It's 505 and welcome into a Tuesday edition of the Carolina Journal News Hour, News Talk 1110-993 WBT. I'm Nick Craig. Good morning to you. But lawmakers are back in Raleigh this week and they will be dealing with concealed carry permits. An effort by legislatures to repeal North Carolina's concealed carry rules is in fact moving forward in the legislature and there is a committee hearing planned today in the state house.
Two bills with similar proposals for allowing nearly pretty much any adult to carry a concealed firearm without a permit were filed last year. One in the House and one in the Senate. Each has passed its respective chamber in the Republican-controlled legislature and is now awaiting final approval by the other chamber. Coming up a little bit later on today, the House will start to take up the Senate's version of the bill, which is Senate Bill 50. We talked about this many months ago.
Senate Bill 50 would allow people to get a concealed carry permit if they wanted to. For example, to be allowed to fully lawfully carry in another state with reciprocity rules. But a permit would no longer be required in North Carolina if the bill becomes law. Under the bill, anybody that goes through the process of purchasing a firearm and going through a legal background check and is approved would be allowed to carry a concealed handgun or other firearms as long as they are 18 years old and don't fall under the list of exemptions, which include people with felonies or dishonorable military discharges. The same background check and rules that exist right now would continue in place.
Place. Currently, the permit process requires applicants to pass an additional background check by a local sheriff's office, pay an $80 fee, and pass a test proving that they can shoot relatively accurately and understand the relevant laws on gun possession and self-defense. This has been a big push for many gun activist groups for many years in the North Carolina legislature. This could be the year where we finally see the General Assembly take this up. We will be tracking that committee meeting today, and we'll have additional details not only here on the Carolina Journal News Hour, but on our website, CarolinaJournal.com, where it's now 507, News Talk 1110-993-WBT.
We have been discussing the budget a lot over the last couple of weeks here on the Carolina Journal News Hour. Lawmakers are back in Raleigh this week, and there will be some more budget discussions likely going on in the General Assembly to walk us through some details this morning on some of the differences between the House and the Senate budget and some of the impacts it could have on you. Joe Harris from the John Locke Foundation joins us on the Carolina Journal News Hour this morning. Joe, appreciate the time. As always, one of the big things that, of course, people deal with come April each year is their property or their personal income taxes, both at the federal and state level.
Walk us through how the two different budgets handle something like income tax, which you go back 10, 15, 20 years ago was one of the highest in the Southeast. It's come down a lot, but there's still maybe some more room to move on that. Exactly, Nick, and thank you so much for that question and having me on.
So under current law, our personal income tax rate sits at four point two five percent, and we are scheduled to go down to three point nine nine percent next year. We also have the possibility of three further half percent reductions, so 399 to 349 to 299 to 249. We have the possibility of those occurring as well if we hit certain revenue triggers. For example, if next fiscal year we collect at least 33 billion dollars in revenue, then we will do that additional half point reduction down to 3.49 percent. And then we have the two additional ones that are possible.
So, under current law, we could potentially get down the personal income tax rate to 2.49 percent. What the Senate recommended is actually removing the first two triggers.
So, under their proposal, they would guarantee the rate reductions all the way down to 2.99 percent. keep that trigger in place down to 2.49% and then add two additional quarter point revenue trigger based reductions all the way down to 1.99%.
So in effect, the Senate would guarantee personal income tax rate reductions down to $299 and make $1.99 possible. On the other hand, the House actually proposed keeping all of those revenue triggers in place. And not only keeping those revenue triggers in place, they would substantially increase the value of those revenue triggers, which in effect would make it much less likely that we ever actually unlock any additional tax cuts past 3.99%. For example, that revenue trigger that's currently 33 billion for next year, they would like to hike it up all the way to 36%. $1.3 billion.
So the big contrast is that the Senate would actually solidify us down to $299 and make $199 possible versus the House. Would in effect make it very difficult that we ever actually see something below 3.99%. This is incredibly relevant based on a conversation we had last week here on the Carolina Journal News Hour about some new forecasting out from the state as it relates to revenue. As we discussed last week on the show, those revenue forecasts, Joe, have been pretty wrong over the last decade or so. They continually run short, but I can imagine that that's probably going to bolster some of the arguments that lawmakers are making, especially on the House side, over some of these additional dollars that they want to bring in before they continue to cut taxes.
