It's 5.05 and welcome in to a Tuesday 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. We continue our coverage of the state budget and its impact across the state of North Carolina. The budget approved by the North Carolina General Assembly back just a couple of weeks ago, signed by Democrat Governor Josh Stein one week ago today. North Carolina's education leaders spent, excuse me, North Carolina's Department of Transportation says a newly enacted state budget will strengthen the agency's ability to continue Hurricane Helene recovery while investing in highway maintenance, Division of Motor Vehicle Services and Transportation Infrastructure across the state.
During the Board of Transportation's July meeting, officials highlighted the budget approved by the North Carolina General Assembly and signed by Governor Josh Stein, describing it as a significant financial commitment to the department after years of recovery work following Hurricane Helene. The discussion centered on two themes, new transportation funding and the continued cost of rebuilding in western North Carolina as we get ever closer to the two-year mark since Hurricane Helene left so much devastation and destruction in the western half of our state. Heather Millett, the North Carolina Department of Transportation legislative director, told board members the department emerged from this year's budget process with additional resources across several programs. She said during the meeting, we officially have a state budget. We fared very, very well, in my opinion, in this year's budget.
The budget provides a $122 million Increase to the Highways Trust Fund for the State Transportation Improvement Program and approximately $216 million for the Highway Fund, Millett told the board. Funding also included employee raises and bonuses, ferry system improvements, additional DMV resources, and reoccurring maintenance funding. Among the largest operational investments is $16.4 million for the Division of Motor Vehicles, along with funding for 65 new full-time positions, also known as FTEs. These new employees will support extended office hours and additional driver's license offices across the state. The budget also authorizes the Board of Transportation to establish certain fees, including a driveway permit fees, traffic impact analysis fees, subdivision renewal fees and ferry tolls.
Millett said that those changes will require additional work before implementation. She told her colleagues during the board meeting, we will be working internally to figure out what the proposal needs to look like in the coming weeks. Board member David Womack asked how future ferry toll decisions would be handled and whether they would be first to review by the board's multi-model committee. Millett responded that the legislation gives the board authority to approve tolls, but said that the agency officials were still determining the process for bringing any new proposals forward. The budget discussion came as NCDOT continues managing one of the largest disaster recovery efforts in the agency's history.
This is one of many agencies dealing with the frontline impacts of Hurricane Helene. Chief Financial Officer Mark Newsom reported that as of July the 6th, the department had spent approximately $1.696 billion responding to Hurricane Helene. roughly 29% of its current recovery forecast of just under $6 billion. With that, federal reimbursements have also continued to increase. Newsom said that the department has received nearly $800 million in reimbursements from the Federal Emergency Management Agency, that's FEMA, as well as the Federal Highway Administration combined.
That breaks down to $348 million from FEMA and $449 million from the Federal Highway Administration. Even with those reimbursements, the North Carolina Department of Transportation continues carrying a cash float of about $900 million while awaiting additional federal payments and reimbursements. Newsome told the board members, our forecast remains unchanged this month with just under $6 billion in total estimated spend. He added that spending is expected to accelerate during the summer construction season as more recovery projects move into active construction, although reported expenditures often lag behind field work because invoices are processed after the work is completed and can lag by quite some time. Newsome said, I would expect that the money spent to start to tick up a little bit as we go through our reports for the rest of the summer and into the fall.
Board Chairman Tony Lathrop praised ongoing recovery works after touring portions of Interstate 40 in western North Carolina. He recounted some of that for his fellow colleagues, saying, this is really strong and robust. You ought to see these very sophisticated and resilient concrete walls that they're building there as they restore the highway. It's quite an operation and is really humming along. Transportation Secretary Daniel Johnson also highlighted several recovery milestones during his remarks during the meeting.
Johnson said that reconstruction of US 64 in northeastern Henderson County has reached functional completion approximately two months ahead of schedule, restoring an important travel corridor between Hendersonville, Batcave, and the Chimney Rock area in western North Carolina. He also reported continued progress on Interstate 40 through the Pigeon River Gorge, where more than 68,000 cubic yards of roller compact concrete have been placed as crews continue rebuilding damaged retaining walls that are very near the Tennessee state line. Additional Helene recovery work is underway in Yancey County, where multiple bridge replacements are progressing and moving forward, and in Polk County, where a $23 million reconstruction project has begun. On Green River Cove Road, following what can only be described as catastrophic storm damage. Beyond disaster recovery, Johnson highlighted operational improvements at the Department of Motor Vehicle, including the opening of a driver's license office at Fort Bragg and a new digital document upload system that allows customers to submit things like insurance cards, leases, phone bills, and other required documentation electronically so that those can be approved and submitted before in-office appointments.
