Shaking budgets like an earthquake

Yesterday’s earthquake got me nostalgic for the days when anything that went awry we could blame Bill Strom. Fortunately, Penny Rich seems a capable substitute. I’d like to move beyond the shenanigans of Rich, but darned if she doesn’t keep serving them up to me like prosciutto and melon on a doily-lined platter.

After her impassioned argument at the May 23 council meeting about how the town could charge $100 an hour or more for the space at 523 E. Franklin if it would lift the alcohol ban, she managed to host her catered affair for the bargain price of $25 an hour, same as all the rest of the alcohol-free spaces the town rents. Over the course of the four-hour party she catered, that put an extra $300 in her pocket over what she would have made for the affair if she had had to pay market rate for the space.

And now Rich has emerged as co-chair of Campaign for Jobs and Schools, an organization that has the same august tone as Americans for Prosperity. As co-chair, she has organized some events for elected (and appointed) leaders to “educate” them on the proposed ¼ cent sales tax hike on the ballot in November.

A sales tax increase, unlike a property tax increase, adversely affects low-income people more than middle- or upper-income households. Low-income households are less likely to own real estate, for one thing, but wealthy and poor alike have to buy new school clothes for kids who have outgrown last year’s wardrobe. The flat tax increase on all goods purchased has a greater negative impact on smaller budgets than on large ones. Even a small tax increase can shake tight budgets like an earthquake.

It’s unconscionable for the relatively well-off residents in the Chapel Hill-Carrboro area to impose a greater hardship on less fortunate residents elsewhere in the county. Having the poor shoulder a greater share of the tax burden for schools and job creation would make Americans for Prosperity proud.

Anyone taking bets on whether Rich’s “educational” events will be catered? Maybe the Koch brothers are paying Rich’s bill?
– Nancy Oates

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  1. Terri Buckner

     /  August 24, 2011

    You might want to take a look at the exemptions embedded into this proposed tax. Yes, it is a sales tax, but food and other basic necessities will not be included. The intention is to increase the tax on luxury items.

  2. John Kramer

     /  August 24, 2011

    Thank God Horses, Mules and Aircraft lubricants are exempt, whew that would have been a show stopper for me. These are basic necessities for me

    What is NOT excluded, unless I missed it, is food, you know the kind you get at a grocery store. Unless you are on food stamps. Or buy from a bread thrift store, or a church, or the food you get at a school cafeteria.

    So anyone just above the poverty level or otherwise not eligible for food stamps will pay this tax on the food they buy.

    Sounds pretty regressive to me, but of course Orange County does not care about that.

  3. George C

     /  August 24, 2011

    There are a multitude of items that are exempt from the sales tax including prescription medication, gasoline, certain agricultural supplies and motor vehicles. For a full listing, see North Carolina General Statute 105-164.13.

    Food (groceries) are also exempt per General Statute 105-164.13B.

  4. John Kramer

     /  August 24, 2011

    Not prepared food. So if I go into Food lion and buy some fried chicken, cole slaw and potato salad- or a sandwich- etc I will pay the tax. And of course if I drive thru McDonalds or Wendys because they have $1.00 burgers I will pay.

    Sorry guys, if you stare at it hard enough it just gets uglier.

  5. Chris Jones

     /  August 24, 2011

    Technically, you are correct — This proposed sales tax increase does affect low-income households to a greater degree than others. But, really, can you say “red herring”. For every $100 of spending, in Orange Co., on non-exempt items, it will potentially cost a consumer an additional $.25. So, yes, if you go to Harris Teeter, and buy a $3.99 prepared sub, it will cost you an additional 1 penny.

    If you want to oppose the tax, go ahead. Opposing it as “regressive” is bunk.

  6. George C

     /  August 24, 2011

    Chris, if my memory serves me correctly Kramer lives in Durham County so he can voice his opinion on it all he wants but it isn’t going to affect him unless he decides to cross over the line and spend his money in OC. His money is always welcome here, of course.

  7. WJW

     /  August 24, 2011

    As Chris Jones states, what is an extra quarter on a $100 in spending. The OC govt will do a much better job of spending that accumulation of quarters than we all would individually.

