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Carolina Journal Radio No. 740: N.C. focuses on fighting human trafficking

Carolina Journal Radio / Donna Martinez and Mitch Kokai
The Truth Network Radio
July 24, 2017 12:00 am

Carolina Journal Radio No. 740: N.C. focuses on fighting human trafficking

Carolina Journal Radio / Donna Martinez and Mitch Kokai

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July 24, 2017 12:00 am

North Carolina lawmakers and law enforcement agencies are focusing increased attention on the problem of human trafficking. The latest Carolina Journal cover package details those efforts. Editor-in-Chief Rick Henderson explains how state legislation approved this year targets trafficking in new ways. Travis also shares personal stories from trafficking victims. A controversial proposal from Washington, D.C., could force North Carolina families to pay hundreds of dollars more each year in taxes on everyday household items. It’s called the border-adjustment tax. Andy Ellen, president and general counsel of the N.C. Retail Merchants Association, explains why his group has been highlighting the BAT’s potential impact on merchants and their customers. The 2015 death of a Moore County toddler has prompted North Carolina lawmakers to approve Rylan’s Law. It requires a county social services department to observe a parent or guardian at least twice before returning a child after allegations of child abuse or neglect. You’ll hear highlights from legislative debate on the issue. While President Trump’s foreign policy is still a work in progress, a noted expert from the Reagan administration sees the outlines of a credible grand strategy. Henry Nau, professor of political science and international affairs at George Washington University, analyzed key elements of Trump’s policy during a recent conference in Raleigh. Nau explains why Trump’s policy might fit well with an approach called “conservative internationalism.” The General Assembly’s budget staff estimates that North Carolina could face a $1 billion gap between revenue and expenses in future years. Democrats and their ideological allies have pointed to the estimate to support their complaints about recent state tax cuts. Republicans have responded that the estimates are based on faulty projections of future state government spending. Joseph Coletti, John Locke Foundation senior fellow, places the numbers in context.

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From Cherokee to current 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'm Ashoka during the next hour, Donna Martinez and I will explore some major issues affecting our state. A proposed federal border adjustment taxes, drawing fire from retail merchants and from consumer advocates of North Carolina.

Learn why the sad death of a more County toddler back in 2015 is led the North Carolina Gen. assembly to enact what's called Rylands law learn how to measure targets child abuse.

Pres. Trump is still developing his foreign policy, but one expert from the Reagan era already see signs of a potentially successful grand strategy you learn why he discussed it recently in Raleigh. Ambler my legislative staffers missed the mark with the recent projection of a $1 billion state budget hole. Those topics are just ahead.

First, Donna Martinez joints with the Carolina Journal headline is a top 10 list that you do not want to be on North Carolina is among the top 10 states for human trafficking in 2016 alone 181 cases were reported and now state lawmakers are taking notice of this human tragedy.

Rick Anderson is the editor-in-chief of Carolina Journal. This issue is now the cover story of the July issue of the print edition Rick welcome back to the program. Thank you. It's an amazing M-series and I would just encourage people if they haven't seen the print edition the July edition of Carolina journal that they either get their hands on one, through us, or to go online and read the stories what is human trafficking, human trafficking is essentially a process in which people are taken often against their will separate the two kinds of human trafficking a moment, but taken against their will and forced to do taken hostage and forced to perform certain actions in exchange for their freedom and safety for safety and freedom of their safety there to use distinct types of human trafficking were aware of. Most people think of what's known as labor trafficking, and that is the first is the worker who can't get into the country legally is an immigrant paying a a mule and some other country to pilot Nevada and drive to someplace and then obtain false documents to work in the United States.

That's the sort of thing you hear about because you're about to the van that overturns on the highway in 10 people were killed 20 people were killed and that of the paved bike $2000 to get the false documentation that's gotten the most attention until recently. What this is. The stories by Carrie Travis feature are of the sex trade.