Johnson said, since it launched, customers have uploaded 32,000 documents using this new tool. It's getting used to as we had hoped, and that's good news for everyone as we work to reduce wait times, prevent repeat visits, and improve the experience for those visiting the Department of Motor Vehicle. The department also announced that it will incorporate the Newly approved state budget into an updated financial spending plan coming up later on this year. Newsom said that staff expects to present an updated spending plan to the Board of Transportation in September with formal action anticipated in October, assuming that the budget certification process proceeds on schedule. That update will include revised Hurricane Helene recovery projections based on current construction activity and reimbursement estimates and efforts.
As recovery work continues across western North Carolina, transportation officials say that the new combination of state appropriations and ongoing federal reimbursements Provide additional resources for both rebuilding storm-damaged infrastructure and maintaining transportation projects across the state of North Carolina. We have all seen the pictures and videos in the immediate aftermath of Hurricane Helene in western North Carolina. Roadways completely washed away, completely sunken in, and in some cases, nothing left of them to see. The North Carolina Department of Transportation, alongside many other state agencies, still have a lot of work to go as they continue the process of making western North Carolina whole. We will, of course, continue our coverage of all of the Western North Carolina recovery right here on the Carolina Journal News Hour.
You can read more about this DOT meeting, some discussion about the state budget, other conversations about Helene recovery. Head on over to our website, CarolinaJournal.com. Look for the story with the headline: NCDOT fared well in state budget. We'll focus on Helene. Recovery.
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Save up to 30% with promo code News at lifelock.com. Terms apply. It's 5:22. Welcome back to the Carolina Journal News Hour, Charlotte's FM News Talk 107.9 FM, WBT continuing our discussion on the state budget. We just heard from DOT officials about some of the updates and changes in the state budget and how it will affect them.
We now transition over to the education portion of the budget, which is a very sizable portion. I'll note. North Carolina's education leaders spent their first meeting since the state budget became law questioning how two of the legislature's highest-profile education moves will work in practice. The topics came up at the July the 9th virtual meeting of the State Board of Education. Staff from the Department of Public Instruction briefed the board on the budget that Democrat Governor Josh Stein signed on July the 7th and slated and a slate of newly enacted legislation.
legislation. Board members questioned a budget provision that will steal steer millions in savings from the Opportunity Scholarship Program towards education spending, plus a new law banning diversity, equity and inclusion DEI programs in K through 12 public education. The sharpest exchange came over the budget's treatment of the opportunity scholarship program and its savings as lawmakers set that amount at about $35.7 million, DPI's calculation of what the state saved over two years when students left the public schools and used the Opportunity Scholarship Voucher Program worth less than the state would have spent on educating them. The funds are earmarked in three ways, $17 million in one-time, $1,750 bonuses for locally and federally funded school nutrition and custodial workers, and $13.8 million for middle school literary training, alongside $10 million to the North Carolina Collaboratory to purchase and adapt another state's K-8 math curriculum. Board Vice Chair Alan Duncan questioned whether the $30 million of that total represents new money for public schools.
Duncan said that would appear to be supplanting the refund in order to fund other things that would have otherwise been the responsibility of the legislature. The collaboratory allocation drew particular scrutiny. Only about $5 million of the $10 million is needed to complete the $35.7 million total. And the collaboratory, a research organization created by the General Assembly, is housed at the University of North Carolina, not DPI. According to DPI's senior director of government affairs and strategy, who presented the budget review, he said during the meeting, while the money is not going to public schools, I guess so what they purchase would be available to public schools depending on how that develops.
He also asked who would administer whatever curriculum the collaboratory selects, with other members calling this an open question in their minds as the discussion continued to unfold during the meeting last week. The reinvestment pledge dates to the 2023 budget law that removed the voucher program's income cap. In that law, lawmakers declared their intent to return any savings from public school transfers back to the public school system. A DPI report presented to the board in May found the two-year savings totaling about $35.7 million and that none of that had been paid into the public school reinvestment fund that the law initially envisioned. School choice advocates say that the mechanism proves a point they have long argued because most vouchers are worth less than the state spends in its per-pupil public school allotment formula.
The program saves money. Rather than draining it. Dr. Bob Lubke, the director of the Center for Effective Education at the John Locke Foundation, told the Carolina Journal: that provision underscores how the Opportunity Scholarship Program doesn't drain funding from the public schools, but can help to strengthen them in the years moving forward.
