Carolina Journal Radio No. 905: Courtroom deal raises questions about N.C. school funding

From Cherokee to Kuretuk, from the largest city to the smallest town, and from the statehouse to the schoolhouse, it's Carolina Journal Radio, your weekly news magazine discussing North Carolina's most important public policy events and issues. North Carolinians and people across the country recently marked the 100th anniversary of the 19th Amendment.

It ensured women's right to vote. John Locke Foundation CEO Amy Cook offers her thoughts about the milestone anniversary. COVID-19 has presented healthcare challenges across the country. We'll hear some helpful ideas from a northern neighbor, and we'll look at the potential fiscal impact of North Carolina's latest coronavirus relief package. Those topics are just ahead, but first, Donna Martinez joins us, and she has the Carolina Journal headline. A North Carolina Superior Court judge has issued a consent order in a decades-old North Carolina case about our state's public schools. At issue in the Leandro case is our state's constitutional requirement that every child must have the opportunity for a sound basic education.

The question, of course, is how indeed do we go about that and who makes the decisions? Dr. Terry Stoops is vice president for research, also the director of education studies here at the John Locke Foundation. He has been following this case literally for years and years and years, and Terry joins us now. Welcome back to the show.

Thank you. So we know that it's decades old. Just give us kind of the Reader's Digest version of what this case is about. It seems that some people were saying that there are some North Carolina kids in some counties who really were being left behind.

Yeah, and that's absolutely right. In 1994, five school districts sued the state, alleging that students in their district were not receiving an equal opportunity and equal education that they were entitled to under the North Carolina Constitution. Some school districts intervened, and together they went through the courts.

And in 1997, the courts established this idea of a sound basic education, saying that the North Carolina Constitution guarantees North Carolina students an opportunity for a sound basic education. It was remanded to a trial court where there were various memoranda issued by Judge Howard Manning. It went back to the North Carolina Supreme Court, and in 2004, there was another ruling alleging that the state was not doing enough for at-risk kids. It would go to the Supreme Court again with a pre-kindergarten issue that would happen a few years after that. Since 2016, it has been under the watchful eye of Judge David Lee, with Judge Howard Manning retiring from the bench and Judge Lee being appointed the Superior Court judge that would oversee the implementation and compliance in the case. So that's where we are now with Judge David Lee in charge of overseeing the constitutional issues related to the Leandro case.

The mere description here makes my hair hurt. Frankly, you got to feel for these kids. They've grown out of the system at this point, the original kids that folks were concerned about. All these years, Terry, I mean, is that an indication that we really, frankly, just can't figure out what the issue is? We know what the problem is, but how to really solve it?

Yeah, I think that that is a big part of it. And there have been various plans and remedies that have been proposed by the Department of Public Instruction, the State Board of Education and lawmakers on both sides of the aisle about ways to address the issue with at-risk kids not performing at grade level in the major subjects, especially reading and math. There have been various programs that have been proposed and some skepticism from Judge Manning, not as much from Judge Lee about what can be done to remedy these issues. A large reason for that is that in 2016, when Judge Lee took over the case, the plaintiffs and defendants decided to get together and to say, let's stop fighting and let's get a consultant report to tell us what we needed to do.

So they finally decided to do that. And they contracted with a California-based consultant by the name of WestEd. It's a company that has gone in various states, North Carolina being their latest, to talk about what would be required to meet these constitutional requirements.

And WestEd came into North Carolina. They did some limited research and they pitched a report to North Carolina courts. And in 2019, they published that report. And so that really, since the publishing of that report has formed the basis of the strategy by which Judge Lee and the plaintiffs and defendants have gone forward to try to address this issue of low-income kids and at-risk kids not performing well. So moving forward now to September 2020, and this is where we have this latest development. And it's really interesting because Judge Lee has now issued this consent order. And I know talking with you, I think we talked about it here on Carolina Journal Radio, you were concerned that the judge was going to issue an order that would require state legislators to spend a certain amount of additional money on public schools, which would set up a constitutional crisis because the courts aren't – it's not the branch of government that actually spends the money, that appropriates the money. That didn't happen in September. He issued an order but he didn't issue a requirement.