And that is sometimes the abduction of people who were not in the country. Weekly more often so so it seems the abduction of people who are in bad home situations who can't make a living, otherwise, who may already be prostitutes or who may be working at strip clubs or something like that and have an being marketed against their will, once again, and being forced to live in the situation of servitude and the the awareness or gaining of this issue and the difficulties not only in finding people who were involved in trying to rescue them but also if they are removed from sex trafficking is there. Out of this network then what happens to that point, then what can they do Rick a key component of this is fear because they are trapped not necessarily kidnapped and for example it chained to a wall.

As I think, but they have a fear that has been instilled in them that if you leave or if you stop doing this something very bad.

As it happened you write exactly fear or if or if you attempt to get away attempt if you attempt to contact family members or other people who may have known you before you were traffic for your abductive essentially into this trait that you're going to you're going to die you badly injured, something I haven't your family members and you hear situations again of people say of the situation of people who are in this country legally.

Who have family members. Other countries that are essentially being held hostage for payments coming across the border and things like that so it's it's a situation that we didn't think happened in this country very much. We thought it was service of heaven elsewhere but it's now situation that is becoming more and more apparent in the United States.

Obviously a human tragedy and that's part of the headline of this series in the July edition of Carolina Journal Rick, this is now become a public policy issue. Obviously, it is a law enforcement issue for things that are happening that are illegal. Why is the state legislature interested in this state legislatures getting interested in it because for one thing, as law enforcement is dealing with this issue. This is not just your basic prostitution ring typically are doing. This is a situation in which you have women who are being sometimes abducted or recruited from places like strip clubs, massage parlors, and are being brought into captivity and then when law enforcement they may be able to bust up the ring, but at the point of that the women are either released from the justice system or simply just allowed to go. Then you have all the sorts of issues that they have dealt with during their time in captivity they have all sorts of issues of of Stockholm syndrome or other different types of mental emotional distress. They have very brief you legitimately marketable job skills.

Quite possibly they may if they're in the case of some businesses that may not speak English very well. They may not have other contacts in this country. And so it becomes a issue of social welfare organizations both private and public, and how is it possible to help these women to heal on this mostly women help these women heal and then also reintegrate them in the society. Are there nonprofits who are doing work specifically to help this type of victim. We mentioned one in particular in this in the stories redeeming joy which the story is the story of of joy Anderson and also of the woman who rescued her and this is an organization based in Charlotte.

There are some they are not very well publicized and some of that's for obvious reasons because you don't want to let other people who were involved in organizing these organized crime rings no the victims are. Secondly, there are not an awful lot of organizations that are really equipped to handle this. There are various religious organizations, churches, and the like. The Salvation Army is now trying to get involved in this but their role essentially is to with Salvation Army is to help homeless people who otherwise probably have pretty good coping skills, get them in the society but quite often women who've involved in trafficking, especially some from very early ages don't have his coping skills. I've always been dependent on their pimp or they have been addicted to drugs throughout the malnourished. Quite often there are not any sort of position necessarily to be able simply to have your warm bed and a few meals and some spiritual guidance and go out in the world.

So this is something that's really going to cause a demand for awful lot of additional services and so that's another reason why the legislatures involved but is why organizations like the Salvation Army are getting interested, but there's still trying to grope around with with how you exactly deal with this.

