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Tuesday, April 28, 2015

N.C. Senate bill would roll back consumer protections against abusive debt collectors

Posted by on Tue, Apr 28, 2015 at 12:17 PM

Do you like seeing itemized charges if you’re paying a debt collector? Do you like not being sued to pay off other peoples’ debt?

Of course we all do, which is why in 2009, legislation was passed to protect consumers from debt collectors suing them for debt without valid evidence that the debt exists, and without proving they are suing the right person for the right debt.

But a bill in the Senate sponsored by Sen. Mike Lee, R-New Hanover, would roll back the 2009 reform that prevents abusive debt collection in North Carolina. A version of that bill, Senate Bill 511, passed a Senate Judiciary Committee Tuesday morning.

Around 2004, the state’s courts started seeing a flood of lawsuits brought by debt collectors against the wrong people, with little evidence that that these people owed the debt. People who couldn’t afford an attorney ended up in default. The 2009 legislation was meant to protect these North Carolina consumers.

The reasoning behind Lee’s bill appears to be that debt collectors (who buy off debt from businesses, banks, hospitals etc.) don’t want to pay extra for documents itemizing the debt they purchase. Lee doesn’t see fraudulent lawsuits as a problem.

“If a lawsuit against you says you owe money, you have the right to say I need itemized business records,” he told the committee. “The debtor has to come to court and respond. Misidentifications occur, you can’t craft rules against exceptions.”

Sen. Gladys Robinson, D-Guilford, defended the average consumer.

“A lot of people are illiterate about financial practices,” she said. “They don’t know they can advocate for themselves, so this is denying information to those folk. You can’t refute a charge if you don’t know what it is and they don’t know to ask for this information. You are saying, ‘get a lawyer to refute things,’ but that’s not a general practice in a lot of our community.”

A spokesperson from the Consumer Protection Division of the North Carolina Department of Justice praised the 2009 reform.

“The General Assembly had the foresight to pass a good law that protects consumers,” he said. “States that haven’t passed laws like this are still having problems. The North Carolina law has been looked at as a model.”

For example, according to a report in the Washington Post, a review of court filings in five Northern Virginia districts found of 16,000 cases filed by one debt collector company, 9,000 got default. In many cases, the consumers didn’t know what had happened until the sheriff showed up and tried to repossess their house or car.

Statistics from North Carolina’s Center for Responsible Lending show that abusive debt collection is the top consumer complaint made by seniors, military and veteran families to the federal Consumer Financial Protection Bureau. 36 percent of debt collection complaints from all consumers, 41 percent of complaints for all veterans and military families and 48 percent of complaints for all seniors relate to continued attempts to collect debt that is not actually owed. 
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    Under the bill, North Carolinians could be sued using little evidence to pay debt that's not theirs

Durham pet apparel company Thundershirt sues BH Pet Gear for patent infringement

Posted by on Tue, Apr 28, 2015 at 9:53 AM

A downtown Durham animal apparel company has sued a Brooklyn business for federal patent infringement and unfair and deceptive trade practices. Thundershirt, which is located next to the Durham Bulls Athletic Park and county courthouse, alleges that the Brooklyn company stole its idea to create pressure-applied pet garments, used to calm dogs and cats suffering from anxiety or fear.

The federal lawsuit was filed last Friday against Brooklyn company BH Pet Gear in the Middle District of North Carolina.

Thundershirt, which claims to be one of the largest suppliers of pressure-applying garments in the country, secured a patent for their design in 2013. There are many features to their design, called "Trade Dress," including distinct flaps and fastening mechanisms. Thundershirt had sold its apparel since 2009.

Pet Gear's pressure-applying model, called "Calmingcoat," is a direct replica of Trade Dress, Thundershirt's lawyers allege in the lawsuit. The company seeks damages adequate to compensate for "all such unauthorized acts of infringement." 
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    Pet garments designed to calm nervous cats and dogs

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Thursday, April 23, 2015

Raleigh declared North Carolina’s most livable city (if you can afford to live here)

Posted by on Thu, Apr 23, 2015 at 4:57 PM

Last night, at the city of Raleigh’s eighth-annual Environmental Awards at the N.C. Museum of Natural Sciences, the city doled out awards to, according to the city’s press release, “those individuals and organizations committed to preserving and improving the environment.” And so the Chavis Conservation Public Leadership Group won the Raleigh Environmental Stewardship Award for “recognizing the relationship between the environment, economics, and the social justice aspects of human society”; EcoVillage at NC State won the Environmental Awareness Award for teaching students about urban development; Highlands United Methodist Church won the Natural Resource Conservation Award, and so on. 

