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Carolina Journal Radio No. 798: Parents, teachers, taxpayers foot bill for school supplies

Carolina Journal Radio / Donna Martinez and Mitch Kokai
The Truth Network Radio
September 3, 2018 12:00 am

Carolina Journal Radio No. 798: Parents, teachers, taxpayers foot bill for school supplies

Carolina Journal Radio / Donna Martinez and Mitch Kokai

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September 3, 2018 12:00 am

Most school-age children are back in classrooms after summer break. Their families recently encountered the annual trip to the store to buy new school supplies. Terry Stoops, John Locke Foundation vice president for research and resident scholar, crunches the numbers to determine how much parents, teachers, and state taxpayers spend to equip kids for a new year of school. Advocates of North Carolina’s Opportunity Scholarship school voucher program recently touted results of a study from N.C. State University. It documented the vouchers’ “positive, large, and statistically significant” benefits for low-income students. Two of the key NCSU researchers, assistant professor Anna Egalite and professor Stephen Porter, discuss their findings. They explain why the Opportunity Scholarship program’s design limits researchers’ ability to perform the highest-quality performance review. North Carolina voters will decide in November whether to lower the state constitution’s existing cap on the state’s income tax rate. The current cap stands at 10 percent. The amendment would reduce that number to 7 percent. You’ll hear highlights from the N.C. House’s recent debate on the issue. Greenville businessman Harry Smith recently took over as chairman of the UNC System’s Board of Governors. During his first meeting as chairman, Smith outlined for colleagues his priorities for the board, which oversees 16 university campuses and the N.C. School of Science and Math. You’ll hear highlights from his remarks. A recent state audit criticized the state Alcoholic Beverage Control Commission for millions of dollars of waste over more than a decade. Some observers hope the audit will help spark interest in privatizing state alcohol sales. Rick Henderson, Carolina Journal editor-in-chief, analyzes reaction to the audit and the likely response from state policymakers.

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From charity to Currituck 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 the Carolina Journal radio on which coca during the next hour, Donna Martinez and I will explore some major issues affecting our state advocates for school vouchers recently tell that the results of a research study from North Carolina State University will chat with the researchers themselves to get their take on the findings you hear highlights from the legislative debate over a proposal to reduce the existing On North Carolina's income tax, chairman of the you would see board of governors outlines his priorities for the group that sets policy for the statewide University system will discuss the impact of a new state audit details millions of dollars of waste within the agency that oversees alcohol sales in North Carolina. Those topics are just ahead. But first, Donna Martinez joins us and she has the Carolina Journal headline hundreds of thousands of North Carolina kids are back in school now for them. Of course that means back to homework. Back to tests, but new friends and a whole lot of other interesting things for dad and mom this time of year means paying off the credit card bill back to school supplies. The same goes for many teachers as well. So how big will those credit card bills be when it comes to paying for the supplies and is it really necessary to spend a bundle at the store. At this time of year.

Dr. Terry stoops is the John Locke foundation's vice president for research. Also, the director of education studies and he has written several really interesting pieces about the history of school supplies and how much we spent Terry welcome back to the show. Thank you. Now I know I'm probably dating myself as being old here, but in my day all mom and dad had to do list every year they bought me a new lunchbox, usually with the logo of some popular TV show on it. They mom a few pencils.

They bought me a notebook and a new pair shoes and that was it.

It's much different book certainly is because parents are confronted with the prospect of having large lists of items to buy and items that are requested by schools and teachers for students to bring on the first day of school will come up in the late 80s we started seeing schools provide the supply lists to students and to parents via report cards being sent to mail or during orientation, nor open houses so slowly built from a couple schools doing in the late 80s to buy the early to mid 90s. It really catching on and lots of school started ramping up the supply lists and of course, once the Internet exploded the supply list went online store started picking up the list making copies and putting them in the lobby so it did not take long for the supply lists and for parents to feel the obligation to use the supply list to supply their kids. Teachers with any number of items essentially became a big important deal to schools and also to retailers to get their product onto the supply list because then everyone kind of assumed I gotta go get all these things, what you said it because you know when when we went to school it was lunchbox pair shoes. Maybe a trapper keeper some conical thing like that that you take. But if a retailer starts putting things on the list and parent start feel obligated to buy those things than the retail retailer makes more money. So of course they're going to encourage these supply list to be distributed to parents and make it as easy as possible for them to access them in today if they made it even easier you can go online, click the name of the school. They have all the items already in a box that you just pay for and that box is sent to the school. Absolutely fascinating how this is it really developed you've written a really interesting piece about this, by the way it's so today Terry I mean you have kids in school. For example, in your former teacher yourself much money are we talking about that families that moms and dads, grandmas and grandpa's are spending every year.