You help these women as you and I are talking, there is a bill that has been passed by the Gen. assembly and at this point in time is on Gov. Cooper's desk don't know exactly how he will deal with it at Senate 548. What it's a bill that was championed by Lieut. Gov. Dan Forest and the main purpose of the bills informational as much as anything else of the design for the bill was to make sure that people who were going to into two basic businesses, or trafficking may take place were aware the trafficking was was going on. Maybe on this early. There, but to all want to know that there was actually a hotline that people can call if they were aware of trafficking with their victims of trafficking. This would apply not only to places like strip clubs, but also to a very controversial thing massage and bodywork locations in the massage industry was very, very despite industry was very, very defensive about this issue, but they part of the discussion was that an awful lot of body therapy places there may not be in the highest part, rent part of town. The women who often work. There are contractors who just rent the space for a while and so this was to let them know that if there essentially being doing this against her will, that there's a way that they might be. I think also in that builder some stiffer criminal penalties for those who are engaging in prostitution that's correct. That's right. And there was this attempt such as paintings that were on the radio, but that is that's that's correct. There were those the. The other concern that was it. Now that this bill has passed some of the people who were involved and try to help these women were singled out with increased awareness. Now what happens now we are getting more calls and how do we now help these women that we know that we don't live in talking with the editor-in-chief Anderson thank you this much more Carolina Journal radio to come 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 imprint each month and on the web each day at Carolina. Journal.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 at Carolina Journal radio imprint on the air and on the web. You can find the information you need@carolinajournal.com welcome back to Carolina Journal radio I Michiko got as Congress debates federal tax reform one controversial idea has attracted a lot of attention. It's called the border adjustment tax or backed retailers and consumer advocates in North Carolina have been speaking out against the back joining is to explain why is auntie Ellen, Pres. and General Counsel of the North Carolina retail merchants Association. Thanks for joining us as very much for having forward. Talk about why you think that is bad over talk about a border adjustment tax what we talk about will lease a misnomer.

One is not about building a wall or some element out of the border.

It is a proposal that has come from the House Ways and Means Chairman Kevin Brady and the House Speaker Paul Ryan as a way to offset tax reductions on the corporate side. And so, should have a pay goes to get the paper something as you do other things. And so their idea is that anything that is exported would not be subject to tax. It would not count as revenue.

If you export something I sell into a foreign country.

But if you import something you would not get to write off the cost of those goods as you currently do today, so if you import a widget and you pay $10 for currently. You get to write that off as a cost of goods.

You no longer to do that which is essentially a 20% tax on those that import anything at all United States. Some people are going to hear that say that sounds good for American made goods because you would pay taxes on something you export but those people import they have to pay taxes. Why wasn't a bad thing. Well, I think we are now is a global economy and there are many things as I've said previously that we have to get from outside the United States and nothing about what I had for breakfast this morning which was a cuppa coffee and a banana and we don't grow either one of those in the United States so every one of those would be so essentially subject to a 20% tariff you think about other things on the right now. For instance, the avocado market which can be grown in California. They've had a very bad crop in the last few years and in California because of rain and other things so will be importing a lot of those this year for your Mexican food and just got through Cinco de Mayo is another item or two. Thing about a car manufacturer, a car may be assembled here United States, but some of the parts may be manufactured elsewhere brought into the United States were to be assembled here, everywhere you turn their part to goods themselves that have to be imported state. In talking about the impact of this border adjustment tax your group and other groups working on this issue have said this could have a major substantial impact on households across North Carolina will correct essentially raising the cost of many goods buys much 20% and so that would add up to roughly $1700 per family per year on average.

So that's an additional $1700 will be pulling out of your bank account you to think about something like the price of gas. Most of our gasoline.

This country comes from overseas, through your immediate 20% increase on that what the economist of done folks like our laughter and in others of very conservative economics professionals have said is it would cost approximately 42 million jobs. Potential United States retailers will be hurt as much as anybody else.

And that's bad for small towns bad for your mall is bad for MainStreet because of those businesses close up because are having to dramatically increase prices by 20%. That's more dark storefronts in Arkansas less property taxes with employees is less payroll tax you mentioned goods like a year.

Coffee in your bananas but were also talking about things that people buy clothing. Other types of appliances or equipment anything that would come from another country there be this extra tax on anything that comes from another country.

And again, whether that's the item as a whole.