Tell us about it. That's right. When the State Board of Education tried to get out of the lawsuit and they're one of the defendants in the lawsuit, Judge Lee wrote an opinion where he basically talked about the fact that he would not be afraid to have a consent order that would require the state to spend money. Now, that was sort of a shot across the bow. He didn't do anything but he indicated in that ruling that he would be open to such an idea given how long that the constitutional requirement has not been met. So a lot of people believed at that point that this was Judge Lee signaling to the plaintiffs, the defendants and everyone else that he was willing to sign a consent order requiring the General Assembly to spend more money. Now, the North Carolina Constitution is very clear about this. It's that the North Carolina General Assembly is the entity that collects taxes and appropriates tax funds and that the courts have limited ability to tell them how to spend this money.

Judge Manning, when he was overseeing the case, never came close to even suggesting that he was going to tell the General Assembly how to spend money but Judge Lee seemed to be willing to do so. And so many, including myself, suspected that this first order in the first year implementing the WestEd recommendations would have some sort of requirement that the General Assembly spend money and in this case, a $427 million down payment on an $8 billion 8-year plan. That didn't happen, mostly because of the pandemic really taking a bite out of North Carolina tax revenue. Going into this year, going into 2020, North Carolina was in fantastic shape due to really great budget management, having billions of dollars at its disposal. And so it would have been very easy for the judge to say, we have the money, go ahead and spend it, consistent with the Leandro requirement.

But we know that now we are hundreds of millions of dollars short in what we expect it to have in tax revenue. And I think Judge Lee was worried that such a requirement that the General Assembly spend money that really it doesn't have and is borrowing from the federal government would impair the state in a way. Terry, is it a fair characterization to say that with this order, the judge essentially said, yeah, I kind of like these ideas in this WestEd report?

Well, this is one of my big complaints about the WestEd report, because I think the WestEd report falls short in many, many different ways. And Judge Lee basically signed off on it without having any hearings, without bringing the WestEd technocrats into North Carolina, putting them on the bench and asking them tough questions. As I said, Judge Manning, who oversaw the case for many years, would have done that. He had no patience for so-called education experts who proclaimed to have all the answers and tell the courts that they had all the answers.

And then when their preferred programs were implemented, only to find that at-risk kids were no better off than they were before these programs were implemented. Instead, Judge Lee just said, if the plaintiffs and the defendants agree on this report, then I will, too. Dr. Terry Stoops has been writing about this for years. You can read all of his work at JohnLocke.org and CarolinaJournal.com. Terry, thanks for joining us.

Thank you. Much more Carolina Journal radio to come in just a moment. Tired of fake news?

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I'm Mitch Kokay. A teacher's union is leading efforts to kill North Carolina's Opportunity Scholarship Program. It's a program that provides up to $4,200 a year to low-income families. The money helps them send their kids to the private schools of their choice. Some of the families are fighting back.

Working with the Institute for Justice, people like Janet Nunn are opposing the lawsuit. Janet has used the scholarship to help her granddaughter, Nariah. I got involved in this program when my granddaughter was in the first grade. And I realized that she was struggling. She was in public school and she was struggling. She was in the first grade. She was reading below kindergarten level.

I was frustrated. I was paying a tutor to tutor her. However, I couldn't afford to send her to private school.

And speaking with a coworker, she directed me to one school and the school introduced me to the Opportunity Scholarship. Once Janet Nunn secured an Opportunity Scholarship for her granddaughter, she helped change her school performance. I had Nariah repeat the first grade because she wasn't ready to move forward to the second grade. So when Nariah went into the private school sector, she repeated the first grade. And upon repeating the first grade, she was able to get those fundamentals that she needed to help her excel and move on forward.

