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Piering into the Murky Depths of the Legislative Deal

John Hood’s Daily Journal
Piering into the Murky Depths of the Legislative Deal
By Becki Gray

October 29, 2010

This week’s “Daily Journal” guest columnist is Becki Gray, John Locke Foundation vice president for outreach.

RALEIGH — Aside from jobs, the economy, and government spending, transparency and open government have concerned voters during this election cycle. Everyone from the governor to school board candidates has promised more sunshine, more disclosure, and more restraint. But will we see it? Sometimes real disclosure hides behind half-truths and shadows. Many of us could support a government that was open, honest, and trustworthy. Unfortunately, we haven’t had it in North Carolina. The story of Jennette’s Pier is an example of legislation that is not as open as it should be.

Built in 1939 by the Jennette family, Jennette’s Pier is the oldest fishing pier in North Carolina. It has been rebuilt, repaired, and renovated many times over the years after sustaining hurricane and storm damage. It remained in private hands until 2003, when the N.C. Aquarium Society bought it and then turned it over to the taxpayers of North Carolina after it was severely damaged by Hurricane Isabel.

Three months into the 2009-10 session of the N.C. General Assembly, House Bill 628 passed unanimously authorizing the expenditure of $25 million to rebuild Jennette’s Pier in Nags Head. The bill was proposed and supported by northeast coastal representatives, including House Rules Chairman Bill Owens, D-Pasquotank, Rep. Tim Spear, D-Washington, and Senate President Pro Tem Marc Basnight, D-Dare.

Members were assured the money would come from “existing funds” and not require any new spending. With record unemployment and the Nags Head area hit especially hard, the bill promised over 1,800 new jobs and a $14 million benefit to the area. It sounded good, and the bill passed unanimously in both chambers. But was the information that the legislators based their vote on accurate?

The General Assembly’s Fiscal Research Division usually provides fiscal analysis legislators depend on when considering spending bills, “but did not provide those numbers to the members who sponsored the legislation, and neither did [they] prepare a fiscal note.” The budget department of the Department of Environment and Natural Resources who were authorized to spend the money didn’t provide the numbers, either. Nope. The number of jobs and economic benefit promises came from Clancy and Theys, the construction company that got the contract to rebuild the pier.

When asked about the status of the jobs created, Clancy and Theys said things had changed since the project was approved. It was no longer about creating jobs. (There were none created.) It was now about saving jobs. But when asked how many jobs had been saved, a representative said the company didn’t keep a log of that. When asked for an update on the promised $14 million economic benefit, he explained that Clancy and Theys was simply a construction company bidding on a job. So, no jobs and no economic benefit.

Basnight and others claimed the project would “jump-start” the area’s economy. Dare County unemployment was 6.2 percent in July 2009 when construction on the project started, and, after a year of construction activity, unemployment rose to 6.3 percent by July 2010 — hardly a jump-start to the area’s economy.

What about the cost of the project?

The bill says the project will be “funded with receipts or from other non-General Fund sources” and will cost $25 million. Funds will be transferred from a 2006 stormwater pilot project that hasn’t been used and any federal stimulus money that might be available.

Where has the money actually come from? Some $2.3 million was taken out of the Clean Water Management Trust Fund, which was supposed “to clean up impaired waters and protect remaining pristine waters of the state.” Supporters took $1.5 million from Water Access and Marine Industry projects, which the General Assembly funded in 2007 “to acquire waterfront properties or develop facilities for the purpose of providing, improving, and/or developing public and commercial waterfront access.” In 2006, $15 million in taxpayers’ money went into a stormwater pilot project to clean up ocean outfalls and outlets, but $10.6 million was used instead for the Jennette’s Pier project. Almost all of the receipts from the Aquarium Admissions Fund, $10.5 million, will go to rebuild the pier. (This allocation cleans this fund out, shortchanging the three N.C. aquariums at Roanoke Island, Pine Knoll Shores, and Fort Fisher). The Aquarium Society, which owned the pier before the 2003 Hurricane Isabel damage, donated $400,000 to the project.

There are currently 18 piers in North Carolina. Seventeen are owned and operated by individuals, some by families for several generations. One is owned by the government: The City of Oak Island purchased Oak Island Pier for $1.7 million in 2009 (a year when the city’s debt increased by 132 percent, in large part because of the pier purchase, followed by an 18 percent property tax increase in June 2010). When it opens in May 2011, Jennette’s Pier will be the only pier owned by the state of North Carolina. Is owning a pier a core function of government, or is that better left to the free market? Could those funds be spent better on education or public safety, or, better yet, returned to the taxpayers?

The $25 million project to rebuild Jennette’s Pier made claims of jobs and benefits that haven’t been met, and how the project was going to be funded was not disclosed. The state shouldn’t be in the pier business. The Jennette’s Pier bill is just an example of how business has been done at the North Carolina General Assembly.

In 1913, the late Supreme Court Justice Louis Brandeis said, “Sunlight is the best disinfectant.” With a new General Assembly to be elected next week and set to take over in 2011, here’s a piece of advice: No more murky pier projects. Stick to the core function of government. Let the sun shine on all you do

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