Whether it's a come as a component of those items. As I've said previously you know I can't move the equator. You know I can't help that we can grow United States bananas or coffee, but those writings are very popular here. My children like the strawberries year-round but we don't grow those United States in January so any of those items are certainly certainly be subject to that tax increase. Again, prices for everybody every working family in America we are speaking with auntie Ellen. He is present and General Counsel of North Carolina retail merchants Association want to look back to something you just mentioned and that is component parts so this is been sold border adjustment tax is a way to help American-made products in the export market. Does it hurt those companies that have to import materials before they assemble the products that they want to then sell to other countries. It certainly does. Because again they would not be a little write off the cost of those goods. The way the corporate income tax works now is your total amount that you sold dollar wise and you get to subtract off as a deduction.

Things like wages or rent our utilities and cost of goods to get a net profit that you then apply the tax due and what the border adjustment tax essentially says is everything you export out doesn't count as a sale. So, but everything is you import, you don't get to write those calls to goods. Also, for a component part. You would not get to write that off even a part of the component parts are from United States apart from overseas. You only get off write off a portion of that and sell it overseas again. It would just dramatically increases the cost of goods.

There is this theory from from speaker Ryan and from Councilman Brady who are more theoretical on this that it would raise the value of the dollar by 25%. If we do this and I think that's more in a textbook that it is an actual real world economics that you still MainStreet. How worried are retail merchants about something like this. I'm nothing from for many retail merchants and a lot of folks have said that the Internet and e-commerce is what was killing retail or hurting retail currently don't necessarily have to case this is sort of the could be the last last battlefield.

If the border adjustment tax goes and you know I said no industry would probably be affected as much as retail, just because of the goods that are sold in and moved in in the United States. We tend to import a lot of things, but those are the things that people want. You know they want those items coming in they want to pay less prices for them, but it would be a death knell to the retail industry which is the largest private employer, Francis, and withdrawn with one out of four jobs you mentioned something also important to keep in mind is that consumers want these lower prices. This is not only an impact on the retail merchants would try people like that like to help their retail merchants, but it's a that's it then back on them themselves and all their neighbors in the stuff that they buy again.

It's essentially a $1700 additional tax on consumers of United States for the average family so you're raising prices on most goods by about 20%, especially likes a number of goods you reference, clothing, or component parts gasoline things that use every single day. I think it's as I said the cup coffee had this morning certainly goes up by about 20% of people are hearing us now and there hearing the arguments of the other side about what a great thing. The border adjustment taxes.

What would you recommend for them to to to turn to to find good information about what this tax actually will.

There's a lot of good information out there on both sides of the equation of user group called Americans for affordable products that we are involved with the coalition, which is made up of a number of companies in an retailers and other groups throughout the United States that are trying to put out good information.

A lot of the economists and others that have come out have said you know this sounds good theoretically, but is it really bad. Especially again in the global economy that were in the other thing that you could have happen. Should this going to place and there's questions over whether is even legal or constitutional that you could be violating international law you could see repercussions from other countries that put a similar bat tax border adjustment tax on their own products and then you're hurting yourself kind export things out to other countries will certainly have very hot topic. An interesting one. We know the one person is going to be watching very closely, as this moves forward or not in Congress is auntie Ellen. He is the president and General Counsel North Carolina retail merchants Association very much for having left North Carolina journal radio just a moment. Are you looking to make North Carolina more free the John Mott foundation is in here are three things you can do today to help us make it happen. First, know the facts visit John Mott data work for data analysis, interviews, and more and read Carolina journal.com to learn what government is doing with your money. Second, influence the debate invest in the John Mott foundation's work with a tax-deductible donation you can get it done in less than 90 seconds, at John lock.org and third make North Carolina more free by sharing the message of freedom. It's easy when you visit John lock.org.

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Support the John Locke foundation back Carolina journal radio I Michiko got a sad story out of Moore County prompted some high-profile legislation this year in the North Carolina Gen. assembly Republican State Sen. Tamra Beringer explains in December 2015. Ryland was a 19 month old toddler from Moore County was returned to his parents without a CPS caseworker ever observing his mother with her children despite numerous red flags objections from the foster parents objections from the Guardian ad litem.