And now, as a result of the Opportunity Scholarship program, Nariah is a rising sixth grader. She is average. She's a B average student. She is confident in herself. She believes in herself. Her reading skills has gotten way, it's amazing, the transformation and seeing that transformation, not only in her education and where she's at, but in her character, in herself, in her confidence in herself. And without the OSP, I wouldn't have been able to provide that for her. It's an important factor for me to be able to provide her the education she needs. Do you think Nariah would be in the situation she is now if she had no Opportunity Scholarship?

No, I don't. Nariah was a child that began school and she was, she would sit all the way in the back. And I witnessed it because I was always, I'm a very up close, I volunteer, I'm at school, I'm speaking with the teachers and I'm making sure that I'm doing my part at home. And I realized that in kindergarten, she was sitting in the back. Her head would be down. She wasn't raising a hand.

She was very quiet. As Nariah's grandmother, Janet Nunn saw the need for extra help. Nariah wasn't going to get that help moving forward with her public school classmates. Me as her, her legal guardian, making the decisions regarding her education, I didn't want her to go to the second grade because I knew she wasn't ready. And I didn't want her to fall any further behind. Well, the school then became concerned about it being a behavior issue because all of her friends in the first grade will move to the second grade and then she will be in the first grade with all of the kindergarteners. And I might be, there might be some behavioral issues.

And it was at that time that I decided that I needed to move her. And again, without the scholarship, I don't think she would have flourished as well as she has and continue to do. What did you think when you heard that there was this lawsuit? It's ridiculous. I mean, we, we live in a country that we say is free. Like we, we, we supposed to be, we supposed to be in a pursuit of the happiness and the freedom. And that pursuit is with education as well.

So I don't see what's unconstitutional because, because I'm low income is, is that what makes it unconstitutional? I want to give my child an opportunity. And that's exactly what the scholarship is.

It's an opportunity for advancement in your life. And she has a right to that. I don't see why that would be unconstitutional. We all have a right to pursue our happiness. And if happiness is education, then we deserve that. We have a right to that. And I don't understand why everybody is so angry or upset or unconstitutional because a child with limited that's come and it's not her fault that she comes from limited means.

It's really not. However, it's not her fault that she can't be provided a good education that's structured to her needs. How important is the opportunity scholarship to you and why should it be protected against this lawsuit? The program is important to me because again, it provides me the opportunity to provide Noriah with the education she needs. Um, and when I say the education she needs, she's in a smaller classroom. Um, she is one on one with her with her teacher, even during these unprecedented times in the learning from home. If she had problems, even myself with this new age math had problems could get on the zoom with her math teacher walk through it, explain it to me that I would be able to help her, um, her going from a child that didn't want to go to school, that now she's eager to go to school and she reads and she wasn't reading before and she reads and it's so much better than what it was. She had, she's come a long way. She has a little bit of way to go, but she's come a long way. And without this assistance, I would not have been able to provide that for her.

I would not have been able to boost her confidence in areas that she needed boosting. And the, and this is what the opportunity scholarship has done for me and my family. It has provided me the means, the financial means to send her to a school that is capable and, and she enjoys the learning.

It's engaging. She's not sitting in the back of a classroom. She's not holding her head down.

She's not saying that she's not as smart as her classmates. She's sitting there. She's raising her hand. She's asking questions. She's moving forward.

She wants to be in the front to be that leader. And I couldn't have done it by myself. And I don't, I do get emotional. I get really emotional because when you see where she was to where she's at now, I am forever grateful, forever grateful. And without this program, I don't know where she would be because as I explained once before, without this program, I would have no choice but to send her back to public school. But what public school would I send her to?

Do we start this process all over? Does she sit back in the, in the back of the classroom? Does she revert back into that introvert? Does she revert back into that child that did not want to go to school?

Does she become a behavioral problem because she's not able to, to keep up with the other students and what's going on? That's Janet Nunn. She uses an opportunity scholarship to send her granddaughter Nariah to a private school in the Charlotte area. Janet and two other families are working with the Institute for Justice.

