Cary Watchdog Says Town Promotion of Bonds Goes Too Far | Eastern North Carolina Now

   Publisher's note: The author of this fine report, Dan Way, is an associate editor of the Carolina Journal, John Hood Publisher.

State law bans use of public funds to endorse referendums

    CARY     A Cary government watchdog organization believes the town is violating state law by placing a one-sided video on the town's website hailing the benefits of tax increases to pay $80 million for three bond referendums on the Nov. 6 ballot.

    N.C. General Statute §160A-499.3 bars any "municipality from using public funds to endorse or oppose a referendum, election or a particular candidate for elective office." The law was adopted in 2010 as a response to cities, towns, and counties running information campaigns that critics say were little more than tax-funded propaganda for new government projects.

    "My impression was that what they were doing was selling the project," said Ray Czarnecki, a member of the grass-roots group Cary Watchmen, after watching the video, at CaryBonds.org. "I felt like they were trying to get you to vote yes, period," or else "Cary's going to fall apart."

    Czarnecki said initially he wrote a complaint letter to the town after viewing some newspaper advertisements purchased by the town as part of its $186,000 "information" campaign about the three bonds. One $57.6 million bond is for transportation, a $15.8 million bond is for parks and recreation, and a $6.4 million bond is for construction of a new fire station.

    Czarnecki said in his complaint he highlighted the town's contention that without bond approval "we probably won't do these for three to five years, and maybe even a question mark after that."

    "What is this, you guys are threatening us if we don't approve this? You won't put them in? That's terrible," he said. "It's not up to the town to tell us to vote yes or no."

    Czarnecki said he suggested the town give opponents matching funds to present their position on the bonds, "but they just ignored us completely."

    Cary Town Manager Benjamin Shivar defended the video as nonpartisan and "very similar to the one that we used in 2005" for the town's last bond referendum.

    "I believe the video factually states the case about why the bonds are needed and what the consequences are. That is our opinion," Shivar said.

    "I think it fairly outlines what the issues are and how the council has decided to proceed in this situation, and it's basically that these projects have been prioritized from a list that really has been on our capital projects agenda for many, many years, going back to 2008," Shivar said.

    Tyler Younts, staff attorney for the North Carolina Institute for Constitutional Law, is not so sure. "I think taxpayers should be concerned when public resources are used to influence an election or advocate for a referendum or a candidate," he said.

    "But currently there are statutes that govern this and statutes only prohibit the use of funds. It remains to be seen how broadly use of funds will be interpreted" by the courts, Younts said.

    "I would say when you are using resources ... to create a website or produce a video, the time that's being used, employees' time, and also using the websites and different programs and software, all eventually come from public funds," Younts said.

    "The legislature should move to clarify that. As a matter of public policy you don't want governments trying to influence elections," Younts said. The institute is reviewing the statute and its application.

    State House Majority Leader Paul "Skip" Stam, R-Wake, helped to push the current legislation to approval in 2010.

    He said the statute was needed because "some towns are too heavy-handed and their information campaign is like a propaganda campaign." Even with the recent law, complaints still are heard every election against government use of resources to improperly influence an election outcome, Stam said.

    Ironically, actions by Cary Town Council more than a decade ago sparked interest in creating the legislation in the first place. J. Nelson Dollar, a 2001 candidate for the council, sued the town after it spent $200,000 on direct mail, media buys and contracted services lauding the town's "slow growth" or "managed growth" policies. Dollar, who opposed those policies, was represented by Stam.

    In upholding Dollar's request for an injunction, the state Court of Appeals wrote: "It is not material that the advertisements did not directly support one candidate over another;  they promoted only one point of view on an important campaign issue."

    Further, the court wrote in its opinion, "The determination of whether advertising is informational or promotional is a factual question, and factors such as the style, tenor, and timing of the publication should be considered."

    The Appeals Court agreed with the trial court's finding that "it is more likely than not that a jury would find that a primary purpose of this [campaign] is to influence [the Town's] voters in favor of 'slow growth' or 'managed growth' candidates in the [2001 Council] election."

    Jon Sanders, director of regulatory studies at the John Locke Foundation, believes Cary is in murky water again.

    "The Town of Cary's website and promotional video appear to cross the line into cheerleading for the bonds' passage, which would be illegal under state law," Sanders said.

    He said the video terms the bond projects as "important community investments" that are "critical to Cary's high quality of life," and as the way to "safeguard what we have by keeping Cary one of the best places to live in the country."

    Sanders said select projects are promoted with such language as, "Imagine driving on smoother roads while a sophisticated software algorithm controls traffic lights for maximum efficiency, quicker commutes, and less engine idling," and, "you would enjoy new neighborhood parks in southern, central, and western Cary, a support facility for a farmer's market, a new off-leash dog area, the town's first children's playground, and two sports-turf fields that would provide year-round playing surfaces and reduce water usages."

    When the video moves on to a brief discussion of the staggered four-cent property tax rate increase the bonds would require, it points out that Cary's property tax rate is the lowest in the county, Sanders said.

    Then, Sanders said, the video "warns, 'There is no contingency financing plan for these projects, and if you vote not to approve the bonds, they likely will not move forward in the next three to five years,' concluding 'Now it's up to you to decide whether' -- note the euphemism following -- 'to invest in our future.'"

    But Cary Public Information Director Susan Moran told the Cary News that the educational campaign simply makes accurate claims about potential effects of the bonds.

    "I think that the video, which I approved, lays out in a factual manner where we are and where we will be with a yes vote. It's a fact that Cary is one of the best places to live. It's a fact that our challenge in the future will keep it one of the best places to live. The result of that vote is factual -- which is that these projects will move ahead," she told the paper.

    Aside from what he believes is use of public resources for political purposes, Czarnecki is irritated that the town acknowledges having $40 million at its disposal and could have limited projects to that amount rather than float new bonds.

    He said the town did not consider the shaky state of the economy before deciding to pursue high-cost projects, or look at the project proposals in terms of need and priority. Rather, he said, council members determined how high the bond price could go before "the populace would revolt."