The city of Raleigh won an award of sorts, too, at its own party: a 4-star rating from STAR Communities, a DC-based nonprofit that tracks livability and sustainability. In doing so, it became the first 4-star city in the state. (Suck it, Charlotte.) 

This is, the city will tell you, a big deal, ranking us among 11 cities that have achieved this designation, including Austin and Washington, DC. 

“The City of Raleigh has a long commitment to sustainability with a focus not only on environmental stewardship but also on economic strength and social equity,” Mayor Nancy McFarlane said in a statement. “The 4-STAR Community Rating for national excellence is a culmination of the hard work and innovative ideas of City staff and the community in not only promoting sustainable ideas but recognizing sustainable programs as a cornerstone of Raleigh’s future.”

Of course, the way it works is, you have to sign up as a member community to be evaluated; Raleigh did so last January, but Charlotte didn’t until the summer. (Signing up and getting access to the reporting tools costs $1,500, according to STAR’s website.) So maybe Charlotte’s designation is forthcoming. And anyway, while the 4-star rating sounds great, it’s not a 5-star rating, which STAR has given out twice (Seattle got the top overall score.) If you’re a glass-half-empty kind of guy, or the type who sees these awards as meaningless press-release blather, you could argue that it’s somewhat middling, given that the lowest STAR goes is 3 stars.  

But the PR of the thing aside, STAR does offer a robust data set that allows us to get a fuller picture of what we’re doing well and, well, what’s not so good. And it’s pretty much what you’d expect: We kick ass at business stuff (18.1 points out of 20 on Business Retention & Development), not so much on the affordable housing (2.8 out of 15) or Infill & Redevelopment (2.7 out of 10) or Civil & Human Rights (3 out of 10). And then there’s this, which is problematic:


Wages and household income aren’t going up, which is probably OK for now, as Raleigh is a pretty cheap city to live in; give it a few years, when you won’t be able to find a townhome inside the Beltline for less than $300K. 

As Lacey Shaver, the community development director at STAR, told me this afternoon, these ratings aren’t just about what the government is doing, but rather about what the community as a whole is doing—nonprofits, civics groups, etc. And for what it’s worth, we scored a perfect 15 out of 15 on “Community Cohesion” and a 9.4 out of 10 on “Social & Civic Diversity.” 

Take a read through the entire scorecard here

Breaking: N.C. House leadership says religious freedom bill won't be addressed this session

Posted by on Thu, Apr 23, 2015 at 4:46 PM

In the spirit of taking the good with the bad today, we are grateful that House Speaker Tim Moore and the Republican caucus came to their senses: Moore announced in a press conference this afternoon that the House will not take up the Religious Freedom Restoration Act in the 2015-2016 legislative session.

(Gov. McCrory is also, probably, very grateful).

We’ve gone over and over how the bill would function effectively as a state-sanctioned license to discriminate against the LGBT community, by allowing citizens to object to municipal and county laws they say run counter to their religious beliefs. After the same kind of legislation imploded in Indiana last month when Gov. Mike Pence signed it into law, McCrory took note.

Businesses, including Red Hat, IBM and U.S. Airways, which employ thousands of North Carolina residents, as well as faith leaders and LGBT advocacy groups like Equality North Carolina, vociferously condemned the bill. So did North Carolina voters: activists took 10,000 signed petitions to McCrory’s offices on Monday urging him not to give his signature to the law if it made it to his desk.

And now it won’t go to the Governor’s desk, at least not any time soon, because House leaders seem to have agreed with the Governor: the law makes no sense. 

“Today, true North Carolina values of fairness and justice prevailed,” said Chris Sgro, the executive director of Equality NC. “This decision is a testament to the actions of thousands of North Carolinians who made their voices heard over the past few months, who pushed back on the notion that religious freedom should never be used to discriminate.”