They're fighting a lawsuit that's trying to kill off the opportunity scholarships. We'll return with more Carolina Journal Radio in a moment. If you love freedom, we've got great news to share with you. Now you can find the latest news, views, and research from conservative groups across North Carolina all in one place. North Carolina Conservative dot com.

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I'm Mitch Kocai. North Carolina and the United States recently marked the 100th anniversary of the 19th Amendment and guaranteed women's right to vote in elections. The John Locke Foundation honored the occasion with an online forum, including CEO Amy Cook. She tackled one of the downsides of current political debates about women. I find the whole victim mentality sort of tiresome and unappealing. I much prefer that we as women are agents of our own change.

And there are sometimes there are circumstances, I get that, but I, you know, I don't want to beat the stop being condescending horse too much, but really like stop being condescending. I look back to, so I have a master's degree in American history. What I found really fascinating when you look at the history of women in particular, think about this. It was women who, without the right to vote, the women's Christian temperance movement that led the movement, sort of led the charge for prohibition.

Just wrap your minds around the fact that this group that supposedly has zero power got men to vote against having a drink. They're looking at Hillary Clinton. Well, she's a woman and she'd be the first female president, as opposed to looking at how much influence we have in our private spheres or our chosen profession.

Anybody who's raising a boy or raising a girl, the influence that we have on future generations can't be overstated. And sometimes that's quietly privately and sometimes it's more publicly. This new progressive left feminist notion that it must be sort of in your face. Not only is it not really terribly attractive or do you want to be a part of it, but I actually don't think it helps us. I think it ends up hurting us because what you do is you, to some extent, you go back to hashtag me too, you almost start making women less attractive in the workplace if all you're going to do, if you're always going to look at yourself as some kind of a victim.

So I find it kind of tiresome a little bit, which I'm sure will solicit some kind of hateful response, but that's fine. It wouldn't be the first time. I just think women are in a position to be agents of their own change and thank God because we do stand on the shoulders of giants who came before us. That's John Locke Foundation CEO Amy Cook, featured speaker during a recent online forum. It marked the 100th anniversary of the 19th amendment to the U.S. Constitution. We'll return with more Carolina Journal radio in a moment. We're doubling down on freedom at Carolina Journal radio.

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I'm Mike Fauci. COVID-19 has created health care challenges across the United States during a recent virtual town hall sponsored by the John Locke Foundation. North Carolinians learned some insights from a northern neighbor.

Ray Hetterman is vice president of the Ohio based Buckeye Institute. It's been a really unique challenge for the health care system and the fact that it's pretty unprecedented for the health care system to be shedding jobs. And it's been a particular challenge for rural areas in Ohio.

It's come along the Indiana border, along the West Virginia, Kentucky border and different parts outside the major metropolitan areas. And so what's happened is these hospitals have been under declining pressure of his population. And so keeping providers first responders there. So it's forces to get innovative and thinking through a new way of delivering care.

And so we've been very excited. I think that the state has basically made innovation such as telemedicine to allow people to be able to see providers may be located in the metropolitan area. Taking a look at also teletherapy, which is actually kind of remote counseling for mental health issues, something that's relatively new, which I think has been important as people are facing mental health challenges. So taking a look at some of the barriers that have been put in place that makes it hard to serve these rural populations has something that the state has been responsive to in Ohio.

And it's been nice that the Trump administration, you know, by basically freeing up how Medicaid and Medicare treat some of these patients as well, has been able to deliver care to these areas that have suffered from declining population or maybe even hospital closures. Hetterman says it's important to allow innovation to continue. We've seen across the nation a lot of these innovations and telemedicine that have been enacted under the emergency orders. I think it's so important that we make these reforms permanent going forward.

People need to lock in these gains. And in Ohio, I don't think we're going to go back because patients like the idea now that they can see the doctor remotely. And it's not just I think one of the important things for telemedicine, not just rural people, but elderly people in nursing homes right now, the ability for them to stay in the safety of their house, see their medical provider.

