there for more competition would lead to lower-cost programs. There's a lot of money at stake here is basically what's going on and you know if 14 other states have completely repealed their certificate of need laws so we know it doesn't completely blow up healthcare markets and no circuits. It's really comes down to just a matter of money to analysts here at the Locke foundation, your predecessor, and that now you're on on the beat now writing about this have done the research have reiterated that where there's really negative consequences due to the certificate of need laws but even writing recently about the fact that damn con laws now have the interest at the federal level by a very interesting group tell us about the group and what they are advocating. Yes, this was a request from Sen. Lamar Alexander is the chairman of the help committee up in the United States Senate and late last year he asked for input from all the health scholars and experts in the country to say how can we lower healthcare costs in America and one of the answers.

A group of scholars from the American enterprise institute a more right-leaning group and the Brookings Institution more left-leaning group that they got together and said here's what we agree on. Here's why healthcare prices his policies that lead to increase healthcare prices and certificate of need laws was one of the policies they agreed on and they recommended that state should repeal these law's here in North Carolina.

Do we have any lawmakers who are really interested in taking the advice not only from the Locke foundation, which we been talking about writing about for years, but now from this federal group yes so there's two different proposals that have been introduced in the North Carolina Gen. assembly one as part of a larger Omnibus healthcare expansion that addresses a few access issues and certificate of need repeal is in that bill amount that would recall that I would call for the full repeal certificate of new laws and then there's another bill that was introduced shortly after that one that is titled amend certificate and you also doesn't completely repealed. But it gets out some of these facilities that really could help drive down costs if they were allowed more unfettered entrance into the market.

Jordan is it fair to say that damn your recommendation is a full repeal absolutely must be the goal but you know it's it's a touchy subject. It's very controversy will be in a lot of parts of the state due to the rural landscape and so you know if we can incrementally change these con laws and start peeling back some of the restrictions on some of these facilities and we could maybe really see some decrease prices and more better access for patients.

Do we have any examples of where something has been exempted in North Carolina exempted from the existing law is so that we can may be have something to point to to say look at what's happening in the marketplace. Well, you know there's there's some of these facilities that are covered by the certificate of new laws when they do get approved. For instance, ambulatory surgery centers. They can evidence shows that they can offer the same services that hospitals offer, but for a much lower price and win something with the diagnostic imaging centers when they get approved and are allowed to provide services for the patients we see that they can offer significantly lower prices to make you wonder if we see this happening M after their approved, why would we want more people to be in the marketplace to do that given her this whole approval process and just let these hospitals or groups of doctors go out and certainly you would think that they wouldn't be investing in whether it's additional surgery rooms or a big piece of diagnostic machinery unless they know that there is a demand there from their patients right in the know that's that's where the rock foundation. A lot of my application for the for this comes from is that we should let private market actors determine where the need is and you know when these groups get together to open new facilities in their skin in the game, you know that's that's really where we get the best market comp market price competition prices get driven down and patients are better off help us understand if you would Jordan what happens. Let's say I'm Martinez Hospital in Matthews North Carolina and I decided that gosh my my surgery suites are just jampacked. We know that we've that patients who are then becoming here. We could really help our patients if we had another couple operating rooms.

What happens what we have to do.

So you would have to so there's a rally there's a state planning board that you know runs models each year to determine the amount of need that is being demanded in certain markets and so they will accept applications for new facilities and they will run the application against their numbers. This, to determine whether or not there is actually a need for more services and then one of the really bad parts of this is that when an application is in front of estate planning board.

The current holders of certificates of need in that area can actually submit comments and basically Robbie against these competitors that come into the market and will compete with them so you know it's really is about system and it really ends up hurting patients okay so in my example, let's say that I've that the Martinez Hospital and I want to expand but you are the Roberts hospital and you're saying hey I want the Martinez Hospital to expand, you could actually make it so that I could not get the expansion permits you, you can you know Robbie all you want is a very expensive processing so that prices a lot of people out of the whole the whole process and I really ends up driving up prices and hurting patients were talking about with Jordan Roberts here, who is the healthcare policy analyst for the John Locke foundation is Sam a set of laws called certificate of need laws and North Carolina is one of the states that still has these laws on the books you can read his latest paper on this@johnlocke.org titled reforming North Carolina certificate of need laws very much like you say with this much North Carolina journal radio to come in just a moment government plays a key role in your life affecting your paycheck the way you educate your kids the way you do business. How can you tell if government is doing a good job making the right choices. Spending tax dollars wisely. Carolina journal.com tackles those questions every day. The John Locke foundation publishes Carolina journal in print each month and on the web each day@carolinajournal.com you'll find exclusive investigative reports on topics. No one else is covering what else a rundown of the best new stories, editorials and opinion columns in North Carolina. John Hood's daily Journal news stories and important public events@carolinajournal.tv and the voices of the newsmakers themselves.