    I don’t know why we are even discussing this piddling quarter. The sales tax should be raised by 2%, 5%, or 10%. C’mon, doesn’t the collective govt spend the money more wisely than individuals???

  8. runner

     /  August 24, 2011

    Raising the sales tax rate in Orange County is nothing more than another revenue grab by our elected leaders. They could not get the additional revenue through the real estate transfer fee they tried to pass last year, so they are going after a less educated and less organized target.

    I cannot for the life of me understand how those who see themselves as progressive would support such a policy. So, go ahead and raise the cost of living on those who can afford it least while my property tax bill goes unaffected.

  9. Terri Buckner

     /  August 24, 2011


    Recently, you posted an excellent piece on the Chapel Hill News and them giving more space to pets than to people. Many of us agreed with you and said so. When you published your first post on Pennygate, I disagreed with you that it was an ethics violation but publicly declared the value in having someone serving as a watchdog on local government since we know that our local press is not going to do the job.

    But this piece serves no investigative purpose that I can see. And as an editorial it feel more like an attack on one person. I can’t tell whether you are more concerned about the tax itself or the fact that Penny was appointed as co-chair for the outreach effort. I know that Penny has been un-justifiably harsh toward you and this blog, so I’m willing to give you latitude. But I don’t think tit for tat is a credible tactic for anyone, whether that person is a journalist, a politician, or a local blogger. I want you and CH Watch to succeed; I believe you serve an important role in the community and I appreciate the time and effort you contribute to our understanding of the local political scene. However, I hope, in the future, you will draw the line at personal attacks.

  10. Chris Jones

     /  August 24, 2011

    “Raising the sales tax rate in Orange County is nothing more than another revenue grab by our elected leaders.”

    Umm . . . . no kidding? Sorry to be cavalier, but isn’t any and all taxation “another revenue grab”?

    Is there assumption that there is a black helicopter conspiracy on the part of Orange Co? That they’re going to propose a new 1/4 cent sales tax, but it’s not really revenue, it’s are Orange County Feel Good Fee?

    For full disclosure, I do not live in Orange County – I proudly live in Durham County. However, I work in OC, my clients are predominantly OC, and I spend the heavy majority of my disposable income in OC. As such, the proposed increase, while I am unable to vote for or against, is of high interest to me.

    Were Orange County to be saying that we’re proposing an additional 1/4 cent tax to prop up the general fund, I may not have even posted. However, it is my understanding that any revenue generated by this increase would have a 50/50 split between OC and CH/C schools, and the Orange County Economic Development budget. Considering the leakage issues and scarcity of new ED opportunities that have been discussed here and other sites ad nauseum, I welcome a conversation that has the potential to put additional funds into generating new business opportunities (with new employment, new revenue, etc) to Orange County. As well, again, we’re talking about 1/4 cent. We’re not discussing doubling the existing rate, adding full percentage points, etc..

    I do believe that any attempt to spin this as an attack on low income individuals/households is mis-informed at best, specious at worst.

  11. runner

     /  August 24, 2011

    An increase in the sales tax effects lower income people more than it effects higher income people. That is a fact. This government doesn’t have the “pelotas” to get that revenue through a property tax increase or cost containment measures.

    If the county wants to cut me some slack and keep the tax rate on my big fat house lower while paying for some sewer lines and consultants on the backs of those “McDonald’s Eaters”, go for it!

    I just find it hypocritical.

  12. WJW

     /  August 24, 2011

    To C Jones you state “However, it is my understanding that any revenue generated by this increase would have a 50/50 split between OC and CH/C schools, and the Orange County Economic Development budget. ”

    Don’t you think that budget money is fungible? Based on my work budgeting experience, even if $400K of the increased sales tax was directly earmarked for, let’s say the schools, the regular funding mechanism for the schools could just decrease by $400k what was going to be budgeted for the schools. That $400K could then be put into the city managers department.

  13. Mark Marcoplos

     /  August 24, 2011

    I bet that the opponents of this local tax have not raised a finger against the corporate welfare state and the tremendous military expenditures that leave us arguing over table scraps on the local level.