That's exactly right. We've recently seen the consensus revenue forecast come out, and they're specifically predicting a revenue shortfall in 2027. That they are citing the continued reductions to the personal income tax as the biggest culprit for causing the potential budget shortfall. But what's important for us to look at is we can go back and look at this consensus revenue forecast, its track record over the past 15 or so years. And they actually do a pretty decent job when they're a few months out and sometimes even within a year out.
And what they're doing is very difficult.
However, when they're trying to forecast out two years or more, like what they're doing right now for 2027, on average, they've been Off by about $1.7 billion per year, or about 6.2%. And they're typically what they're doing is they're underestimating revenue. Essentially, they're thinking that the income tax reductions are going to draw down revenue much more than what they actually do because they're failing to account for how much economic growth and population growth the tax cuts are actually generating.
Well, let me ask you about that. I mean, there's the old adage that if you continue to cut taxes for people, whether we're talking about things locally like property taxes or things like the state income tax, people have more money to spend, Joe. Therefore, they're participating in things like sales tax or ad valorum tax or various taxes that they're paying throughout the state of North Carolina. Walk us through that process. Does in fact cutting taxes end up meaning that the state has more money at the end of the day?
That's a great point, Nick.
So, this idea is that if you don't have to pay as much in personal income tax, then you have more disposable income available. And what a lot of people do with that disposable income is they use it on consumption goods, in which they'll end up paying a sales tax. And so, this is kind of a dynamic effect where decreasing one tax rate in one area can actually help generate more revenue in another area. And what's important to remember with something like that, it's probably not going to be immediate and overnight, but definitely over one, two, three, four fiscal years, you are going to see that effect. But not only are we going to see, or have we seen an increase in sales tax due to people having greater disposable income, but we're seeing our college graduates decide to stay in North Carolina because of the lower personal income tax.
We're seeing college graduates from other locations throughout the country who don't want to pay a higher progressive income tax coming to our state.
So it's actually In effect, we've been able to generate very strong revenues in personal income tax over the past 10 years despite. the uh continued rate reductions. I think it'd be unfair for me not to also bring up some of the changes that have happened in the corporate income tax over the last couple of years as well. That number continues to go down. I know there's plans to phase it out completely across the state.
Is it fair to assume the same equation works out there? You lower that tax rate, more business comes to the state, and the businesses that are already here have more money to spend, whether that's hiring employees or investing in new products and development? Yeah, that's another great point. As far as the corporate income tax, as we continue to drive that down, we're going to attract more and more employers, more and more corporations, and they are going to be paying their workers wages. And those wages are going to go towards the personal income tax.
And they're also going to take the extra income left over after they pay their taxes, their disposable income, and spend it on consumer items and pay the sales tax as well. And that is one big distinction specifically between the House and the Senate versus Stein. Stein actually wanted to not only pause the personal income tax at 4.25%, he also wanted to halt any further reductions in our corporate income tax past 2.25% as well. We'll talk NC Innovation and Savings Reserves with Joe Harris from the John Locke Foundation coming up after this. You're listening to the Carolina Journal News Hour.
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Welcome back to the Carolina Journal News Hour. News Talk 11:10, 99.3 WBT. Yesterday morning, we talked about the start, the official start of the Atlantic hurricane season, which runs all the way through November the 30th of this year. We are learning some details this morning about the National Weather Service. They are seeking to hire about 126 people across the nation, including at least some meteorologists, after massive layoffs at the agency, according to some officials, left it understaffed.