Well, you have to look at the different categories of expenditure searches for things like school supplies were looking about hundred $25 now looking at a a necessarily a lots of money per kid for supplies supplies is just one of the many things that a parent has to buy their child. They obviously were by them close new pair shoes, lunchboxes, backpacks and all the other items can really add up to hundreds of dollars back-to-school shopping for child and family that has multiple kids.

Suddenly, this is really a lot of money, it becomes a major investment. It becomes a survey Christmas time activity where your spending hundreds of dollars on your kids.

But in this case in the not happy about what your spending the money on. Unlike Christmas, so this this really adds up for parents, especially those that have large family. Terry teachers also get in on the back-to-school supply buying a game here and we hear lots of media stories about how teachers are spending their own money to make sure that they have supplies and they have decorations and curricula materials, etc. in their classrooms. Is that really necessary in North Carolina is there not enough money that is going to classrooms to have them ready for those kids will teachers spend their money on lots of different things and they the average from we can glean several studies about $500. The average teacher will spend an back-to-school throughout the waxy throughout the school year in various sort of items that I'd like to break this down to three different items versus decor. These are borders.

These are interesting things posters that a teacher may put up in the classroom affect my wife after cutting her border last night from classroom so I see this firsthand of the second thing is school supplies for kids paper, pencils, and those sorts of things. The third category is professional development and curriculum of the teacher come by to his laborsaving devices. Basically, rather than coming up with the lessons on their own, they can buy lessons online or obtain professional development materials books on how to teach in an different strategies you can use in the classroom. Now, I tend to think that the third category is so there's plenty materials online and I think teachers should be expected to be over by those things out of pocket.

I think every professional buys things that helps them do their job better, and doesn't expect someone else to pay for those things. So it's really the second category I worry about the most buying supplies for kids. I think the teachers probably have a good case. It is a reasonable expectation the schools and the perfect parents provide things like notebooks, papers, pencils, and maybe folders keep everything organized. One angle on this story that again is reported on a lot around this time of year is how much money is being spent actually in that is appropriated from the state Gen. assembly to schools for those items is enough being appropriated, or is it now a requirement that in order to have your room ready, the teacher has to spend their own money.

This gets tricky because the state sets aside around 60 or $70 million for textbooks and their various other state monies that go to supplies.

Not only that there is local money in this federal money. That's also used for supplies were really talk about if you look at statewide hundreds of millions of dollars for supplies, materials being spent by schools, but the issue here is that if schools want more supplies and need more money for supplies. There are very few restrictions for them to be able to use money from other categories and move it to their supply budget.

The one thing that a lot of people don't want talk about they they argue that the state is forcing them to spend money in certain ways. When the state actually gives him a great deal of flexibility. So if I was in charge of school district and I saw that I had insufficient supplies and I know that supplies are necessary and needed in textbooks was necessary. I can take the money from any number of different categories and moving into that category for books and supplies. There is something known as the annual workplace survey in North Carolina and that were posting some of the interesting results are where teachers are responding to questions about how much is appropriated to schools and what they have them to use and in their classrooms. What they say about this question of supplies and being ready. While about 8/10 teachers say that they agree or disagree that they have sufficient materials and technology to be successful in their classroom and and I think that this is a survey that's often overlooked. We talk about helped teachers feel about various things in the classroom.

This is the 2018 teacher working condition survey that asked teachers about any number of different issues including professional development, parental involvement administrators, but also asked them about facilities and supplies and so teachers are reporting they have what they need. Now there's about 20% teachers that say that they don't.