  14. Joe Capowski

     /  August 25, 2011

    I agree with Terri.
    Nancy, I think you are crossing the line into a pure personal attack on
    Penny Rich. In your first paragraph, you indicate that Penny is your new scapegoat for all
    bad events, replacing your former scapegoat Bill Strom. If, to you, Bill caused the earthquake, is Penny causing Hurricane Irene?

  15. Don Evans

     /  August 25, 2011

    Boy, if this isn’t punishing the messenger, I don’t know what! If anyone crossed a line, it was Penny Rich.

    Penny, a caterer, proposes to allow caterers to greatly benefit from a rules change that she votes introduced and voted on. Then we find out she had an event planned before she proposed the rule change, but didn’t mention that while she was rushing the proposal through and racking up the votes from her fellow council members. Top it off with her paying the rock-bottom rental fee even though she proposed increasing the fee four-fold.

    And Nancy has crossed the line?!?

    Has anybody called Penny out on this issue? I know she has refused to talk to Chapel Hill Watch or The Durham Herald-Sun about the apparent abuse of her office. Her silence on the issue speaks volumes.

    Penny screwed up, not Nancy. Penny remains unrepentant. Nancy just reported the malfeasance, so don’t go piling on her.

  16. Ph. Johnson-Sledge

     /  August 25, 2011

    Pointing out a series of questionably ethical behaviors– coupled with a lack of undefineable political convictions of any kind beyond the handy and accessible–(cell phones while driving–really? you want to do that before the state does? why does that sound like an unenforeceable idea to every one but you?) is not a personal attack. I’ve not heard anything personal mentioned about Ms. Rich other than the fact that she seems less than forthcoming with her professional plans in regards to her political access to the proceess, And this is bothersome to me; a tax payer in CH. Once a putz, always a putz.

  17. Mark Marcoplos

     /  August 25, 2011

    When the actual story is told, it may be embarassing for the conclusion-jumpers – the Matt Cz – Chapelhillwatch – squezzethepus crowd. Tempest in a teapot that reveals more about the flamers than about those who worked for the event to celebrate a local school principal. Of course, Matt Cz did not mention that key element, but he did knowingly call for town resources to be used for political advantage. What a waste of tme & money. He knew better, but chose the low road.

  18. John Kramer

     /  August 26, 2011

    My, oh my, the Chapel Hill Liberals are all so touchy about this. LOL- it is all Nancy’s fault! No, wait, it is Bush’s fault! No, it is the war’s fault!

    How dare you point out the true nature of our politicians, Nancy- come on, stop it- you are ruining their wonderful little dream!!!

  19. Terri Buckner

     /  August 26, 2011

    Mark M—you’ve have your blinders squeezed as tight against Matt C as Kramer does on everyone else. Penny should have disclosed her personal interest in the subject and timing of the policy. Hopefully, this has been a good lesson for everyone. (But I stand by my position that the provocative language used in this particular post comes across as a personal attack.)

  20. John Kramer

     /  August 26, 2011

    I love it, making a personal attack-me wearing blinders-while accusing someone else of a personal attack. That is really too rich! Thanks for the laugh. A classic progressive tactic.

  21. Don Evans

     /  August 26, 2011


    So share the “actual story” with us.

  22. ActLocal

     /  August 26, 2011

    Although I am not a caterer, I spent over 30 years owning restaurants and it seems to me that the rental fee for a venue is merely a pass-through expense. I don’t believe that it comes out of the caterer’s profit. Whether the venue rents for $20 or $100, it’s the client who ultimately pays the fee, even if the town receives it from the caterer.

  23. runner

     /  August 26, 2011


    Your request is useless. Mark M. has never backed up even one of his statements on this site, or any other media. He’s best suited for barroom chatter.

  24. As a point of fact I have not requested any information from the town regarding 523.

  25. Mark Marcoplos

     /  August 26, 2011

    Runner – who are you? At least I’m in the open.

  26. runner

     /  August 26, 2011

    Your being “out in the open” doesn’t make your comments on this site, or all the others, any more credible. Please understand that your N=1 observations are not facts, they’re just your opinions.

