- [Kelly] House Speaker Tim Moore is not seeking another term as speaker, so we analyze his possible replacements.

And Democrats and Republicans are offering very different opinions on further and future state tax cuts.

This is "State Lines."

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[gentle music] ♪ - Welcome back to "State Lines," I'm Kelly McCullen.

Joining me on today's panel, and it's a good panel, political analyst, Joe Stewart, Mike Woodard, senator from Durham County, Representative Erin Pare of Wake County, and down in chair four, WUNC Radio's Colin Campbell, welcome, lady and gentlemen, to this great show.

Slow week for bills.

I'm spoiled by chasing bills and they go on vacation.

But Tim Moore says he does not wanna remain house speaker.

So I think we put that at the top of the show.

He says he's out as speaker after 2025, his decision.

And caucus leaders, you know, those lieutenants underneath his office, are preparing many campaigns.

House Majority Leader John Bell, who you see there, says he'd like to be the speaker next time it comes up, as does Rules Chairman Destin Hall.

Representative Keith Kidwell announced this week he's entering the speaker's race.

And House Appropriations Chairman Jason Saine might run as well, that's assuming Republicans can retain House control in 2025, 'cause you can't forget about Robert Reives, Colin, representative who leads the House Democrats.

I think he's poised well if there is a seismic shift in power in this state.

- Oh, for sure, I think Democrats would pretty quickly make him the speaker if they manage to win a majority in 2024.

But the problem is they've got redistricting in their way.

Republicans expected to draw lines that are more favorable to them going into next year's election.

So, most likely, Republicans still maintain the majority if they aren't able to maintain the super majority, and that's why you see so much measuring of the drapes in the speaker's office.

Now that Tim Moore has at least made it publicly official, everyone else can now talk officially about what they'd like to do in a couple of years down the road even though we are, you know, more than a year away from when House Republicans would sit down and actually vote for their next speaker.

- So do you see like you have Tim Moore, and there's John Bell, and there's Destin Hall, and Jason Saine, is that the clique?

Are those the boys if you will?

And then, you have Keith Kidwell who I know is not- - Yeah, House Freedom Caucus.

- He's in the House Freedom, yeah.

- Yeah, exactly, and he was actually recently stripped of a leadership position over some controversial remarks that he had made.

So I think that'll be the interesting dynamic, 'cause you have sort of Tim Moore's top lieutenants who have been eager to continue his legacy going forward.

And then, you have Keith Kidwell who would like to take the House in a much more conservative direction.

He's sponsored bills on abortion that go well beyond the restrictions that actually got approved.

- All right, Representative Pare, I have to ask you, they're gonna lobby, I guess lobby you theoretically going through.

How do you know who to pick?

And is it a popularity contest or do you look at leadership qualities and say, "There's three or four people here," and you gotta get behind one of them?

- Right, well, first, I think that we will retain the majority in 2024, and hopefully retain the super majority in 2024.

But I think that members of our caucus are gonna be looking at the different leadership qualities and those candidates, and their vision in keeping the majority solid, and retaining and winning a super majority going forward.

And I think that we are very happy and lucky to have such talent in those four candidates, potential candidates.

And I think we're gonna be listening to what their vision is and picking the best person that we think can deal effectively with the Senate, and also keep our majority strong going forward.

- Senator Woodard, if you're a senator, which takes you outta the House discussion, you're also a Democrat, so join Joe and I over here in the peanut gallery and just watch this from afar.

But they're gonna select a new house speaker and three powerful folks.

And, as you have said before, Representative Kidwell adds spice, adds debate to this dynamic of who could be house speaker.

How do you see it from looking, you know, in the other nest looking at the other tree?

- Yeah, I'm just getting my popcorn out.

I'm gonna watch this one from our distance over in the upper chamber.

But, again, I think four strong candidates there.

Representative Pare and her colleagues are gonna have to make an interesting choice in a year and a half, or so, when they come down to that decision.