But the idea that every teacher is mad and every teacher feels like they don't have what they need to be successful in the classroom is clearly contradicted by the survey results surveys a survey that the compasses almost every teacher in the state will is fascinating. The whole subject of back-to-school supply lists and how much is spent and that Terry stoops has been writing about this. You can read all of his pieces on this subject at John lock.working Terry, thank you very much.

Thank you this much more 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 tackles those questions every day. The John Locke foundation publishes Carolina journal in print each month and on the web each 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 and the voices of the newsmakers themselves at Carolina journal radio in print on the air and on the web. You can find the information you look back Carolina journal radio amateur coca school choice supporters have touted a recent North Carolina State University study assessing the impact of states opportunity scholarship program. We featured some of those supporters on this program.

Now we chat with two of the researchers themselves.

Stephen Porter is a professor at an egalitarian assistant professor in ANSI states Department of educational leadership policy and human development.

Welcome to the program so people who listen to the show have heard some of about this report. When you look at everything that you put together all of the assessment of how this affected student achievement. What's the main take away that you hope people in North Carolina will know about the same point to keep in mind that we consider this a pilot study.

This is certainly not the definitive white on the program we were able to recruit 698 students and that was a big left to do that we had to administer an assessment to them does her students in private and public schools and conduct a matching analysis to to ascertain the program's impact. So were very pleased that even able to do that and give some sort of the snapshots interested in performance in the program, but it's important to keep in mind cannot speak about average student performance for kids getting the scholarships, not a definitive study them, not school choice supporters looked at this, especially the lines in their talking about the positive, large, statistically significant impact for students who were spayed in this, they said, hey, this is a sign that the voucher program is working well are they rights and if they're not completely right what what Yachts order or other qualification should they keep in mind. Well, we can say that the subsample the 698 students that made it anti-analysis and is actually a smaller number that made it into the final model that has all of the control variables are so important to account for certain we can say with some degree of confidence that they're performing higher than the other. What otherwise would half in math and language skills but the thing to keep in mind is that we cannot say that the program overall is effective because I just don't have enough information yet something we would love to be able to do it would take a larger sample and it would take some changes to how the programs currently designs the ladies it's not something that lends itself to evaluation right now.

We thought it was important to do the work so that we could demonstrate either the buyers in place right now. If you're serious about seeing an evaluation.

This is what needs to be overcome those of the other caveat is that unfortunately don't know enough about all the private schools in the state to say exactly what was going over the private schools that agreed to allow us to test her students. I think a reasonable guess would be that they are relatively well-functioning which is why the wooden mind is coming in and testing student. So if I had to put a caveat on the results.

It would be. It's probably more the effect of giving a kid a voucher and letting them transfer to a well-functioning private school as opposed to any private school so questions involving both the sample of the students, but also the sample of the schools involved yet and I think probably sample school factor than the simple students and that leads into the next question.

That is, there have been some people who monitor the situation, especially those who are not as big fans of school choice who have raised questions about the study itself and said this. This isn't telling us what the school choice supporters think it's telling us they have legitimate concerns about the way this was conducted in the context matter here, that where there was previously a knowledge vacuum. We now have some glimmer of information about lots going on so we see that as being of value and the right to have concerns because we still don't know enough about the students at the impact of the program on student academic outcomes also do some confusion about self-selection is really two levels are the first is schools on both public and private site had to select to participate, and then individual students within those schools had to grieve and their parents had to agree to be tested and so I when I read some of the commentary seems of people using those two issues we have a pretty rich variety of variables. Most importantly the prior year EOG score.

So I don't mind my gut feeling is that selection of the student level is not really what's driving our results. Instead, it's I think that I think they do have a point when they say that RRR sample schools on both public and private schools are not completely representative of schools in the state, but that's typical in these kinds of studies and in essence it's difficult to achieve perfect internal and external validity and so is often the case. Researchers focus on strong internal validity at the expense of external validity, something to be said about letting the perfect be the enemy of the good we have acknowledged and then transparent about all the limitations of what we can say but were still proud that we've done the work that we can take right we have one more thing now than we did previously. What can we do that until we we started a conversation that is the voice of Gallatin. He will serve Stephen Porter therewith into State University's Department of educational leadership policy and human development so you have the study was actually using the first study is one of several that you've done related to the opportunity scholarship program. Your answer suggests to me that there is much more work that can and should be done on this one of the types of things that you would like to see moving forward.