Carolina journal radio in print on the air and on the web. You can find the information you need@carolinajournal.com will go back to Carolina journal radio amateur coca North Carolina has been looking into changing the way public schools are funded in the state. One person who's been watching the discussion with interest is Aaron Smith education policy analyst for the libertarian reason foundation. Thanks for joining us.

Thanks for having me today. Why is this such an important topic for people to know about school finance is obviously a very important topic. So, as a country we spend about $600 billion every year in our K-12 education North Carolina particular numbers about $13 billion. When you count for local, state and federal federal funding.

So from up from a finance is to prickly fiscal perspective is very important because were allocating a lot of dollars towards but what doesn't get a lot of play is regardless of how much were spending so whether we spend more, less or the same per pupil on education is that how we allocate those dollars impacts what happens in classrooms and that's true both for Opera teachers and for students as well. Now you have looked at other states and from a sort of a national perspective when you look at North Carolina and compare it to other states what he will you see what what stands out so every school finance formula has its issues there all complex to at least some degree so much better than than others, but you know I would.

I would say an honest assessment is that North Carolina's is uniquely bad in a lot of respects it's very antiquated. So, it stems from the 1930s instead of allocating actual dollars down to districts, North Carolina allocates staffing positions and uses categorical allotments and while a lot of people may not really understand what that means. It's basically there's a lot of red tape around how education resources are used in a set of making decisions.

Locally there made centrally by the states so that districts and schools and school leaders such as principles can actually make decisions without dollars are spent wisely.

The problem, because you want decisions to be made as locally as possible, because only a principal and a teacher really knows the needs of their school and so you can compare two schools and look at their allocation patterns in terms of how dollars are expended and they might get very different results. And so what that shows is there's no one way to find a successful education needs to be locally responsive and to do that you need to empower principals to make trade-offs and so the question is who you want making.

The trade-offs do want state officials to make the trade-offs district officials or you want principles teachers to make the trade-offs in terms of how dollars are spent, and there's a good amount of research that shows when you empower local decision-makers to make those trade-offs. Kids will we are chatting with Aaron Smith he is in education policy analyst with the reason foundation and so, given that your assessment that North Carolina is uniquely bad in its system. Are you encouraged that the some folks are talking about perhaps making up change I'm very encouraged and encouraged by by one thing to begin with, and that's there seems to be widespread agreement that the formula needs changing. That is antiquated and it's very inefficient so that the positive now in terms of what to do next. Seems to be a little bit of a disagreement, but I think the idea of moving towards a model that uses weighted student funding to allocate dollars is certainly great gaining traction and is something that legislatures should certainly pursue now correct me if I'm wrong to give you an idea of what I think you mean by the weighted student funding basically, rather than giving school districts money based on you going to have X number teachers are extra for textbooks that you have this number of students you're going to get this amount per student with certain weights added in for special categories up her special needs for economically disadvantaged English language learners, and so that's the that's the that's basically how it operates and so instead of funding programs such as a no.