What I would be looking for as a member of the Senate is somebody we can work with.

Because as we see right now, negotiations between, as we call them on Jones Street, the corner offices, the president pro temp on my side, the speaker's office on the House side, is critical.

So I hope our new speaker, love for it to be Representative Reives, but whoever, is gonna be able to work with the Senate when we're negotiating the budget and major pieces of legislation, that's a very, very important function.

- Joe, personality types, John Bell, Destin Hall, Jason Saine, lots of folks, Democrats and Republicans like them, find them to be good guys, good people, once you set aside Twitter and Facebook and all the stuff we do with memes.

What do you take of this race?

And throw in Representative Kidwell, his name is in there, and I would presume he needs to be taken very seriously with this caucus.

- Well, like everything else in the legislature, this has something to do with everything else.

And so the coalitions that will form around the individual candidates seeking the speakership will in effect be looking for something of interest from those particular candidates for speaker.

We still have to get through the budget and allocations that will be made to individual projects in legislative districts, there's redistricting, there's candidate recruitment that will take place.

Of course, the vote for speaker doesn't take place until January of 2025, but I think each of these candidates will be lining up members of the Republican caucus.

Now we may see other candidates for speaker emerge.

If you have six friends that wanna support your candidacy for speaker, you might hold onto those six votes until you find out who of the other candidates might need that many votes ultimately to get the majority of the caucus to support them.

So a lot of brokerage, a lot of dealing, a lot of conversations taking place.

I do think, because the Republicans are very likely to come back in the majority, and with some possibility of coming back in the super majority, I suspect as contentious as the race for speaker might ultimately become, there will be a coming back together and an agreement among all the parties for the leadership team leading the Republicans forward after the '24 election.

- Yeah, but part of the fun of this game, of this show and game, Colin, we can talk about people, we could call Tim Moore and say, "Are you gonna endorse anyone?"

Do you think he endorses one of these four people running for speakership or does he stay out of it and let the caucuses?

- I mean, if I were him, I would stay out of it, 'cause a lot of these are close friends of his.

People he's worked with closely.

You know, he's gonna create a lot of bad blood if he does choose to make an endorsement in this race.

So, you know, there's nothing for him really to gain by jumping in there and picking one of these folks over the others.

- Does the flavor of the House change after a speaker's been there 10 years?

Does it fundamentally feel different when Tim Moore is not a speaker?

- That'll be interesting, I mean, I've been covering that place since 2015 and it's been burger and more the entire time.

So it's gonna be fascinating to see what the dynamic shift is, regardless of who gets that job.

- Alright, Republican House and Senate budget negotiators are finalizing a state budget bill, have been doing so for several weeks.

It's not stopping Democratic leaders from offering their opinions.

Mike Woodard on expected tax cuts.

The Cooper Administration was out, says additional tax cuts would reduce expected state revenues by over $13 billion in 2030, 31.

The governor will say K through 12 Joe, would be cut by $2.1 billion.

The UNC system would see cuts ranging near $700 million.

Current state law is reducing income tax rates in the coming years and Senate House Republicans are disagreeing right now on how fast to accelerate income tax cuts, personal and corporate.

Joe, is this really money lost or just money not expected to be collected?

- Well, I think it is a little curious with Republican super majorities in both chambers that the budget negotiations have been protracted like they are.

The two downside risks to Republican leaders in the General Assembly and having the budget not in place by the start of the fiscal year, July 1st, is it offers an opportunity for the Democratic Governor Cooper and the Democrats in the House and Senate to engage in a certain amount of loquacious-ness about what the problem is of not having a budget and what's actually contained in it.

Ultimately, a budget is a statement of priorities and what the majority party sees as are the important ways to lead the state forward relative to the expenditure of funds.

The Senate being a little more focused on wanting to reduce taxes faster than has been originally discussed means that there's less revenue for things.

The House being a little more interested in increasing the pay of teachers and state employees.