But we shouldn’t get too excited just yet.

Senate Bill 2, which would allow state magistrates to opt out of performing one of their job duties— marrying couples— based on a stated religious objection, is still on the table, and Moore said something to the effect of "people seem to agree about it" this afternoon.

“We remain focused on continuing to fight a law that would allow public officials to discriminate against same-sex couples, advocating for proposed legislation that would finally provide statewide protections in employment for tens of thousands of LGBT North Carolinians, and fighting to keep our state on the right side of the RFRA debate, and history, in this legislative session and beyond,” Sgro said. 

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    House Bill 348 is out; magistrates' bill still in

Renewable energy standards survive this legislative session

Posted by on Thu, Apr 23, 2015 at 3:38 PM

Updated: House Bill 681 was defeated in the House Public Utilities Committee Wednesday, according to reports. Four Republicans, including Wake County Reps. Nelson Dollar and Chris Malone, joined 12 Democrats in voting against the bill in a 16-14 majority. 

Renewable Energy Portfolio Standards laws—REPS—have been great for North Carolina, but a new bill would end the REPS requirement, under the guise of protecting the state’s ratepayers.

On Monday, four Republicans in the House filed the NC Energy Ratepayers Protection Act. The bill keeps requirements for utilities to include renewables in their energy portfolios through 2018, but cuts any requirements thereafter.

This is unfortunate.

REPS ensure that a portion of electricity sold by our three investor-owned utilities come from renewable sources (like solar, hydro and wind), ensuring a cleaner environment and a more sustainable future for all of us. These laws are one of the reasons why the state’s solar industry has taken off, allowing the state to rely less on coal or nuclear energy; now, North Carolina has a $4.8 billion clean energy economy which generated $280.7 million for state and local governments last year.

Under the comprehensive Senate Bill 3 in 2007, North Carolina became the 25th state in the country to enact REPS laws which would ensure that by 2021, 12.5 percent of the state’s electricity came from clean energy sources. Senate Bill 3 was passed with broad bipartisan support.

According to the North Carolina Sustainable Energy Association, a nonprofit comprised of clean energy stakeholders, H681 will halt the state’s ability to introduce new energy strategies into its heavily monopolized electric utility sector and deter current and potential clean energy developers from doing business in North Carolina.

“This monopoly control of our utilities limits innovation and market competition,” said Betsy McCorkle, the Director of Government Affairs for the NC Sustainable Energy Association (NCSEA).

“(The introduction of REPS laws in S3) was the first real opportunity for clean energy companies to compete with the utilities and offer consumers a choice, all while creating thousands of jobs, expanding business opportunities, pumping billions of dollars into our economy and driving down the cost of clean energy resources.”

NCSEA says that, contrary to what the bill’s sponsors would have us believe, H681 would actually burden ratepayers, who were set to save $615 million in electricity costs by having clean energy in the mix.

We saw a version of this legislation back in 2013 with the same primary sponsors, Mike Hager, R-Burke, Rutherford and Rep. Chris Millis, R-Onslow, Pender. That bill didn’t make it past the committee stage, where H681 now lingers.

“Due to the leadership of our utilities, our state is ahead of schedule in complying with REPS in most areas, while staying well below the ‘cost cap’ that was put in place as protection for consumers,” McCorkle said. “This legislation would be needlessly destructive to a job-creating industry and would result in government interference into a well-functioning market that continues to attract investment."

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    House Republicans wanted to dump REPS, get shut down, again

Toned down, but still terrible: abortion bill passes N.C. House

Posted by on Thu, Apr 23, 2015 at 2:32 PM

The provision that would have prevented employees at public medical school departments in North Carolina from performing abortions and teaching medical students the procedure was dropped from House Bill 465.

But the medically unnecessary 72-hour waiting period (up from a current, barely legal 24-hour period) for a patient obtaining an abortion, and a provision forcing physicians performing abortions after 20 weeks in a pregnancy to report information to the Department of Health and Human Services, remain.

After more than an hour of debate on the House floor, House Bill 465 passed by a 74-45 vote; it now heads to the Senate.

