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VGW Group, voidwear prohibited by law. 21 plus. Terms and conditions apply. And a good Friday morning to you. Welcome into the Carolina Journal News Hour, News Talk 1110-993 WBT.
I'm Nick Craig. Good Friday morning to you. An interesting story we have been covering over the last couple of months surrounds a company in Durham known as Wolfspeed. They are a semiconductor supplier, and in an announcement earlier this week, they are now officially planning to file for Chapter 11 bankruptcy under a restructuring agreement that they say will strengthen the company's financial profile and give creditors control. As we have been reporting over the last couple of weeks, bankruptcy with this company seemed pretty imminent.
Formerly known as Cree, Wolfspeed manufactures wide bandgap semiconductors focused on silicone carbide and gallium nitrate materials, including microchips that are used in cars from General Motors and Mercedes-Benz. This has been an ongoing struggle for the company as shifts in the electric vehicle market do continue across broad portions of the United States market. The company, as it stands right now, has more than $6.5 billion billion dollars in debt. We will keep a very close eye on this bankruptcy and some of this restructuring over on our website, CarolinaJournal.com. You're listening to the Carolina Journal News Hour.
We have been keeping a very close eye on the North Carolina General Assembly over the last couple of weeks as budget negotiations continue between the North Carolina House and Senate to walk us through where things stand this morning. Brian Balfour with the John Locke Foundation joins us on the Carolina Journal News Hour. Brian, we were told months ago that by July 4th the budget should be said and done. As we sit here in mid-June, it seems like we may have hit some roadblocks. What's the latest that you're watching at the GA this morning?
Yeah, yeah, it seems to be an annual rite of passage every year now. We start the session out with high hopes for a budget to be in place at the beginning of July, the new fiscal year. And here we find ourselves we're getting deep into June, and there's no budget in sight. Hearing that there's not a lot of urgency taking place in discussions between the House and Senate to iron out their differences, and more than likely that they're getting ready to take a break for about three weeks or so and come back in around mid to late July to try to resume conversations about the budget. As we look at the differences between the House and the Senate budget, they are pretty far off.
At least the top line number is the same. They both are saying they're going to spend the same amount of money, but there are some key differences in how the House and Senate want to handle the fiscal viability, I guess, of the state of North Carolina moving forward. Do you suspect that that's probably one of the major holdups that has lawmakers at odds? Yeah, I think the biggest sticking point It's probably how they're a different approach to taxes.
So the Senate wants to keep Keep the pre-scheduled tax reductions in place that were scheduled years ago to try to continue to roll down the tax rates for personal income and corporate income tax rates, and then even add on an additional reduction in the personal income tax rate a few years out. But meanwhile, the House, conversely, they take a pretty different approach where they They leave the tax reductions in place, but they significantly increase the threshold for revenue, the revenue triggers, to make those or to allow those tax reductions to come into fruition. And so, a fiscal research division, which had a look at those triggers, the new triggers that the House are proposing, is saying that there's a very strong likelihood that those triggers would not be met. And so it would make it very difficult for North Carolinians to receive those tax cuts under the House budget plan. For those that are maybe new to North Carolina or maybe just starting to get involved in North Carolina politics, many of them might be scratching their heads wondering, Brian, well, we've got Republican leadership in the House.
We've got Republican leadership in the Senate. Why can't they get together on that? What makes these two chambers so different that they're approaching something as major as taxes for not only corporations but individuals so differently? Yeah, I think one of the things that kind of threw certainly the house for a loop is some. Updated revenue projections that were coming out showing that revenues might start to take a little bit of a dip in the second year of the biennium of this budget.
Cycle. And so that's, I think, what prompted the House to get much more nervous about these previously scheduled tax rate reductions coming out over the next few years. There'd be concerns that the tax rate reductions would make it more difficult to meet the spending demands of the budget. And that's also, I think, a little bit of a different approach as well, where it kind of suggests to me that the House has a different viewpoint on what they want to do with spending over the next handful of years, that they want to make sure that the revenue is there to meet the different kinds of spending priorities that they have versus the Senate, which seems to be a little more interested in trying to provide more tax relief for North Carolina taxpayers and then rein in the spending accordingly if it does impact the revenues. And one of the things that's kind of reflected in their different outlooks is you look at their Their different approach to a teacher pay and state employee salaries.