So important. And so I really hope a lot of states can make these emergency orders permanent because we're seeing that it helps both patients and can drive down, I think, the cost of health care. Hetterman talked about the negative impact of government mandates during the COVID-19 pandemic. When I see a lot of these mandates going through and the government is trying to pick and choose industries and when they're being able to open, you're having a lot of collateral damage that's going to take, I think, a long time to recover. And so I think, you know, again, letting people take precautionary measures, taking a look at how things operate, because we know things are different between rules and urban areas. Rural areas should, of course, be allowed to open more freely because there are fewer people.

There's less chance of contagion and spread. And I think, you know, that the lockdown that we've seen from a lot of states that have handled it extremely poorly, I think it's going to take them a lot longer to recover from. In Ohio, for example, we've had restaurants being allowed to open using reasonable safety precautions. And we've seen people, refugees, if you will, from Pennsylvania border states, you know, flowing into Ohio because their states have had worse lockdowns. And so as a consequence, we know that things are going to be much tougher for businesses in some of those states. And so, again, letting people utilize common sense compared to county officials that may be interpreting rules differently. And so we need to be smart in thinking about how we can take care of each other and thinking about how the communities can react. I think that makes far more sense in how the nation is going to recover, both in terms of public health and through the economy going forward, compared to some of these sweeping mandates that treat every business the same, treat every county the same, and every person the same. That's Ray Hetterman, vice president of the Buckeye Institute in Ohio.

He's speaking during a recent John Locke Foundation virtual town hall. The pandemic has helped expose one problem in health care, barriers linked to state boundary lines. We know New York City was kind of the epicenter of this crisis where you had fatalities increasing on a daily basis. And at the height of the crisis, you had medical responders coming in from around the nation.

You know, you started seeing pictures popping up on social media. Ohio sent ambulance drivers, you know, paramedics. You had a picture of doctors flying in from Colorado to New York. And before the pandemic, a lot of times most states would not allow medical professionals, even in the case of emergency, to practice across the state line.

So even in a place where you had a desperate need for nurses to come in and be able to triage, be able to take people where you needed ER professionals to come in because the caseloads were overwhelming the resources in New York, people were prevented by some of these regulations. And Ohio, one of the first things we did was basically say, look, if Cleveland, Cincinnati, all of a sudden starts having a surge, we're going to let medical professionals come in from other states to treat us in these cases of emergencies. And you've seen so many states, you know, waive these restrictions to say, look, if you're in a licensed professional from another state, we should be allow you to practice. Some states are doing it for emergencies.

In some states, I think we'll do it permanently. Those are the type of reforms, again, that allow people to get access to care when they need it in an emergency situation. Hetterman offered an example of Ohio loosening restrictions that limit access to care.

We basically said, look, if you're a spouse of a military family, we're going to recognize your license. Let's say, for example, you know, if you're in the Air Force and you've gotten your wife as a practicing nurse, she comes into Ohio because her husband or maybe the other spouse has been relocated to Wright-Patterson Air Force Base, you would have to sit there and spend months going through the Ohio licensing process to become a registered nurse in Ohio. Well, Ohio, we just signed into law saying, look, we should automatically recognize your practice of a nurse, see that you're valid.

You can now find a practice in Ohio to make it easier. And I think it's important, again, to give people care, to remove these barriers. And these are the type of things that I think will go a longer way to reducing the price of health care, make it more affordable, and more importantly, give people the access to providers that nurse the doctor that they need. Democratic politicians and their allies have used COVID-19 to push for Medicaid expansion in North Carolina.

Hederman responds, Ohio expanded Medicaid. And, you know, our experience was we basically had far more people, about twice as many people as originally projected, you know, came into the program, you know, which increased cost to the state. And so Ohio is still trying to figure out right now who is this population and what the better alternative is, because I think it's one thing to sit there and say, look, how can we make sure we're giving care to the truly vulnerable, you know, some of the people in the nursing homes that should be on Medicaid already? And it's another thing to expand these protections to people who should be in the workforce, because the Congressional Budget Office, other economists are pretty clear that Medicaid expansion reduces the incentive to work.

