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It's 505 and welcome in to a Monday edition of the Carolina Journal News Hour on Charlotte's FM News Talk, 107.9 FM, WBT. I'm Nick Craig. Good morning to you. Former FBI Director James Comey will not be heading to a federal court in Greenville today as was originally scheduled. That scheduled court appearance related to Comey's recent indictment by a North Carolina federal grand jury has been canceled.
Comey is currently facing two charges related to alleged threats against President Donald Trump. The charges are based on social media posts last year in which Comey allegedly documented seashells on a North Carolina beach arranged to spell out 8647. He appeared in a Virginia federal courthouse on April the 29th. That was the day after his indictment back just a couple of weeks ago as Comey is a resident of Northern Virginia. Comey's lawyers filed a motion on Thursday to cancel a second initial appearance that was scheduled for May 11th today at a federal courthouse in Greenville, North Carolina.
The federal government responded saying it consented to this motion according to court filings. Comey's lawyers wrote in part, here Mr. Comey made an initial appearance in the Eastern District of Virginia promptly, and a court has issued all of the appropriate notifications to both parties as codified in Rule 5. Comey's lawyers went on to say, accordingly, the purpose of Rule 5 has been satisfied and a second initial appearance is not anticipated, much less required by the rule. U.S.
District Judge Louise Flanagan issued an order Thursday indicating that she would cancel the May 11th proceeding if Comey filed a waiver by Friday, which is exactly what he and his legal team did.
So for those that were expecting, and as we reported last week, to see James Comey in the Eastern District of North Carolina, which essentially starts at Raleigh, runs all the way to the eastern half of the state up in the northeast corner, the Outer Banks, all the way down to southeastern North Carolina as well, the Wilmington-Brunswick County area, a couple of different federal courts throughout the region making up the Eastern District. That is not going to happen, at least as of today. The charges against James Comey stem from a 2025 Instagram post involving seashells arranged on a North Carolina beach with that 8647 term. The indictments include two counts. First, it charges Comey with, quote, knowingly and willfully making a threat to take the life of or inflict serious bodily harm upon the president of the United States.
While in the Eastern District of North Carolina, according to the indictment, Comey published a photograph on the internet social media site Instagram, which depicted those seashells. The second court charges that Comey knowingly and willfully did transmit in interstate and foreign commerce a communication that contained a threat to kill President Donald J. Trump, specifically with U.S. Attorney General, acting U.S. Attorney General, I should say, Todd Blanche, saying just a couple of weeks ago with this announcement, threatening the life of the president.
Of the United States is a grave violation of our nation's law. The grand jury returned an indictment alleging James Comey did just that at a time when this country has witnessed violence incident after violent incident followed by deadly actions against President Trump and other elected officials. The temperature needs to be turned down, and anyone who dials it up and threatens the life of the president will be held accountable.
So, again, the top story that we're tracking here this morning, James Comey, who was initially set to appear in a Greenville courtroom today, will not be doing so. That second appearance has been canceled by an attorney. It is not immediately clear, at least as of right now, when his first appearance, if there ever will be a first appearance here in the state of North Carolina. We are, of course, keeping a close eye on this story. It's got major implications, not only here in North Carolina, but across the nation.
We'll keep you up to date right here on the Carolina. Journal and NewsHour. On to some statewide news on this Monday morning, a bipartisan group of North Carolina lawmakers have introduced legislation to eliminate major tax exemptions from data centers, escalating a growing debate over the cost of subsidizing this rapidly expanding artificial intelligence and cloud computing industry. The legislation, House Bill 1213 titled Protecting Taxpayers and Consumers, was filed on April 30th by State Representative Donny Loftus, the Republican from Gaston County, Bill Ward, the Republican from Pasquatank County, and Pricey Harrison, the Democrat from Guilford County. The legislation would repeal several sales and use tax exemptions for qualifying data centers beginning pretty quickly starting here July the 1st, the new start of the fiscal year in 2026.
