The 2020 North Carolina Economic Performance Factbook is now available online. Chock full of helpful information about our state’s economy, business climate, taxes, and schools, parents and policymakers are sure to find it a handy resource. Enjoy the Factbook and join the ongoing discussion to make North Carolina a better place!
Politicians & Politicking
New NC Economic Performance Factbook available
Interview: Dan Bishop ‘frustrated’ by Cooper’s ‘roadblocks’ and ‘obfuscation’ on reopening
A Charlotte Observer article covering the back and forth on the reopening protests between Rep. Dan Bishop (R-NC) and his upcoming congressional opponent prompted Civitas to reach out to both parties for an interview.
Rep. Bishop’s Democrat challenger for North Carolina’s 9th Congressional District seat is Cynthia Wallace. Obviously, Rep. Dan Bishop accepted the invitation while Civitas has not heard from Wallace. The invitation for an interview with her stands as long as protests are in the news cycle in North Carolina.
The interview with Bishop is nearly 30 minutes and fairly comprehensive regarding coronavirus and governmental policies. Regarding the headline, the most newsworthy aspect might be Bishop’s frustration with Gov. Roy Cooper over an unwillingness to engage much with a U.S. Congressman on the data and timeline he is using for reopening. Predictably, so much of the process has become political on both sides. Interestingly, Lt. Gov. Dan Forest has a somewhat similar complaint with the lack of cooperation from Gov. Roy Cooper in a recent interview with The Daily Signal.
Bishop discusses the importance of natural rights for the protestors, a need for more local control on reopening, and the importance of Congressional presence during the coronavirus crisis.
Below is the entire interview:
The downside of North Carolina’s one-size-fits-all coronavirus approach
I’ve mostly given up on the daily Trump coronavirus press conferences from the White House when it comes to news. Most of the decision making and power regarding restrictions and reopenings rest in the hands of governors.
Here in North Carolina, I was originally cautiously optimistic that Gov. Roy Cooper might allow for some local control in areas less impacted by the coronavirus. Part of managing a public health crisis when so many people need to get back to work is trusting the citizens of our state to responsibly implement safety measures.
This from Cooper’s April 28 press conference:
We’ve already seen some pushback to Cooper’s one-size-fits-all reopen plan from Gaston County. The chairman of the board of commissioners there wants to implement reopening plans related to the federal guidelines but Cooper’s administration quickly fired back against that plan. Undoubtedly, some county commissioners might even be under a little pressure and are hearing from angry constituents. Dallas Woodhouse covered that in-depth in a recent Civitas article.
We’ve already seen a few instances of citizens opening up their businesses in the state in opposition to the governor’s order. They were quickly rebuffed by law enforcement. Some will grow more impatient or even desperate to provide for their family as 31 states have implemented reopen plans more defined than North Carolina.
Of course, the politics of all this will get messier as more and more states open up for business and North Carolina remains closed. The government is not equipped to handle the economic crisis millions are facing. It’s arrogance to even think that it can systematically provide for or address the needs of the people.
One of the big positives from allowing for more local control is deescalating some of the partisanship. Certainly, there is an urban-rural divide, where some counties have few or no positive tests for Covid-19. Overall, many in those locations aren’t in occupations where they can work from home indefinitely if they are working at all. And then many more educated and affluent in urban areas are equipped to work from home as long as its deemed necessary. Some even say we can’t go back from lockdowns until there is a proven treatment or vaccine. A feeling of safety above anything else is the main concern for many if all other needs are easily met.
I interviewed Rep. Dan Bishop (R-NC) recently over video, mainly about the coronavirus policy controversies and the government response. I won’t give away the interview right now (it should be up on our social media platforms soon) but he brought up the principle of subsidiarity. That’s not something you hear from a U.S. Congressman every day. The basic principle of subsidiarity is that political decisions are handled best by the government that is closest to you, which is local. It makes sense, right? Those that govern closest to you are not only more approachable but they are much more likely to be aware of the needs of the community they directly represent. Yes, I know Republicans and Democrats both routinely use these principles for their own hypocritical advantages, reminding us again how broken our political system has become.
Yet, Gov. Cooper’s main argument in his press conference against more local control is that more localized control would encourage traveling and traffic across a county or regional lines. To me though that seems like a pretty weak argument in a free society built upon the foundations of self-government.
We are a state and nation accustomed to freedom and ultimately we need to trust people to do right during a public health crisis. We can’t eradicate the virus in the very near future but we can mitigate it through voluntary action and not coercion or strong-arm tactics. Our actions should always have a moral component and bring us back to this basic question: What is our capacity for self-government?