We did a study at the Buckeye Institute that said this will cost hundreds of thousands of dollars over a lifetime. And you combine that right now, which, you know, with the boosted unemployment benefits for the state, and it really becomes a challenge, I think, to getting people back into the labor market to get the economy functioning. And this ends up hurting people because they miss out on wage opportunities and makes it harder for them to regain the workforce. And I think that needs to be a concern that people have going forward with this program. Hederman touted other potential reforms, such as association health plans for insurance and increased price transparency. When you go shop for a car, you know how much cars are going to cost. If people are trying to figure out now with a lot of people with health savings accounts, you know how much things cost at a hospital, they're not given that information. So these type of tools that let people be able to know how much a procedure may cost at a hospital may drive them, hopefully and evidence will suggest that they may sit there and say, you know what, this hospital will cost me $10,000. This hospital will cost me $7,000.

I'm going to go with the $7,000 hospital with no difference in quality. This is good price transparency, which will help benefit consumers. That's Ray Hederman, vice president of the Buckeye Institute in Ohio. He's speaking during a recent virtual town hall sponsored by the John Locke Foundation. We'll return with more Carolina Journal radio in a moment. Real influence.

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I'm Donna Martinez. One billion dollars. That is the price tag of the latest coronavirus relief bill passed by the North Carolina General Assembly and signed into law by Governor Roy Cooper. So exactly what is in it?

Where does the money come from and what does it mean to the fiscal situation for our state? For that, we turn to Joe Coletti. He is senior fellow with the John Locke Foundation. He joins us now. Joe, welcome back to the show.

Always glad to be here. First of all, where does the one billion dollars come from? Is that state money, federal money? This is federal money that was passed back in March as part of the CARES Act, which we all are familiar with.

That's what led to the twelve hundred dollar payments per person. And part of that was one hundred fifty billion dollars to states and localities. North Carolina's share of that was four billion dollars. Three point six billion dollars of that state. The rest of that was distributed to Wake, Mecklenburg, Guilford, the largest counties in the state in the state was supposed to provide some of that three point six billion dollars to local governments. And the rest of it was just go all of it to go to expenses that were not expected related to covid.

And we were involved with some efforts to provide some flexibility to states for that. That wasn't clear that that was coming, apparently, to the legislators and the governor and the legislators put forward competing plans about what to do with the remaining money that the state had that was unappropriated or was appropriated expecting flexibility. And so this is all just new spending from the legislature of this federal money. And it all is related to covid-19 in one way or another, because legally and technically they don't have the ability to do what you have recommended, which is to for Congress to give legislators the flexibility to backfill on tax revenue that has to come in because of covid.

Right. So let's talk about what is classified as a covid expense. What is in this bill? What's getting a lot of a lot of play in the media is a payment to parents of school aged kids. Yeah, that's the biggest portion of the money. That's four hundred forty million dollars that is going to parents with two families with with children who are school age. Three hundred thirty five dollars, I think, is what the final amount that was estimated that we got that that'll be going out to families.

And it's per family, not per child. But that that's a huge difference from in what passed with bipartisan large bipartisan majorities compared to what the governor was looking for. The governor was going to use most of was going to use about half the money to pay teachers and community college professors and UNC faculty and staff and principals at schools was going to use that for bonuses for them because his vetoes, as you remember, meant that they didn't get a pay raise this year, at least not a not a large pay raise.

And Joe, that seems like a real victory then for the Republican legislators who said, look, we want relief to go directly to North Carolinians who are on the front lines trying to keep their kids in school, most of them virtual with all sorts of expenses that would go along with that. Yeah. And so that seems like the governor is really rebuffed on what he wanted to do. He he lost pretty badly on this one.