The bill would remove exemptions covering electricity used by data centers, computer software, and as well as equipment and support infrastructure purchased by qualifying facilities. This proposal comes weeks after Governor Josh Stein publicly urged his Energy Policy Task Force to examine whether the state of North Carolina's existing data center tax incentives should be repealed or potentially heavily modified. A spokesperson for Governor Josh Stein recently told the Carolina Journal, electricity bills are already too expensive for North Carolinians. Governor Stein believes that North Carolina families shouldn't be forced to subsidize or foot the bill for data centers' energy consumption. The governor has also called on legislators to be clear-eyed about the cost of these data center sales tax breaks while understanding the value of the business industry.
He is pleased to see that the General Assembly is taking a hard look at those exemptions, and he is eager to work with legislators to find the best path forward for these corporate tax breaks. According to estimates from the Department of Commerce cited by the governor's office, North Carolina currently provides roughly $50 million annually in sales tax exemptions for electricity and replacement equipment that is used by data centers. If all proposed data center projects in the state are ultimately built, those annual exemptions could increase nearly tenfold to approximately $450 million a year, according to data out of the governor's office. Current law also exempts purchases of new equipment during what is the data center construction phase. All of that is exempt from sales tax as well, with Stein's office estimating that those one-time exemptions could eventually total as much as $2.3 billion in foregone tax revenue across the Tar Heels state.
The debate comes as lawmakers confront long-term budget pressures as well as rising electricity costs and demand driven in large part by some of this AI data center infrastructure, with the governor's office recently saying when this tax break to incentivize investment was enacted in 2006 and expanded in 2015, data center development was not on the scale that we see today. With trillions of dollars flowing into this sector, those days are long gone. Supporters of maintaining the incentive have argued that the exemptions have helped North Carolina remain not only competitive, but give an upper hand with other states seeking major technological investments. According to Patrick Riley, who spoke on behalf of the board of the North Carolina Blockchain and AI Initiative, the acronym there is NCB AI. He told the Carolina Journal: North Carolina didn't become a destination for companies like Apple, Google, and Microsoft by accident.
He went on to say it took deliberate policy decisions that made the state competitive. Eliminating the data center tax incentive that attracted that investment sends the wrong signal at exactly the wrong moment. AI infrastructure runs on compute and compute runs on data centers. If North Carolina wants to be where the next generation of AI is built and deployed, we need to preserve the policy environment that makes that possible. House Bill 123 moves us in the wrong direction.
Economic development advocates have also pointed to construction spending, local tax revenue, and job creation tied to these large-scale data centers, with supporters of removing the tax exemption, however, saying that the incentive is unfairly and has unfairly shifted costs onto regular everyday taxpayers and utility customers while favoring one industry over the other. Brian Balfour, the Senior Vice President of Research at the John Locke Foundation, says, like hundreds of other carve-outs in our tax code, the exemption for data centers was likely pushed by lobbyists to legislators with central planning who believe the economy, quote, needed more data centers and that this exemption would encourage more of them. Exempting specific businesses or industries from taxes violates the principles of tax neutrality, in which all economic actors are taxed the same. Tax all businesses the same or don't tax them at all, Browfour told the Carolina Journal. Such favoritism not only distorts and therefore hampers the economy, but also patently unfair to those who are forced to pay the full tax bill.
And with the countless and billions of dollars worth of investments being lunged into the AI industry, it certainly seems unfair and unnecessary to grant data centers this significant tax exemption. This bill has now been referred to the House Finance Committee, where it sits right now, taking a look at the General Assembly calendar here for this full second week of May. Lawmakers, especially in the North Carolina House, are set to be back in Raleigh on Tuesday and Wednesday. That's the 12th and 13th for potential votes. And then on Thursday, there is another potential voting day as well.
So we'll be keeping an eye on all of these various pieces of legislation that we've covered over the last couple of weeks. We'll track them and their progress right here on the Carolina Journal News Hour.
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But but. It's 22 minutes past the hour. Welcome back to the Carolina Journal News Hour. Good Monday morning to you. Charlotte's FM News Talk 107.9 FM.
WBT, keeping our eye on the North Carolina General Assembly as the short session continues. We are seeing a lot of pieces of legislation being introduced. Of course, the million-dollar question on a lot of these: will any of them get any serious traction before lawmakers wrap up the short session as it is planned right now, sometime in early July? How many of these proposals make their way into potentially a full state budget? A lot going on.
