Bev Perdue Throws Ken Lay Under The Bus Over Millions In Tax Revenue!

NC Tax Secretary Chief Is Out, N.C. State Senator Is His Replacement


North Carolina Revenue Secretary Kenneth Lay is leaving his job after a series of problems involving refunds that have frustrated North Carolina taxpayers seeking any little bit extra in their wallets in the extended downturn.

Gov. Beverly Perdue's office announced she had accepted Kenneth Lay's resignation Wednesday and will replace him with outgoing state Sen. David Hoyle, D-Gaston, until recently the longtime co-chairman of the Senate Finance Committee.

The resignation's effective date is Oct. 22 for Lay, a former Bank of America executive who took the Cabinet position when Perdue was sworn in January 2009.

"I thank Ken Lay for his service to the state, and for the progress he has made in seeking a new strategic direction for the Department of Revenue," Perdue said in a statement.

When asked if Lay was forced out, Perdue spokeswoman Chrissy Pearson said only the governor and Lay agreed Wednesday that it was the right time to bring in new leadership. Asked for an explanation of his departure beyond a two-sentence resignation letter, Lay said in a prepared statement only that the strategic vision "has reached a point of inflection, which is a perfect time for new leadership."

Lay had been under fire in recent weeks after a new department policy made public was making it harder for North Carolina residents to get refunds when they overpaid their taxes by mistake, potentially leading to millions of dollars in withheld funds. Last year's change, following a 2007 law, led department officials to direct workers not to review returns flagged for a refund if they were more than three years old.

Perdue said last month she hadn't known earlier about the department policy change. Lay and the governor announced soon after a plan to eliminate a backlog of 230,000 returns since 1994 in the agency's computer system by year's end and pay refunds.

But Lay told The News & Observer of Raleigh recently the General Assembly would have to alter the law so that refunds for returns older than three years could be paid.

Hoyle, who decided not to run for a tenth term in November, said the price tag on the ill will with taxpayers with the policy change costs more than the refunds that had been otherwise withheld.

"We have an obligation to the citizens to administer everything fairly," Hoyle said in an interview. "People are suspicious of government anyway ... it's just not right."

The tax collections department also had been forced to delay tax refunds the past two years because of cash flow problems within state government. More than 300,000 refunds valued at $222 million hadn't been distributed this year, nearly a month and a half after the April 15 filing deadline.

Lay also took criticism after a WRAL-TV report found two department leaders had been reimbursed tens of thousands of dollars for mileage and lodging while commuting between their Charlotte area homes and their Raleigh offices.

Hoyle, 71, said he accepted Perdue's job offer Tuesday. He said he wanted to help Perdue, a former senator and president of the Senate as lieutenant governor.

Hoyle "has seen the Department of Revenue from the inside and out. He has spent years helping to write the state's tax laws, and I'm sure that experience will prove invaluable in his new role," Perdue said in her statement.

Hoyle was often a foil of the department as the Finance Committee leader, criticizing the agency for putting small business owners over a fiscal barrel because of poor advice it gave taxpayers or vague rules.

"I think a lot of people get caught in a trap," he said.

Hoyle said he would resign his Senate seat the day before he assumes his new job. Perdue said Hoyle's appointment was subject to a usual review by the state Ethics Commission. Hoyle said he doesn't believe his extensive business dealings will generate potential conflicts of interest.





Bev Perdue Right To Replace North Carolina State Revenue Secretary

Gov. Bev Perdue was right to replace N.C. Secretary of Revenue Kenneth Lay, a former Charlotte banker, after his department changed state policy and kept taxpayers' overpayments if they did not request a refund with a three-year statute of limitations.

That policy was unethical, undermined public trust in state government and, not to put too fine a point on it, was dumb.

Perdue's office said the governor never knew about it until a newspaper report in mid-August revealed the department was not informing taxpayers about the overpayments, making it harder to get refunds if taxpayers had not asked for them.