Yeah. That that he was looking to to pay teachers and not and not provide much relief to families. And the legislators bipartisanly said families are in a really bad spot right now, that they're having to take care of their kids to to adjust their work schedules and find other ways. And they're taking on additional expenses. You know, it was one thing when it was the end of spring.

Now we're starting a new year and we don't know how long they're going to be home. So we have to provide something to families. And so that's the biggest part of it.

And that's it. And that was against everything that Governor Cooper recommended. Similarly, the Opportunity Scholarships that Governor Cooper and his proposal had was looking to take that money away for new new students, continue it for existing students. And the legislature said, no, we're going to expand opportunity scholarships and make them more available to families with with slightly higher incomes and and keep this program going because we see that parents are opting for private schools because the public schools are all online and are having a challenge with their kids.

Joe, we also know not not just education and families with school aged kids being affected by COVID, but we've got a lot of people, unfortunately, who are out of a job, whether it's because of the Cooper shutdown, their their business, their industry not allowed to open or simply just not as much demand for an industry that is still open. So is there any relief there for folks who are trying to make it on an unemployment check? Yeah, this is another area where the the bill that passed was was an improvement over what Governor Cooper had recommended. They have one hundred thirty five million dollars to match the federal money for which is three hundred dollars per person on unemployment, which is which is used to be six hundred dollar bonus. Now it's a three hundred dollar bonus.

So it's not as much of a disincentive to to find work in the short term. That's per week. And that's per week.

Yeah. They're adding another fifty dollars on top of that for everybody. And Governor Cooper's idea was to increase the maximum amount so that if you are a higher earning person and you're on unemployment, the maximum could be more.

This says everybody on unemployment is going to get another fifty dollars per week. And so this is it's it's expensive, but this is all federal money and they're holding harmless the unemployment trust fund, which was another concern, which is that the state, if you remember during the last recession, we built up a two and a half billion dollar shortfall on that one debt that we had to pay back to the federal government. We're at about a four billion dollar surplus at the beginning of January. But with the extent with the number of people who are unemployed, that surplus has been coming down.

And this this protects a little bit of that now. So, Joe, this is federal money from the CARES Act. Let's talk about state finances. North Carolina. Fair to say we're in a bad position, but yet not as bad a position as a lot of other states.

Yeah. North Carolina came into this in really good shape, in part because of the last ten years of good of good spending and in part because the governor and the General Assembly couldn't agree on what to spend last year. So we had a billion dollars over a billion dollars in rainy day funds that our savings reserve. And there is about one point seven billion dollars coming into the year in unexpended, unexpended revenue from previous years. So that set the state up in good shape.

The governor would have spent all of that money with an expansion budget. And the General Assembly has not put forth a new budget yet, waiting to hear from fiscal research about what the revenue picture actually looks like and waiting to hear from Congress if any more money is going to come down. But the state can get by with what we have, that the revenue shortfall, to the extent that there is one, should be in line with the spending that's already planned as long as they don't look to expand spending much more.

And Joe, here's the problem. Fewer people working, fewer people buying things. So that means less income tax coming into the state, less sales tax coming into the state. That's not a good scenario.

It's not. But again, North Carolina is in better shape than most places and this is why the low spending is critically important. That we had twenty three point, we spent less money than we had coming in in previous years. Last year we were able to get by with lower spending than had been proposed by either the General Assembly or the governor.

And so this year we should be in decent shape to be able to get by without having to dig too deep. Joe Coletti is a senior fellow with the John Locke Foundation. He writes about these issues at johnlock.org. Joe, thanks for joining us. Thank you. That's all the time we have for Carolina Journal Radio this week.

Thank you for listening. I'm Donna Martinez. Hope you'll join us next week for more Carolina Journal Radio. Carolina Journal Radio is a program of the John Locke Foundation. To learn more about the John Locke Foundation, including donations that support programs like Carolina Journal Radio, send email to development at johnlock.org or call 866-JLF-INFO.

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