North Carolina has 37 separate allotments summer reading program and technology and not to say those things are important, but your your your funding kids and allowing district and looking school officials to actually make the call and how those dollars are spent. If North Carolina does make a change is basically going to be following the footsteps of some states that do it right or at least do a better not necessarily, but I hope so and so and in might be compared to the hear this but but California is actually a model of the state that is doing really good things the school finance back in 2013 and amended the local control funding formula, which drastically simplified how they'd divvy up dollars in so there were similar to North Carolina and that they had about 50+ categorical allotments, which basically funded everything under the sun and came with a lot of red tape and right now and so there about six years into implementation and the earlier research on it is very positive. Superintendents and principals are happy and satisfied with the changes one big take away is that there are better able to align resources with their actual goals and strategies what they want to accomplish. They could direct more resources towards those things. Now a lot of people will have fights about how much funding is the proper amount of funding what you're talking about doesn't really have anything to do with the level of funding, but making sure what funding you do have is used most efficiently and effectively right exactly so regardless of how much were spending on K-12 education are good ways to allocate the funding, there are bad ways to allocate the funding into what I'm saying is we need to be more efficient and we need to empower those who are closest to children including parents as well and so what a lot of people don't realize is that school finance formula is very much related to school choice and so if you have a lot of inefficiencies in your formula, especially a lot of inequities and where were dollars don't follow the child school choice becomes very difficult to implement. And if you do have school choice programs, it's more difficult to grow and that's one thing that we've seen in California is that with these changes, they have a very fair and transparent system. School choice has expanded rapidly for about 150,000 students now in California who cross district boundaries to pursue better options for their families. In the same is true in Indiana as well. So they made some pretty big changes in Indiana to promote a better fit funding system and as a result, school choice has literally exploded in any very positive way. This is not a brand-new discussion and when this is come up before the general assembly in the past. Some people of said I hear what you're saying about more local decision-making. But some of these locals are going make bad decisions.

We in Raleigh need to be the ones dictating things. Why is that not right is not the right approach because what you really want to focus on is his outcomes and not inputs.

So instead of dictating how resources are used and what districts do you want to focus on how they are performing and so looking at things like student outcomes and parental satisfaction, and so incentives dictating what they're doing.

Let's look at outcomes and one way to achieve this is through transparency some more transparency around financial reporting and how districts allocate dollars and actually spend dollars and more transparency in terms of outcomes as well and in test scores and being able to actually lined those things out and to show how schools are performing, lining up test scores with the dollars allocated and spent. This is going to be a long-running subject expected North Carolina one of the people who will be following it very closely. Is Aaron Smith. He is education policy analyst for the libertarian reason foundation. Thanks for having me today and will have more on Carolina journal radio just about if you have 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 conservative.com it's one stop shopping. North Carolina's freedom movement and North Carolina conservative.com. You'll find links to John Locke foundation blogs on the days news Carolina journal.com reporting and quick takes Carolina journal radio interviews TV interviews featuring CJ reporters and let foundation analysts, opinion pieces and reports on higher education from the James Dean 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 conservative.com that's North Carolina spelled out conservative.com North Carolina conservative.com. 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 follow us on Twitter at John Locke in the sea and at Carolina journal news, insights and analysis you'll find nowhere else. Thanks to the experts at the John Locke foundation and thanks to the first-class investigative reporting of Carolina journal. Don't wait for the morning newspaper. 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 NC and at Carolina journal did you know you can now advance freedom and free markets just by shopping with Amazon it's true online shopping is now a great way to support the John Locke foundation just shot using the Amazon smile program and designate the work foundation to receive a portion of your purchase amount that's right you shop and Amazon donates money to last the John Locke foundation. So here's how it works long time to smile.amazon.com Amazon smile. It's the same Amazon you know same products same prices is much better. Amazon donates .5% of the price of your eligible purchases to pass the John Locke foundation to try to be sure to designate the Locke foundation is a nonprofit, you want to support. It's that easy. So now not only will you enjoy what you buy will also support freedom. Don't forget log on to smile.amazon.com today by something nice and help defend freedom. Support the John Locke foundation. Welcome back Carolina journal radio I Mitch coca the fatal shooting of a North Carolina state trooper last year was leading to new action in the general assembly.

It's a bill called Connors law suit House Speaker Tim Moore discusses the legislation's goal sad occasion brought us here, but were hoping that this legislation is adopted will make will crackdown on the criminals who threaten the lives of these men and women in public service.

Make sure that do all we can to make sure these kinds of things don't happen again. Republican representative Brendan Jones of Columbus County offers more specifics about Connors law brands.

We are here is very clear message through our law enforcement. We got your back also gives a very clear message about Longhorn officer were not put up with this bill is a great deal. Everyone here is that it can fall the greatest proof of life. Sure) is sought last year.

Sadly this happens far too often, the North Carolina and across the country and enough is enough, all those very important things.

