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Morning Memo: Three strikes for HHS secretary; NC unemployment now nation's 3rd worst

THREE STRIKES FOR SECRETARY WOS: The controversy about high salaries for two inexperienced aides at the Department of Health and Human Services is only the latest trouble for Secretary Aldona Wos. (See more on the story below.) It's the third major controversy at the agency in the eight months since Wos, a major Republican donor and former physcian, took the helm. In February, Wos hired a director for the agency's childrens division who never took the job amid a firestorm of criticism. And in May, Wos blamed the state's decision not to expand Medicaid on the state's Democratic insurance commissioner -- not the Republican legislature and her boss, Gov. Pat McCrory. The distractions for the McCrory administration are related to communications and policy -- the two areas the high-paid staffers are charged with managing.

THE BIG STORY -- N.C. UNEMPLOYMENT NOW 3rd WORST IN THE NATION: The unemployment rate in North Carolina inched higher in July, the first uptick in the closely watched economic indicator since January. The state’s seasonally adjusted unemployment rate rose one-tenth of a percentage point to 8.9 percent last month, according to data released Monday by the state Department of Commerce’s Labor and Economic Analysis Division.

Although the jobless rate was seven-tenths of a percentage point lower than it was a year ago, North Carolina’s unemployment rate is tied with Rhode Island for the third-worst in the nation. Only Illinois, at 9.2 percent, and Nevada, where the unemployment rate is 9.5 percent, have higher unemployment rates. It represents a fall from fifth worst just a month ago.

***More on the state's unemployment rate and the latest DHHS controversy below in the Dome Morning Memo.***

ANALYST ON UNEMPLOYMENT RATE: “It was a disappointing month,” said Mekael Teshome, a PNC Financial Services Group economist. ... “I think we have a story of two North Carolinas,” Teshome said. “We have some really strong areas in the state – the Triangle area, Charlotte – but then other parts of the state are struggling to get back on their feet from the Great Recession. Overall, the state’s recovery has been pretty modest.”

The national unemployment rate for July was 7.4 percent, an improvement from June’s 7.6 percent. Read more here.

BLOOMBERG OP-ED -- Al Hunt's piece: "The massacre of the NC model." From the column: "North Carolina is channeling Alabama and South Carolina when it comes to the best economic, social and political model for a U.S. Southern state. ...

To critics, this conservative agenda – much of it orchestrated by Art Pope, the governor’s budget director and the multimillionaire retailer who is the Tar Heel State equivalent of the Koch brothers – threatens the state’s legacy. “We’re turning back everything that made us different from other Southern states,” said Jim Goodmon, the chairman of CBC New Media Group LLC and owner of the Durham Bulls Minor League baseball team. “With this shift, economic development is broken.” ...

"Ann Goodnight, a powerful advocate of higher education whose husband is CEO of the giant technology company SAS Institute Inc., wrote a letter to The N&O charging that cuts in education funding were a “grievous mistake.” The places that succeed in economic competitiveness, she wrote, “are investing in education and using the playbook we once embraced.”

THE McCRORY INTERVIEW: More from the column: "As Republicans took full control of the state government in Raleigh, there has been a shift to the right – a move Gov. Pat McCrory, a Republican elected last year, says was necessary and is paying off. “We’re getting tremendous positive feedback from the business community,” he said in an interview. His state had “lost its focus” and needed to be “shaken up.”

"The governor, who is as moderate in demeanor as his previous record as mayor of Charlotte suggests, denied that he has been captured by the right.

"Goodnight, he said, is a Democrat. Besides, he added, her husband supports him. When asked about the alleged voting fraud that mandated the changes in procedure, he offered no specifics: “It’s like insider trading; you don’t know until you look.”

The kicker: "North Carolina, dating to the 1960s with Terry Sanford as the country’s best one-term governor, and after four terms of Jim Hunt produced a much-envied system of higher education and community colleges, good race relations, a desirable quality of life and a healthy business climate. The North Carolina model, which served the region and country so well, is gone. Read more here.

McCRORY ADMINISTRATION DUCKS ADDITIONAL QUESTIONS ON SALARIES: From today's N&O: Two prominent employees at the state Department of Health and Human Services whose salaries have been criticized in recent days are making about the same as their predecessors – even though they have far less work experience. ... DHHS would not provide staff resumes. Department spokesman Ricky Diaz would not be interviewed.

The governor’s spokeswoman, Kim Genardo, referred questions about Diaz and McKillip to Dr. Aldona Wos, DHHS secretary and McCrory’s appointee. Wos could not be reached. “Secretary Wos is going to put together the best team she can put together,” Genardo said.

STAFFERS SALARIES DON'T MATCH EXPERIENCE, EXPERTS SAY: Don Taylor, an associate professor at the Sanford School of Public Policy at Duke University focused on health policy, said governors should be able to pick their advisers, but added: “I think the chief health policy advisor to DHHS having so little experience is surprising.” Taylor said he would have expected the chief policy officer to have a background more like Louisiana Gov. Bobby Jindal’s former chief health policy adviser, who had more than 20 years experience in consulting, policy and management.

Rick French, chairman and CEO of the public relations firm French West Vaughan based in Raleigh, said Diaz is making much more than a 24-year-old public relations professional would make at a private agency. “A $84,000 salary for a 24-year-old is something I can’t even fathom for a PR position,” he said. “They’re just not experienced enough.” Most PR agency employees at that age are account executives making in the range of $35,000 to $45,000 a year, French said, though corporate public relations staff earn more at the beginning of their careers. Read more here.

A FRUSTRATED KINNAIRD RESIGNS: Democrat Ellie Kinnaird of Orange County resigned her seat in the N.C. Senate, opting for a role far from the Legislature Building, in grassroots advocacy. Kinnaird, who is in her ninth term, said in an email Monday that she had submitted her resignation, effective immediately.