Ultimately, we are not servants but the master of our government. Free citizens entrusted with power not only should champion liberty, but we also must champion responsibility and virtue too. North Carolinians should always err on the side of more freedom when it comes to protecting the rights and the livelihood of the citizenry.
Student migration: estimating the local cost of yet more coronavirus fallout
A slowing economy creates many challenges for families and schools, public and private alike. The migration of students from private to public schools or the closure of private schools is one of the challenges I blogged about last week.
Such changes can have far reaching consequences. So what might the financial impact of these changes look like locally? Let’s try to address that question.
In 2018-19, Wake County had 18,567 students in private schools.
If 5 percent of private school students in Wake County migrate to the public schools, 928 students would be added to enrollment.
What would these changes cost?
in 2018-19, state per pupil support in Wake County was $6,000. Multiply state support by 928 students brings a total additional cost of $5,568,000.
We know however that local funding must also be included in this calculation.
According to the Statistical Profile of the Public Schools of North Carolina, local per student in Wake County was $2,827, multiply by 928 students gives us an additional local cost of $2,623,456.
Therefore, the estimated total cost (state and local) of a 5 percent migration of private school students to Wake County Public Schools would be $8,191,456.
A 10 percent migration – not an unreasonable scenario -doubles the amount, to $16,382,912.
Wake County Public Schools is the largest School District in North Carolina. Charlotte-Mecklenburg Public Schools is the second largest school district in North Carolina. It has 18,530 students in private schools, roughly the same number of private school students and similar levels of state and local support. As such, we could assume the county would likely have similar numbers for the scenarios discussed.
A ten percent migration to the public schools in the state’s two most populous counties would generate a fiscal impact of approximately $32.6 million.
While the situation is serious, there are options. Approximately $3 billion of $30.75 billion dedicated to Education Stabilization via the CARES Act has been set aside for The Governor’s Emergency Education Relief Fund (G.E.E.R.). North Carolina can receive approximately $95.6 million in G.E.E.R. funding.
These funds could be used to help support private schools, help low income families pay tuition or supplement funding in existing programs.
A recent brief from ExcelinEd outlined various ways governors could help private school families — and in the process — help stabilize all schools and students.
North Carolina can move forward on Covid-19 by trusting its citizens more
It’s fascinating to read and listen to all the different analyses for reopening large parts of states and the economy during the Covid-19 crisis. While I’m no expert on the epidemiology, even the casual reader must know now, there are a lot of different takes on how to move forward by experts in their field. The notion that “following the science” leads to a one size fits all lock-down policy no longer makes as much sense.
But for the purposes of this post, I think it’s important to primarily talk about people over data and numbers. It occurred to me when I was at Lowe’s Home Improvement multiple times this weekend, just how tight people were packed in there. It was certainly more crowded than usual even for a weekend. This makes sense, more people are home right now and have extended time for home improvement projects. At any rate, it seemed like one of those scenes that governors, politicians, and most health experts are trying to avoid during this pandemic. Lowe’s is certainly raking in money hand over fist, at least near me, and earning reports should at least please stockholders.
I’m not picking on Lowe’s it’s just where I was this weekend. But if somebody owns a restaurant or some other small business in North Carolina and looks out upon that scene; they would easily observe the unfairness of it all. Why is Lowe’s trusted to implement social distancing measures in their own stores and not the little guy or woman? And all the more so in a retail store with a lot less foot traffic than Lowe’s?
I know the gas station/convenience store Sheetz is not a small business but they are certainly smaller than Lowe’s and it’s not a company that is publicly traded. I’ve been impressed with how their business has promoted cleanliness and good hygiene tips throughout their stores, which I’ve patronized on a number of occasions of late. Sheetz is way ahead of another big business that I won’t name but it’s a popular big pharmacy chain that is present nationwide. Sheetz is constantly cleaning and wiping things down and appears to be going the extra mile for its staff and customers. They have glass shields at checkout (at least where I have been), and plenty of signage related to Covid-19 education.
At any rate, the point is we need to trust business leaders and the people of this state more than we do now. Let’s trust them to be good citizens and to take the necessary precautions so we can have more businesses open to salvage small and medium-sized commerce.
Freedom requires virtue. This is something America’s founders continually stressed. We need to allow for our own government and authorities to trust the citizenry to manage this crisis and protect public health too. A reopening plan can’t be effectively micromanaged from Raleigh. We’ve already seen the disaster of that with Gov. Gretchen Whitmer in Michigan decreeing state mandates for what might make sense in the Detroit area, yet makes no sense in virtually unaffected places, such as Michigan’s Upper Penninsula.