One source and women will place as the pill he foresaw him officer class D felony for the change that will harm jail time for anyone convicted of second know best benefit the family a lot of this is the least we can do. These are small, but I sent a very clear message message that we do have the backs of the men and women police our communities and their families also sent a message that we have a zero tolerance for anyone. One of our officers on 12 standards of the everyday of our law, what would be the practical impact of the change. House Speaker Tim Moore explained protocol right now, if someone assaults a law-enforcement officer with the far and doesn't elevate. For example, to the assault with a deadly weapon inflicting serious injury or with intent will face you are sometime shooting some minor injury. You could actually have a situation where the person because of the record will not get any prison time because the current law states that is last he felt based on the record and all person could Get off with probation under this new although person has mandatory prison time doesn't matter what their record is by raising it from a classy plastic and they could face up to 204 months unanimous statehouse approved the measure also requires support from the state Senate to become long term with more 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 and@johnlocke.org/podcast 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 that's listen to Carolina journal radio each week and listened Locke to remember, you can listen to headlock@johnlocke.org/podcast 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. Welcome back Carolina journal radio I Mitch coca when someone dies from a drug overdose in North Carolina.

It's often hard to prosecute the person who sold the drugs proposal in the general assembly could change that Republican representative Destin Hall of Caldwell County explains many don't understand that the dealers who supply these highly highly lethal drugs and profited supplying these drugs can't be sure with first-degree murder and really difficult charge of second-degree murder as well. It's been somewhat hamstrung in using our moral laws to prosecute these folks for anything really more serious than manslaughter or involuntary manslaughter, and in a lot of cases, the conviction of involuntary manslaughter doesn't mean any jail time at all, and often it, it means only, probably 10 to 20 months. So what we've done is folly bill in the House and Senate that would give our law enforcement officer in our prosecutors a new tool in the fight. Only you would prices representative Destin Halls bill would create the new crime of death by distribution, death by distribution is a torch that could be brought against any drug dealer death results from their distribution of an opioid including certain methamphetamine or cocaine. The key difference between this law and the other laws we have on the books is this law would not require malice to be poor. The key is that prosecutors also wouldn't have to show that intent to simple death by distribution would come with a sentence roughly in the range of voluntary manslaughter would equal roughly 3 1/2 seven 1/2 years. There's also a crime for aggravated death by distribution of an individual is been previously convicted of certain drug can't drug crimes. It would carry a heightened punishment be to punishment which could mean somewhere in the neighborhood of 10 years. We know that simply criminalizing things that does it does unto itself solve the problem. This is just one to that we want to give these folks to work with this general assembly has done many things over the course of the last two years to try to fight this opioid crisis, including the bill we had in the last tone dealing with prescription meds and trying to reduce the number of opioids that are prescribed, but we think this is an important tool in an ongoing battle representative Destin Hall is explaining a proposal to create a new crime hold death by distribution Senate Majority Leader Harry Brown of Onslow County also supports the legislation.

Six people died every day in North Carolina due to drug overdose in everyday six more families are left permanently and profoundly wounded. Often after a long struggle, save your loved one from grips of drug addiction. We must do everything we can to stop the people who write human weakness for profit. This bill is an effort to address this class of the drug problem. Of course we should do everything we can to address the demands addiction treatment, education, work and availability means that we can come up with this bill doesn't take anything away from any of law enforcement has told us that I need a note to their toolbox. Another weapon in their arsenal. If you will to combat the scorch. Most of you probably know that in 2017.

North Carolina had the second-highest increase in the country and overdose.

This law enforcement and state health officials have been working hard to fight this epidemic. We hope to say that we make some progress. We get new data this for down from 2000 I think we all know that fundamentally we still have way too many people dying of drug drug overdose. This bill will ensure that anyone who is working against us by supplying lethal drugs for vulnerable people were treated like murderers, but are Bob McBride lost his son Josh to a drug overdose. He joined the lawmakers to support the death by distribution bill McBride described picking up his son from a drug treatment program that I ended about 11 clock with a hug good night I love you exchange thank you for Josh for all that I've done to try to help.

Last, so love the text message exchange with his dealer was on his phone.

Sometime after Josh made the bond the restroom at the mall Josh Texas dealer and said he had been shorted.