The House is much more aggressive in terms of a percentage increase across the board for both teachers and for state employees generally, where the Senate was a bit more conservative in terms of the percentage increase, but while also kind of bolstering that with one-time bonus payouts for the employees, but the Senate approach with those one-time bonus payouts would not commit the state to a higher level of spending for employee salaries, where the House, you know, they would be ratcheting up. the overall salaries for state employees and teachers, and thus kind of increasing that baseline for what would need to be spent moving forward. Yeah, those reoccurring funds that would, in fact, come back every year. You talk about this report from fiscal analysis and fiscal research. Covered that a couple of weeks ago.
And, Brian, I've seen a lot of commentary on that. That over the last decade or so, many of these fiscal analysis and reports that have come out have been dead wrong as it relates to North Carolina revenue. Where do you fall on that? Yeah, I've done a little digging into that and looked back over the last decade, and they have consistently erred and in most years pretty significantly, they've consistently erred on the side of underestimating the actual revenues that come in.
So you look you can go back and you look at what they were projecting for a given fiscal year and then what the actual revenues turned out to be in that fiscal year. And the actual revenues year after year, consistently, aside from the COVID year, of course, revenues consistently come in significantly higher than what they're projecting. And one of the causes, and even in their projections, they'll say, well, we're projecting that revenues are going to uh you know, be limited due to the scheduled tax Decreases coming in. But lo and behold, the actual revenues come in much higher than what they projected because, in no small part, because those tax reductions actually stimulated the economy and economic activity, which generates more tax revenue.
So we're kind of at this point taking those revenue projections with a bit of a grain of a salt just because we've seen the history of the last decade of where they've gone wrong. We'll continue the discussion with the ongoing debate over the North Carolina budget coming up after this with Brian Balfour. You're listening to the Carolina Journal News Hour. Check. Looking for excitement?
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Live the chumba life at chumbacasino.com. Necessary VGW Group Void where prohibited by law 21 plus terms and conditions apply. And welcome back to the Carolina Journal News, our news talk 1110-993WBT. Keeping our eye this morning on the North Carolina General Assembly, the legislature last week gave final approval to the Power Bill Reduction Act that took place last Thursday. The bill would eliminate the state's statutory goal to cut carbon emissions by 70% by the year 2030.
Senate Bill 266 is the bill number, and it did pass the Senate in a 29-11 vote, where it now heads to the governor's desk after the chamber voted to concur with some of the changes made in the House. Supporters of the legislation say that the policy change could save North Carolinians up to $15 billion in future utility costs and will help meet skyrocketing power demands. That, of course, has been on the eyes and ears of many North Carolinians this past week due to record high temperatures across North Carolina. According to Senator Tim Moffett, the Republican out of Henderson County, he told his colleagues, quote, the House has returned to us the Power Bill Reduction Act in Senate Bill 266. Section one of both bills is the same.
It eliminates the interim date for carbon reduction, but it also maintains the 2050 goal. The bill does maintain that long term goal of reducing one hundred percent of carbon emissions from a two thousand five level by the year twenty fifty.
However, it removes the requirement that utilities hit an interim milestone in the year twenty thirty. Utilities like Duke Energy must still file long range carbon plans with the North Carolina Utility Commission, but the focus, if this is to be signed into law by Governor Josh Stein, would shift to longer term goals of net zero emissions by twenty fifty. Senator Moffat continued by saying, if our state wants to remain competitive globally, we need to take steps now to keep our energy sources reliable and least cost. By taking these proactive steps, our residents and job creators can confidently build a future here knowing that blackouts and astronomical power bills won't plague North Carolina. The move to repeal the 2030 goal gives more flexibility in North Carolina's energy makeup, enabling the use of natural gas, nuclear, and emerging technologies alongside renewables, all of that without being restricted by what many believe are politically driven deadlines.
The leader of the North Carolina Senate and Phil Berger said, Our residents shouldn't be saddled with higher power bills to satisfy arbitrary targets. Senate Bill 266 ensures that North Carolina will have reliable energy at competitive prices to serve our citizens and businesses. Governor Stein must sign this bill immediately. With that, the legislation has now officially passed the North Carolina House and Senate. It has been sent to Governor Josh Stein, currently sitting on his desk.
We'll continue to track the progress of that legislation over on our website, CarolinaJournal.com, and right here on the Carolina Journal News Hour. We are learning additional details this morning about the ongoing struggle between legislative leaders in the North Carolina House and Senate as it relates to the biennium budget. We're getting details with Brian Balfour from the John Locke Foundation.
So now, many folks, of course, look at Washington, D.C., and there's always the threat and discussion around Christmastime of a looming government shutdown. How does that process here work in North Carolina? If we get to July 1st coming up and we don't have a budget passed, does the state shut down? What exactly will happen here? Right, yeah.