Tom Fay, the legislative director at a union that represents NWS employees, told thehill.com that the weather service would be conducting the hiring. Positions that would be open include meteorologists, hydrolysists, physical scientists, and some electronic technicians. Faye with the National Weather Service Employees Union said that the physical scientist category does include some meteorologists, while the electronic technician group maintains equipment like the radar network that the National Weather Service operates. A spokesperson for the National Weather Service confirmed via email that the agency was in fact taking some steps to fill vacancies, saying, NOAA leadership is taking steps to address those who took a voluntary early retirement option. NWS continues to conduct short-term temporary duty reassignment and is in the process of conducting a series of reassignment opportunity notices.
to potentially fill some roles at and at National Weather Service field locations with the greatest optional needs. Additionally, a targeted number of permanent mission critical field positions will soon be advertised under the exemption to the department-wide hiring freeze to further stabilize frontline operation. This move comes after the National Oceanic and Atmospheric Agency, NOAA, went through the process where they allowed hundreds of individuals to go forth with an early retirement option, including some at the National Weather Service, as part of an effort to shrink the size of government. This also comes after an internal document stated that the department was seeking to reassign staffers to fill vacancies in, quote, critically understaffed offices. That email was leaked last month.
So with the start of the hurricane season, there does appear to be at least a couple potential necessary positions required at some National Weather Service offices. We'll, of course, continue to keep an eye on the Atlantic Basin throughout the vast majority of the hurricane season right here on the Carolina Journal NewsHour. It's now five twenty two, News Talk 1110, 993 WBT. Continuing our discussion this morning with Joe Harris from the John Locke Foundation about the dueling budget proposals that currently exist in North Carolina. NC Innovation has been a very interesting discussion over the last couple of years.
Briefly, before we get into the details on the budget, can you walk us through exactly what NC Innovation was and why it should be relevant to taxpayers across the state of North Carolina? Yes, so NC Innovation is a nonprofit that received $500 million throughout the previous budget.
So over the 2023 biennium, they received $500 million in taxpayer money that they then turned into an endowment. And the idea was that they wanted to increase the university to industry pipeline here in North Carolina. That was the phraseology that they used. Explained simply, essentially, they wanted to use these funds to invest in low probability research projects at North Carolina universities in hopes to actually commercialize some of these products and get them taken to market. And they were taking that $500 million and then giving it to an investment management firm who is then going to expose it to the market and use the returns to actually fund these projects.
So that was the idea behind NC Innovation. And the organization has received quite a bit of pushback based on accountability and transparency issues. But fundamentally, more of an argument that this is not the role of the state government. The state government needs to provide roads, look after education, health and human services, things like that. It's not the job of the state government to essentially be engaging in venture capital.
And so, what the Senate actually recommended with NC Innovation is clawing back the entire $500 million, but then over the next four years, giving $100 million back to NC Innovation via annual appropriation, so $25 million each year. And so, instead of using an endowment model where they're seeking out these returns to fund the projects, they just take the $25 million each year and they fund projects. The remaining $400 million would go to help starting the NC Children's Hospital, which is a new children's hospital that's being created through Duke and UNC. On the other hand, the House actually wanted to completely sever ties with NC Innovation. They wanted to take back the entire $500 million and redirect all of those funds to the immediate needs in Halene with the Haleen recovery.
And I guess maybe that goes into my next question here. You're talking about nearly half a billion dollars that was appropriated not that long ago by lawmakers. And I understand your point. You make the argument that that's not what the state should be focused on. But Joe, you're talking about a major policy shift with a major amount of money in the span of just a couple of years.
You think Helene was one of the big drivers behind this? Maybe some lawmakers woke up and smelled the coffee and realized they didn't have this additional money to keep sending to NC Innovation? Yeah, I think that's a great point. Helene, kind of this immediate need. And not only that, kind of in the backdrop of what happened with NCOR.
Incorpor, essentially, they were in charge of the Matthew and Florence recoveries. And unfortunately, they still are because they haven't completed the job. But I think policymakers kind of saw how. bad of a political um It didn't look very good politically, so I think they recognized that disaster recovery is very important. And so they really don't want to mess up with Helene.
And if there's this extra half a billion dollars available, to actually help these people who have direct needs. I think they kind of are motivated by that. But also just somewhat thinking about it as well, I mean, it could also be somewhat related to the consensus revenue forecast also. We've had some really great budget surpluses over the past few years. And we've done some really great things with those budget surpluses, like build up our savings reserve all the way up to $4.75 billion before Helene hit.