Local leaders need to be empowered and should be able to push back against state directives in certain cases so livelihoods aren’t completely destroyed. Likewise, the people are still the government and it’s okay to pushback and seek unanswered questions over Covid-19 policies and timelines. You shouldn’t be made to feel like you want people to die or have no compassion for grandma or grandpa because you are asking questions.
At any rate, as an observer, I’ve noticed that small businesses can effectively, and in many cases, more effectively implement social distancing and safety precautions to protect citizens in this state. Fortunately, I think it’s become obvious to more and more people that the one-size-fits-all management and arbitrary closings are no longer fair or make much sense.
How might coronavirus impact school enrollments?
Coronavirus has put the brakes on a once booming state and national economy. Today, one in five American workers is currently out of a job and many are asking: when will we return to normal?
With many parents of out a job, some families face the prospect that things might not return to normal. Families might have to move or might no longer be able to afford tuition at a private school. Moreover, a decline in enrollment or private support might force the closure of some private schools. Recessions are always hard on private schools, which frequently see drops in enrollment during hard economic times.
How might public schools be impacted by student migration and coronavirus? That’s the question Edchoice asked in a recent report. The analysis estimated the state and local costs of migrations of 10 and 30 percent of private school students to the public schools. Analyses were run for all 50 states.
So how would such scenarios impact North Carolina? According to the report, the estimated cost of 10 percent of private school students (approximately 10,900 students) transferring to public schools to be almost $64 million dollars. If you include local costs as well, the bill jumps to $90.6 million.
The cost associated with a 30 percent migration is even more eye-popping; a state tab of almost $192 million, and total costs (state and local) of just over $272 million.
Of course, no one knows how many students will transfer when they do there will be costs and schools should try to make that transition for students as smooth as possible.
North Carolina private schools educate almost 110,000. It’s true 9,600 students — or about 9 percent of private school students — receive almost $38 million in tuition awards from the Opportunity Scholarship Program. However the other 91 percent of private school students and their families have to figure out how to pay tuition since the schools they attend receive little if any direct aid from the state. Private schools perform a public service. These schools develop our children academically, morally and socially and provide important educational alternatives for families. North Carolina needs healthy private schools. Lawmakers would do well to remember this and the many contributions these schools make to our communities when they consider how to assist schools impacted by coronavirus.
This article was updated.
A few thoughts on the politics of reopening our state economy
As just about everybody knows at this point, there is no magic flick of a light switch to reopen our states and the economy. We’ve heard plenty of governors and medical professionals (including Dr. Anthony Fauci) use the dimmer switch analogy. President Donald Trump and Vice President Mike Pence have said as much as themselves, albeit in different words. The point is if you pay attention to press conferences and what governors are saying there is not a lot of differences to the plans for reopening.
Our system of federalism provides unique tools to roll out the places that are ready to open and less so in the areas of the state and nation more stressed by the coronavirus. There are still seven counties in North Carolina with not a single positive test. Imagine, the potential public-health chaos of a top-down highly centralized plan, where Western North Carolina was treated with the same oversight as Manhattan?
For Gov. Roy Cooper, there is a prescient need to have a reopen plan in place that trusts localized leaders so people can get back to work quickly. A little over a hundred North Carolinians have filed for unemployment for one recorded verified case of coronavirus. Having personally known two people in our country who have been on a ventilator, it’s also more than reasonable to have compassion and relief for those out of work as well.
We hear some ideologues ranting and raving on social media that we must only listen to scientists. I’ve listened to a lot of different opinions from medical doctors and epidemiologists in interviews and podcasts as well. Mostly, when it comes to the important issue of reopening more of the economy, I’ve heard about plans related to mitigation over eradication. There is a broad understanding of the need for many to get back to work so they can provide for themselves and their families.
From a political perspective, it’s essential to point out that while there is a lot of agreement between the president’s comments and many governors, even those that politically oppose him, let’s hope that partisan politics doesn’t rule the day. There may be the temptation by some governors to continue lockdowns because they won’t take the hit for a cratering economy and citizens going destitute. They would rather the president take the blame and help their party. Pessimistic, I know, but we’ve all seen what politics has become over the last few decades. A slower rollout is inevitable. We all know rock concerts and packed stadiums aren’t suddenly going to happen right away, but allowing more localized control for reopening is needed. We need our governor to get us there. There are enough economic and health barriers we face as it is, we don’t need to add partisan politics to the mix when so many are suffering.
“Stimulus checks” raise questions
People across North Carolina and the US began receiving deposits from the federal government this week as part of the federal coronavirus relief package, known as the CARES Act. Under the legislation, all Americans meeting certain income thresholds will receive a direct cash payment from the IRS, regardless of if they have been economically affected by the coronavirus shutdown.