They will reply with exactly what he sold three of this the wrappers corresponded exactly what was law enforcement working with the DAs office build a case against the dealer and he was arrested and charged with second-degree murder along with a felony with 11 felony drug charges. In my opinion, the case against drug data was verified confessed to selling drugs. Josh later said he sold drugs for money and profit. His entire conversation was everything Wanda so you might say well if it was such a perfect case. While was well so hopefully manslaughter is very very slow. There is, in which she asked every juror potential convicted dog show. They'll put those jurors convicted everyone up. Even though I heard them say yes. I just didn't hear I don't think I think it is not uncommon for people to think that in addition vision is choice thank convincing. Convicting someone of murder selling drugs.

Vision removes barriers associated with Cumberland County district attorney Billy West says he and other DAs across the state support the plan. 1500 people. Approximately each year from drug overdoses North Carolina that's up 350% since 2000. Probably the most alarming to stick is that more people dropped off from the drug overdoses and from firearms crashes in our state. So, law enforcement, legislators and district attorneys have come together to try to do something about this. This will be a tool you should build and I think it's important to point out, we are not here to any way of punishing attic with an addiction were not here to cross off once someone who's being a good Samaritan when they are with someone that has a overdose, even if they were using the drug themselves, and certainly not here to try to punish doctors with given legal prescriptions but were here to charge, prosecute and punish drug because they are peddling poison in our community. It is a violent crime. This bill treats it as a violent Sen. Harry Brown and representative Destin Hall pledge to keep working on the issue is a start. Before I don't think we got a look at other ways with stuff so hopefully this is just the beginning of things we can do. This is an absolutely serious problem in our state that we got to do something about. We've been working on it. It's an ongoing process. He's right.

It's something that this is this is just the start.

You been listening to highlights from a news conference at bailing the proposed death by distribution bill.

It will give authorities another way to charge a drug dealer after a person dies of the drug overdose in North Carolina or Carolina Journal radio in a moment a commitment to truth and transparency in government. That is the mission of Carolina Journal and we are proud to deliver and now proud to tell you the North Carolina press Association has honored to members of our team with awards reporting and writing, that's right, we really do deliver award-winning journalism we shine the light on government spending, reveal the truth about boondoggles and dig deep into programs paid for with your tax money.

We keep you in the know in a way other media outlets don't in our reach and influence are growing all of our outlets. We reach more than 1 million N. Carolinians each month so make sure you're one of them. Our monthly print edition arrives in your mailbox every month.

Our online daily news site Carolina Journal.com has fresh stories, opinion pieces, and more. The award-winning Carolina Journal team I reporters make government accountable to you. Call 1866 JL FINF0 for your free subscription, welcome back to Carolina Journal radio I'm Donna Martinez. Local governments should not get called in the broadband business that is the conclusion of our next guest, John Sanders, whose recent column posted@carolinajournal.com urges state lawmakers to resist the temptation to involve government addressing a challenge that can be met by private enterprise. John is the director of regulatory studies for the John Locke foundation. He joined us now to talk a little bit more about the points he made in this really interesting, welcome back to the show thanks to so I think the impetus for you writing this column is the fact that with the general assembly in session now there's some rumblings and in fact a couple of different pieces of legislation that people are introduced in order to allow local governments to start sneaking back into this effort to provide broadband to their citizens give us a sense of what's going on in the legislature right what's going on is that there's a couple bills, especially that would try to deal with this problem. This is a problem. This is a concern the people have because it's more expensive and harder to get broadband technology to more far-flung areas of the state. The rural areas.

The mountainous areas, so it's it's a market problem that doesn't mean it's something that's got a government solution to it, especially in the area of high-tech because things as you know change so quickly in this area talk about 5G and some coming soon.