Rep. Tricia Cotham, D-Mecklenburg, told an affecting story on the floor about her first pregnancy, which was ended in an induced miscarriage when she learned that continuing the pregnancy would threaten her life. (The bill does allow for exceptions to the waiting period in emergencies, according to sponsor Rep. Pat McElraft, R-Carteret, the woman who wants a few more little taxpayers born).

Cotham said swift medical intervention saved her, and she went on to have two boys while serving in North Carolina’s House of Representatives.

“I am offended at the message that women need more time to make this decision,” Cotham said. “What a terrible message we send to young women about how we perceive their lack of ability to make decisions about their body, or their future.”

Rep. Susan Fisher, D-Buncombe, introduced amendments designed to protect the privacy of patients and physicians obtaining and performing abortions, by limiting the information that would be supplied to DHHS. Both failed.

Rep. Rick Glazier, D-Cumberland, the only man brave enough to speak on the bill, warned that it marks the end to a constitutional right by unduly burdening women seeking abortion. He disparaged the “charade” of a public hearing in the House Health Committee Wednesday, where six anti-choice women talked about their experiences mostly with not choosing abortion. 

Citing the Fourth Circuit Court of Appeals’ December decision striking down a 2013 state law that would have forced women considering abortion to view an ultrasound before the procedure, Glazier said this law, too, would not pass constitutional muster. And that there would be no medical evidence, or legislative records, to support the change.

Rep. Verla Insko, D-Orange, summed it up well: “This bill says the state knows best,” she said. “It promotes the most disparaging stereotype about women, that they are irrationally emotional and can’t make important decisions.”

Rep. Jacqueline Schaeffer, R-Mecklenburg, the bill’s primary sponsor, and her cadre of old white supporters in the House insisted the bill was to “promote women’s health and safety,” and to “empower women” by making sure they were “equipped with the right information,” doubtless meaning the right misinformation supplied by anti-choice Crisis Pregnancy Centers.

“We believe this is truly a bill that both pro-life and pro-choice can get behind,” Schaeffer said.

Actually, nah.

But the bill isn’t really about advancing women’s health or ensuring sound medical practices or preserving the relationship between doctor and patient. It’s about politics and ideology. It's about shaming women. It’s about the state knowing best. 
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    House Bill 465 would triple mandatory waiting time for abortion services

Backlog leads to 18-month waits for rape-kit results, Durham police acknowledge

Posted by on Thu, Apr 23, 2015 at 2:05 PM

North Carolina women who file sexual assault complaints must wait 18 months for rape-kit results to return from the state's laboratory, a Durham homicide detective told a crowd this afternoon at a community luncheon. 

Durham police process about 600 sexual assault cases per year, Investigator Quincey Tait told the guests at the luncheon, held at Shepherd's House United Methodist Church in East Durham,  and sponsored by the Religious Coalition for a Nonviolent Durham.

The event was organized to bring awareness to DPD's new "Start by Believing" campaign, designed by the organization End Violence Against Women International. The campaign offers support to rape victims and addresses the need to change societal attitudes toward sexual assault.

Tait discussed the arduous task women face when reporting their rape; upon their admission into a hospital, they must repeat painful details to at least four different parties in the course of two hours: a charge nurse, a patrol officer, a victim advocate, and a police investigator.

At the East Durham community gathering, Tait led a Q&A session, during which one audience member asked how long it took for the police to receive rape kit results. Tait responded that it took 18 months. The delay, she said, was partly attributable to a backlog in the state's laboratory.

Some audience members were concerned by the notion that a wrongly accused suspect could wait in jail for 18 months before a rape kit cleared him. Others worried about the financial drawbacks to delays. 

"The whole process is costing this community an enormous amount of money to wait," said coalition director Marcia Owen. 

The Durham Police Department was the first organization in the state to sign up for the Start by Believing campaign, said Tait.

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    Delay affects hundreds of cases a year

Bill that would gut state environmental policy passes N.C. House committee

Posted by on Thu, Apr 23, 2015 at 11:42 AM

In 1971, North Carolina’s General Assembly passed SEPA—the State Environmental Policy Act—which regulates environmental projects undertaken by the state (and paid for by taxpayers) that could have potentially damaging effects on natural resources and public health and safety.