So that's the a lot of that was a lot of the discussion there on DE on The Opportunity Scholarship Program and funding.
Now, transitioning over to DEI, later in the meeting, State Superintendent of Public Instruction Mo Green told the board that the department is preparing guidance for school districts dealing with Senate Bill 227. That is a bill that removes DEI from K-12 public education that became law back on June the 24th when the House completed the legislature's override of Democrat Governor Josh Stein's veto. Mo Green said there are going to be genuine questions about how educators are to apply the law, noting that one section restricts instruction on defined divisive concepts while another expressly and appropriately preserves teaching difficult history, including historical oppression, based on characteristics such as race, ethnicity, and religion. Green added, certainly at DPI we are grappling with the law. As for the compliance timeline, every public school unit must certify to DPI by September the 1st that it is following the law, and the Department of Public Instruction must report those certifications to the General Assembly by January the 15th of next year.
The law sponsored by Senate GOP leadership bars public schools from instruction, professional development, and offices promoting 12 defined divisive concepts, such as the belief that one race or sex is inherently superior to another. Senate Majority Leader in Michael Lee, the Republican from New Hanover County, has said that the bill is not a ban on teaching history or discussing past injustices, which is the same distinction Greene now says DPI's guidance must help schools navigate in the months to come. Lawmakers do return to Raleigh on July the 27th to take up technical corrections and other remaining legislation as DPI has not yet announced a release date for its DEI guidance and its next report on voucher savings is due to the board next spring when the questions of whether the money reaches public schools will likely come up again. We'll be keeping an eye on this guidance from the Department of Public Instruction as it relates to DPI. As soon as we get any clarification from them and from the superintendent of the superintendent of public instruction, Mo Green, we'll pass those details along to you as soon as we get them right here on the Carolina Journal News Hour.
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Save up to 30% with promo code News at Lifelock.com. Terms apply. 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 Tuesday morning to you.
One of the big business stories that we've been tracking over the last couple of days is a new report out from CNBC. Each and every year, they rank the top state for business across the United States. North Carolina has been at the top or very close to the top of that list over the last couple of years. To walk us through the new rankings from CNBC, Brian Balfour from the John Locke Foundation joins us here on the Carolina Journal News Hour. Fortunately, Brian, the Buckeye State, our friends up in Ohio beating us out for number one in the list.
However, North Carolina is still a pretty strong showing at number two. Give us your overall view of this new report out from CNBC. Yeah, yeah, very interesting. North Carolina continues to perform extremely well in this measure. This is the sixth straight year where North Carolina has finished either first or second, just being edged out, as you mentioned, this year to Ohio.
Interestingly, one of the categories of the rankings, a very important one, obviously, is the state's economy, the health of each state's economy, and they rated North Carolina as number one in that.
So I think that's something we can still continue to really hang our hats on, and that North Carolina ranks as the top state. uh for a healthy economy uh in the country. Yeah, and when you compare and contrast that to Ohio, who's on the number one of that list, their economy is ranked ninth overall, so significantly lower compared to the numbers here in North Carolina. One of the things in reading through some of the details on the report, CNBC says that they've changed a little bit how they're weighting some of the scores. They ask for or kind of go through a variety of different categories to determine how this top list is laid out.
And they said they put a keen focus on infrastructure. This is an area where Ohio is number one. North Carolina is 13. And I would suspect as they've played around with some of these formulas this year, Brian, that's probably what bumped us down to second place. Yeah, that had something to do with it.
They talked a lot about Ohio's infrastructure and improvements they've been making, and also just how accessible the state is to such a large share of the country's population, something that North Carolina is a little limited to, given that our eastern border is an ocean versus Ohio being surrounded by states.
So, a little bit of a ding there. We can talk about also a couple of the categories that hurt North Carolina. One of them was the cost of living. North Carolina's cost of living increasing. And that's, I would speculate, in no small part due to the net in migration that North Carolina has been experiencing, one of the top states.
Fortnite in migration versus Ohio, which had up until last year, had been experiencing several years of domestic outmigration.
So that's going to obviously ease cost of living pressures when you're losing population versus a state of North Carolina. that's gaining significant population over the years. Yeah, cost of living in this most recent survey from CNBC has North Carolina at 35, which is not necessarily the number you'd want to be at. But, Brian, I mean, it's the unfortunate reality when everybody seemingly and their brother wants to live in North Carolina, which I know is a big pain point for some folks across our state. Of course, it's simple supply and demand.