We're keeping an eye on that as a bipartisan group of North Carolina lawmakers recently held a press conference to promote a proposal to create a $50 million revolving loan fund to help nonprofit developers cover upfront infrastructure costs for affordable housing projects across the state of North Carolina. The legislature. Is numbered House Bill 1072, and it is titled the Affordable Housing Infrastructure Development Act. And it was introduced by some pretty high-ranking officials, including Representative John Bell, the Republican from Wayne County, Robert Reeves, the Democrat from Chatham County, Chris Humphreys, the Republican from Lenore County, and newly independent lawmaker, Representative Carla Cunningham from Mecklenburg County. Representative Bell said during the conference, press conference, we can all agree housing is one of the most pressing challenges that families face across our state.
This legislation would direct the North Carolina Housing Finance Agency to establish and administer a below-market rate loan program for qualified nonprofit organizations developing affordable housing. Under the bill, loans could be used for early stage development expenses, which would include things like land acquisitions, site prep, utility connections, water and sewer infrastructure, permitting, and other related pre-construction costs. Supporters say that the measure addresses a financial gap that often delays or prevents affordable housing developments from moving forward, as nonprofit developers frequently struggle to secure funding for some of those very expensive early infrastructure and site work projects before they can even begin pouring concrete and beginning to develop these homes. Robert Reeves, the Democrat minority leader, said during a press conference last week: for nonprofit affordable housing builders. Especially those working with limited margins and under the mission-driven model, these upfront costs can stop a good project before it even gets off the ground, causing it essentially to be stuck in limbo.
This bill would appropriate $50 million from the state's general fund during the 26-27 fiscal year to capitalize the revolving loan fund with loan repayments being returned to the fund for future projects. Because of this, Bell described the proposal as a long-term investment rather than a recurring state expenditure, saying, Importantly, this is a one-time investment of self-sustaining funds. It's not just about addressing today's shortages, it's about creating long-term solutions that can continue to work for years to come. Bell and Reeves were joined at the press conference by Paul Revis, who is the executive director of the Habitat. For Humanity from North Carolina, another individual by the name of Matt Whittle, who is the executive director of the Habitat for Humanity for Goldsboro and Wayne.
Reeves, whose organization represents roughly 56 Habitat for Humanity affiliates across the state of North Carolina, said access to reliable financing for land acquisition and infrastructure development does remain a significant challenge, particularly as more affiliates move towards subdivision-style projects instead of just one-off single-home construction. With Reeves saying during the press conference, across our state right now, the cost is roughly $50,000 per lot to put in infrastructure, which means if we've got an affiliate that's doing a 10-house subdivision, they're going to get a bid at $500,000 or north just on infrastructure. He added that the revolving loan program could help create approximately 1,000 housing units during the first five years. This proposal was filed back on April the 28th and did Receive its first reading in the House before being referred to the House Housing and Development Committee. If approved there, it would move to appropriations and rules.
That is essentially the final stop before legislation makes its way to the full House floor for a vote. This is one, as I mentioned, of the many very interesting proposals that we are keeping a close eye on as it stands right now. The Housing and Development Committee within the North Carolina House has not yet heard this legislation. And looking at the North Carolina General Assembly calendar for the week, well, it is a busy one ahead. We've got a lot of committees that are going to be taking place both Tuesday and Wednesday.
On Tuesday, we've got the House Finance, the Commerce and Economic Development Committee, the Alcoholic Beverage Control Committee. All those meetings happening in the House this week. On Tuesday, over in the Senate, similar situation going on as well. We see the state. And local government committee and judiciary meeting in the Senate K through 12, state and local government, a jam-packed General Assembly calendar for both Tuesday and Wednesday.
So it is very possible that a couple of the pieces of legislation that we've talked about here over the last couple of weeks on the Carolina Journal News Hour will begin the process of clearing the legislative hurdle and potentially. Making their way to the House or Senate floor for a full vote, as the other option with many of these proposals is to be put into the budget. If it seems like lawmakers are going to move forward with a full state budget for the new fiscal year beginning on July the 1st, we could see many of these proposals essentially just brought into the budget so it would pass as a much larger piece of legislation. Nevertheless, we're keeping an eye on all of the details on the General Assembly short session. Very, we'll have that continued coverage over, of course, on our website, CarolinaJournal.com, and bring you the latest as it is relevant to you right here on the Carolina Journal News Hour.