Studying this program so the gold standard evaluation that we would like to do requires for the program to be oversubscribed if there is a situation in which Martians apply patches are offered lends itself very nicely to a very rigorous call standard study where we could compare students in the causal claims about their achievement when upper went down and actually know definitively what the impact was so that idea on the participation Is perhaps unpopular, but it's something that should be put on the table. If we are serious about evaluating the program and by saying oversubscribed, which means that some people would end up getting the voucher. Others wouldn't. You could compare those actual people rather than try to find similar students in public schools right the way the current of the programs currently structured much anyone who applies and follows through all the steps will receive the voucher so no one is turned away, which is different from any other voucher programs.

How important is it from the vantage point of researchers like yourselves that we get some sort of good legitimate look at how this is working beyond the pilot that shows some potential good size for this program how important his attempt to move on and not to say okay this is now we know works.

Students using these batches at the moment and $20 million program that entering its fifth year of operation, and we still know very L we've attempted to to bridge that gap provides some insight into the program to the reports that are posted on our website. I he states, but for such a large program. I think that there is a public policy interest in knowing more about its impact in the time that we have left the Gen. assembly in our state has put forward a long-term commitment to this program. There's more funding going out several more years.

Now, as that moves forward from a research perspective is a going to be important for them to have some good solid study piece in place, rather than just rely on researchers who were interested in it and wanted to and wanted to do something, should they build something specifically into the law depend on their goals.

If the goal is to expand choice for the sake of choice, and for some people that is sufficient and I have met that goal. Let's quit the program has grown every year.

It's been in operation. If the goal is to expand quality choices quality seats in which students are learning more as a result of participating in the program that we have no idea anything that goal is not set up to be evaluated and that require some changes if it's going to happen no okay very good. Once again we are speaking to Stephen Porter who was a professor and gala take was an assistant professor into State's Department of educational leadership policy. Thanks much for joining us level I Carolina Journal radio just 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 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. Follow us on Twitter at John Locke in the sea and at Carolina.

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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 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 past the work foundation to receive a portion of your purchase amount that's right you shop and Amazon donates money to us. The John Locke foundation.

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So the bill would help safeguard sufficient actually provided in recent years protect taxpayers from local tax increases in the future. Total 75 establishes a reasonable limitation of taxable income. Most harmful form of taxation puts the state positions without protections against tax hikes in the future. Among those who say no Democratic representatives pricey Harrison and Darren Jackson. I think the number is about him once and once regressing to relock it in future legislators gone from an ability to react to the financial crisis.

We haven't hit a recession since we have been cutting income taxes, but we may get another session on her. The relevant someone of a structural deficit in future years.

As a result of the current income tax cut.

We may have another horrible on disaster to hurricane spires flights and I think that the thought of limiting our ability to typically raise income tax so that we can do what they significant shortfall of funding for our state's needs is a really bad idea. Washington DC is running about about $1 trillion year deficit at some point you're going to have to stop that.

I think I think we would all agree that I would be a good thing if they would stop down both sides will and I do. There's several things I could do that I could raise taxes like cut spending that could shift things down so the state to pay for and when that day undoubtably columns where you have to decide how we want to deal with that and this is going to take one of her options off the table.

Republican Nelson dollar response to the critics, I am quite confident that that the room between what the right is going to be in 2019. Where this Is is more than sufficient to satisfy any of the writing houses as well as to satisfy any of the needs that we may have in the future as far as our recurring appropriations need to be and I would also point out to the body that we have currently in our rainy day fund $2 billion.