If a project costs taxpayers $1 million or more, and could have a direct environmental impact, SEPA kicks in to review it.

Now, Republicans in the House (always Republicans in the House) want to render SEPA meaningless, by not enforcing its environmental impact review on projects that cost less than $20 million to taxpayers. Put another way, they want license to undertake virtually any permitted project that could harm the environment and threaten public safety, without comprehensive regulation.

Additionally, they want to redefine “direct environmental impact,” so that speculation, information based on previous projects or based on projects that happened outside North Carolina, would not be accounted for in deciding whether or not to go ahead with a project.

The bill’s sponsors, Rep. John Torbett, Rep. Mike Hager and Rep. Chris Millis say $1 million just “doesn’t go that far” nowadays, so it's OK if a bunch of little projects that cost less than $20 million wreak utter havoc.  

These House Republicans— particularly one Rep. Mike Hager, former Duke Energy employee and brazen ALEC hack—are fond of introducing this kind of legislation under the guise of “reform,” or “protecting taxpayers.”

In the House Environment Committee today, Hager went through all the reasons why North Carolina residents don’t need SEPA anymore, arguing that the National Environmental Protection Act would cover the bases for state projects (in fact, NEPA applies to a different set of standards, as Rep. Pricey Harrison pointed out).

“We’re talking about taxpayer dollars and we’re talking about environmental protection,” Hager said. “We are no longer in 1971. We actually have DENR. We actually have air quality permitting requirements. We have water quality permitting requirements. Regardless of whether you’re using private or public funds, the environmental protection is there.”

Yes, we “actually have DENR” to protect our air and water now.

Even Tom Reeder, DENR’s Assistant Secretary for the environment, doesn’t think House Bill 795 will protect our air and water.

“There could possibly be some negative consequences to the state water infrastructure program, our waste water and drinking water revolving loan fund program,” Reeder told the committee.

Though public comment was not allowed this morning, the director of the North Carolina Sierra Club, Molly Diggens, was given a minute to speak.

“SEPA is one of those fundamental laws that inform our entire approach to environmental policy,” Diggens said. “The purpose of SEPA is to guarantee that the decisions to spend taxpayer funds on public projects are made only after three things have happened: receiving public input, considering all the potential protection impacts and evaluating alternatives.”

“Individual air and water quality permit reviews are a much more narrow and come only after a commitment has been made to pursue specific projects.” 

The bill passed the committee on a voice vote. 
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    H795 would render current laws that protect land, water, wildlife and public health, meaningless

Homeless numbers in Durham reach 10-year high

Posted by on Thu, Apr 23, 2015 at 9:40 AM

There is Zac, aka Casper View, the guitarist, with his dog, Lela; Reggie, the veteran with cancer; Moses, who, although he shouts at the voices inside his mind, is a threat to no one but himself.

Zac, aka Casper View, with Lela - LISA SORG
  • Lisa Sorg
  • Zac, aka Casper View, with Lela

There are others whose names I do not know: A woman new to downtown, who trudges down Main Street, two bags at a time, until she’s relocated to a place she can rest for a little while. The young guy who has told me to fuck off when I have told him I don’t have any money.

More than 800 people are homeless in Durham, a 10-year high. The city’s Community Development department today released the numbers from the annual Point in Time count, conducted statewide each January.


Community volunteers count people staying in emergency shelters, transitional housing and those living outside. However, these figures don’t include the couch-surfers or people who can’t afford a place of their own and are staying with family or friends.

Although the 2014 count was incomplete because of a snowstorm, the number of homeless people in Durham peaked this year at 813. The lowest number was 502, tallied in 2006.

Other notable statistics:
Of the total homeless population, 102 are children.
People who abuse drugs or alcohol account for more than half of the homeless adult population.
527 African-Americans are homeless, compared to 243 whites.
Veterans (138) and people with mental illness (101) also make up a significant portion of the homeless.

However, the number of homeless people who were discharged from jails/prisons and hospitals has fallen dramatically since 2005, possibly because of more focused intervention, housing opportunities and support services.