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It's 5:36. Welcome back to the Carolina Journal News Hour, Charlotte's FM News Talk, 107.9 FM, WBT, I'm Nick Craig. Good Monday morning to you. Over the last couple of weeks here on the Carolina Journal News Hour, we've talked about the Leandro lawsuit. If you've been a longtime political observer here in North Carolina, it goes back more than 30 years.
Over the last couple of weeks, we saw a recent decision from the North Carolina Supreme Court essentially ending that case and saying that it cannot move forward. It is said and done. Just recently, just in the last week or so, Mitch Kokai from the John Locke Foundation joined us and brought us some information that the group that lost that case was set to petition the North Carolina Supreme Court for a rehearing.
However, we did not have those arguments when we talked with Mitch last week.
Well, we've got those details now to walk us through this on a Monday morning. Mitch Kokai from the John Locke Foundation joins us on the Carolina Journal News Hour. Mitch, it's been kind of a wait and hold pattern on this as the group that lost this signaled their intention for this rehearing. You've actually got the copy now indicating what some of the arguments are. Walk us through the latest if you would.
Yes, it's very technical argument, Nick, about what's going forward as the five school board plaintiffs, actually six now that are on board with this, six local school boards that want to see a rehearing before the state Supreme Court. And they're making very technical arguments. You mentioned that we had talked about this before. There was a signal in late April that these school board plaintiffs were going to ask for a rehearing because on April 2nd, The Supreme Court came out with a decision that essentially ended the 32-year-old Leandro case, saying that the case had moved far beyond what it was originally designed to do when it was filed in 1994. And basically, by a 4-3 vote, the court said that everything that had happened in the Leandro case since 2017 was going to be voided and the case was going to be shut down.
And the words with prejudice were used. And that's significant because in legal terms, that means it's over. You can't do anything else. Nothing else happens with the case.
So in late April, we learned that there was going to be a potential petition for rehearing in a court filing that took place in trial court. Because once the Supreme Court made its decision, that decision goes back to the trial court that's been dealing with this. And basically, the mandate of the court was to shut the case down.
Well, these school board plaintiffs filed something that said, Wait a minute, please don't move forward with this mandate because we're going to have a petition for rehearing. The legislative leaders who have been working against the plaintiffs in the Leandro case and trying to get this case over with, they responded and said, no, there's no reason to do anything of that sort. The mandate says to shut down the case, you need to shut down the case. The trial court hasn't said anything. Basically, I think the trial judge has been in wait and see mode to see what happens.
And now, this week, the latest development was, or within the past week, the latest development was that we actually saw the petition for rehearing. And the plaintiffs waited until the last possible moment. What happens is, if you want to have a rehearing in a North Carolina court, you have to ask for that rehearing within 15 days of the mandate of the court coming out. We breached the deadline the very last day that the petition for rehearing could happen. It happened.
And what is being requested is what's actually called a limited rehearing. They're not asking, and these are the school boards in Cumberland, Halifax, Hoke, Robinson, Vance County, along with Charlotte Mecklenburg, so one large city county, along with some of these generally smaller counties and more low-wealth counties. They're not saying Supreme Court. revisit and turn over what you just said. But they are asking for the case to remain active in a couple of ways.
First of all, what they're saying is that the Facial constitutional challenge to the North Carolina's education system. Basically, a challenge saying the way that the funding moves forward is inadequate, that that should not be dismissed with prejudice, that it should be without prejudice, meaning that there could be additional court filings that would be on point and that would challenge the education funding. That's point number one. The second issue that was raised is basically saying. Even if you're Saying that everything has gone off track since 2017.
The trial judge still should have authority to look at what happened from the initial Trial ruling in this case, now more than 20 years old, that said that the Hope County schools were failing to meet their constitutional obligation. And so the case should continue, at least in the sense of dealing with what was found in the problems with the Hope County schools now more than 20 years ago.