The Revenue Department has released e-mails that suggested it had consulted staffers in the governor's office about the change. In stories that ran Sunday in the News & Observer of Raleigh and the Charlotte Observer, Lay said he could not explain why the governor didn't know about the policy change and said he thought her office had checked off on it. Her staff said the matter was mentioned only in the briefest way, not in a formal policy discussion.

The department should have recognized the political storm that would blow up over keeping money that shouldn't have been paid to the government, and Perdue was rightly incensed when she learned of it. She ordered the department to eliminate a backlog of flagged returns by the end of this year and send the overpayments back to taxpayers. Officials have since determined the state owes $949,000 in overpayments to 3,300 taxpayers, but refunding them all will require a change in state law when the legislature convenes next year.

We don't know what Perdue thought when she saw Lay's remarks Sunday saying the governor's office had acquiesced in the change, but we imagine the words "new leadership" were among them. She announced Wednesday that she had accepted Lay's resignation and that outgoing state Sen. David Hoyle, D-Gaston, would replace him.

That Perdue would turn to a longtime ally is not surprising. Hoyle is an experienced politician and businessman unlikely to make a blunder such as hanging on to tax overpayments. And as co-chair of the Senate Finance Committee, he knows state tax policy. Whether he's the right person to run a large bureaucracy is another question, but Perdue's office surely will be careful to make sure he has a good staff - and that the governor's office knows what it's doing this time.


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Sources: McClatchy Newspapers, WRAL, Google Maps

2010 Republican Tsunami Possible; Mass Exodus Of Dem Lawmakers

Top Democrats Head For The Exits



The grim outlook for Democrats in the 2010 midterm elections just got a little worse.

Four top Democrats — including veteran Sens. Chris Dodd and Byron Dorgan — all prepared to pull the plug on their campaigns in a 24-hour period that began Tuesday, and in the process, offered an unnerving glimpse at the perilous election year ahead.

With Dorgan’s stunning retirement announcement Tuesday evening, Democrats are now facing their bleakest election outlook in years — and the very real possibility the party will lose its 60-40 Senate super majority after the November elections. On the House side, the prospect of a 20 to 30 seat loss is already looking increasingly likely.

“It’s not good news for Democrats,” said Roy Temple, a Democratic strategist. “The reality is this is going to be a challenging year, and this is an additional challenge you would prefer not to have. Because of the success of the last two cycles, there are a lot of seats to defend. This is just an additional complication.”

Dorgan’s announcement was accompanied Tuesday by Michigan Democratic Lt. Gov. John Cherry’s decision to end his floundering bid for governor, and by the revelation that both Dodd and Colorado Gov. Bill Ritter would announce Wednesday that they would not seek reelection.

There is some silver lining in the Democratic cloud: Ritter, Cherry and Dodd were all struggling to gain traction and their departures could actually increase Democratic chances of holding those offices.

Several top-tier prospects immediately surfaced in Colorado as potential Democratic candidates for governor. In Connecticut, Democrats expect that state Attorney General Richard Blumenthal will run in Dodd’s place, providing them with a stronger nominee than the embattled five-term senator.

But the retirements of two senior Democratic senators, and the suddenly altered landscapes in Michigan and Colorado, continue a wave of Democratic bailouts that began with a burst of retirements by veteran House Democrats representing competitive districts, followed by the stunning late December party switch by freshman Alabama Rep. Parker Griffith.

In the meantime, President Barack Obama’s and the Democratic Party’s poll ratings have slipped across the board, generic polling is now generally more favorable to Republicans and a handful of promising Democratic House candidates have abruptly ended their campaigns.

Suddenly, the sad sack GOP is looking at its best shot in three election cycles of making serious gains in November.

“Sen. Dorgan’s retirement coupled with the recent spate of retirements by House Democrats show the national mood is swinging against them,” said Carl Forti, a GOP strategist. “With Sen. Blanche Lincoln and others in a precarious position, Democrats will have to thread the needle to get back to 60 seats.”