Those are big numbers in terms of the total amount of dollars in the budget.

So the fact that there's a protracted amount of discussion necessary probably makes sense, given the significance of that issue.

But I think it would behoove the leadership of the House and the Senate to try to get this stuff figured out, get it done, pass a budget, and give Republicans a chance to get back into their districts and talk about the good things they feel are contained in this package.

- Representative Pare, are you patient to wait and let this process play out even if it takes most of August and many budgets and all the things that can keep you here year round?

- Well, I'm actually thinking very positively about the budget process so far.

I mean, I know that we hear on the news, everybody's gone, the buildings are empty, but we can't fool ourselves.

I mean there is a lot of work being done on the budget behind the scenes even this week, every single day actually with our budget negotiators in the house and the Senate to move this forward.

So I'm looking forward to seeing a conference report on the budget maybe the second week in August when we return.

And I'm very happy about the work that's been done in these weeks where the public feels that we have just stalled.

But there is work being done and I think you're going to see an effective budget that takes care of state needs in a responsible way.

And I'm looking forward to talking to my constituents about that and the public seeing that compromise budget.

- Senator Wood, why would Democrats need to say anything, let the budget play out and why talk about what may or may not happen in 2030, 31.

Is that just how the game's played?

Stick it to 'em where you can?

- Well, I think there are legitimate concerns about these tax cuts.

We've said that since they were first introduced and now that we seem to be putting them on a fast track, at least the Senate proposal, we raise legitimate concerns about revenue shortfalls, not just in the upcoming biennium but what's gonna happen 6, 8, 10 years down the road, you're gonna leave mighty big holes in our state revenue forecast and we have a lot of concerns about how we're gonna continue to pay teachers and law enforcement officers and how we're gonna continue to provide just basic state services if these tax cuts start happening without something to replace that revenue.

And we've talked on this show about what some of those things might be that are not taxes, but the revenue hole is a legitimate concern and I think we have legitimately been raising that while we're waiting to see the conference report.

- Colin, is the argument that the state government will not be able to pay its bills or the state government will not be as large or pay people as well as Democrats would like next decade?

- I think it's a little bit of both but what's interesting is what you're sort of seeing with the Democrats getting involved is, they can't say it publicly 'cause it would sound like endorsing a Republican.

But sort of backing the House position on that when I've talked to House leadership, they're also concerned about if you cut taxes too soon or too sharply, do you come up with a revenue hole?

So there's been some talk about revenue triggers in place with those tax cuts.

The Senate seems to want to go all in on tax cuts and that seems to be sort of the crux of the disagreement here in addition to the overall policy size of state government issue.

- Joe, a decade ago, Site Selection magazine, we made the top, the cover of that.

CNBC now says we're the best in business for two years in a row.

How can you knock Republicans for what they've done on that?

Number one is number one according to the Wall Street media.

- Well, it's hard to argue with the success that we've enjoyed economically as a state, we remain a very attractive place.

A hundred thousand or more people move to North Carolina every year.

The economic landscape of the state is very positive.

Republicans do rightfully have some something to say about the role they've played in that since they've run the legislature since 2011.

The challenge is we have a lot of investments that are necessary to maintain that distinction, to be a good attractive place for businesses.

There's a lot of stuff that needs to be done, but I think at the end of the day, what republican leaders in the General Assembly are looking for is a budget package that is helpful to making the case in 2024 that they deserve to remain in the majority of the legislature.

Very rarely do voters take action based on the process of legislation.

It's more the outcomes that they focus on.

I do think it's likely we get things wrapped up here, probably in the next 30 to maybe 45 days.

And it gives the Republican leadership something to talk about in terms of the priorities they've established for North Carolina in this budget document.

Other than school teachers, Representative Pare, is anyone in your district talking to you about the state budget not having one?

I mean the state rolls on without one, it just keeps running.

- That's right, we're not like DC where if we don't come to an agreement, everything shuts down, there's actual chaos in North Carolina and the budget does roll on.