This is not like it was several years ago when it was maybe 200 million at most. We have $2 billion and frankly if you look at the other reserves we have in a variety of places. It's actually over $3 billion that we have. We are quite in good shape. In this day and we've managed well and this Is quite reasonable in terms of this bill and I'm sure that the citizens of the state will overwhelmingly support this and ultimately again be there decision. Voters will decide on the income tax In November will return with more Carolina Journal radio with about 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 light 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 will Qubec Carolina Journal radio I'm Ashoka the UNC board of governors has a new chairman one who wants to inject more business practices into the board. Harry Smith recently conducted his first meeting as chairman when looking know where we want to do as a team will be using, which will allow you to remember to always and and then work tremendously to get the thought that in the totals so the board can work in a manner to make good decisions in the best interest of the system and I think you will see us operator kinetochore and unlocks the boat with our present that Pres. is UNC system president or grid spellings. Smith offered spellings spend the rest of the board some ideas about his priorities moving forward.

Just some thoughts that older committee structure.

You know, we took a load we will have actual challenges and charters of the committee level to those things that we actually will and try to accomplish in the so one of things we do want to lose that I will measure our success over the truly moving the social unit regardless of benchmarking goals for the committee structure and then work together some that I'll talk to the signatures about general budget and finance. There's no doubt we will to reinvent the funding model and try to get something that is much more for less, calculated in the much more congruent to where we are as a system to the only a single we definitely figure out on our plan is submitted will continue so many times it is stuff that would build buildings after buildings we have multimillion dollar about all of the parent of motion with only got 33 million this year, which we are as auto zero short sale you should think we can probably think the building so that and so it's a challenge and so those are some of things that we will shoulder rural and workable for long-term solutions is also referenced other areas of UNC system governments such as educational planning or we can look at nonperforming degree programs degraded closely and inefficiencies within that platform and eventually work again with fact that in the sale, not a motion to make decisions that are in the best interest of the sixth Smith also referenced goals for the UNC boards personnel and tenure committee. One of the things that I will work on that. I'm pretty excited about that.

I think of the law without analytics is well-developed, fourth-place compensation plan for all of our tasks and so you know, one of the challenges we've had in the system is the ability to measure so you know I should walk around and see how we do in their dry weight in the qualification for this tool will allow us to start measuring where we have greatness at the school level and we have challenges that we can bill for the long program work hard so the Aldrich interest in purchasing site related great things so we got some other things it will work only or also were looking the search committee process and enhancing the someone down the side of the world to the relations letter you're listening to you with the board of governors chairman Harry Smith discussing his priorities for the board, another one involves governance of the UNC systems individual campuses where you're going to lose something ballistically different there. One of the things I learned in the short five years is that we need to be really change the trustee process and what a well-meaning but we got really trite and so with our education in the amount of precious got on one of the things that myself and a lot of the other members continue to understand is we really never trained atrocities is not their fault. It's been a lot of homage and we would like to delegate more downstream and we can do that congruently would a robust training program so that the trustees understand the pressures that the chancellors have areas that we need to be focused so have it again to reference data analytics because that is the tool that we needed to benchmark and monitor what's truly going all the campus level and so overhauled process in the world, all the vetting process and really the only trustee process, including unit areas that remain.

These particular skill sets that each school refinance construction. We will make sure that we too have across population there school social. Another area of focus involves public affairs advocate advocate advocate advocate with all the great things were moving and for that will be benchmarking were actually measuring our success is one of the files we have success and we want to go there show value they're getting for their so the transformation accountability. Please look at their again as well as that analytics all on the same Jim and his team are working quick smart fast on several fronts. You know, he also refocused on transparency and accountability. UNC board has a special group focusing on strategic initiatives led by Alex Mitchell.

I will make sure that everybody understands Alex's got some great things going always been drawn, some good and this is summer school so getting our students more affordable, efficient manner and you know it's amazing things that have come up with excited to have Alex done some really great stuff Harry Smith also wants to increase the board's focus on some schools that have special challenges when the committees on some about his situation. Miles of literati for five years. I can remember a five-minute conversation where and we are going to focus later and support of RSS.

We know that they have challenges nationwide and also we want to take a look.

Go figure out what we can do the position you know those assets for long term sustainability and long term success will focus on sustainability advocacy repositioning those assets and for long-term success.

