Civitas ReviewThe Blog of the Civitas Institute

Mar

27

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The General Assembly’s move to revise the badly flawed Dorothea Dix property lease is a step for realism in state government, where it is badly needed.

Lame-duck Gov. Bev Perdue pushed through the lease last year after she no longer had to fear the voters. It leased the valuable land in Raleigh to the city for 75 years.

Consider the lease price: about $500,000 a year, with slight gains over time. The total payments: $68 million.

An appraisal of the site put its value at up to $86 million. So at its worst,  the value of the lease — total till the year 2088 — is less than what the state might get by selling the land outright.

I bought a house last year. I looked at what the mortgage payments total over the lease. That total will be far more than the appraised value. And face the facts that if it’s a park for 75 years, it will remain a park forever. It’s not really a lease, at best it’s a very-long term interest-free loan; at worst, it gives Raleigh millions in addition to offering a no-interest loan for a token amount.

1. The state isn’t so rich it can’t just give stuff away any more. For that’s what it is: for a nominal sum, the city of Raleigh will get a valuable piece of land. North Carolina isn’t as bad off as California, but a sober look at its finances shows it can’t be Santa Claus any more.

2. No more welfare for those that don’t need it — including Raleigh. This deal would benefit the city, but would raid the pocketbooks of people from Asheville to Wilmington.

Needless to say, the GA and the governor still seem addicted to giveaways. But maybe this bill, Senate Bill 334, Dorothea Dix Lease, is a step in the right direction.

3. Opponents make it sound as if the state wants to put up a steel mill and a wood-pulping plant on the site. But the plan is for about 200 acres to be parkland.

As for facing facts, news stories say some of it is on floodplain. Well, read the appraisal, which divides the property into two tracts:

Drainage for both tracts appear to be excellent for

the most part. There are some minor areas of 100-

year and 500-year floodplain on the 165 acre tract along

with potential areas of riparian buffers and minor areas of riparian buffers on the western 169 acre tract.

Mar

27

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News reports tell us that Europe’s economy has been threatened by “haircuts” to be administered to bank depositors in Cyprus. For more, read “Bank of Cyprus Uninsured Deposit Holders Face 40% Haircut-Central Banker.“

As financial slang used in recent news stories, a haircut often refers to a penalty bondholders, shareholders or depositors pay when bad debts are settled. When a company goes bankrupt, creditors may take, say, a 50 percent haircut, getting back only 50 cents of each dollar they are owed.

In Cyprus, the government planned to seize a percentage of bank deposits to pay for a 10 billion euro bailout of the troubled economy, thus inflicting a haircut on people with money in the bank. (The latest plan affects only a couple of banks, but that just means different styles of haircuts.)

This “haircut” spurred outrage. How can the government just tax — grab — people’s money, which they thought was safe in the bank?

And it threatened the financial structure of the entire European economy. When depositors think the government may steal their money, they may yank their money out of banks, threatening the whole financial system. Check out “3 Ways Cyprus Is a ‘Game Changer’ for Europe.”

Think however of all the tax haircuts ordinary Americans face all the time. Consider the money you have in the bank. You think it’s safe. But what happens to that money when you die? You get a posthumous haircut — if your estate is subject to the inheritance tax, better known as the death tax.

The North Carolina General Assembly is considering repealing this unfair,  tax, via HB 101, Repeal Estate Tax.

Doing so would the fair thing to do. Successful people are often assailed for being greedy. (See “Romney, Mitt.”) Yet leaving an inheritance is the most selfless thing anyone can do. It’s absolutely true you can’t take it with you. So a tax seizing some of the wealth you leave to other people is one brutal haircut.

The fears of a Cyprus bank run are another illustration of what the death tax does. The fear is that in Cyprus depositors will take what is left from their deposits and stuff it into their mattresses, where it cannot fund business activities, as bank loans do.

Well, the same thing happens with the death tax. Many North Carolinians trying to avoid this unfair levy do the equivalent of putting their wealth into mattresses — perhaps by buying life insurance, or moving to Florida, which has no such levy — so the tax man won’t snatch it after they shuffle off this mortal coil.

There are many other examples out there of how unfair taxes damage the economy. The death tax is near the top of the list.

1

Mar

27

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There has been much fuss about North Carolina’s move to shun Medicaid expansion. (The law is Senate Bill 4, No N.C. Exchange/No Medicaid Expansion.)

But as time passes, that measure seems like an astute way of avoiding a train wreck under Obamacare (a.k.a. the Patient Protection and Affordable Care Act.)

For it will be a train wreck. First, as National Review Online put it, “it will neither protect patients nor provide for affordable care.”

Second, Obamacare may take years to function at all. Remember, it’s basically like asking the Post Office to take out your appendix. Just getting the computers up and running will be a huge … mess. If it can be done at all.

Michael Barone has an insightful column, “More on the Obamacare IT Nightmare.” Think about the problems you have with your computer, or with the IT department at work. Then imagine that translated to covering all the health information of every American. With different rules for every state. Run by the federal government, so there will be great effort into putting Obamacare IT contracts into every congressional district, while spending much time and energy making sure that enough transgendered albinos are hired as programmers.

Update: Survey: Health Industry Executives Don’t Think ObamaCare’s Exchanges Will Be Ready on Time.

Obamacare is going to be a disaster purely on practical terms. North Carolina will be better off staying away from it as much as possible.

(HT to Instapundit)

Mar

27

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Yesterday the Indiana Supreme Court handed parents and students everywhere a major victory when it upheld  — by a 5-0 vote  — the constitutionality of  Indiana’s school voucher program, the nation’s largest.

The decision ends an almost a two year long legal battle waged by Indiana taxpayers and the National Education Association. The plaintiffs claimed that the vouchers improperly benefited private religious schools and violated the state’s Blaine Amendment which prohibits drawing money from the state treasury for the benefit of any religious or theological institution.

The court said, “the voucher program expenditures do not directly benefit religious schools, but rather directly benefit low income families with school children by providing an opportunity for school children to attend nonpublic schools if desired.”

The decision is good news for Indiana families. Currently more than half the state’s student population qualifies for the existing school voucher program.   The Indiana legislature is considering a major expansion of the voucher program which would expand eligibility to include siblings of current voucher recipients, students in foster care and the children of active military personnel.The legislation would also increase the size of the current voucher from $4,500 to $6.500.

This is good news for school choice advocates in North Carolina. Earlier this year, a Special Needs Scholarship Grant was introduced in the legislature. The legislature would provide parents of special needs students up to $3,000 per semester to help with the educational costs of special needs children.

Mar

26

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The Senate Committee on Judiciary I is meeting this morning about SB 306. SB 306 would repeal the Racial Justice Act and lift the moratorium on the Death Penalty here in North Carolina. This is the 2nd of 3 videos that shows what the Turner Family thinks and had to deal with in their Racial Justice Act Hearing.

See the first video of The Real Victims of the Racial Justice Act.