Research Reports: 2006

The state of North Carolina levies differing forms of price regulations on a range of what would otherwise be free-market activities. These include controls on wages, gasoline, interest rates, and an unspecified number of prices during disasters and states of emergency. The purpose of this paper is to explain why a free and flexible price system is so important to both social order and the efficient allocation of goods, services, and resources in a free society. Particular emphasis will be placed on North Carolina’s laws meant to regulate prices and the negative effect that these regulations have on both markets and the well-being of the citizens of the state.

There is a consensus on global warming, but it is not the consensus that environmental groups and many in the media suggest. There is no consensus on the extent of future climate change or the extent to which current climate change is human induced or a result of natural variation. The true consensus — where there seems to be no disagreement whatsoever among scientists — is on the proposition that there is no public policy currently being considered to restrict carbon dioxide (CO2) emissions by any level of government, including the State of North Carolina, that would have a measurable impact on the climate, either in the short or the long run (a century or longer). That proposition so far remains undisputed. (Revised February 20, 2007.)

Legislative leaders may be planning a nearly billion-dollar tax hike. The state would take one cent of the sales tax from counties and offer them the option to increase the local sales tax by one cent. To make the trade palatable, legislators would stop charging counties for 15 percent of Medicaid, offer an earned income tax credit for low-income workers, and cut the corporate income tax rate. Counties would also have more responsibility and flexibility in funding school and road construction. Legislators should look for savings in the state budget to pay for schools, roads, and Medicaid before passing the cost to taxpayers.

Over the past five years, Mooresville’s city owned and operated golf course experienced operational losses of nearly $450,000. With its course, the city engages in unfair competition with six private courses in the county and 12 more courses in the surrounding area. Private golf courses pay taxes that support government services; the city does not. Unlike police and fire protection, golf is not an essential city service. If the course were sold, city taxpayers would gain the amount of the sale and avoid paying its average annual losses of $90,000 per year. Also, a privately owned golf course would contribute to the tax base of the city and county.

The North Carolina Public Utilities Commission is considering charging an extra fee, separate from existing rates, to electric utility customers. This extra charge will help support what is called a “public benefits fund.” The fund would support programs that have nothing to do with the supply of electricity. Consumers would be required to pay the “fee” if they want to receive electricity, and the more electricity they use, the higher their fee will become. To environmental extremists and other proponents of this extra fee, the use of electricity, which allows us to warm our homes and function in modern society, is a “sin” and needs to be reduced.

As the Triangle grows, motorists face significant increases in traffic congestion. City and county planners are hired, in part, to suggest plans that will alleviate this congestion. Unfortunately, they are doing the opposite. Based on city staff recommendations, city councils in Raleigh and neighboring cities have fallen victim to the latest planning fad: traffic calming. This seemingly worthwhile goal has significant detrimental consequences, including increased traffic congestion, more deaths due to slower emergency vehicle response times, and unnecessary costs to taxpayers.

North Carolina utility consumers may face higher rates for no justifiable reason if extreme mercury regulations are adopted. The United States Environmental Protection Agency (EPA) is regulating, for the first time ever, mercury emissions from power plants. The purpose is to minimize potentially harmful mercury levels in fish consumed by humans. However, there has never been any documented case in the United States of mercury poisoning from fish. Data linking fish consumption to any type of adverse effect in humans is very weak. In addition, the EPA acknowledges that it does not know the impact mercury emissions from power plants have on the mercury levels in fish. Despite the lack of benefits and the additional costs, North Carolina’s Environmental Management Commission (EMC) is considering whether to adopt regulations which exceed the new and stringent federal standards.

Beginning in 1996, the state implemented a comprehensive program of education testing called the ABCs of Public Education. It did not take long for state leaders to declare North Carolina a national leader in implementing state-level accountability measures. In 1999, then Governor James Hunt declared that, “we’re holding our schools accountable for results. Education Week Magazine says no state is doing more than North Carolina to put in place real and meaningful accountability measures.”

The most critical challenge facing Wake County Public Schools is to find the most responsive, cost-efficient, and timely way to provide seats for a growing student population. In this regard, the school system’s proposed $1.056 billion school facilities spending plan falls short.

Health insurance should act like insurance, not a payment plan for regular medical needs. It should also be available for individuals to purchase in a deregulated market. A high-risk pool for health insurance, as in other insurance markets, would keep premiums affordable for the small percentage of those with significant care needs without raising costs for the entire market. The state of North Carolina should finance any high-risk pool entirely through the General Fund and existing taxes, rather than assessments on insurers or other hidden taxes. Money for a high-risk pool can come from Medicaid savings.