So there's a backstop. There was a bill passed a number of years ago that would keep the state government open and functioning. There will be no shutdown. What happens is when July 1st kicks in with the new fiscal year, that state expenditures would remain at the same level as they are in the current fiscal year until they get some sort of budget in place. And it's kind of a double-edged sword.
Of course, on one side, there's no panic in terms of a government shutdown and funding government agencies and employees. But on the other side, it also kind of decreases any sort of urgency that legislators might feel to try to get a budget in place because the funds are continuing to flow into state agencies.
So it kind of plays out in two different ways and can and what we've seen over the last about six to eight years, we've seen prolonged budget negotiations sometimes carry out deep into the fall.
Now, of course, we're talking about these negotiations as it relates between Republicans in the Senate and Republicans in the House. I guess the elephant in the room this morning, Brian, would be: no matter what they end up deciding, it's got to go to a Democrat's desk. Josh Stein would be the final say whether something like this moves forward or not. Yeah, yeah, absolutely. And Stein came out kind of somewhat surprisingly, but he seemed to take sides a bit after the House released their budget plan.
And he came out and kind of tacitly endorsed the House budget plan over the Senate budget plan, I think, in large part because of the more aggressive teacher raises and state employee raises.
So that to me kind of suggested that. If they were to present the House budget proposal to Stein, he may very well have signed it. But we'll have to see what elements from the House budget versus the Senate budget make it into the final budget that is actually presented to Stein's desk and then see where he takes it from there. You mentioned that the government will not shut down on July the first, and lawmakers are likely to be back probably sometime after the Fourth of July holiday and get working on this. As we head through the rest of this year, at any point, can they come to a budget agreement and get that done?
Or do they have to wait for a specific time period to start that again? They can, best of my knowledge, they can pretty much come to the agreement whenever they are able to. And they can also put into the budget if there are certain elements within the budget, in that specific section, they can say this is effective upon such and such a date.
So they can. You know, make tweaks specifically for when they want certain things to go into effect within the budget. And then When they do pass the budget, if there's spending increases or salary increases, those will become retroactive to July 1st as well. How about this term? I've seen it thrown around on social media over the last couple of days, this idea of mini-budgets.
Is that something that North Carolina has had in the past? And is it something that you see is maybe likely going forward? Of course, Hurricane Helene continues to be a major discussion out in the western half of the state, more money flowing out there. What exactly does that mean? Yeah, yeah, that's a great question and a great point.
And that is something we've seen in recent years in North Carolina, these kind of mini budgets, where instead of one huge five, six hundred page budget bill, they'll address specific items within the budget and pass them in separate smaller bills. Like, for example, there'll be one bill that addresses teacher pay and state employee salary changes. And then there'll be a separate bill addressing specifically Hurricane Helene recovery funding. And then maybe another bill addressing needs for Medicaid spending. And then they'll just kind of piecemeal together the priorities that they want to try to accomplish.
We will be keeping a close eye as the negotiations continue. A great update this morning. Brian Balfour of the John Locke Foundation joins us on the Carolina Journal News Hour. Yeah. Welcome back to the Carolina Journal News Hour News Talk 1110-993 WBT.
It has been a very busy week in the North Carolina legislature. Multiple pieces of legislation making their way to Governor Josh Stein's desk this week. We'll start off with House Bill 67. It passed unanimously in a 109 to 0 vote earlier this week. The bill combined health care provisions from about 10 different bills.
It would tackle various health care issues, including updating the Interstate Medical License Compact, preventing surgical smoke exposure for workers, and developing a healthcare workforce enhancement program in community colleges. That's now on the governor's desk. Another piece of legislation, House Bill 378, it passed in a 111 to 1 vote. This bill updates education laws, boasts protection for Education savings accounts allows name, image, and likeness, that's NIL, big story over the last couple of years, agency contracts for student athletes, as well as exempting NIL deals from public records. That is also sitting on the governor's desk this morning.
It deals with some other things, including Alina's law, that is House Bill 537. That passed in a 108 to 0 vote, unanimous there. The first part aims to expedite death declarations for missing disaster victims. It enables families to legally declare a loved one dead sooner if they are declared missing following a natural disaster. That came to light last year after many individuals are still unfortunately missing from the impacts of Hurricane Helene.
The second part of the bill deals with streamlining administrative processes, vital records, and allowing adoption birth certificates to come back to local Register of Deeds office. Again, that passed unanimously. Sits on Governor Josh Stein's desk this morning. You're listening to the Carolina Journal News Hour. Some changes could be coming to the North Carolina Medicaid plan as it relates to work requirements.