The toddler was placed back with this parent without a case worst worker ever observing the child with that parent. Tragically, a few months later Ryland wandered away from her and drowned in Beringer says the story of Ryland is not unique. Sadly, this is not the only time this occurs. This is a card countless times over the last 10 years in North Carolina and we have an opportunity as Republicans and Democrats and unaffiliated people to do something about. That's why lawmakers pushed Ryland's law it one bipartisan support including Democratic Sen. Gladys Robinson, all of our hearts drop, we see that the chalice injured or are you guys especially if there is something that could've been done to prevent it. The Senate combined Ryland's law with the study of North Carolina's child welfare services. Beringer has been pushing the issue. Democrat Floyd McKissick offered a word of caution, the things which have asked her to do and I tend to work with her on is trying to make sure that we don't throw the baby out with the bathwater and when I say that there are best practices used today within 100 counties there some counties that do an exceptional job in delivering social services of their other counties that do not. I think the important thing to do is to look at best practices and found out what is best practices are out there that can be emulated in all 100 counties.

Beringer responded to McKissick, she says.

The study does not have any predetermined goal is no foregone conclusion. This does give me an opportunity to to argue vigorously for a good data system without the data that you said you mentioned I sent her to McKissick we are doing is simply shuffling cards on a document will not affect the children or families of the state. We have to have data that we can read that we can apply these to these various situations said that there can be proper training, there can be management can be management and measurement of the outcomes and so there is in the spirit about the opportunity for counties for the first time to collaborate across county lines. Children deserve a family, not a system and so what we need is not a system that we need families for children and children and their families have to be healthy listening to debate about legislation designed to improve government services for children in North Carolina overture with more Carolina journal radio in a moment. Are you tired of fake news. Well you won't find it here at Carolina journal. We don't make things happen and we don't presume or assign motives.

There's no simpler way to put it then that were proud to say that honest, factual, rigorous journalism is the Carolina journal way I reporting team is focused on accountability in government and policymaking. No matter which political party is in power, and regardless of the person taken to task in the story it Carolina journal where beholden to the truth and to transparency. Unlike fake news lies, innuendo, questionable sourcing are meant to create controversy not inform the debate. So the next time you're confronted with fake news one onto Carolina journal.com or pick up the latest print edition you'll find compelling news reporting from a team that knows what it means to be real journalists committed to truth Carolina journal.

You can count on us for the facts will go back Carolina journal radio I Michiko guy does America have a so-called grand strategy in the age of Trump should have such a strategy recent panel discussion hosted by the John William Pope foundation and Jesse Helms center tackled that topic. One featured speaker was Dr. Henry, now a former National Security Council senior staffer and current political science professor at George Washington University before addressing Trump now reminded the audience how grand strategy helped his former boss Ronald Reagan. By the late 1970s, we were in trouble big trouble economic trouble Soviet Union was on the advance in the world oil prices were skyrocketing and Ronald Reagan confronted a very, very difficult and sometimes he didn't say well I'm gonna react to those work care of this little problem that little problem so he had a strategy for how he wanted to receive the first thing wanted to do.

Of course, was to rebuild America's military and economic might write for the purpose not of trying to defeat the Soviet Union some kind of a nuclear war mind if they worried a little bit about that, but his objective was eventually to the Doshi with the Soviet Union, but to do it.

Of course, from a position of strength where the Soviets realized that they wouldn't be able to keep up with him unless he sat out of the table and talked with him and eventually led to the agreements many cases that unraveled the Soviet Union that led to the end of the Cold War.

Now, then turned to Pres. Trump. I would argue that look he has a fundamentally nationalist view right of America's role in the world, coupled with the few realist elements in terms of his desire to work with some of the great powers Russia and China, but that he has very little.