But I wanted to make this point and I think this follows up on what Joe was talking about.

So we have people that are relocating to North Carolina from other states in droves and they're not doing that because we have high taxes.

We have businesses that are investing in North Carolina and making meaningful long-term investments that have helped boost our economy and help to make us the number one place to do business in the nation.

We, according to CNBC, two years in a row, we've had the strongest economy in the nation.

And that's not because we have high taxes.

So when you look at investing in our state and making those smart investments in schools, in education, that really helps grow our economy because we need strong education to feed into those jobs, to feed into our university system.

It really helps our economy as a whole, so I think this this scare, I think it's more of a scare tactic that if we don't come to this agreement, we take taxes down a little bit, that we're gonna somehow, you know really hurt education.

Look, nobody wants stronger education than I do and my Republican colleagues do.

But we also know that when we have a robust economy and we have robust revenues that are coming into the state that we should look at lowering personal income taxes.

And in current law, you know we're taking that down to 3.99% in 2027 so we're on that path already.

- Yeah, North Carolina, you know it's great to be number one, two years running but we are always in the top three, four, five, for decades now and I would let, let's go back to the nineties I'll go back that far.

When we first started getting mentioned in a lot of these Wall Street publications, because we've had, I would say, half century or more of building pro business state of being a moderate state of stability.

And when I talk to business leaders that's what they're looking for is stability.

And they want the infrastructure exactly what Representative Pare was talking about, they want us to invest in education, which we've done in a university community college, and our K-12 system.

They want infrastructure, and until we can get past these little budget squabbles and show that stability, that's what gives me concern and I think our business community's looking at that lack of stability and wanting to make sure that we get there.

So that's why I'm hopeful like Representative Pare, will see a budget real soon and that we don't go through the mini budget stuff that we did a few years back.

- Alright.

North Carolina's Department of Health and Human Services announced his plans to expand Medicaid services beginning on October 1st at least the full rollout.

The Health Secretary says Federal regulators are allowing him and his team to accelerate the process by several weeks.

The plan gives the Cooper administration an opening of course to challenge the GOP to pass a permanent budget bill.

A budget Bill's passage is required to legally authorize the Medicaid expansion effort.

Representative Pare, we're hearing many budgets are on the table three weeks ago, everyone denied it, but it looks like we're gonna maybe have some stop gap.

Should folks be nervous that Medicaid expansion may not happen?

- No.

- Okay - I believe that when we come back like I mentioned before, that we are going to have a budget in August that we will be considering, and I don't think that the decoupling is going to be happening.

I mean, we passed House Bill 76 accessing healthcare options which, you know, voted in place Medicaid expansion.

And that was with that provision in there that made the budget the trigger for that Medicaid expansion that passed with unanimous support from the Democrats.

So I think that there really is no interest in the decoupling idea, I think that we will have a budget in August, and I think that I appreciated Secretary Kinsley's remarks when he talked about a swift quick redetermination process from those members that were on the traditional Medicaid during the Covid 19 timeframe that were kicked off but now would be put back onto the Medicaid through expansion.

So I think that's good for the people of North Carolina.

- From your perspective is the Health Secretary aligned with state leaders and the budget and what they say are going on behind the scenes?

Or is this the Cooper administration just putting the flag in the ground and saying, we're just gonna do it as if you're gonna have a budget and that kind of dares the Senate and House to come together?

That's what I'm looking at and going, huh?

I wonder what happened here.

- Yeah, I think Secretary Kinsley, when he came out with that statement did raise some eyebrows and got some people thinking.

But I think that the house has been on its own track.

Look, I think that they have been making progress with the budget but I think there's been some sticking points, part of that is the revenue piece and part of it is capital investments.

But I think going back to when we talk about the economy in North Carolina and stability, right?

'Cause we're really talking about stability here.

