Whispers in the Hallways, Part I

Editor’s note: This is the first part of a two-part article on lobbying by government agencies in North Carolina. The second part is here.

The word “lobbying” can conjure up some pretty negative images, such as industrial fat cats plying government officials with expense-account goodies to grease their way to big subcontracts, tax breaks, or favorable regulations.

But such lobbyist stereotypes may not be the biggest threat to taxpayers’ wallets. Incidents like the direct purchase of favors with cash (which sent Jim Black, former speaker of the North Carolina House of Representatives, to jail) tend to be relatively rare. It’s not always money and favors from outside of government that cost taxpayers the most—sometimes it’s influence and pressure from within that does the most harm.

Inside North Carolina’s government, agencies have their own lobbyists, called “legislative liaisons.” Their job, when pared to its core function, is to fight to keep department budgets high, raising a serious question: Why are North Carolinians taxed to pay the salaries of people whose primary function is to convince legislators and administrators to spend more of their (the taxpayers’) money?

It is a question of basic fairness: since it is in the interest of the taxpayer to pay low taxes, is it right that taxpayers should be forced to pay the salary of someone who will lobby for greater government spending and therefore higher taxes?

The University of North Carolina (UNC) system is a prime example of this phenomenon. It has done very well financially in the past decade, until this year when the state government had to fill a massive budget shortfall. Not only had UNC appropriations grown as a percentage of all state government spending, from 12.5 percent to 14.1 percent in the years from 2001 to 2010, but the legislature had granted permission for UNC to more than double tuition and fees in the same period.

A spokesperson for the system’s general administration has insisted that UNC hires no lobbyists. But this is merely a matter of semantics. North Carolina state statute 120C-500 declares that “[A]ll agencies and constitutional officers of the State, including all boards, departments, divisions, constituent institutions of The University of North Carolina, community colleges, and other units of government in the executive branch shall designate liaison personnel to lobby for legislative action.”

Furthermore, to “lobby” is legally defined quite broadly in statute 120C-100 below: (Note: “designated individual” is defined as “a legislator, legislative employee, or public servant.”)

a. Influencing or attempting to influence legislative or executive action, or both, through direct communication or activities with a designated individual or that designated individual’s immediate family.

b. Developing goodwill through communications or activities, including the building of relationships, with a designated individual or that designated individual’s immediate family with the intention of influencing current or future legislative or executive action, or both.

The job description for the main legislative liaison for the UNC General administration—who was a registered lobbyist immediately prior to working for the university system—says that she “works closely with the North Carolina General Assembly, the Executive Branch, and related staff to advocate for university priorities.”

While the statutes limit the number of liaisons for each government agency to two, each UNC entity is considered an agency in this case. As a result, the UNC system could potentially field a team of as many as 38 people whose jobs are at least partially centered on lobbying the state government. The secretary of state’s website lists 20: two from the system’s general administration, and one for each of the 16 universities, the School of Science and Math, and UNC Healthcare.

That’s a lot of high-priced talent to be putting pressure on legislators: twelve of the 20 receive six-figure salaries, topped by Kevin Fitzgerald, the Associate Dean of Medicine Administration at UNC-Health Care, at $262,891, and Betty Doster, special assistant to the chancellor for constituent relations at UNC-Charlotte, hired this year at $160,000. Salaries for the 20 UNC legislative liaisons listed on the state government’s web site total at least $2,387,323.

Certainly, not all of the liaisons are lobbying the state full-time. In fact, for some, it is a relatively small part of their jobs. But others are at the legislature almost every day it is in session. And while the salaries of the state’s contingent of legislative liaisons are costly, the bigger expense is the increase in state budgets that occurs due to their lobbying efforts.

Some level of lobbying is necessary; maintaining access to legislators for constituents, citizens, and interested parties is without question a must for a free society. Legislators also need experts to provide them with information—they often need people representing government agencies at committee meetings to provide that knowledge.

Yet, as a result of lax and unclear lobbying regulations and enforcement, the capitol takes on a carnival atmosphere during a legislative session that is not always conducive to good legislation. Next year’s short session may be a good time for the legislature to perform a comprehensive review of lobbying laws that doesn’t just nibble around the ages but shows some teeth.

Underlying this need for better regulations is the fact that, while state agencies press legislators hard for more funding, almost no one speaks for the taxpayer (except, in some cases, the legislators themselves). Perhaps the best explanation for this imbalance in influence comes from the economic theory of public choice. Government spending tends to have “concentrated benefits” and “dispersed costs,” in that most government expenditures benefit a small, select group of highly interested people, while the costs are dispersed among everybody who pays taxes. The few who stand to gain a lot from their budget item are more vocal than the many, who pay only a small amount for each expenditure and therefore feel less urgency to press their case.

As one can imagine, the influence of the vocal few is multiplied when they are already working for the government. (Even more so when their ranks include many who formerly worked in the legislative or executive branches—a frequent occurrence in North Carolina government circles, especially at UNC.)

All this pressure is not without effect—legislators, just like everybody else, are susceptible to the influence of impassioned arguments. As a result, there is a natural tendency for budgets—and therefore taxes—to rise, except under the most dire conditions. Even against the wishes of the people who pay for it.

To make matters worse, public agencies have what is perhaps an even more effective weapon in the fight to influence legislators. Part II of this article will discuss how they can use volunteers to flood the halls of the legislature with emotional appeals for higher subsidies.