Understandably, most people will be excited to see the number in their bank accounts jump overnight.
Since many of the people negatively impacted are struggling as a result of government-mandated shutdowns, there is a valid case for government to mitigate those impacts. But it is important to remember that there is no such thing as “government money” – the money funding the relief efforts comes from taxpaying Americans, both present and future.
With that in mind, there are compelling reasons why we should be skeptical of normalizing government providing direct cash payments to taxpayers in times of emergency.
Reason 1: This won’t “stimulate the economy”
The checks are largely being framed as “stimulus” money – similar to the language used in 2008 as the nation grappled with the Great Recession. To the credit of the Trump administration, the IRS avoids the “stimulus” language, calling the checks “Economic Impact Payments” instead.
It is important to remember that government spending can provide temporary relief for struggling families, but the money is unlikely to mitigate the broader economic impacts of the virus.
Civitas Executive Vice President Brian Balfour explains it this way:
A one-time potential boost in demand won’t encourage businesses to invest in expanding and hiring more workers.
Moreover, government checks being sent to consumers will not magically translate into an increase of productivity or more goods and services being produced. It won’t put workers that are being required to stay home and distance themselves back in factories or offices. It won’t enable parents who are forced to stay home and care for their kids because their daycares are closed to get back to work.”
The language that we use around this policy tool matters. Balfour emphasizes the dangers of believing the rhetoric:
The notion that government should try to “boost demand” during economic downturns is textbook left-wing Keynesian policy that conservative, market-friendly legislators typically scorn. They shouldn’t let sound economics fall prey to panic.”
For more information, read Balfour’s full article here.
Reason 2: Deficit spending
Unlike a similar plan to provide taxpayer rebates to North Carolinians from surplus tax collections, the federal checks are financed through government debt. A federal government that is $24 trillion in debt is unprepared to face a crisis without digging an even deeper hole. This is in stark contrast to the North Carolina state government. The North Carolina State Constitution requires the state to balance its budget on an annual basis and has been able to – through sound fiscal management – to put money aside for emergencies.
We shouldn’t think that the coronavirus response checks (and other spending from the virus response legislation) are simply “free money,” either. A day will come when the nation has to deal with its debt crisis.
Reason 3: Perspective problem
Public response to the coronavirus checks have been largely positive. It feels like “free money” – even though we know it’s not. The sentiment that government should be providers of economic stability or stimulation points to a deeper problem with how our country views the role of government.
Our government is designed to be a system of self-governance. The idea of government as separate from the people – and thus capable of providing to the people that which they did not create themselves – has dangerous repercussions. In the extreme, this line of thinking may explain the growth of the popularity of socialism.
It also explains the political unpopularity of fighting for a balanced federal budget. We are simultaneously unwilling to give up any government services and unwilling to pay for them through the astronomical taxes that would be required to sustain that level of spending.
In illustration of this point, the April 2020 Civitas Poll asked a sample of North Carolina likely voters what steps they thought the government should take to deal with the fiscal impact of the coronavirus on the state budget. While a plurality of respondents said the state should cut non-health spending (46%), thirty-eight percent were unwilling to commit to spending cuts or tax increases.
We have to remember the trade-offs that we face when the government intervenes and spends taxpayer money. Government intervention is often one ineffective and expensive tool for combatting society’s problems.
Coronavirus and school spending: what’s changed?
Coronavirus has upended and closed many of the public school buildings. While the buildings may be closed, instruction continues, mostly using online instruction and distance learning. How has the tumult effected school spending? What are the costs for districts and what savings might accrue?
Those are questions Education Week (subscription may be required) recently asked school fiscal analysts across the country
Here’s what they found:
Here Are the Big Costs for Districts:
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- Staffing: Most districts have continued to employ their entire staffsthrough the rest of the school year, including teacher assistants, counselors, librarians and administrative assistants. Many hourly workers were reassigned to other duties such as passing out grab-and-go meals or providing childcare.
- Janitors and cleaning supplies: Many janitors are being paid double time or overtime for cleaning every door knob, desk, light switch, locker, and other high-touch surface in schools. If schools reopened to serve as child care centers, administrators redeployed janitors to clean several rooms, ramping up overtime costs even more. Many districts also had to spend tens of thousands of dollars to purchase heavy-duty cleaning supplies. One Oregon district said it had spent $23,000 on overtime for essential employees in one week and had spent $10,000 on cleaning supplies, according to a March 23 survey of school district leaders by the EdWeek Research Center. A California district reported in the survey that it had spent $60,000 on hand sanitizer.