So that is the argument that's being put forward. Interestingly enough, The way that this works is that there is a deadline, as we said, for the petition for rehearing. And then the state Supreme Court has 30 days to decide what to do with it. And the other side of the case, either the State Board of Education Or the state of North Carolina, or state legislative leaders who've been the real antagonists in this. In this process, they don't get to say anything.
They don't get to respond to this petition for rehearing. All the court gets to use is the petition itself. and what it said in the previous court ruling.
So sometime within the next month, the state Supreme Court must respond to this petition and say either, yes, we'll take up these issues or no, rejecting the petition and then shutting down the case completely. Mitch, you mentioned one of the key highlights there is that this group is looking for it to not be dismissed with prejudice, and you already mentioned the significance of that. Seems kind of interesting, a case that has dragged on now for more than 30 years, as you kind of indicated, would allow some additional legal challenges potentially to come forward with that. I mean, that just seemingly is just going to continue to drag this thing on, presumably forever at this point. It's already been going on for 30 years, and it has become a major issue here in North Carolina.
Yeah, that's right. And it was interesting that the Supreme Court decided to shut the case down and say that it ended with prejudice. One of the dissenting votes was Republican Justice Richard Dietz. Remember, this is a 4-3 vote. Both of the Democratic justices voted against that.
And that's not surprising because at least one of them, Anita Earls, was part of the majority back in 2022 that said that the Leandro case should involve more funding and that judges should be allowed to order the state to make that funding.
So the fact that she dissented and that her colleague Allison Riggs, who often agrees with her, the fact that they both dissented, was no surprise. It was a little bit more surprising that Justice Richard Dietz dissented. And the main reason that he dissented was not that he thought that the Leandro ruling from 2022 had been proper, but he didn't want the case to be shut down. He thought that the case should go back to a trial judge. And to tweak it in such a way that it could finally be resolved in a way that would be the normal process.
So there was at least one Republican objection to ending the case with prejudice. But it would surprise me if you saw a majority on this court that would want to reopen the case now that they've said the case should shut down completely. It's interesting that the requests from the plaintiffs are not to Revisit the ruling, change the ruling. They basically want to keep the case active, saying that within this current Leandro framework, they could make new arguments for a facial constitutional challenge to the way education is funded in North Carolina. And then that also they would like to keep alive the trial judge overseeing the remedy and the reaction to the only trial that's ever taken place in this long-standing case.
And that trial took place 20 years ago or so. And so basically, both of these requests for rehearing are to keep the case active rather than shutting it down completely. Mitch, let's turn to the political side of this. Obviously, in a lot of legal, you join us and we talk about a lot of different legal challenges. Most of them are in some cases, not overtly political.
This one, I think, is probably the exception to that rule. If you follow school board meetings, if you are involved heavily in local politics, you will definitely have heard the term Leandro before as it relates to school boards. It's a major talking point, most predominantly for Democrat candidates across the state of North Carolina and races like the General Assembly and those local races as well. Do you think part of this is that the fact that Democrats have invested so much into talking about Leandro and claiming that essentially Leandro is this magic wand that fixes the public school system? I should say, quote, fixes the public school system here across the state of North Carolina?
I definitely think that's part of it. I think there are also other factors at work. One of them is the fact that this case has been going on for 32 years and definitely has its constituencies. If the case is shut down, And there is a desire to challenge the way North Carolina funds education in the courts, you basically need to have a new suit. And that means that the people who've already been involved, the current plaintiffs, the current set of lawyers, They don't have a leg up on anyone else.
I mean, someone else could say, all right, Leandro is done, but we want to file an education suit. Let's file the suit. And a whole new different group of lawyers, whole new different group of plaintiffs could get involved. And the old plaintiffs wouldn't necessarily have any standing or I shouldn't say standing because that's a legal term, but any leg up or priority for being the people who are driving this.
So my guess is part of this is a turf war thing, that if you're going to be fighting these education funding battles in court and you've been involved in this process for most, if not all, of the 32 years, you want it to still be your baby, your case, rather than have to let someone else in who might be taking a different angle on it.