The more and more people that want to be here, they'll throw out as much money as possible to purchase a house, build a house, get into an apartment or condo, kind of puts the state at an interesting disadvantage with everything moving in the right direction. Yeah, yeah, the cost of living, you know, housing is a big thing, and that just kind of really, I think, underscores the need for state legislators to try to address the housing issue and to be able to free up supply a bit more, you know, kind of tear down some of those hurdles for new construction, unravel some of that red tape.
So that's certainly a big part of it. Healthcare is a big part of the cost of living as well. And they mentioned daycare, also cost of child care rising. And a lot of that, so much as that is just a manifestation of the increase in migration and population. But there's also, and we've had these discussions before, especially with healthcare, there's also ways that state legislators can address rising health care costs.
To try to bring that down, like certificate of need laws in particular. I mean, we have such a rapidly growing state. Why are we? Continuing in this policy to restrict the amount of medical care that can be available to people. You know, that that that that's kind of jumped out to me when I was looking at these numbers as well.
Unfortunately, we saw just a little bit of certificate of need reduction in this most recent state budget signed last week by Governor Josh Stein approved the week prior by the North Carolina legislature.
So hopefully we continue on that path towards a full reversal of certificate of need. One of the other areas that I found interesting in this CNBC study, cost of doing business. Ohio was at number one. North Carolina was at number 20. Brian, as I understand this, you can file for an LLC through the Secretary of State's office in Ohio.
It is free. There is no cost associated with it. Costs a couple hundred dollars to do that here in North Carolina. And something you and I have talked about in the past, this franchise tax, which I don't think a lot of people know about, probably factors into that area where there definitely needs to be some improvement. Yeah, yeah, 100% franchise tax.
And that's a tax basically on the net worth of a company, of business. But in that here in North Carolina, that tax is levied whether a company makes a profit or not.
So a company could have a losing year revenue-wise, and they still aren't faced with paying at least a minimum. I think it's a $200 minimum tax. And that strikes at a lot of even sole proprietors, individuals who just file as an LLC and don't even have any employees, don't even have any assets to speak of, they still have to file this paperwork and submit that $200 minimum fee.
So I think that has something, you know, something that North Carolina can look to Ohio to emulate and try to eliminate that franchise tax to make it easier for businesses, especially small businesses. Yeah, and there are a lot of those. We've been hearing recently from Secretary of State Elaine Marshall that North Carolina is on the precipice of breaking a record this year in 2026 for the amount of new businesses filed with the Secretary of State's office.
Some ungodly numbers over there, Brian, which is good news. The fact that people are filing these sole proprietorships, these LLC documents with the Secretary of State's office. All right, this one caught me a little off guard. Quality of life. North Carolina ranked 34th, which seems odd.
We've got such a unique place here in North Carolina. The beaches in the eastern half of the state, the beautiful mountains out in the western half of the state. What gives on 34th for quality of life? Does this maybe go back to some of the cost concerns that we were talking about earlier? Yeah, it was pretty interesting.
I was looking at the details under that because I that kind of stuck out to me as well. Struck me as a little bit odd. A couple of things that I did find in the details there, they one of the things for quality of life is labor protections and right to unionize.
So North Carolina being a right to work state, Uh meaning workers don't aren't don't have to be forced into joining a union to gain employment at specific places. Me personally, I would rank that as a positive for North Carolina. The CNBC, they view it in the opposite direction, unfortunately. And really interestingly, is they look at a state's abortion laws uh and and they view that uh more strict um Abortion limitations as a negative on a quality of life.
So I thought it was kind of interesting, some of the different factors that they incorporate into that. Yeah, you folks can check out the entirety of this survey. We've got it linked up over on our website, CarolinaJournal.com. A couple of the other areas where North Carolina looks pretty good, workforce, we rank number third, technology and innovation, number eight, even business friendliness, contrary to what we just mentioned about the cost of doing business, ranking eighth there as well. Access to capital comes in at number five, education, 12.
So seemingly a lot of things trending in the right direction here in North Carolina. Brian, from my vantage point, it seems like if lawmakers could tackle just a couple of these keen issues that we've talked about, this could put North, almost cement North Carolina at the top of this list for years to come. Yeah, absolutely. Like we said, six straight years, either first or second, and if we can straighten some of those things out, like the franchise tax, eliminating that, certificate of need laws, getting rid of that, some housing reforms to address the lack of supply, the inability or difficulty, I should say, of supply keeping up with demand with all the folks moving down here. And quality of life, we get a poor ranking of that.
But if the quality of life is so bad here, why does so many people continue to move here?