In Dorgan’s case, Republicans now have a very strong chance at picking up his seat in Republican-oriented North Dakota, a state that Obama lost by eight points in 2008 and John Kerry lost by 27 points in 2004.

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Dorgan said his decision had nothing to do with his re-election campaign, where he had yet to face stiff competition — though the popular GOP Gov. John Hoeven might have jumped into the race and forced the senator to wage a fierce campaign. In the wake of Dorgan's announcement, North Dakota GOP Chairman Gary Emineth told POLITICO that he believes Hoeven is likely to run now.

In a memo to staff and later to the press, Dorgan said that he came to his decision over the holiday season and wanted to pursue interests outside politics, including writing two more books, working on energy policy and teaching.

“[M]y decision has no relationship to the prospect of a difficult election contest this year,” Dorgan said. “Frankly, I think if I had decided to run for another term in the Senate I would be reelected.”

Still, his decision forces Democrats to defend yet another open seat in addition to Delaware and Illinois — two states in which Democrats typically run up the score but where the GOP is poised to run competitive candidates this year. And it comes in a year in which Democratic incumbents including Majority Leader Harry Reid, Sen. Arlen Specter, appointed Sen. Michael Bennet and Lincoln are battling weak poll numbers.

“Remember the old Tareyton cigarette slogan? ‘I'd rather fight than switch?’” said Alex Castellanos, who advises the Republican National Committee. “Now that the Democrats are expected to drop under 60, we will probably see other retirements as Democrats decide they would rather retire than fight.”

Despite the souring outlook, Democrats are hopeful about their chances in five of the six states where Senate Republicans have their own retirement-related problems — Ohio, New Hampshire, Missouri, Florida and Kentucky. They envision a scenario in which the economy will yield job growth heading into the midterms, and expect that public perception of the party will brighten if Congress gives final approval to the Democrats’ sweeping health care bill and approves other measures on the ambitious agenda.

Some Democrats give little credence to the retirements, noting that they have no broader meaning other than the fact that individual lawmakers chose not to run for reelection.

“These guys quit sometimes,” said Jim Jordan, a Democratic strategist.

The timing — the first week of the new year — and the locales of the retirements makes them hard to dismiss as isolated incidents, however.

In Colorado, the epicenter of the recent Democratic resurgence in the interior west, it is telling that Ritter, a 53-year-old former Denver prosecutor who cruised to victory in 2006, would unexpectedly pull down the curtain on a promising career and that Bennet, the senator he appointed to a vacant Senate seat, would be in jeopardy of losing it.

In Michigan, a state battered by job losses but still a reliable Democratic bulwark in state and federal races in recent years, the heir apparent to two-term Democratic Gov. Jennifer Granholm is similarly quitting before even starting, unable to raise money or get out from under the shadow of what has become a deeply unpopular administration.

And back in Washington, Democrats were all but blindsided by Dorgan’s decision to retire rather than seek a fourth term in a seat that only he might have been able to hold. Neither the Senate majority leader nor the White House even had a statement prepared.

Compounding the problem for Democrats — and spreading the pain to all three Democratic campaign committees Tuesday — the one Democrat who may be able to hold Dorgan’s seat is Rep. Earl Pomeroy. But if he vacates North Dakota’s at-large seat, that would create another problem: Republicans would be positioned for another House pickup.




Stars Aligning for Republicans in North Carolina Senate



The odds for a Republican take over of the North Carolina State Senate just got a lot better. State Senator R.C. Soles (D-Tabor City), the longest serving in the Senate has announced that he will not seek re-election. It’s not that surprising that he has chosen to retire. Aside from being 75 years old, he has been plagued with two scandals, one that he molested a teen aged boy and he is facing a possible indictment for shooting someone in his home last August.

Republicans need to win six Senate seats to take over the body and Soles is another retirement that may make that possible. The district has been trending towards the GOP and Soles opponent last year, Bettie Fennell, came considerably close to defeating him. Soles’ retirement is in addition to a few other Democrat retirements who also represent Republican friendly districts.