So far he's given us very little by way of telling us how we would like to shake the world how we would like to move the world forward.

Very few what we call the internationalist elements now started with trumps nationalist tendencies. Nationalist generally accept the world as it is, they don't fear the great opportunities to change. They define national security rather narrowly in terms of defending America's territory borders and immediate sea lanes. They see no need to help others defend themselves because they have a greater motivation to defend themselves.

And we do so, they'll take care of themselves generally expects the world to kinda take care of itself. But if that world does mesh witness. If that world does intervene in some way to strike back at them very, very hard, no doubt about the fact the trust puts America first, but now says Pres. Trump is not a nationalist alone.

Now, the realist elements in trumps thinking are also evident. I think that there may be a little fuzzier. What do I mean by realist elements wanting those elements where we think we have to engage the world more broadly to try to balance power around the world, not just on our borders, but in Europe and Asia and in the Middle East you can figure of Henry Kissinger and world order one of those elements in trumps thinking. First of all NATO now. He did say during the campaign that NATO was obsolete.

But even before the election. He said that now I've changed my mind because you know what I made was beginning to pay more attention to terrorism.

They just deployed a division of four brigades of troops in the Baltic states and in Poland and they're getting the message. So, in his inaugural address he said were going to reinforce NATO insight dismantle reinforce NATO so I think there's a element that suggests that he understands that we've got to be engaged in the balance of power we got good allies right he's going to demand more from them. There's no question about that. That's George Washington University political scientist Henry now a former National Security Council senior staffer under Ronald Reagan is discussing Pres. Trump's approach to a grand strategy focusing first on trumps nationalist and realist tendencies. The internationalist elements, though, that are missing in trumps approach up to this point he doesn't like to think too much like my boss did Ronald Reagan about the importance of defending and spreading democracy in the world.

The internationalist is looking for ways to shape the world change and not just accept it and react to it like the nationalist and the realist, but rather to kinda make it a little better place that we go about this in two ways. Generally one is by strengthening international institutions at sort of the liberal alternative. But there's another way to do that and that is by using military leverage in negotiations as Ronald Reagan did in order to advance the cause of freedom.

So what does Nell think of where the president stands.

I like his nationalism with a bit of realism and I'm not overly disturbed by the lack of the internationalist elements. Up till this point I think we needed right after the kind of very internationalist, very liberal internationalist approach of Obama but I don't know if nationalism and realism are enough. I think we really have to worry about the way the world is drifting politically.

What I mean by that.

Well, if we retreat as a nationalist would argue or no tear down our role in the world, or if we simply accommodate events like Crimea Russians intervention crime you know to get along with other great powers. The world is going to drift against us.

Authoritarianism is going again it's gaining now.

It's been gaining ever since 2006.

Nell says the United States can't ignore international challenges. Our defense depends not just on protecting our territory in our borders and our allies. It also depends upon the kind of world in which we are defending ourselves a world of more democracies is automatically a safer world for America the world in which the authoritarian powers are getting.

How could Trump approach international relations in a way that makes sense. It's not easy to do this. It costs something to do this and this is where we have to really respect. I think the American people and I'm probably over my time already, but this will have to respect their schizophrenia. It was said earlier, or their caution about being involved in too many places to deeply around the world and sending our troops offer 10 or 15 years into places like Afghanistan and Iraq and an earlier Vietnam propose something very simple here which will cause a lot of headaches.

I suspect for military planners and others, but it's one way of trying to make the costs of an American leadership role in defending and expanding freedom around the world make those costs more acceptable, bring them down. What I would argue is we need to set some priorities need to worry about the conflicts in the international arena that really matter for freedom.