To get some additional details on that this morning, Brianna Kramer, CarolinaJournal.com, joins us on the news hour. Brandon Medicaid expansion happened a couple of years ago in North Carolina.
Now there's some big potential changes in Washington, D.C. That's putting some significant pressure on the North Carolina General Assembly. Yes, that's right, Nick. North Carolina's Medicaid expansion is facing a period of uncertainty as lawmakers prepare for the possibility of the federal government reducing its financial commitment to this state program.
So, in response, state legislators are advancing a bill that would commit North Carolina to implementing work requirements for Medicaid recipients, and that would be if federal policy allows it.
So, it's a move that lawmakers hope will help protect the state's federal funding for Medicaid within North Carolina, just a couple years after it passed the General Assembly and is now law in the state with, I believe, over 600,000 people on this program.
Well, I think it's relevant to bring up to our listeners and viewers this morning that part of the expansion plan, which was the federal government covering 90% of those Medicaid costs, Brianna, if those levels change, if that number or percentage goes down at all, as the law is currently written, North Carolina would have to revoke those 600,000 people and their Medicaid coverage across the state. Yeah, that's right.
So that's kind of the concern right now because we know at the federal level there are a lot of cuts happening, and we've seen with Doge different government efficiency efforts, which is all a good thing. But when it comes to this particular funding, this has kind of put state-level Republicans in the hot seat because they passed this a few years ago and now they're watching Republicans at the federal level possibly take it away. And that agreement, like you mentioned, that 90-10 federal state funding split that really currently supports our Medicaid expansion here is at risk.
So this kind of comes, this legislation they're pushing, it comes as a policy signal to Washington and a contingency plan for what lawmakers fear could be coming in the months ahead.
Well, you mentioned that 90-10 split, and if let's say that percentage went down to 50 or 60%, Brianna, the state as it stands right now, could be the one on hold for that additional money. You could potentially be talking about hundreds of millions of dollars a year that lawmakers would have to reappropriate from wherever else in the budget to fund over to the Medicaid program. Yeah, that's right.
And so they would have to find a way to increase the funding at the state level or find some sort of policy solution.
So I think this is the first step right now: directing the state Department of Health and Human Services to implement a work requirement plan as a condition for participation in the Medicaid program. And this would, again, only apply if this policy becomes federally permissible. Let me ask you about the d why is that not allowed right now? Is that something that the Feds do not allow states to put a work requirement in place for this 90 ten or eighty twenty split that exists in some states across the country? Yeah, right now at the federal level, we would have to see a change within the Medicaid.
I guess, agency, a department that manages that for the entire country.
So, there's just certain rules in place that would likely be altered as the Republicans in Washington crack down on spending and stuff like that. And so that's something that North Carolina Republicans have already said that this isn't necessarily going to do a whole lot of changing because it was already included years ago in their Medicaid expansion, this work requirement feature.
So if the federal government allows that to be implemented, North Carolina will make that work requirement part of even getting on Medicaid. Are we getting any reaction from lawmakers about everything that's going on surrounding Medicaid? What do they have to say? Yeah, I mean, I think lawmakers are concerned right now and not sure what could happen in the months ahead. There's a lot of things that are unpredictable right now within the federal government, and so I think they're doing what they can.
But we did hear from different advocacy groups who spoke at one of the House committees on health, and they were actually against it.
Some argued that work requirements risk cutting off essential health care for people who already face significant barriers to employment.
Some people noted that 60% of Medicaid enrollees already work, while the remaining 40% do not work because they're either disabled, too ill to work, they attend school, or they're a caretaker.
So there were several different advocacy and political organizations that wanted to show their disagreement with this effort. But it is moving forward in both the House and Senate. This is a companion bill, which means both sides are working together on a piece of legislation. And so it's gone through a committee, health committee, in both chambers. Just this week, actually, on Thursday, it passed the Senate committee.
And last week, it passed a House committee.
So we'll expect more action on this bill in both chambers likely next week. We'll continue to track those details. You can read some additional quotes. Plus, check out some video as well by checking out Brianna's story. It's over on our website this morning, CarolinaJournal.com.
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As we often see with lawsuits, whether those here in the state or federally, many outside third-party groups try to intervene in those lawsuits. We are tracking some details this morning on an ongoing legal challenge between the North Carolina State Board of Elections and the United States Department of Justice to walk us through some of those details this morning and why these third-party groups are trying to get involved. Mitch Kokai with the John Locke Foundation joins us on the Carolina Journal News Hour. Mitch, I think many of our listeners are probably familiar with some of these outside groups. They tend to all pile on whenever we've got any election-related lawsuits.