    As I told Mr. Hill, I will post under my own name when/if this site changes its policy.

  27. John Kramer

     /  August 26, 2011

    yeah, runner, Metropolis loves to put the whole problem on your name, so easy and convenient. Much easier than discussing the issue at hand. I put my real name in and the BS attacks continue so don’t waste your time. Somehow the lib-ians think they get some sort of purchase by having my real name. To date I have not had one come by the house because they had a real problem with what I posted. Maybe they are afraid to see that I am a pretty normal person, that would be a huge deflation of their hate balloon you know.

  28. Mark Marcoplos

     /  August 27, 2011

    Actually I have been impressed with your relative civility now that you are posting under your real name. You set some world flame-throwing records when you used an alias.

  29. Mark Marcoplos

     /  August 27, 2011

    I think the story will eventually come out.

  30. Don Evans

     /  August 27, 2011


    Enough with the coy posts! If you know something or can direct us to concrete information, tell us. Information instead of name-calling or pie-in-the-sky would be a refreshing change.

  31. DOM

     /  August 27, 2011

    What STORY?!

  32. Terri Buckner

     /  August 29, 2011

    So this must be what Mark M has been referring to:–Franklin-Controversy/10760290

    Apparently, Nancy requested details from Penny, Penny ignored the request and then gave to the details to WCHL after Nancy speculated. Very convoluted and no one comes out of it without fault.

  33. Nancy Oates

     /  August 29, 2011

    Penny also declined to talk with The Durham Herald. I agree that when she refuses to answer questions from a constituent or the press, she leaves herself open to people forming judgments from facts (not speculation) that she wishes she had weighed in on at the time.

    Penny showed a remarkable lack of good judgment all around in this affair.

  34. Terri Buckner

     /  August 29, 2011

    The fact that Mark M knew there was more to the story but refused to say is just more gamesmanship. Transparency be damned. One upsmanship wins. Very disappointing. I wonder if this is why the media is so hamstrung in this community.

  35. Mark Marcoplos

     /  August 29, 2011

    A few points that I hope you’ll understand:
    1) I don’t know how a reasonable person can conclude that this story is convoluted. Penny did not book the event, she did not make money off of the event (in fact she helped generate funds for needy students), she volunteered her labor, it was a community service to honor a beloved school principal, and the Town attorney was in the loop at all important times.
    2) Everyone has the right to decline to talk with anyone about charges that are baseless. The Herald-Sun is notorious for yellow journalism and pushing a political agenda. She may leave herself open to people forming judgments, but when a blog (portrayed as a news blog) run by former journalists publishes information, the public has every reason to expect that journalistic due diligence has been performed. Why wasn’t a phone call made to the Town lawyer? Why wasn’t the time-line of events – booking of the venue, hiring of the caterer, etc. – verified? Why was the story published as a speculative editorial masquerading as news without factual backing?
    3) Given the obvious intent of this thread – i.e to entrap Penny – why would she fall for the tar baby of engaging with the “journalists” who made the baseless charges?
    4) It was Penny’s story to tell, not anyone else’s. It was destined to surface. Now it’s time for honorable people to acknowledge whether or not they dealt accurately with the facts.

  36. Terri Buckner

     /  August 29, 2011

    1) It’s convoluted because we should all expect transparency in our elected officials and the whole messy thing could have been prevented by Penny answering Nancy’s questions. Nancy could have chosen to not write the post; in the absence of facts that was probably the wisest course of action since the whole thing was really a non-issue. But what if it had been more serious? Given the Bill Strom sneak out and the Cam Hill PAC, I would think that all of our elected officials would be hypersensitive about anything less than super-transparent–even if they don’t like the investigator.

    2) Of course everyone has the right now to respond to journalists or citizens. And they should expect to pay the price for those decisions.

    3) Since the questions were asked prior to the article being written, there was no way of knowing there were going to be baseless charges.

    4) I hope everyone involved acts honorably and acknowledges their personal contribution to the fiasco. What a waste for everyone involved.