Senator David Hoyle of Gastonia represents a heavily Republican leaning district that the GOP will almost certainly pick up. Senator Julia Boseman of Wilmington who like Soles has been embroiled in personal conflicts has also decided not to run for re-election. Her predecessor was a Republican.

Who controls the state legislature next year will be vital as he who has the power controls the redistricting after the Census is completed.







Tony Rand Stepping Down From NC Senate


NC State Sen. Tony Rand, one of the most powerful political figures in the state, is leaving the Senate.

Rand, a Fayetteville Democrat, will become chairman of the state Parole Board, Mark Johnson reports. He will resign before the end of the year.

“There comes a time when it’s time to go,” Rand said.

The News & Observer

His time to go was several years ago. Tony Rand had his hands directly in steering North Carolina into being the highest taxed state in the southeastern U.S., the beginning of turning the state into a northeastern rust bucket.

There will now be a fight I’m sure among the Senate Democrats to claw their way up to the top and take over as Majority Leader. That should be an interesting sight to behold. What will also be on the radar is how hard the Republicans will fight to try and win this seat when the special election is called. The GOP needs to win six Senate seats if they want to take it over in 2010 before redistricting takes place. I don’t know how heavily Democrat this seat is, but if they can pick it up that will bring them closer to their goal.

There is speculation at Katy’s Conservative Corner as to whether or not Rand’s resignation has anything to do with the recent Easley trials, but according to the N&O he is stepping down to take a position as chairman of the State Parole Board.




Grand Jury Finds Probable Cause To Indict NC Sen. R.C. Soles

R.C. Soles Jr., a N.C. State Senator from Tabor City will be indicted by a grand jury. This was reported in the News and Observer today.

The grand jury wrote in its presentment that it had reason to believe that Soles had committed a crime:

Twelve or more grand jurors concur in finding probable cause to believe that R.C. Soles, Jr. committed the offense of Assault With a Deadly Weapon Inflicting Serious Injury against Thomas Kyle Blackburn in Columbus County on or about August 23, 2009 by unlawfully, willfully and feloniously shooting Thomas Kyle Blackburn and inflicting serious injury.

Looks like we have another Democratic being taken to the woodshed. I wonder if Democrats will call for his resignation like they did the drunk Republican? Will they treat him the same as Rep. Wright?



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Sources: AP, Politico, MSNBC, Carolina Politics Online, McClatchy Newspapers, News & Observer, Star News Online, WWayTV3.com, Youtube, Google Maps

David Hoyle Announces His Retirement From NC Senate...Bye, Bye

David Hoyle to retire


NC State Sen. David Hoyle, one of the most powerful lawmakers in the Senate, plans to retire.

Hoyle, 70, a Gaston County Democrat who has been in the Senate for 18 years and is consistently placed near the top in effectiveness rankings of legislators, said he will finish his current term, but won't run again.

"Public service has always been a central part of my life and my commitment to our community and our state remains strong," Hoyle said in a news release. "Having had the honor and privilege to serve my community and state in every way that has been asked of me, beginning 45 years ago as mayor of Dallas, it is now the time and the season to welcome the next phase of my life."

Hoyle, who rooms with Senate Leader Marc Basnight in Raleigh during sessions, is one of the leading voices for business interests in the Senate. His district is competitive and his decision not to run again gives Republicans a legitimate shot at claiming the seat.

Hoyle's decision continues what is shaping up to be a changing of the Democratic guard in the Senate chamber. Senate Majority Leader Tony Rand is leaving the chamber this month. Sen. R.C. Soles Jr., the longest serving member, has not yet announced whether he intends to run again, but has been plagued with personal issues that make a run difficult.

Soles, Rand and Hoyle represent three of the longest-serving and most powerful lawmakers in the chamber. Another Democrat, Sen. Julia Boseman of Wilmington, has also announced she won't seek re-election.

Boseman's district is also considered a swing district where Republicans or Democrats could be competitive.



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Sources: McClatchy Newspapers, Under The Dome, News & Observer, NC General Assembly, Google Maps