- Technology: Districts’ technology costs vary depending on how ready they were to deploy a comprehensive distance-learning program. Costs include purchasing licenses agreements for new software, wi-fi hot spots, communication tools for teachers, online curriculum, and professional development for teachers who must shift their teaching to virtual platforms. Many districts had to purchase more laptops or other devices for students who didn’t have them. Those costs are likely to increase in the coming months as districts figure out students’ needs. An official in a New Jersey district reported that the district spent $36,000 on Wi-Fi devices to provide to students who do not have internet access in their homes, according to the EdWeek survey.
- Food Services: Districts are deploying food services across the city, which often times requires new investment in staffing, transportation, supplies and food.
Here Are Some Savings for Districts:
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- Substitute teachers: Many districts decided not to pay their subsitute teachersfor the remainder of the year, outraging many people who work as full-time subsitute teachers. Whether or not substitute teachers get paid depends on their contract with the district, state law, or governors’ waivers from the state law.
- Transportation: Not putting dozens, or in some cases, hundreds of school buses on the road every day for several weeks will likely save districts tens of thousands of dollars, particularly in gas and maintenance costs. Many districts deployed a smaller fleet of buses to deliver meals to students or to serve as wi-fi hotspots in neighborhoods that lack internet access.
- After-school programs: With no students in school buildings for a prolonged period, many districts don’t have to pay for costs associated with spring sports programs, after-school clubs, or other events. But administrators said there’s a loss too—they won’t be bringing in revenue from those programs.
It should be noted these highlights are from interviews across the country. Cost trends in North Carolina might be slightly different in some areas. For example the costs for online learning in rural districts may be higher because of the lack of infrastructure and broadband. Regarding savings, expect North Carolina schools to produce similar budget savings. How will savings compare with expected budget reductions? That’s a key question and one of the challenges superintendents will need to skillfully manage in the coming months.
Government opposition to protestors is a pitiful look
I am fascinated by the now infamous tweet from the Raleigh Police Department that stated: “protesting is a non-essential activity.” It’s certainly a terrible look, particularly coming from a law enforcement agency. After all, police and law enforcement officials take an oath to protect and defend the Constitution. If there is any legal maneuvering on the pushback to the Reopen NC rally in downtown Raleigh on April 14, I’d suspect it will be good news for First Amendment advocates.
It sounds like governors are already allowing wide latitude for protestors. Gov. Mike DeWine in Ohio is assisting in the health and safety of those protesting against his executive orders and actions related to the coronavirus. When we talk about something that is essential, it’s essential that the government protect inherent rights. Thomas Jefferson says as much in the Declaration of Independence, reminding us that governments are implemented to secure our natural rights. John Adams put it more succinctly: “Liberties are not the grants of princes and parliaments.” What can’t be given can’t be taken away. Jefferson even goes on to say that it is the right to abolish governments that do so. Do you know what the Declaration does? It puts the tyrants on notice.
At any rate, there should be a unified understanding that inherent rights are protected during a crisis. It’s reasonable for lawmakers to take measures to protect the public health but not to trample on the Bill of Rights, or cite governmental decrees over and against natural rights. During a crisis, every reasonable accommodation must be made to secure the rights of the people.
I think there is a push to make the protests for reopening North Carolina a pro-Cooper or anti-Cooper agenda too. North Carolina political reporter Andy Specht at WRAL essentially hinted that pushback against Cooper is not widespread given that a newly released Civitas poll gives him sky-high marks for handling the crisis. Ultimately though, who cares? There is plenty of time for partisan politics to sort itself out. The government has responsibilities at this time too, and as mentioned, none remain as important as securing rights. That’s forever immaterial to Gov. Cooper’s political fortunes or popularity.
People are often motivated by their passions. This is why we see some Democrats and even many in the news media suddenly rediscover the tenets of federalism. Certainly, some on the right want to leverage the closures to go after Gov. Cooper.
I made the point that only a highly politicized culture could see a revival of federalism while simultaneously seeing a decline in inherent rights. In a highly politicized era like this one, picking and choosing from the Consitution for one’s own selfish political ambition or power grab is an all too common occurrence.
At least one protestor I spoke with said she was there to protest infringements on religious liberty and her presence downtown wasn’t aimed at anti-Gov. Roy Cooper sentiment. It’s possible this may not be the most common sentiment behind the protests, but I suspect it’s more common than the political ideologues see it. It’s essential that we never lose sight of that in a frenzy.
Citizens of North Carolina know we have a great state motto. They may be unfamiliar with another good one down in Alabama: Audemus jura nostra defendere or “We dare defend our rights.”