  37. Mark Marcoplos

     /  August 29, 2011

    “Nancy could have chosen to not write the post; in the absence of facts that was probably the wisest course of action since the whole thing was really a non-issue. ”
    Yes – but she chose to write it as a “journalist”. That is her risk and credibility is at stake.

    If it had been more serious? But it wasn’t. So why did it get “reported” as fact?

    I’m confused about “Since the questions were asked prior to the article being written, there was no way of knowing there were going to be baseless charges.” Doesn’t the journalist who wrote the article have an obligation to tell the truth? When does a trained journalist shed ethical standards and become a spin doctor?

    Was Matt Cz involved in the spinning and theatrics of this non-story? Chapel Hill taxpayers should be informed. I also hope, as Terri said, that “everyone involved acts honorably and acknowledges their personal contribution to the fiasco. What a waste for everyone involved.”

  38. Don Evans

     /  August 29, 2011


    The building was booked by Penny — it’s in the town list of events and who rented the space. In the WCHL piece Penny says several times she was hired. Maybe a poor choice of words on her part, but it does raises questions. There are plenty of facts in Nancy’s piece — she got town records and talked to people familiar with the event — those are facts that Nancy noted in her original piece. The town attorney was asked about the legality of the event AFTER it had happened (quite possibly why Penny and her PR team are dancing so fast).

    If the questions that Nancy asked were baseless, then Penny should have said so. Instead she chose to hide when journalists tried to contact her. Again Nancy did the due diligence — it was Penny who screwed up in that regard (you’d think a town politician would have better judgment in a matter such as this). Again the story is not speculative — Nancy wrote a fact-based piece, which she followed with an editorial and more facts.

    No one at Chapel Hill Watch was trying to entrap Penny. All we did was ask some questions that were not answered. Again, don’t blame the media when the subject of a story screws up. Blame the person who used poor judgment.

    Penny’s “story to tell” should have come out at the council meeting at which she sought to change the rules to favor a business arrangement she had going. Again, don’t blame journalists for digging up information. It’s called a free press, and it’s one of the foundations of what makes this country great.

    Now, next time you post here how about contributing some facts to the discussion. And at least use some rationale as you analyze the facts.

  39. Mark Marcoplos

     /  August 29, 2011

    Just to clarify – Penny did not hide when journalists tried to contact her. She told her story to WCHL. There is a distinction to be made between agenda-driven bloggers and authentic, objective local journalists.

  40. Mark Marcoplos

     /  August 29, 2011

    In case anyone missed the actual reporting on this:

    WCHL: Rich Stands Ground In 523 E. Franklin Controversy

    Elizabeth Friend Reporting

    CHAPEL HILL – Council member Penny Rich petitioned the Town Council in May to amend the town ordinance to allow alcohol to be served at 523 East Franklin, a town-owned property that sat vacant after the Chapel Hill Museum shut down last year. The council approved the change in a 7-1 vote.

    One month later, Rich was hired in her professional role as a personal chef to cater a retirement party at that venue.

    Although some have questioned the timing and propriety of Rich’s role in bringing the matter to a vote, Rich says she acted in good conscience.

    “I don’t have a problem with any of the events or the timeline of what went down,” she says. “If you don’t have the facts you can easily blow something out of proportion.”

    Rich says she was contacted in April by a group of teachers who wanted to host a retirement party for their principal. She says her role at that time was to explore possible venues for the party, which was slated to be a potluck event. In the course of her research, she found that the ordinance that previously allowed alcohol to be served at 523 East Franklin had lapsed when the Chapel Hill Museum lost its lease.

    “The reason I was bringing the petition forward,” Rich says, “is because I wanted to make sure that anyone who was having a party or an event at this building, whether it be an art opening, a baby shower, or a retirement party, that they were doing things legally—that they weren’t just serving alcohol when the ordinance didn’t state that they could.”

    Rich says she discussed the issue with Town Manager Roger Stancil and Town Attorney Ralph Karpinos prior to bringing the petition to the council on May 9. Karpinos confirmed to WCHL that that discussion took place.