While the Community Development Department concluded Durham has enough space in emergency and transitional shelters, “the unmet need is for permanent housing.”

Utah has reduced the number of homeless by 72 percent with an obvious but controversial strategy: giving chronically homeless people homes. Not only does this help stabilize the residents’ lives, but it saves money.
Emergency room visits, jail time can cost taxpayers between $30,000 and $50,000 a year—per person, according to Mother Jones. By finding homeless people permanent housing, cities can save an average of $16,00 per person.

It’s not like Durham lacks vacant buildings that could be transformed into permanent housing. A prime example from the private sector: The old Ramada Inn/ failed Duke Studio Condominium project at 601 S. Duke St. could house at least 150 people, and it’s a block and a half from the bus station. However, considering the downtown development pressures, it’s unlikely that property will be reserved for anything approaching affordable.

As for publicly owned property, when the Durham Police Department moves to East Main Street, that building could be turned into permanent housing for the homeless. Again, it’s right on the future rail line and a two blocks from the bus station.

Now, how will Durham get creative about the money?

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    Point-in-time count tallied more than 800 people living in shelters, on the street

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Wednesday, April 22, 2015

Senate Republicans kneel before the Magic Tax Cut Fairy, are wrong

Posted by on Wed, Apr 22, 2015 at 5:56 PM

As I noted yesterday in this space, It is a fundamental principle of supply-side economics that tax cuts basically pay for themselves—that is to say, whatever losses the state would incur will be offset by the improving economy those tax cuts spur, which will lead to the state bringing in at least as much if not more money because, even if people are paying a smaller percentage of their incomes to the state, there’s more money to go around. 

This is the myth of the Magic Tax Cut Fairy. 

People who pay attention to macroeconomics have known for some time—and folks in Kansas are starting to figure out now—that the Magic Tax Cut Fairy doesn’t exist. Here’s the Washington Post back in 2007, when some congressional Republicans were arguing that, in the words of then-U.S. Senate Minority Leader John Boehner, “Tax relief pays for itself.” (It does not.)

This is not a merely academic debate, although no serious academic, including Mr. Bush's own economists, has argued that tax cuts produce enough additional economic growth to make up for lost revenue.

I mention that because the Magic Tax Cut Fairy reared her ugly, misbegotten head earlier this morning at a meeting of the North Carolina Senate Finance Committee, which was considering a handful of different tax cuts packages. Here I’ll focus on the most wide-reaching, Senate Bill 526, the Job Creation and Tax Relief Act of 2015, which builds upon tax cuts the General Assembly passed back in 2013. Without getting too deep in the weeds, SB 526 would further reduce the individual income tax rate over the next two years from the current 5.75 percent to 5.5 percent; replace the standard exemption (now $15,000) with a “zero tax bracket,” which will mean that the state won’t tax you on, eventually, your first $20,000 in income; reduce the corporate income tax; and change the way the state’s economic incentives program is divvied up, as Republicans think the current system favors advanced urban areas over rural ones.  

This will, according to a fiscal note prepared by the General Assembly’s staff, cost the state $6.974 billion over the next five years. Except, according to Republicans on the Finance Committee, that is not true and will not cost the state anything. 

Here was one telling exchange, transcribed as precisely as my handwriting would allow:

Sen. Josh Stein, D-Wake, after discussing the nearly $7 billion hit: “Question for Sen. Brown: How does that feel? As an appropriations chair, is that practical?”

Sen. Harry Brown, R-Jones and Onslow: “There is no revenue particularly lost,” adding that what was lost would be made up in increased employment. 

At this point, Sen. Bob Rucho, R-Mecklenburg, an SB 526 sponsor, chimed in: “We had a tax cut in fiscal year ’14-’15; the estimated new revenue is $780 million. Do you think it’s bad that you have nearly $780 million more money than you did the previous year?” 

Stein: “I would love to have that.” 

Rucho was both perfectly correct and terribly deceptive. The state did pass a tax cut, and the state does have $780 million more coming in this year than last. The logic, though, is fallacious: the post hoc ergo proctor hoc fallacy, to be exact. Put simply, it does not follow that the tax cuts generated that additional revenue, nor does it follow that those tax cuts didn’t injure the state’s finances or that more tax cuts wouldn’t exact some considerable amount of damage. 