So I think there is the fact that the Democrats have invested so much, certainly in the last decade, in saying Leandro is going to be the magic wand. There's that, but also a bit of. turf war and Frankly, lawyers who are trying to get a payday, saying, look, if this case goes on, at least we might eventually get some sort of payday, rather than having the case shut down and not having the court say that they're going to get. hundreds of thousands or even millions of dollars in attorneys fees. Yeah, and some may describe that, Mitch, as a little bit of a grift on the system here to kind of keep some of this stuff ongoing for a lengthy period of time.
And in some cases, as you just mentioned, there, be able to generate some significant amount of profit for doing so. As it stands right now, as Mitch has just walked us through, the North Carolina Supreme Court has 30 days to respond to this and determine whether they will proceed with this limited or rehearing or not. Mitch, if they choose not to and say, no, these arguments are not valid. We're not going to move forward with this rehearing. Is it that point, is Leandro finally dead?
Or are there some other tricks in the book here that could be pulled out? My guess is that it's finally dead. But we thought that when the Supreme Court made the decision on April 2nd, and then it was a little bit surprising that there was going to be this request for a rehearing. I think this is probably the last Arrow in the quiver for the Leandro plaintiffs is to try to get a rehearing, at least on these limited issues. And if that doesn't work out, then you probably will, if you're interested in fighting education funding battles in the courts, have to come up with a new lawsuit.
And remember, the original Leandro author, former Chief Justice Burley Mitchell, wrote a recent column not too long ago saying he thinks there should be a new lawsuit that would cover all kids in the state and would deal with educational adequacy rather than educational funding.
So some people are already looking ahead to what's going to be the next lawsuit. I think the Leandro people are saying, well, as long as we're still in this, let's see if there's any kind of chance we can keep this going. Yeah, and I've seen that similar argument, Mitch, of, hey, this has been going on 32 years. It's morphed in so many different directions. It's bloated in so many cases.
Maybe this is truly the situation where you kind of knock it down to the foundation and begin the process of rebuilding. We'll be keeping a close eye on this over the next month or so. We've got continuing coverage over on our website, CarolinaJournal.com. Mitch Coke from the John Locke Foundation joins us on the Carolina Journal News Hour.
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But but. Good morning again. Welcome back to the Carolina Journal News Hour. It's 5:55. You're listening to Charlotte's FM News Talk 107.9 FM, WBT recapping our big story this morning.
Former FBI director James Comey, who was set to appear in federal court in Greenville, North Carolina today, will not be as a scheduled court appearance related to Comey's recent indictment by a North Carolina grand jury has been canceled. The former FBI director is currently facing two charges related to alleged threats against President Donald Trump. Those charges are based on a now deleted social media post last year in which Comey allegedly documented what he called a very cool seashell formation on a North Carolina beach that spelled out 8647. He appeared in a Virginia federal courthouse back just A couple of weeks ago on April the 29th. That was one day after his indictment was announced, as Comey is a resident in Northern Virginia.
Comey's lawyers filed a motion Thursday of last week to cancel what is called a second initial appearance, which was scheduled for today, May the 11th, at a federal courthouse in Greenville. The federal government said that they agreed to move forward and not in case, and not in this case, require Comey to make this second appearance. With Comey's lawyers writing in part that they had already gone through all of the proper process as codified in Rule 5 and that they did not feel that that second appearance was necessary. U.S. District Judge Louise Flanagan issued an order Thursday indicating that she would cancel the May 11th proceeding if Comey filed a waiver by Friday, which he in fact did.
So for those that were looking to get a look at the former FBI, Director in a North Carolina courtroom.
Well, that is not going to be happening, at least as of right now. Again, there is a thought, at least at some point, that the former director will have to appear in North Carolina as the grand jury that indicted him over those social media posts did so here in the Eastern District of North Carolina. We'll keep an eye on this case with its state and national implications right here on the Carolina Journal News Hour.
Well, that's going to do it for a Monday morning edition. WBT News is next, followed by Good Morning BT. We're back with you tomorrow morning, 5 to 6, right here on Charlotte's FM News Talk 107.9 WBT.
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