If you look back in the last decade when the Republicans took over the majority in the General Assembly what they did was they put in place a vision of wisdom in low taxes regulatory reform and budget stability and accountability, and I think that that has carried us to where we are now where we're seeing the fruits of that we're seeing the benefits of that.

And that's because of Republican leadership.

So when we look at budgeting and budget stability and budget accountability, we did that, the Republicans did that over the last decade sometimes in spite of our governor and in spite of the Democrats in the General Assembly.

And I think that what we'll see next month is a progress almost surprisingly, given what we've been seeing in the press of a good budget that we will be able to push forward as quickly as next month.

- Senator Woodard, it looks like they're gonna be ready if this budget passes in August as is being indicated here, Medicaid, like October one should the secretary have gone out there so boldly, I mean whether you're a Democrat or Republican leader I've never seen leaders take kindly to such dares.

- No, I listen my hat's off to Secretary Kinsley and his team at DHHS for greasing the skids because while we're waiting for this budget, decoupled or not from the Medicaid decision there's still a number of steps we've gotta take before we're ready to start accepting these Medicaid patients.

We've waited over 10 years for this now, and every week we wait is millions of our dollars we're already paying into this, North Carolinians have sent hundreds of millions of dollars probably approaching billions now to other states that have passed Medicaid.

So it is way past time for us to do this.

I believe what Secretary Kinsley's statement was what I heard was we're preparing, we've got our, the folks in Washington ready for our proposal because there are waivers and there are things in there, that is why our Medicaid plan is different than New Jersey's or Indiana's or pick a state that has already expanded.

So he's gotta start preparing that so that we can be ready October 1st when we passed the Medicaid bill and when our Republican friends started saying they were negotiating and working on the budget back in March, I think some of us were hopeful that we might be ready to have Medicaid ready this summer and now we're looking at fall, people are waiting to get out of that coverage gap and be covered by expanded Medicaid.

- Well, Joe Insurance is your game and your civilian life when Medicaid expansion goes through, and let's assume so, will it be like an immediate shot in the arm of cash for rural hospitals and healthcare providers?

How does it Work?

- Well there's a couple of interesting implications, you know, the provision of public policy is a little bit like the practice of painting the Golden Gate Bridge.

By the time you get done with this it's just time to get started again on the next thing.

So suddenly now 600,000 people will be eligible for healthcare benefits under this expansion.

We need to make sure that there's a capacity in the healthcare system to provide services that we need providers, we need doctors and nurses and technicians and such for these additional people that are probably by and large not receiving ongoing care currently.

The the other challenges are we have a relatively significant challenge in the mental health realm where a lot more people are expressing concerns and need for the provision of services.

Telehealth has made access to mental health professionals a lot easier for a lot of people.

But there's undoubtedly, once we get all of this settled and we've implemented the expansion, we're gonna need to have a really serious conversation.

Do we have the infrastructure in the state necessary for all of these additional people that are now eligible for healthcare benefits under the expansion?

- Kelly, can I make a point here and I wanna make sure our viewers remember this.

Day one, if that's October 1st, you don't turn the spigot on and 600,000 people go rushing into their hospital, their clinic, their doctor's office.

It's gonna be phased in eventually when folks realize they have to apply, they have to qualify, eligibility has to be determined for them.

So it's not like day one there's 600,000 people ready.

This is gonna be phased in.

But Joe does raise important points about our healthcare system's ability to absorb this over time.

And I'm glad you raised the mental health piece because I think you would get some agreement maybe with the two of us.

We've gotta make a serious investment in that and hopefully the signing bonus for Medicaid, we're gonna be able to put on to some mental health care in the state.

- Well, Colin, the media has been dropped on this, contrary to what the media has reported.

How has the media covered this Medicaid issue and the expansion issue.

'Cause people do get alarmed by headlines and what they read on the internet and the newspapers.

- Yeah, so the focus I think has been, at least the last week or so, on these people who are kinda stuck in the middle of this interim time period where they're I think 8 or 9,000 people who've been dropped since the COVID state of emergency ended, but will be eligible under the expansion population.

