Column: Taking the Easley road to riches
Published 12:00 am Friday, January 26, 2007
Here’s a foolproof plan to help the state of North Carolina raise lots of new revenue to spend on things like roads, schools and new prisons.
Republicans will like this plan because it doesn’t involve raising taxes. Democrats will like the plan because it doesn’t involve cutting social programs. Independents will like the plan because it doesn’t require them to make a commitment to any coherent set of philosophical beliefs.
The plan is beautiful in its simplicity. Let’s take part of the state’s existing revenue stream and let Gov. Mike Easley invest it in real estate. Based on the governor’s recent land-investing prowess, the state could probably double its money in less time than it takes the Boston Patriots to blow an 18-point playoff lead.
While the common folk of North Carolina are encouraged to get rich quick by playing the lottery, the governor is nobody’s fool. Rather than going the Lotto route, he sinks his own spare change into land. And when it comes to buying undervalued property, the man obviously has the Midas touch. Two years ago, he bought a waterfront lot in a ritzy resort in Carteret County for $549,880. This month, according to the Associated Press, a county appraisal valued the one-third-of-an-acre parcel at $1.2 million — and the governor hasn’t even improved the property yet with a satellite dish and a new double-wide.
That’s better than a 120 percent increase. To reap a comparable rate of return, most of us commoners would have to bet the farm on a stock tip, rob a bank or change our name to Google and get a state relocation grant.
Of course, with its typical penchant for dwelling on the negative, the media has failed to seize on the golden possibilities of the governor’s financial wizardry. Instead of urging him to use his land-buying acumen to bulk up the state budget, newspaper articles and editorials have suggested that Easley got a sweetheart deal simply because his broker, the project developer and a financier are all Easley pals who previously had contributed to his campaign. This sounds like sour grapes to me, the curmudgeonly grousing of ink-stained wretches who never took an economics course and have no appreciation for the wonders of the free-market system. Instead of soliciting their friends for advice on cut-rate land purchases, journalists put their money in beer, bad haircuts and ill-fitting polyester pants. Their early retirement plans usually hinge on winning big in the office betting pool.
They aren’t giving Easley the credit he deserves, just like they didn’t give Sen. Harry Reid proper credit last year when the Nevada Democrat walked away with a $1.1 million windfall on some Las Vegas property he bought in 1998. Actually, Reid may be an even keener doer of deals than Easley. He managed to make his profit without even owning the property, which had been transferred to a limited liability corporation (created by a longtime friend) before the sale. That’s what separates run-of-the-mill real-estate investors from the real pros. Amateurs think you actually need to own property to profit from its sale. Spend a few years honing your financial skills in elected office, however, and you soon realize that things like ownership are mere technicalities that can impose unnecessary obstacles to economic gain while inviting distastefully hefty tax bills.
Don’t get the idea that Democrats alone have the ability to make shrewd land deals. Back in Georgia, where I previously lived, Republican Gov. Sonny Perdue bought 101 acres of land in Houston County in 2003 for $303,000, using a limited liability company for which the registered agent was a dentist whom the governor had named to the state Board of Dentistry (please, no sarcastic mutterings about windfalls only going to people with pull). Subsequently, the land was transferred to Perdue’s personal ownership, with a transfer price of $305,000; by 2006, the land had more than doubled in value, according to tax records cited in published reports.
Before we get carried away with visions of the state’s coffers spilling over with real-estate profits, a word of caution is in order: Politicians don’t always make money on their land deals. While Hillary Clinton quickly turned $1,000 into $100,000 when she invested in cattle futures back in 1979, she and her husband Bill apparently took a bath on the endlessly dissected Whitewater resort deal. You’d never be able to prove that, however, since the Whitewater paper trail is so convoluted you’d need a global positioning system and a backpack full of bread crumbs to avoid becoming hopelessly lost in its byzantine complexities.
Still, there’s ample evidence that our elected officials know how to boost their personal bottom lines. Governor Easley has offered impressive evidence that he can turn a tidy profit on land deals, and I think we should let him play with a little house money. Let’s give him the proceeds from the state gasoline tax and allow him the rest of his term to see if he can double or even triple it. Who knows? If his investing success holds, the DOT might get enough of a windfall to finish the I-485 loop around Charlotte, with enough left over to splurge on a new I-85 bridge across the Yadkin River.
* * *
Chris Verner is opinion page editor of the Salisbury Post. Contact him at email@example.com or 704-797-4262.