I asked Alexandra Sirota, a policy analyst at the left-leaning N.C. Budget & Tax Center who sort of specializes in the state budget, for her take. She replied in an email: 

[Rucho’s assertion is] suspect indeed since we know that the ideological foundation for the idea that tax cuts lead to more revenue has largely been discredited. What Senator Rucho is referring to is the year over year growth in revenue that is part of any functioning revenue system particularly in a recovery period (obviously revenues have been known to fall). The fact that there is revenue growth does not negate the fact that the tax cuts passed in 2013 were very costly to the state. Moreover, based on the consensus forecast that was released recently, official analysis finds that revenues are growing at a rate far below the long-run average and below what they were projected to grow at for this year.

So yes, there is revenue growth (I can’t confirm the exact $780 million figure that he is using) but it isn't new revenue. It is largely committed to enrollment growth and would allow no new funding for initiatives that could make our state competitive. If Senate Bill 526 is enacted it would actually lock in current spending levels by putting natural revenue growth (and then some) towards income tax cuts. This is a bad idea for NC, we know that there are very real needs to be met in communities, classrooms and courts, for example and without revenue to make those investments we will not just stall but fall further behind.

In other words: That extra money came because the state’s economy was recovering from the Great Recession, and though it was more than the previous fiscal year’s take, it was not as much as was projected before the tax cuts were passed. The next batch of tax cuts would make the state’s fiscal situation even more dire. 

The graph below is taken from a BTC report


The BTC is projecting that the original tax cuts will cost the state about $1 billion this fiscal year and the next, while the new batch will tack on another $600 million or so loss this year and nearly $1.5 billion next year. 

This next graph, also taken from a BTC brief, lays it out: 


For 15 years, the state has averaged a 4.7 percent year-over-year revenue increase, because the economy is growing. Since the tax cuts, the state’s revenue growth has limped along—2.9 percent, 3.3 percent, and a projected 4.1 percent in fiscal year 2016-’17. Sure, the state’s coffers get a little bit fuller as the state and its economy grow, but the state’s expenses to keep up with that growth are increasing too, and the revenue growth isn’t keeping up.  

Again, from a relatively recent BTC report: 

Since the 2013 tax plan passed, revenue projections have been revised downward time and time again. In July 2013 when lawmakers passed the biennial budget, they anticipated having $21.35 billion available in general fund revenue in the current fiscal year. By July 2014 when lawmakers adjusted the second year budget, policymakers based their spending decisions on a revised and lower $21.08 billion in revenue. Current estimates now suggest that just $20.73 billion will be available this fiscal year which while more than what was actually available in FY 2013-14, is far less than was originally budgeted [before the tax cuts].

Moving forward, projected revenue growth for the next biennial budget cycle will continue to be constrained due to the economy and the 2013 tax plan. This will limit the ability of the state to make critical investments in core public services. A limited list of identified budget pressures—such as school enrollment growth—amounts to $448 million for FY 2015-16, roughly two-thirds of the current projected revenue growth of $679.8 million [ed. note: now, per Sen. Rucho, $780 million]. This means that policymakers are likely to face challenges in meeting ongoing commitments and will be unable to make progress towards replacing the worst of the cuts that have been made or pursuing new initiatives.

Again, year-over-year revenue growth is to be expected at this point in the recovery and does not mean that the state is experiencing a surplus. In fact, current levels of revenue growth are proving too sluggish to meet expectations meaning that policymakers face a current year shortfall and will be far more limited in their ability to reinvest in the next biennial budget.

This year the state expects to bring in $271 million less than it projected when the tax cuts were passed two years ago. Now, state analysts admit that SB 526 will cost upward of $7 billion over the next five years; Rucho and his fellow Laffer Curve devotees may not want to see it, but the Magic Tax Cut Fairy didn’t show up in the last two years, and won’t be around to make up the difference over the next five.  
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    The mythical Magic Tax Cut Fairy reared her ugly, misbegotten head earlier this morning at a meeting of the N.C. Senate Finance Committee.

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