And the question is exactly how does it affect those people that they're not gonna have health coverage for a few months, but they're gonna get it back, but they don't know exactly when they're gonna get it back.

And making sure those folks are educated about the process I think is gonna be really important for the media to do so that folks know what their options are.

- Yeah.

Well, thanks for coming on our show.

You always enlighten us on these topics.

Well, there's growing interest in the 2024 lieutenant governor's race.

Former Republican State Senator Deanna Ballard formerly entered the GOP field this week, joining state representative Jeff Elmore.

Hal Weatherman, who worked on former Lieutenant Governor Dan Forest's staff, Rockingham County Sheriff Sam Page in on the GOP side.

For the Democrats, State Senator Rachel Hunt and former State Senator Ben Clark are running in the Democratic primary.

Mike, I thought you were running for lieutenant governor.

There was a rumor of that.

You're doing something else.

So might as well start with you on this.

What makes this race attractive?

Because people kind of say, "Ah, you don't do much as lieutenant governor."

But lieutenant governors do make governors.

- Well, let me make an announcement to say I'm here today, that I will not be running for lieutenant governor [laughter] and joining with has become a gaggle of folks.

It has always been viewed as a stepping stone and that goes well before Senator Hunt's father made it an obvious stepping stone in the '70s, but the lieutenant governor was always viewed as the next likely governor.

But that trend has changed a lot over the last half century since a young Rockridge lawyer became lieutenant governor and then governor eventually.

But, you know, why people want the job.

You know, if you like presiding over the Senate, it's fun.

You get to sit at a big desk and you know, gavel us in and gavel us out.

There are ex officio appointments though, to many boards, and if you want to get in there and make policy on a lot of things, the lieutenant governor can do that if they wanna be an activist lieutenant governor.

And we've seen activist lieutenant governors.

We've seen some that didn't take the job very seriously and do much, but some have been activist lieutenant governors.

I suspect, looking at this field, I know most of these candidates have worked with them very closely.

They're gonna be active lieutenant governors, whoever we elect to take office in '25.

And I think education, given that almost all of them have put flags down in the education field, will be very active.

- Representative parlayed to lieutenant governor.

You know, you could join.

I mean, why not?

- [laughs] Thank you for that.

I appreciate that.

[everyone laughing] I'm actually looking forward to seeing this play out.

I think it's exciting on the Republican side that we have so many qualified candidates, especially in education.

I mean, we have Representative Elmore and former Senator Ballard who both have been very active in education during their time in the general assembly but I think public safety is an important issue for the people of North Carolina as well.

So I'm looking forward to seeing them make their case to the people of North Carolina and I'm looking forward to hearing that and making my choice and seeing who else jumps in the race in the coming months.

- You have about 20 seconds for each of you.

The Hunt name still have power in North Carolina?

- Probably not as much as it once did, but it's still a significant name within the Democratic Party.

And so people will immediately identify Rachel Hunt by proximity with her father.

You know, one of the things, the lieutenant governor used to be a very powerful member of the Senate and had a lot more influence.

That's been undone.

Probably time for us as a state to talk about maybe coupling Governor Lieutenant Governors a ticket.

- 15 seconds.

Colin Campbell, Lieutenant Governor's race.

You better be fast.

- Yeah.

And it's gonna be a absolute crapshoot.

I mean, so many candidates.

Who knows who's gonna win?

I don't really wanna handicap it at this point 'cause I've been surprised before.

- We have milked every second out of this show.

Thank you so much for joining us.

What a great show and a great-- I like the dynamic here, very conversational.

Thanks to you for investing a half hour with us.

Email your thoughts and opinions to State Lines at PBSNC.org.

We read every email you send, good, bad, and the occasional ugly one.

I'm Kelly McCullen.

I appreciate you watching and I hope that we will see you next time.

Bye-bye.

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