If we lose freedom. For example, the prospect for freedom in Ukraine, let alone in Poland or Hungary or in the Baltic states. We've lost a lot, we lost a lot more if we lose democracy, which is never really existed in any significant form in Iraq or Afghanistan or earlier Vietnam. So should we should keep our eye on the ball and the ball is on the border like all the major frontiers of freedom between Russia and the European states were now free and democratic and the frontier between China and the Democratic allies of America in Asia now would downsize the efforts to build up democracies in parts of the world haven't had them in the past, put in a little another governmental little bit better stay over the horizon in case the situation deteriorates again and you have to go and I mean look. If they start training terrorists and we see that there are about to attack Europe or what have you. You go inputting 3040 50,000 forces if you need to take care of it, but then come back, then come back and let the local forces work with it snarky to be perfect. It's gonna be messy by these groups can't get along. For example in Afghanistan and Iraq, but we can do this a little bit. I think with a little bit less cost than we have in the past.

Still dealing with threat, but making sure above all that we don't get diverted.

We don't get diverted from the central battles and by the way in the last 10 years that's happened to some extent now labels his approach conservative internationalism. It was one perspective put forward during a recent panel discussion in Raleigh on American grand strategy will return with more Carolina journal radio in about if you love freedom we got great news to share with you now. You can find the latest news, views, and research from conservative groups all across the state. All in one place North Carolina conservative.com one-stop shopping for North Carolina's freedom movement 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 Locke foundation analyst plus opinion pieces and reports on higher education. All of that from the Pope Center for higher education policy commentary and polling data from the Cintas Institute and news and views from the North Carolina family policy Council. That's right, all of that, all in one place North Carolina conservative.com that's North Carolina spelled out conservative.com North Carolina conservative.com.

Log on today. Welcome back to Carolina Journal radio. I'm not a Martinez North Carolina's new $23 billion operating budget continues the fiscally conservative approach of the Republicans control the Gen. assembly restrained spending more savings, more tax reform to ensure the North Carolinians keep more of what they earn. But some critics are now saying that this could actually lead to long-term fiscal problems. Are they wrong or are they right. Joe Colletti is a senior fellow with the John Locke foundation. He is a budget expert. He's been looking at the numbers Joe welcome back to the program first set the stage for a stock little bit more about the trend of the past several years.

Fortunately the trend over the past few years, especially since 2011.

As we started to recover from the recession and and and lost the federal stimulus money has been some fiscal restraint from the general summary that's been spending what they been spending has been growing at a slower rate than population inflation and so have been cutting spending but they been growing at slower than than in a hat and it had been growing and while doing that they been able to sit as as you said in the introduction and able to cut taxes and been able to save more money aside in savings so that when the next downturn hits will be in better shape because we been spending my spending within our means and that we been saving some, and so the next time that something happens will be in good shape and that leaves like you said more opportunity for us to be able to get more money so the legislature has indeed been increasing spending, but they have been tearing back how much that it had traditionally increased in in previous years, yet have been going through the 2000's be up faster than population inflation, growth, and faster than revenues could keep up with it. That's what we Having temporary tax increases and why they kept dipping into one-time funds. We haven't had to do that in the last few years. Fair to say that were on more sound financial ground.

We are doubly on a much more sustainable path with with the budget that we had been in the Mercator center recognizes that rank is 15th in that's based on 2015 ever since. We should keep continue to improve on that rank. What has generated some media coverage and some questions sent by some that somehow or another the fiscal restraint in terms of budgeting is going to lead us down the wrong path. Well, even with slower spending as we've had a few take a look at what we currently spend and how we did skirt and how we currently spend when you take those it and extend about five years, which is what the fiscal research division of Gen. assembly, like the Congressional Budget Office at the state level, they were asked to do that by by Senate Democrats. And when you do that you assume that were doing all the right things all the right ways at the right price for the right people at the right time and this is probably not true. And so the only thing that changes in that in those assumptions is at least couple more people at higher prices.