    The blog Chapel Hill Watch has questioned if Rich had an ethical obligation to disclose her interest in catering an event at 523 East Franklin at the time the council voted on the measure, but Rich says she was hired to cater the June event only after the council voted on May 23, and she had no say in the location of the party.

    “I’m a personal chef and a caterer,” she says. “I do not rent venues out. The host of the party rents the venue, it’s not up to the caterer. The host always decides where the party will be. I had no influence over where this party would be.”

    Furthermore, she says she donated her time and did not make any profit.

    “It was all a charity event, (and) there was no money that was made by anyone,” she says. “The servers were all students of this principal, the music was donated, the flowers were donated, and the cake was made by the teachers. There were tickets sold for drinks, and we donated that money to a scholarship fund to the school so that children in the 2011-2012 school year that can’t afford to go on field trips can now go on field trips, because of the money raised that evening. Basically, my costs were just covered for food and wine and beer.”

    Rich says although she had no specific interest in the 523 venue when the council voted on May 23, she was upfront about her desire to make it more attractive for those looking to host private parties.

    “I never hid the fact that I thought this is a great venue for parties,” she says. “I discussed it for over a year at Arts Commission meetings, and I also stated over and over that this building needed to sustain itself, that it needed to generate income.”

    The Town Council Code of Ethics calls for a council member to seek the advice of the town attorney if there’s a chance that his or her actions could be misconstrued. Rich says she consulted with Town Attorney Ralph Karpinos after the June event to clarify her position.

    “I asked him about any problem with me having a party there, and he absolutely said that there was no reason we should think otherwise.”

    Karpinos confirmed to WCHL that Rich consulted him both before submitting her petition and after the June event.

    Rich says the controversy regarding her role in changing the alcohol policy at 523 East Franklin has been overblown.

    “This was a wonderful event,” she says. “There was no scheming, there was nothing going on behind the scenes. I have no problem with the timeline, I have no problem with my fellow council members taking a vote to amend that ordinance, and I would encourage anyone to use town buildings so the town could benefit.”

    Despite the vote to allow alcohol at private events, the space at 523 East Franklin once again sits vacant, as the council voted in June to close the facility due to lack of funding to repair and maintain the building.

  41. runner

     /  August 29, 2011

    Can someone tell me who rented the venue and when they rented it?

  42. Nancy Oates

     /  August 30, 2011

    In response to my query, the Town of Chapel Hill sent me a list of events and who rented the venue and for how much. The list read that Penny Rich rented the space for four hours at $25 an hour. The list did not say when she secured the reservation.

  43. Nancy Oates

     /  August 30, 2011

    Mark, my impression of The Herald is that it presents balanced, factual stories. Greg Childress is a seasoned, respected reporter with decades of experience. As for Chapel Hill Watch presenting itself as a “news” blog, I present myself only as a constituent and voter. We started this blog as a place where everyone can join the discussion of the town leaders’ decision-making process, regardless of their political persuasion.

  44. Don Evans

     /  August 30, 2011


    WCHL’s is a one-source story. There’s no corroboration of Penny’s claims except for one line saying that Ralph Karpinos confirmed meeting with Penny. There’s no source other than Penny for what went down at the event. There’s no confirmation that a donation was made to the school. The reporter didn’t contact the school board about a school-related event where alcohol was served. As with your message above, there are a lot of holes in the story.

    All Penny confirms is that she was planning the event when she introduced the motion to the council. Which is why I’m upset with her — lack of transparency while doing public business.

  45. runner

     /  August 30, 2011

    Did Penny pay by check? If so, when was the check written and processed?

  46. Road Warrior

     /  August 31, 2011

    Sales Taxes are always regressive and hurt the poor more than the rich. It’s kind of sad that my fellow Liberals seem to forget that when the tax allegedly supports something they believe in. Liberals and Conservatives always believe the that only things poor people should ever buy are food and medicine.

    As for the tax on food, if food were totally exempt from all taxes that would make sense, but in the South, we love to tax that too. Liberal or Conservative – Sales taxes are regressive and wrong, but the rich love them, because it doesn’t hit them as hard.

    If you call yourself a Liberal and support Sales taxes, you don’t know what Liberal means.