One of things I learned early is that all rehearsals are important and they play a role not only under geographic markets but also in the student population of the represent and congruent with. I will tell you that a lot of our schools are geographic position to help us fight the rule challenges that we have in the East and the West with urbanization that were facing in study so we have to focus there more than ever UNC system plays a major role in North Carolina. Healthcare Smith. Once the board of governors to examine that role approach allows muscles, tomatoes, whale, and fix clicks and figure out how we can use our healthcare assets for the citizens of North Carolina that would be nursing programs at schools and hospitals in union with an emphasis on how we can utilize assets to help these in the West, and so do we all know that were function organizationally in the country but certainly in the study and I think that we have a key role in helping each of the West have long-term proper success and we should after offering an overview.

Smith turned to one particular initiative dashboard designed to help board members make decisions when I start talking about that we literally were somewhat perplexed how we didn't have the data that we needed to make decisions. This is not a doctor to this is a healthy tool that you take a look at the incredible amount of the tilt cylinder still. This is also detrimental to what we're looking for training flatlands, trending the and so what we want to do is figure out who actively by every school.

If we think we have an issue steadily and how can we help with policy to see resources that help schools be successful. The other thing that you will see some of the school of Oregon. It is to compare how you're doing versus your peer constituents within the system. We we've already found some stuff where best practices and and so you know I think that you will see there's a public platform here and this will be an old one process that we will continue to redefine on and as we move forward. That's Harry Smith of Greenville, chairman of the UNC system's board of governors will return with more Carolina 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 has fresh stories, opinion pieces, and more. The award-winning Carolina journal team I reporters make government accountable to you. Call 1866 JL FINFO for your free subscription, welcome back to Carolina journal radio and Donna Martinez in the wake of a state audit of the ABC system that found poor contract oversight and wasted money. One state lawmaker is raising the specter of fundamentally reforming North Carolina's antiquated alcohol control system Carolina journals Rick Henderson. He was editor-in-chief is here with an update on a really fascinating story Rick, welcome back to the program based on the first about help us understand what is different about the way that North Carolina handles the sale and distribution of alcohol then a number of other states is one of 17 states is called control, state, and that is that state government maintains control over at least the distribution to some extent in the licensing of all of the spiritus liquors. This is the big distinction between North Carolina and a lot of other states. Some states have total control over alcohol, including beer, wine and spend spirits. North Carolina has differing levels of control that gives the most to spirits that would be anything largely with an alcohol content of content by volume of about 20% and how our state differs is that you want to buy something at retail and liquor product you have to go to a state ABC store state ABC stores are operated by the state of North Carolina through County ABC boards and all of the product is not actually physically in the store is kept at a centralized warehouse in Raleigh. Unlike other states like South Carolina, our neighboring state South Carolina and Virginia are both called control states they do that but they actually allow much more flexibility in the retail sale just to give you quick example of the distinction something and yelling at the retail merchants Association was Carolina recently said the state of North Carolina's pharmacy board controls the licensing of pharmacies and pharmacists. It doesn't sell drugs North Carolina they license the AV. At least they license the people who can distribute and sell liquor can bartend alike and they also sell by control the sale of the product itself.

In some localities in the retail business as well as being in the business of regulation. So that's one big distinction. This is one giant bureaucracy really is and is not only just at the stem really the state bureaucracies very small. If you think about it County zero hundred and 68 ABC boards and North Carolina's one on is not yelling counties with Graham counties quickly drive so that's the one County. It's like there's no alcohol sales at all, but there are hundred 68 boards and there's no rhyme or reason as to how these works are set up for instance.

Wake up Mecklenburg County each have one board so small County like rocking him have three and these boards are considered to be separate entities of local government state has very little oversight over them basically oversee themselves and that's that's that's the topic for another segment, but there's been. They have been dens of corruption over the years talk a little bit about accountability because recently state auditor Beth Wood released an audit of the ABC system and found that there was poor implementation and oversight of a contractor, timeout, warehousing and distribution on here so there's a there's a company yes that does this for the state ABC system is supposed to have oversight over that the state auditors them. Audit was really blistering in criticism of that and wasted money gives the highlights of that.