That's that's work and so when you start making those assumptions that can lead you into into difficult problems in spending is actually what drives what the projected deficits project spending gaps that that are seen in five years, more so than anything else and so that's the best starting point. We start in a budget gap. Because economic growth is slow and we got the site relatively high spending growth. So do you think that this report then and in the media coverage of it has been accurate.

Are we headed down a wrong path. Know why the report is accurate. What fiscal research was looking at the way that they look at it was accurately start from some question from some assumptions that right help are helpful and in raising questions about what should we do and how should we be spending money but the coverage of it. Mrs. those those other points of what's driving the spending growth what's baked into the assumptions of this and so that's led to a lot of coverage that blames the tax reform for the for the budget gap when really it's it spending growth based on some questionable assumptions and even folks who are in support of higher taxes because that's what the general refrain is let's have higher taxes.

Even people who are in support of higher taxes when they look at the budget. There are things that they see that they would want to do spending so so as we start. What is the biggest wrong assumption. I guess I will call it then that is in this report that we are doing the right thing all the right things all the right ways for the right people. What we've said it what what this what the legislators been able to do in the past few years is take a look at. We were where we are spending money do some analysis of that and say we shouldn't have this program will, there's their ways to make these things more efficient. We have improving technology we have improving processes and so even without changing the services that are delivered how you deliver them to change can affect what the court costs and so they focused on how much are we spending and how do we live within our means instead of what are we doing and how do we continue doing the exact same thing.

So Joe, you have some recommendations because Sam you have acknowledged in your writing that we have been doing some fiscally restraint things over the past several years, but you're always thinking and we need to continue this a little bit concerned that maybe somewhere along the line, some legislators might say no less, ramp up that spending into things differently. What you recommendations to make sure that we are continuing to be on sound fiscal ground but the this my regulations are generally on the spending side because that's first place that that you can run into trouble. As I said, that's where we the $200 million that's with each football starts is on the spending side so looking at ways to be more efficient ways to improve programs ways to eliminate programs that's that's always in a place to begin. So some of the things that were we took a look at that. They did this year that the legislature did this year was providing earmarks to a number of organizations, both for-profit and nonprofit, and some of those are for four competitive grants of things that normally should be open to anybody and so making those actually competitive and amazing basing funding on what the results are is a good place to start with number of programs and then taking a look throughout the rest of the budget about what should we be doing so those are couple places that I happen some that will require some more spending actually in the near term to make sure that we have the financial systems and management systems to be able to answer this question ultimately jelly it kinda sounds like what you're saying is that you can't take anything for granted, and that in order to make sure that you're keeping things in line and don't to go off on the wrong path. You got it. Just watch that budget by Aycock essentially yeah what would phrase that I used earlier and something that I just wrote is question based budget that all of these things should raise questions that shouldn't be taken as final answers.

Whether it's a budget projection or anything else which any time that we see something that should raise more questions. But what were doing and how were doing and if we do that, then we can get you good answers about what we should be spent because sometimes the approach is well if we happen to be funding a particular service or program in 2017. The assumption goes forward that in 2020 year 2022 were to be finding that program and more people are going to be quote meeting that program right sometimes. If we do things right and that the economy grows.

Then we have fewer needs for some social services and and we can always change how we do things so hopefully some people don't need as many things and we can find other ways to accomplish our same goals to one of the things that you have done recently with this set new general fund operating budget is you have broken it down into some major categories of spending was a really great graphics and explanation gives people a really good sense of what were spending the money on in North Carolina and course we all pay taxes. If you're working you pay taxes and so it's a great very easy to understand guide and you can find that John lock.for Joe Valenti don't think that's all the time we have for Carolina journal radio this week for listening on behalf of Mitch Martinez's. We hope you join us again next week for more Carolina journal radio Carolina journal radio is a program the John Locke foundation to learn more about the John Locke foundation donations that support programs like Carolina journal radio send email to development John lock down or call 18661665534636 journal radio nation airline is present on this program nearly amazing about Michelle or other foundation is any airline sponsored Carolina radio again


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