Unlawful Taxpayer-Funded Electioneering Alleged In Run Up To North Carolina’s Primary Elections

Lawmakers in more and more states are seeking to address the conundrum of taxpayer-funded lobbying, which often entails advocacy for heftier tax burdens and higher levels of government spending. Pennsylvania taxpayers, for example, spent at least $42 million last year on lobbyists, according to a study from the Commonwealth Foundation, a Pennsylvania-based think tank. Meanwhile in Texas, a study by the Texas Public Policy Foundation found local governments spent $41 million on lobbyists during the 2017 legislative session alone. In response, legislation to prohibit local governments from hiring lobbyists passed out of the Texas Senate in 2019 and lawmakers in other states are expected to introduce similar reforms in 2023.

Lobbying retainers aren’t the only way in which local governments use taxpayer funds to advocate for higher taxes and more government spending. North Carolina’s third most populous county, Guilford County, was recently accused of using taxpayer resources to unlawfully advocate for two measures on the May 17 primary ballot, one of which would raise the local sales tax by a quarter percent while the other would authorize a $1.7 billion bond. Critics contend the county is in violation of a state law that prohibits taxpayer dollars from being used to endorse or advocate for a given ballot measure or candidate.

Jerry Alan Branson, who previously served on the Guilford County Board of Commissioners for eight years and is now running for an at-large seat on the commission, filed a complaint with the county board of elections on April 27 alleging that taxpayer dollars are being improperly used to advocate in favor of the bond and tax hike measures.

As evidence, Branson’s complaint cites information about the two ballot measures featured on the county government website. Branson’s complaint contends that the county website’s description “presents the viewer with an entirely unbalanced discussion of the bond, accentuating the needs and downplaying the costs.” Branson’s complaint notes that the county provided the public with no information on the hundreds of millions of dollars in interest and other costs associated with the bond.

Guilford County is also accused of misleading voters by insinuating on the official bond information page that the proposed sales tax hike, if approved, would trigger a property tax reduction when such a tax cut is already scheduled to occur. Guilford County’s information page on the bond measure, Branson noted in his complaint, “fails to mention that, because of the revaluation of all property in Guilford County this year, the tax rate is going to be reduced regardless of the result of the referendum.”

The complaint against Guilford County also cites a postcard mailed to county residents advertising the benefits of the school bond. Though that mailer did not list the funding source, it has been confirmed that it was paid for by the county government. Despite the legality of their actions being called into question, the county has since sent a subsequent mailer on the bond measure to voters. According to Branson, his attorney asked the county run remedial advertisements on the ballot measures in local outlets, a request the county has rejected.

At one point the county website displayed only the Democratic sample ballot, which exclusively lists Democratic candidates. It was after complaints from Guilford County Republicans that the official county website was updated to show sample ballots for both major parties.

The chair of the Guilford County Board of Commissioners, Melvin “Skip” Alston, rejects the assertion that what the county is doing is thinly veiled advocacy funded by public resources. “What the county does is education,” Alston claims. “The county is responsible for funding our schools.”

“By law, county governments are permitted to use taxpayer funds to conduct educational campaigns surrounding ballot referendums,” explains the Carolina Journal’s David Bass. “But governments are strictly prohibited from actively promoting the passage of those referendum. That sets up a fine line between education and advocacy that counties often appear to cross.”

“As the state treasurer, as the chair of the Local Government Commission, I’m always in favor of voter-approved debt,” North Carolina Treasurer Dale Folwell told the Carolina Journal. “I’m always against violating ethics laws regarding using money for promotion when it’s not allowed by law.”

Folwell is not the only statewide official to comment on this alleged misuse of public resources. “These are serious allegations that the residents of Guilford County, like myself, need to be paying attention to,” North Carolina Lt. Governor Mark Robinson (R) told Forbes. “While governments can use tax dollars to educate the public about a bond referendum, they are not permitted to advocate for these disguised tax increases.”

“The inappropriate use of our tax dollars to buy advertising for the purpose of persuading voters to raise their own taxes is prohibited by our laws for good reason: Citizens should be able to trust the information that comes from their government, and when government crosses the line into providing biased and one-sided information to voters, using the voters’ own tax dollars, that trust is damaged,” Robinson added. “Guilford County taxpayers deserve to know that our tax dollars are being spent legally and wisely. If laws have been broken, the taxpayers deserve an investigation, and for those who are responsible to be held accountable.“

A 2002 North Carolina Court of Appeals decision cited in the complaint against Guilford County bodes well for Branson if he or someone else decides to take legal action against the county. That 20 year old precedent setting case — Dollar v. Town of Cary — also involved an allegation of improper taxpayer-funded advocacy. In that case, the court ruled “it is not necessary for the advertisement to urge voters to vote ‘yes’ or ‘no’ or ‘for’ or ‘against’ a particular issue or candidate in order for the advertising to be promotional.”

Members of the North Carolina General Assembly have a number of options to deter moving forward the type of misuse of taxpayer dollars that is currently alleged in Guilford County. To start with, Governor Roy Cooper (D) and the Republican-run General Assembly could consider legislation that would require all local tax and bond measures to be placed on the November general election ballot when turnout is much higher, thus giving a greater share of the electorate a say on these important matters.

Another reform that state lawmakers could implement to provide truth in advertising would be to pass legislation requiring all bond measures list for voters not only the principal amount the bond would borrow and for which taxpayers would be on the hook, but also the interest costs that taxpayers would have to cover. If the $1.7 billion bond measure is approved on May 17, it will cost Guilford County taxpayers $50 million annually to service the debt, which is enough money to hire 1,136 new teachers based on the average teacher salary in Guilford County schools. The sales tax hike on the ballot is projected to raise as much as $22 million annually, which means it will cover less than half of the cost of the annual interest payments associated with the new bond. Those interest costs had been omitted from the county’s official information page on the bond measure, but was updated days ago to include it at the request of Branson and other Guilford County Republicans.

The Guilford County Board of Elections recently voted to refer Branson’s complaint to the state board of elections. Regardless of how this complaint pans out, this dispute in Guilford County could provide the impetus for state lawmakers to enact meaningful reforms in 2023, when Republicans might have veto-proof majorities in both chambers of the General Assembly.