You basically found that this company ABB, which is based in Durham, I believe, but actually is headquartered in Maryland handles a logistics logistics help this LB in the ideas I will you still be music this logistics company and so what they do is they they operate, run, manage the warehouses. The contain all the liquor that goes in the state. ABC stores and what the audit found was it because of bad oversight and management of the contract itself. They overcharge taxpayers $11.3 million. At least $11.3 million over about a 10 year period and, moreover, there was about $2 million worth of unused warehouse space that the state was leasing and essentially what the ABC folks said was this is warehouse space that we lease to have room to put together holiday packages when the different distillers and distributors put together packages that have the gift set with that with the bottle), then the shot glasses and stuff like that they needed special storage space for this, but the state auditor said will maybe it wasn't necessary to rent a warehouse for an entire year. If you use it two months when the warehouses ripped in much the time so there was some back and forth about that now.

All of this has caught the eye in particular of one state lawmaker representative Chuck McGrady and he has long been interested in how North Carolina handles the issue of alcohol distribution and sales, but in the wake of this audit. He's had some things to say and Carolina journal has been reporting on this. What is it is his reaction was he want to do representative, Grady is Henderson County wants to look very seriously at going to a different system, a partial privatization if you will, of the ABC system and that is to get the state out of the retail business.

Essentially have the state ABC commission still in charge of issuing licenses of making sure through the through alcohol on through the alcohol law enforcement vision to prosecute people who violate licenses to sell and license liquor to go after to go after you the illegal stills and to do all the sorts of law enforcement aspects of the regulatory aspects, but then have some other sort of model for retail and distribution, and basically others get the state out of warehousing business and get the state out of the retail business, but still have state oversight and control as you have with pharmaceutical products for. Is there any realistic appetite in the general assembly for conquering or addressing something like this.

Member did this thing is been in place for many many decades. And very entrenched interest groups involved right there in very entrenched interest groups. There a lot of religious groups who think that state control system is a very good way to to suppress alcohol usage.

There are the local ports were very interested in maintaining their little fiefdoms and so there's that that area there also are the sort of the propaganda arm.

I think of it in the law that's led by the local basically say what we provide an awful lot of tax revenue to the local local governments. We do all these are two things we make sure that we don't sell too much merchandise and things like that. We keep good control over things. Then again, that I think represent Grady's answers. Look north Carolina charges an excise tax per volume of alcohol sold keep charging that tax no matter whether it sold at a local liquor store and ABC stores was not as of the tax revenues go to go away. Also, all of these ABC employees work for local government, so they are getting out there getting paid by taxpayers or providing providing were not to the state pension system there involved in the state health planning are always other source of costs that would go away, go to the private sector if the state got out of the retail there's already been the departure of one key executive at the ABC commission. Mr. Hamilton did his departure have anything to do with this audit.

The ABC folks are talking, but the timing was extremely interesting because July 26 I believe was the day he departed that was also the day that the ABC commission was given the audit to review and respond and he left no circumstances then soon after that Michael Herring who was a member of the commission itself. I had been involved in the ABC one level or another was the administrator was the resolve of the daily operations agency for some time. He also resigned in the wake of the audit because he said that the ABC and the governor Cooper didn't back up the ABC's position. Even though the word itself signed off on the audit agreed qualified. Lastly, Rick is representative. McGrady prepared to actually move some sort of legislation on this is likely to start with something for probably the long legislative session, but the other thing that's going on right now is there is a major lawsuit to school and all this being filed by some of the producers of alcohol in the state would like to do away with our system of alcohol control entirely and so is that unfolds we'll see what happens. We been talking with Rick Henderson. He is editor in chief.

It's a great story again

Thank you. Thank you. That's all the time we have for the program this week on behalf of my cohost Mitch. Okay I'm Donna Martinez. Join us again next week for another edition of Carolina journal radio Carolina journal radio is a program of the John learn more about the John Locke foundation donations that support programs Carolina journal radio send email to development John Locke call 66 JL left info 166-553-4636 airline journal radio the John Locke foundation airline is maintained. Carolina system. All opinions expressed on this program nearly commission about Michelle or other programs and services in the John foundation missing John Locke three main downwind radio cross airline sponsored Carolina journal radio listening again

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