I know I have to admit, I'm not sure what 5G is still getting used to 4G myself but give us a general sense of some of the ideas that have been presented in a couple of these bills about them. How how it would work and what some legislators may want government to do one bill basically would allow electric co-ops to apply for grants with the US Department of Agriculture, which has a brand-new grant program that would allow them to use their rights-of-way to build infrastructure so as far as that goes something that's an intriguing idea. The problem with it is that looks like it would allow for cross subsidy subsidization, which is a rather nice out to so that the electric customers would have to pay for the other parts of the business that the broadband side and that's that that's the worry, they have to change state law to allow them to apply for the grant. But I don't think that they would need to change state law to allow the cross subsidize the cross subsidizing it's a money loser meeting that that if you are sick Sandy water bill. For example, part of the charge would be actually pay for broadband right pay for the infrastructure interesting so you wouldn't be exit paying for the service that says in this case of a water bill, water something else to be added to it in order to subsidize that John we have a history of of this kind of thing. In general, and much more concerning is the other bill which would allow municipals and county governments to to set up broadband infrastructure for leased to private companies and then they would do it by basically they would be allowed to charge you through electric car through taxes or innocent. The bill would allow for cross subsidization. It would set aside the level playing field law which was passed in 2011 in response to what your mentioning the history that we seen in local governments getting in involved in broadband infrastructure and there was a reason that legislators have passed the bill that she referred to just a few years ago because we have had several different incidents across North Carolina, dating back to around one 2010 2011 just thing down the mid-2000 yeah where we had some local governments getting involved in this tell us what happened in and what the impact ended up being will Saulsberry, for example, set up fiber network trying to solve the problem. The lack of broadband infrastructure. Wilson did Mooresville and Davidson and repeatedly one after another, you would see the cities not being able to afford it. Having to hit up their other funds.

Saulsberry, in fact getting their bond rating downgrade because they were there getting so deep in the hole in the last year. The voters finally allowed the lease of the system green. The green light for Wilson had been by 2011, losing millions and millions of dollars and they were having to go to their electricity fun and Wilson's electricity rates were already some of the highest in the state. It sounds to me like those governments, they decided to do this found that it was much, much more costly.

Perhaps they thought it was going to be in and they ended up not being able to make back the money. It also have to start dipping and other buckets of money yell and my colleagues, my former colleagues, Alaka Michelson there and then enter the cave with you want about that saying this stuff is has been tempted in other parts of the nation, and that's been the inevitable result. Talking about setting up a private business, basically through the government and something that changes quick and government cannot change quick and they were they were they were spending, taking 25 year bonds on some some cases to do these. And so there many others will. John what do you say that supporters of this approach say well you know what there's gonna be some far-flung communities in our state where private companies just don't want to go to because they don't think it's profitable enough. So what we say to the people who live there, and that's always the argument you hear some a sense of what you have seen in terms of private companies that are working in the state and what happens if Mary isn't served with. It was really interesting is the very same day that one of these bills drop the W and C story about some private entrepreneurs that were hooking up farms using sometimes sweet gum trees or or grain bins or I can't remember all of it, but they were finding some very unique ways to go about dealing with the need for for relaying and getting Internet access to these far-flung areas.

It is a market process. In some markets concern, but that doesn't mean that entrepreneurs can't solve the problem. They are more likely to solve the problem the government because government really only knows one way of going about it and that's fine saddling their customers with settling there can taxpayers with extra cost to build something that may be obsoleted within a couple of years.

Do we know are there examples.

Private companies already going in and serving areas that may be in the past folks that not there. Never gonna get broadband here trying to remember the name of the company that was mentioned W and say that I mean there are companies that are that are coming about it. It's just not as fast as people with wanted to be and I certainly understand what John what you say then to state lawmakers who might be listening to us now in the kind of toying with this idea and trying to weigh all of the information in the data and argument. Sam, what would you say are the principles they should consider here when they're thinking about taking a step like this I would say not get distracted by what their building and forget the cost. On the other end they're looking at is like overbilling a great thing for consumers of broadband, but they forget that they're also building an expensive thing that there taxpayers the people in the roles as taxpayers, involuntary taxpayers are going to have to to fund so yes on one in there getting something that maybe they didn't have. Or maybe they're not getting as quickly or as nice as they are expecting but on the other end they're selling the wood way more costs than they were expecting women talking with John Sanders. He is director of regulatory studies for the John Mott foundation here this really interesting piece published a Carolina Journal.com.

The headline local governments still don't need to get in the broadband business. Take a read of that and you can get more detail on what John and I've been discussing here today. John, thanks for joining us think that's all the time we have for the program this week. Thank you for listening on behalf of my cohost Mitch.

Okay I'm Donna Martinez hope you'll join us again next week for more Carolina Journal radio Carolina Journal radio is a program of the John one. To learn more about the John Locke foundation donations support programs like Carolina Journal radio send email to development John Locke.or call 1866 jail left info 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. John Locke.toll-free at 866 JM would like to thank our wonderful radio affiliates across Carolina and our sponsors. Carolina Journal radio. Thank you for listening. Please join us again next week


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