What's going on that you're watching this morning?
Well, remember back in May, the United States Justice Department filed a lawsuit against the state of North Carolina and the State Board of Elections and basically accused the Elections Board of violating federal law, the Help America Vote Act, by failing to maintain accurate lists of voters.
So the lawsuit pits the federal government, the U.S. Justice Department, against the state government and specifically the State Board of Elections.
Well, after that suit was filed, a number of groups, as you referenced, wanted to intervene in the case as defendants. The first one that filed was a group called the North Carolina Alliance for Retired Americans. If no one's ever heard of this group, you're not alone. Very few people have heard of this group. But the interesting thing from a political perspective is that this group is often tied to Democratic operative Mark Elias.
His law firm represents this group. And this group wanted to intervene in this case as a defendant. Later on, the Democratic National Committee The NAACP, North Carolina State Conference, League of Women Voters of North Carolina, and some individual voters labeled as impacted voters all filed motions to intervene in this case as defendants. And basically, their argument is that they don't believe that the State Board of Elections is adequately going to represent their interests as defendants, and so they want to intervene in this case. What the interesting development that's taken place recently is that both the U.S.
Justice Department. and the State Board of Elections filed paperwork saying no, these groups should not intervene for various reasons. One of which is that this Help America Vote Act does not necessarily allow Groups to intervene in a case because it doesn't give them the right to be involved as an intervener. It also says that they don't really have a reason to intervene permissively, as the legal terminology is used, because the things that they are worried about, that people are going to be removed from the voting rolls, that's not something that's going to happen as part of this suit. What the suit calls for is for the State Board of Elections to go back and collect missing information.
From registered voters, meaning the last four digits of a Social Security number or a driver's license number. What the goal is, is to get... The information into the voter base so that information is there as required by HAVA, Help America Vote Act. It doesn't say anything about removing people who don't provide the information or who don't have that information. That is what the interveners talked about as their concern.
And so the State Board of Elections and the U.S. Justice Department are saying there's no reason to bring these people into the case because what they say they're worried about is not something that would happen because of this lawsuit. Let me ask you this, Mitch. You have walked us through a variety of legal cases over the last six months or so. What kind of influence do these third-party groups have when they are allowed to intervene?
Many of these same groups that you're talking about this morning have intervened in a variety of North Carolina legal challenges, a lot of them being, of course, the Griffin-Riggs case that you kept us up to date on. What influence, if any, do these groups have if they are allowed to intervene in a case like this, for example?
Well, they certainly can have an impact. And in this case, it's possible that they would because I believe that one of the reasons these interveners get involved is that they worry that this is going to end up being what we have seen happen because of some of the lawyers involved for the interveners, is what you call a sue-and-settle scheme, where the U.S. Justice Department filed the lawsuit wanting the State Board of Elections to take a particular action. The State Board of Elections, because of recent changes, flipping it from a 3.2 Democratic majority board to a 3.2 Republican majority board with a new chair, with a new elections executive director. They're all interested in making this change.
And in fact, you've already talked about on the Carolina Journal News Hour that the State Board of Elections unanimously voted for a plan that would help address some of these same concerns.
So this is an issue that's likely to be resolved without a long, drawn-out court fight. And I think the interveners in this case wanted to get involved because they thought without their input, you would basically just have the Justice Department and the State Board of Elections singing from the same hymnal and None of the Concerns that the Democrats, the NAACP, League of Women Voters would have would be raised.
Now, It's not necessarily true that The input in this case would have an impact, but it does have an impact in other cases. One of the things that was filed in this paperwork. That the State Board of Elections filed was that a more appropriate thing. For these various proposed interveners to do would be to get involved in this other case that's still lingering out there that the Republican National Committee filed over this exact same issue: the missing information for these registered voters. And if they intervene in that case, Both cases, this case and the Justice Department case, are in front of the same judge, Chief District Judge Richard Myers.
He's going to be dealing with the same issues in all of these cases. And so, if they want to intervene in that case and participate in that way, that seemed to be a much more appropriate venue than in what is described as an enforcement action of the U.S. Justice Department against the State Board of Elections. It's a very interesting kind of back and forth. We've got a full article up on our website this morning, CarolinaJournal.com.
We appreciate the update. Mitch Kokai from the John Locke Foundation joins us on the Carolina Journal News Hour. And that's going to do it for a Friday edition. WBT News is next, followed by Good Morning BT. We're back with you Monday morning, 5 to 6, right here on News Talk 1110 and 99.3, WBT.
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