But then we also did things like NC Innovation. I'm sure that $500 million would not have made its way to NC Innovation if the budgets were much tighter in those years. It's kind of like these, well, we have all this extra money. You're kind of a little more open, just like anyone else, to spending things, spending money in certain areas that you might not have if money was a little more tight. And maybe they're kind of viewing that they see the budget tightening a little bit and they want to allocate these funds to direct needs as much as they can.
I'm glad you brought up the savings reserve. We've run a couple of stories over at Carolinajournal.com about that. Is it okay to equate that to just a savings account that the General Assembly essentially that the state puts together? Is that what a savings reserve is? That's the probably the easiest way to think about it.
We also call it the rainy day fund. And that kind of goes back to the idea that we've all were probably taught by our grandparents as little kids is that it's important that every bit of income that you earn, you try to put a little bit away for that rainy day for that possibility that maybe you don't have as much income this year as you do next year.
So you have that there. And that is how the state should be using the fund and how it is typically used. It's oftentimes used on disaster recovery, but it's also one of these important things that if we do have a budget shortfall, like they are projecting for 2027, you tap into that savings reserve. During those years when you had the big surpluses, you put money away just in case you have a little deficit, you can cover it and get through those hard times, those rainy days. Joe, you've got a lot more analysis on all three of those topics this morning.
Where can folks go and check out some more of your research and analysis? Yeah, so just they can check me out on the John Locke website, so johnlocke.org. And once again, I'm Joseph Harris, the fiscal policy analyst, and I will be tracking. The continual debates with the budget. We'll see how long it's going to take.
It could be as late as. Early fall before we actually get a final budget, but I will be tracking this all summer and continuing to keep up with NC Innovation and disaster recovery all throughout Halleen. Joe, thanks for the time this morning. It's greatly appreciated. Joseph Harris from the John Locke Foundation joins us on the Carolina Journal News Hour.
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I'm Nick Craig. Good morning to you. A retirees group represented by Democrat lawyer Mark Elias's law firm is seeking to intervene in a U.S. Department of Justice lawsuit against North Carolina and the North Carolina State Board of Elections. The DOJ alleges that the state had violated the Help America Vote Act, that's HAVA, by failing to maintain accurate voter rolls, including not collecting required ID numbers or social security numbers from some registered voters.
The group, which is the North Carolina Alliance for Retired Americans, with support from the Elias Law Group, argues that the lawsuit is based on the On flimsy evidence and would lead to eligible voters being unfairly removed. They claim similar past lawsuits filed by the Republican National Committee and losing GOP state Supreme Court candidate Jefferson Griffin also failed to prove voter role problems. The GOJ suit filed back on May the 27th cites former President Donald Trump's March executive order on election integrity. It calls for a major data gathering effort to bring voter roles into compliance with the alliance saying that it could wrongly perjure legitimate voters from the roles. The state's election board recently shifted from Democrat to Republican control after a law transferred appointment powers from the governor, who is currently a Democrat, and Josh Stein, to state auditor Dave Bollock, who is a Republican.
Previous Republican lawsuits sought to disqualify hundreds of thousands of voter registrations without full have a required information.
However, as we talked about in the process of following The Jefferson Griffin race. Most of those had been rejected. Those efforts had, in fact, been rejected.
However, the DOJ's suit continues the fight over those registrations and broader election integrity efforts that continue to take place in North Carolina. We will continue to track this lawsuit. It is shaping up to be a very interesting one. We've got additional details on this story, and of course, we'll keep an eye on the lawsuit itself over on our website this morning, CarolinaJournal.com.
Well, North Carolina has the sixth best economy in the United States for 2025. That's according to a report released yesterday by personal finance company WalletHub. To determine the best states' economies, they compared the 50 states as well as the District of Columbia across three key dimensions: economic activity, economic health, and innovation potential. They then evaluated those dimensions using 28 relevant metrics, including things like GDP growth, startup activity, unemployment rate, government surpluses and deficits, as well as jobs in high-tech industries. Each metric was graded on a 100-point scale, with a score of 100 representing the highest economic performance.