So, maybe I would question a couple of the metrics there. But yeah, like you said, it's been really North Carolina has really performed strongly in the last several years. And I think the legislature deserves a lot of credit over the last dozen years, especially with significant tax reforms that started back in 2013, has really made North Carolina a much more competitive place to do business and for people to get jobs.
So a lot to really brag about, but still some progress to be made too. Like you said. said really cement our spot in that top slot. Probably the line of the interview there: if it's so awful to live in North Carolina, if the quality of life is as poor as these numbers reflect on CNBC, you'd be hard-pressed to find why so many folks want to move here. Continuing coverage of this over on our website this morning, CarolinaJournal.com.
We appreciate the insight and information. Brian Balfour from the John Locke Foundation joins us on the Carolina Journal News Hour. Lots of places can expose you to identity theft. Oh no. That's why LifeLock monitors hundreds of millions of data points a second for threats to your identity, which is way more than anyone can do on their own.
If we find anything suspicious, like new loans or changes to your financial accounts, we alert you right away, all through text, phone, email, or the LifeLock app. Get the alerts that could make all the difference. Save up to 30% with promo code news at lifelock.com. Terms apply. Good morning again.
It's 5:52. Welcome back to the Carolina Journal News Hour, Charlotte's FM News Talk, 107.9 FM. WBT North Carolina's new state budget raises the taxes on sports betting operators, redirects wagering revenues to public university athletics, and opens the door to taxing prediction markets. This is all part of Senate Bill 257, the roughly $34 billion state spending plan that was approved by the governor last week. The sports betting changes come less than three years after lawmakers legalized online sports wagering in North Carolina, with mobile sports betting launching statewide in March of 2024.
The budget raises the tax on licensed sports wagering operators from 18 to 23 percent of gross wagering revenues and changes how some of those funds are doled out throughout the state. For the 26-27 fiscal year, legislative analysis estimated sports wagering tax revenues will increase from $161.2 million under the prior law to more than $206 million moving forward. The largest beneficiary is the state's general fund, which is expected to receive $126.1 million from sports wagering revenue in the 26-27 fiscal year. That's more than $50 more, a $50 million more than previous analysis projected. The budget keeps several existing distributions unchanged, including $1 million for the North Carolina Amateur Sports Authority, $2 million for gambling addiction education and treatment throughout the Department of Health and Human Services, and $1 million for the North Carolina Youth Outdoor Engagement Commission.
The larger change comes in the distribution of funds to public university athletics. The budget adds North Carolina State University and the University of North Carolina at Chapel Hill, so UNC and NC State as recipients of sports wagering proceeds and increases some of the projected distributions to several other UNC system athletic programs. In the 26-27 fiscal year, App State, ECU, North Carolina ANT, NC Central, UNC Asheville, UNC Charlotte, UNC Greensboro, the University of North Carolina at Wilmington, and Western Carolina are each projected to receive $3 million, which is an increase of about $400,000 per school. NC State and Chapel Hill are also each projected to receive $3 million after being added to the funding formula. Beginning in the 27-28 fiscal year, the budget creates an additional distribution category for public universities with football subdivision programs, which will include App State, ECU, NC State, Chapel Hill, and UNC Charlotte that will be capped at $2.5 million per school.
The increased use of sports betting revenue to fund college athletics drew criticism from Robert Luddy. former founder and president of Captive Air Systems and founder and chairman of the Franklin Academy, as well as some others, who told the Carolina Journal, the state of North Carolina is taxing gambling a morally dubious activity. When the funds are provided in part for UNC sports, it encourages more gambling for a purported good cause. Gambling is causing bad behavior in games, and now the predictive gambling encourages nefarious individuals to bribe players, undermining the sports. A separate provision does target prediction markets by creating a 6% tax on net trading fee revenues generated by some of those prediction market operators, which allows users to buy or sell contracts tied to future events.
Prediction markets allow users to buy and sell those contracts tied to those outcomes. They include things like sports, politics, Weather, economic indicators, and other measurable outforms. Platforms that you've probably seen advertisements for in recent years, Caulchy and Polymarket, have grown. And have received some pretty significant user adoption across the United States as federal regulators and states debate as to whether these products should be treated more like financial contracts or gambling. The state making some pretty significant changes there.
You can read more, get quotes from House Speaker Destin Hall and the leader of the North Carolina Senate in Phil Berger. We've got those details this morning over on our website, CarolinaJournal.com. Look for the story with the headline: NC Budget Raises Sports Betting Tax Ads Prediction Markets. Those details, again, over on our website, CarolinaJournal.com. That's going to do it for a Tuesday 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 FM, WBT. Uh
