Fact Check

GOP ad attacking Democrat Walter Dalton distorts truth

jfrank@newsobserver.comMay 15, 2012 

Frame grab from a Walter Dalton political ad.

Republicans launched the first television commercial Tuesday in the November governor’s race, an attack ad that tries to link Democratic nominee Walter Dalton to the unpopular Gov. Bev Perdue.

The Republican Governors Association is spending about $850,000 to air the commercial as it seeks to help elect GOP nominee Pat McCrory.

But the 30-second spot’s major points don’t fully meet the truth test. Here’s a claim-by-claim fact check:

Claim: “Walter Dalton is Bev Perdue’s right-hand man.”

Context: Unlike other states, the governor and lieutenant governor are elected separately in North Carolina. As lieutenant governor, Dalton’s main job is to preside over the state Senate and serve on a few boards and commissions while Perdue oversees the executive branch. The two Democrats agree on many issues but don’t collaborate as often as suggested. Even Dalton found out at the last minute about Perdue’s decision not to seek re-election. When asked, the RGA provided no evidence to buttress the claim.

Ruling: To suggest Dalton and Perdue work closely together is not accurate.

Claim: “Under Perdue and Dalton’s high tax policies, 40,000 more North Carolinians are out of work.”

Context: Let’s start with the number. In January 2009, when Perdue and Dalton took office, the state reported 410,784 unemployed workers, representing a 9 percent jobless rate. In March 2012, the state reported 451,657 unemployed workers. At face value, the math is correct; however, the ad doesn’t consider the growth in the labor force (94,000) or employed workers (54,000) since 2009.

The assumption that high taxes, particularly a sales tax hike, is the driving force for joblessness is more dubious. Wells Fargo senior economist Mark Vitner said it’s true that tax rates factor into companies’ decisions about where to locate jobs. But, he said, “there are so many things that affect the unemployment rate” that it’s difficult to pinpoint one cause. Likewise, Brent Lane, a researcher at UNC’s Center for Competitive Economies, refutes the idea that tax rates are responsible for putting people out of work. “This is a long-term trend, and it can’t be attributed to high taxes,” he said.

Ruling: The math is right but not the whole picture, and the assumption on causation is false.

Claim: “Unemployment is 9.7 percent. One of the nation’s highest.”

Context: The RGA accurately cited the state’s jobless rate in March. North Carolina’s rate ranks as the fourth highest among all states, or No. 5 if the District of Columbia is included in the list.

Ruling: True.

Claim: “The Dalton-Perdue new 15 percent sales tax increase will kill 8,000 more North Carolina jobs.”

Context: As a part of her budget proposal, Perdue wants to increase the state sales tax from 4.75 percent to 5.5 percent, a three-quarter penny hike to generate $850 million a year. Dalton agrees with her plan. It comes after the state let a temporary penny sales tax expire in 2011. If you do the math, the increase is 15.7 percent at the state level – but the size of the increase is different for taxpayers across the state because of local sales tax levies. The RGA later clarified that the ad referred to the state sales tax.

But, again, the predicted outcome is debatable. The RGA cites a study by the UNC Center for Competitive Economies at the Kenan-Flagler Business School. The problem: The study never mentions that such a sales tax hike would cost the state 8,000 jobs. Released in April 2011, it suggests a 1-cent reduction in the sales tax could create 11,700 private sector jobs. It did not consider possible layoffs in the public sector as a result of reduced revenues.

Report authors Jason Jolley and Lane said it is reasonable to assume tax hikes could have a negative affect on employment, but their research says nothing about how many jobs could be lost with a sales tax increase. To assume the inverse of their study is “layman’s logic but certainly not what our center would attest to,” Lane said. The economy also changed since the study, he added, making it difficult draw conclusions from it now.

Ruling: The description of the sales tax hike is roughly correct. Its affect on the economy is unproven and not accurate.

Frank: 919-829-4698

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