Each state and the District of Columbia's weighted averages then were all determined across all metrics to calculate its overall score. And they used, of course, that overall score to rank the states of what they seem as the best economies for the United States in 2025. The list is this: Massachusetts, Utah, Washington, that would be the state of Washington, California, New Hampshire, and North Carolina. North Carolina ranked 11th in economic activity and innovation potential, and 4th in economic health.
However, the ratings may take a hit in the next few years as the state's budget analysis has a scaled-back forecast and the state's general fund revenue projections for the next three years continue to look down, at least according to one report from state government, citing signs of economic slowdowns and the increasing pressure on the economy from tariffs in federal trade policy. State economists wrote, quote, the downward revision is due primarily to lower than expected corporate income collections in April, particularly related to reduced estimated tax payments from businesses, likely due to anticipated higher input costs and lower profits from recently implemented tariffs. The revision comes as legislative leaders in the General Assembly begin their work to reconcile competing budget proposals from both the House and the Senate. The May 2025 reversed consensus revenue forecast, which was released by the Office of State Budget and Management, as well as the General Assembly's Fiscal Research Division, projects that state revenues for the current fiscal year will total $34.71 billion. That's still above initial expectations, but now $180 million below what February's forecast look like.
Economists cite weaker than expected corporate tax collectors, collections, rather, slower personal income growth, and persistent inflation as one of just a couple of the contributing factors. Forecasts for the fiscal year 25, 26, and 26 and 27 have also been adjusted and downwarded by more than $200 million apiece. The report notes that the recession risks are rising with anticipated slowdowns in employment and wages likely to affect revenue growth. through the year 2027. Notably, economists point out to a downward trend specifically in transportation revenue for the state due to emerging trade policies at the federal level.
So looking at this Wallet Hub study this morning, again, North Carolina sits in sixth place this morning. The top five include Massachusetts, Utah, the state of Washington, California, and New Hampshire. North Carolina's total score was 58.86, ranking 11th in economic activity as well as innovative potential and 4th in economic health. But as we just went over, Could potentially be seeing some of those issues as it relates to economic health. Joseph Harris, who we chatted with earlier this morning, says, quote, personal income tax reductions initiated in 2014 have contributed to budget surpluses, strengthening reserve accounts, and supported population growth across the state of North Carolina.
Reflecting this momentum, Wallet Hub recently ranked North Carolina as having the sixth best economy in the nation and the top economy in the southeast. At the same time, however, the state faces a projected budget shortfall for the fiscal year 2027, with continued personal income tax cuts cited as the primary cause. This forecast contrasts with North Carolina's robust wallet hub ranking, raising essential questions about the assumptions underlying the projected budget shortfall. We not only will keep a very close eye on the budget debate that will be taking place in Raleigh over the next couple of weeks. Lawmakers still continue to claim that they want to have the budget done by the end of this month, before the July 4th break and holiday, and have that budget in place at the end of the fiscal year, which for not only the state of North Carolina, but all state governments, is June 30th.
That new fiscal year does kick off July 1. We'll keep an eye on the details right here on the Carolina Journal News Hour, where it's now 544, News Talk 1110, 99.3 WBT. It is Ryan Seacrest here. There was a recent social media trend, which consisted of flying on a plane with no music, no movies, no entertainment. But a better trend would be going to chumba casino.com.
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21 plus. Terms and conditions apply. Good morning again. It's 5:51. Welcome back to the Carolina Journal News Hour, News Talk 11:10, 99.3 WBT.
Don't forget, if you miss any portion of our show weekday mornings, 5 to 6, you can check out the Carolina Journal News Hour podcast. It's available in your favorite podcast app. Just search for the show, hit tap the subscribe or follow button, and you'll get a new broadcast delivered each and every weekday morning. It's the Carolina Journal News Hour podcast. Download and subscribe now.