“I feel that my energy and time is best spent to help get Democrats elected statewide and restore our standing as a progressive beacon of light in the southeast,” Kinnaird, 81, wrote. “I am also working on a grassroots effort to assure that people have a voter ID and are registered to vote.”
Kinnaird, who has served 17 years in the General Assembly, said in an interview that she decided to leave office before her term ended because she wouldn’t have been able to accomplish anything in next year’s short session. For the most part, Democrats are marginalized in the Republican-dominated Senate. Read more here.

STUDENT'S POLITICAL BID GETS NATIONAL ATTENTION: Montravias King is an Elizabeth City State University senior who has been voting in Pasquotank County since he started school there four years ago. The civic-minded student government leader has voted early in city, county, state and national elections in the Pasquotank County seat in northeastern North Carolina, always using his campus dorm address.

Now King wants to run for City Council in his college town and his campaign has drawn the attention of such national media figures as MSNBC’s Rachel Maddow, a vocal critic of the sweeping North Carolina elections revisions signed into law last week. Read more here.

PROTESTS CONTINUE AGAINST 'THE MECKLENBURG TRIO': Moral Monday protesters on Monday gathered in the city that launched Gov. Pat McCrory’s political star to speak out against laws passed by the Republican-led legislature – and backed by the Republican governor.

One of the city’s largest protests – police estimated about 2,000 demonstrators – packed into uptown’s Marshall Park. They sang protest and religious songs, waved signs of discontent and railed against the legislature’s flurry of lawmaking they say is “waging war” on the poor, on voting and abortion rights and on the state’s public education system.

During the event, Gene Nichol, director of the Center on Poverty, Work and Opportunity at UNC-Chapel Hill, blasted what he called “the Mecklenburg trio”: McCrory, House Speaker Thom Tillis of Cornelius and Sen. Bob Rucho of Matthews. The three Republicans, he said, were dedicated “to waging war on poor people and granting more largesse to the wealthiest North Carolinians. Our governor and our General Assembly looked at those strong inequalities and decided to make them deeper.” Read more here.

GOP SAYS ITS GETTING A 'MORAL MONDAY' BOUNCE: Democrats and liberals aren’t the only ones who hope to see Moral Monday protests galvanize their side. So do Republicans. Three days before Monday’s gathering in Marshall Park, the Mecklenburg County Republican Party blasted an email to area Republicans.

“These liberal-backed protestors have been attacking the progress made by Governor Pat McCrory and our Republicans in the General Assembly,” the party said. “We need to send a strong message that Mecklenburg County supports the work done by our elected Republicans and does not agree with the protestors, who would like to see the Great State of North Carolina go back to the days of big government, excessive spending, and liberal ideas.”

Moral Monday helped fuel interest in a countywide Republican voter canvass this past weekend, said Mike Rusher, chief of staff of the state GOP. Volunteers knocked on doors and registered voters to spur interest in this fall’s municipal elections. “When folks found out Moral Monday was coming to Charlotte, they wanted to do something on our side … something productive as they saw protesters hold signs and essentially yell at Republicans,” Rusher said Monday. Read more here.

LEGISLATIVE OVERSIGHT COMMITTEE TAKES LOOK AT RURAL CENTER: State lawmakers want more restrictions on how public money is distributed to nonprofits and accounted for in light of critical reviews of the North Carolina Rural Economic Development Center.

The panel overseeing the legislature's government watchdog organization asked agency staff Monday to draw up draft legislation likely debated next year. The recommendation followed State Auditor Beth Wood's presentation on last month's audit on the center. The audit found grant reporting requirements weren't carried out, job creation measures for grant recipients failed to be verified and pay of then-President Billy Ray Hall was unreasonable.

Members of the Joint Legislative Program Evaluation Committee sounded most unhappy with $20 million the center collected in interest from unspent state funds. Wood told the legislators there are no rules on whether the state or nonprofit gets the interest sitting in private bank accounts. "That is a gaping hole," Wood said. ...

Some legislators said the interest should belong to the state. "We need to get our $20 million back," said Rep. Julia Howard, R-Davie, a committee co-chairwoman. Read more here.

CHARLOTTE AIPORT DIRECTOR GETTING PAID WHILE IN LIMBO: Charlotte’s former Aviation Director Jerry Orr is still receiving his $211,041 annual salary, a month after being removed from his city job, under terms of the law that created a new commission to run the airport. Orr is awaiting the federal government’s decision on whether the commission can run Charlotte Douglas International Airport. But although the commission doesn’t have any employees or revenue, Orr is legally the executive director. His salary is being paid from the revenues of the airport, which is still a city department. Read more here.

OFA EVENT ON GUNS: Organizing for Action (OFA) is continuing President Barack Obama's push on gun control measures. The group's North Carolina chapter will hold an event at 4 p.m. Wednesday at Dr. King Memorial Gardens on Rock Quarry Road in Raleigh. From the press release: "OFA-NC volunteers will be holding a gun violence prevention event in Raleigh to tell Congress that they won't stop fighting to protect our children and protect our communities. Supporters of gun violence prevention have not forgotten about Sandy Hook or Aurora, Tucson or Virginia Tech, and they won't let leaders in Washington forget that they can act to make our communities safer."

GOP LEADER SUGGESTS OVERRIDES ON THE WAY: A top North Carolina House Republican leader says GOP Gov. Pat McCrory appears to have an "uphill battle" to preserve his first two vetoes as governor. House Majority Leader Edgar Starnes said Monday most of his Republican colleagues he's heard from don't plan to change how they voted on the two bills, which passed comfortably last month in the House and Senate. Read more here.


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