We are expecting a busy week in the North Carolina General Assembly, taking a look at the legislative calendar this morning. It is jam-packed today and tomorrow with various committee meetings as various pieces of legislation did make the crossover deadline and are now making their way to the opposite chamber to be debated by lawmakers in the various House and Senate. Committees. A couple of things that we're tracking this morning. One is attempts to repeal concealed carry laws across the state of North Carolina.
Two bills with similar proposals for allowing individuals to carry a concealed firearm without a concealed carry permit were filed this year in the General Assembly, one in the House, the other in the Senate. Each passed its respective chambers in the Republican-controlled GA and are now awaiting final approval from the other chamber. We will see some movement this morning as the House will take up the Senate version of the bill, which is Senate Bill 50. That legislation would still allow people to get a concealed carry permit if they wanted to conceal carry their weapon in another state that has reciprocity with North Carolina.
However, permits would no longer be required to carry a concealed handgun here in North Carolina if that bill becomes law. Under the bill, anyone could carry a concealed handgun or firearm as long as they are 18 years old, pass all of their federal background checks when purchasing their firearm, and don't fall under the list of exemptions, which include people with felonies or dishonorable military discharges. That would all be caught in what is known as the NICS NIX background check system that takes place when you purchase that firearm. Currently, the permit process requires applicants to pass an additional background check by their local sheriff's office, pay an $80 fee, and pass a test proving that they can shoot relatively accurately and understand the relevant laws on gun possession and self-defense.
However, gun advocacy groups and Republican lawmakers say that some of those rules are just too restrictive and they need to be repealed. They continue to contend that if more people are able to conceal carry, the state would be safer. Since police aren't always immediately on the scene of robberies, mass shootings, or other violent crimes. Senator Danny Britt, the Republican out of Robinson County, said during debate earlier this year: quote: Good people with guns stop bad people with guns. We will watch that process unfold in the General Assembly this week, at least on the House side.
They will be taking up that Senate proposal. We'll keep an eye on the details right there. Another bill that made the crossover deadline and is set for debate is dealing with the minimum age of the sale for tobacco and vape products. Currently, that age is 18 in North Carolina.
However, some movement in the General Assembly could raise that age to 21. That is an effort to get North Carolina in compliance with federal law and make it harder for individuals close to the age of 18 to obtain those products.
Some pretty shocking stats. On average, three students vape in any given high school classroom in the state of North Carolina, according to the State Department of Health. In 2019, Congress increased the federal minimum legal sale age of all tobacco products, including e-cigarettes, from 18 to 21.
However, the legal age to buy tobacco products in North Carolina remains at 18 years old. North Carolina is one of only seven states that hasn't passed a law to raise the age and make the state law. in compliance with federal law. State lawmakers also want to implement a tobacco retail sale permit that would be used to help keep track of who is selling vapes across the state of North Carolina. There is set to be a press conference taking place a little bit later on this morning, around, I believe it's around 10 o'clock, where some lawmakers will be getting together to discuss some of the details on this.
There is a bipartisan press conference that is taking place at 10 o'clock. They will be speaking about the change in the law. They will also be having some teenagers on hand there to speak against vaping and asking lawmakers for help in battling youth vaping and nicotine use as well as addiction. That is obviously a major topic, a major topic of discussion. We'll continue to track those details.
Turning back to the legislative calendar and what we are going to be seeing today, everything really begins kicking off around 9.30 this morning. And operations of the Senate will meet at 9:30, plus a variety of other House and Senate committees will all be meeting throughout the day. There are a couple of press conferences as well. Both the House and the Senate will be in session. Not immediately clear if they're planning on taking up any major legislation, at least as it stands right now.
That does not look to be the case.
However, things moving in a very fluid manner in the General Assembly as lawmakers, again, continue to push to get their budget proposal reconciled through both houses and a lot of various pieces of legislation being dealt with in both chambers. We will keep an eye on what is slated to be a busy week in Raleigh right here on the Carolina Journal News Hour.
Well, that's going to do it for a Tuesday edition. WBT News is next, followed by Good Morning BT. We are back with you tomorrow morning, 5 to 6, right here on News Talk 1110 and 99.3, WBT. Hey, it's Ryan Seacrest. Life comes at you fast, which is why it's important to find some time to relax.
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