- The Phil Berger / Sam Page State Senate race heads toward a recount and state House leaders propose asking you the voter if property tax hikes should be limited.

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♪ - Welcome to State Lines.

I'm Kelly McCullen.

Joining me today our good friend of the show Skye David of New Frame Incorporated, to her right former North Carolina state senator Mike Woodard of Durham County.

Jim Perry of NC Capital Strategies is in Seat 3, and the staller, Colin Campbell of the Capitol Press Corps and WUNC News more importantly.

Hello everyone.

- Kelly.

- March is basketball.

March Madness is here.

Go High Point and you're an Illini fan in Wisconsin.

How about is it March Madness for politics?

A little quiet except for one thing.

- We have Madness year round in politics.

- How about that March Madness recounting in Rockingham and Guilford County.

That process was conducted this week in that Phil Berger / Sam Page State Senate race.

The Berger campaign requested the machine count.

It got it.

23 vote lead for Sam Page remains 23 vote lead for Sam Page after the machine count.

There's some requests out there to possibly select a few precincts to see if a possible hand recount.

We don't know what's going to come of that as of Friday.

Colin, let's go to you on this one.

There are a lot of options to protest this race if you're the Berger campaign.

What do you expect to happen?

- I think well who will most likely go through the whole recount process by the time people are watching this.

He will probably have requested a which was considered a selected a randomly selected hand to eye recounts not counting every ballot by hand but pulling out a certain randomly selected number seeing if they match the original results.

And then after that it's a question of whether any of his pending election protests which really only involve about a dozen or so voters at this stage would make any sort of difference and whether he's going to continue to pursue that into April.

But we're still days maybe weeks away from having an official winner in this race with all the different post election things.

I mean this this is pretty typical for your 23 vote margin race.

You're going to see every possible avenue to make sure everybody who should have voted voted.

Everyone who shouldn't have voted didn't vote and all the ballots were counted correctly and that seems to be where we're headed with this.

It's a question of whether it drags out beyond that if there's any sort of outstanding complaints that we haven't seen yet.

- Jim when it comes to the elections and running for office and all the processes that are legally available.

You'll read online people say Berger should just recuse and give the victory to Sam Page before every avenue is exhausted.

Is there a problem is the Berger team wants to go through every step?

- I don't think there's a problem.

I think you always are going to hear something like that from the other camp or the other side regardless of who's in the election.

We have a legal process that's laid out for them to follow and I think every candidate is afforded the right to use that process.

- Mike on the recount, election integrity in action or is this open the door for the critics of what Senator Berger and the legislature have done with the election process in North Carolina which is it more more stable or more questions?

- I actually think it's more stable.

Look we went through the recount process.

It was the same number we had after the canvas was done.

So here's to those local elected officials, the executive directors in one hundred counties, those appointed boards and for our those folks in the precincts working all day well all through early voting and all day on election day for running good clean elections in North Carolina.

So that's what to me what it says is that we run good elections here.

- That race had twenty six thousand voters in it and only one in Guilford for each candidate and one in Rockingham were you know miscalculated.

So it really instills sort of that feeling that our elections are correct.

Well I need the attorney scientist guy David here.

If only thirteen votes are under protest you need Phil Berger needs twenty four votes to go his way.

Yeah.

Why worry about the thirteen or is it just as an open the opportunity for further processes to unfold?

- It seems like it just opens the opportunity.

I don't know if this is a lawyer question sounds like a math question and I'm not great at that.

But it seems like it is just playing out every string that is possible.

- I think the thing to watch in the next couple weeks is this protest in Guilford County that allegedly up to eight maybe more than eight voters might have gotten the wrong ballot.

That's something that the elections board there is looking into.

Scheduled a hearing for April on and if that turns out to be more than eight people then suddenly we might be looking at a different ballgame here.

If it's less than eight people or no one at all that actually legitimately got the wrong ballot and didn't have that race on it then that goes away pretty quickly.

- Help me understand this wrong ballot deal.

Was it a Republican primary voter that got a Democratic ballot or is there some allegation they had ballots that just didn't have Sam Page or Phil Berger on it?

- Guilford County is split between three different Senate districts and some of the even individual polling places people might be getting different races that they're in.

So the question is did somebody get a ballot that was not part of that Senate district?

It was for somebody who lived in a different Senate district or did they just think maybe they were supposed to vote on Page and Berger?

I mean this was a thing that had so many ads everywhere.

A lot of people probably thought that that was their district and maybe they realized on election day actually it wasn't.

- Is it that confusing Mike out there?

Are the districts drawn in such a way that the average voter could get stumbled?

Maybe go to the wrong precinct you file a provisional.

- Yeah, I think there is some confusion.

We had school board elections in Durham County in the primary and we were in four individual districts.

So there were a lot of people who went to their district to vote or they went to an early ballot.

I mean an early voting site and got they thought they could vote for candidate A when they were really in district C. So they didn't get to vote for candidate A. So there is some confusion.

Guilford an example with three Senate districts there.

- And I zeroed in on the maps once.

There's one part of neighborhood in High Point where this house is in Berger's district.

This house is in a different district.

This house is in Berger's district.

So it's I mean if you live in those areas it's got to be confusing to know who your senator is.

- Jim I have to ask you this.

You're an ex-senator but the Senate President Pro Tem is losing the race as of right now.

How long does it take that caucus to start thinking and those that have higher ambitions to start mapping out their colleagues or their allies in a battle to be Senate President Pro Tem of the next long session?

- I think that those that have ambition have those thoughts.

They've always had those thoughts.

And I think it's a little early for them to move forward with any of those at this time.

We have to see the results of this election.

And I think that Senator Berger will handle everything appropriately internal with communication as he makes decisions for his campaign and what he's going to do next.

- What is the vibe inside that legislative building just as a tone with with this idea of an upset Sam Page becoming state senator?

- I think it is a little bit chaotic and there that was a great answer.

But I do think that it does instill a level of gossip throughout kind of the bubble of people that are within the General Assembly and on the outskirts of it.

Just talking about what could be if this happens and that is the discussion you're hearing every day over and over.

- Nobody I've talked to seems to think there's an obvious heir apparent to Berger should he lose.

There's I think four or five maybe more names that are floating around that Republican caucus of people who might be interested but who can get the majority support of the caucus is very much an open question and nobody wants to say publicly that they're interested because it's entirely possible Berger pulls this out and he's here for two more years.

- Mike if Berger pulls this out is he a weakened Senate President pro tem?

- It'll depend a lot on his caucus.

Senator Berger has shown and Jim lived it.

I got to just be on the outside watching for twelve years but he has built a good staff.

He's had a very disciplined caucus in the fifteen years that he's been leader now pro tem.

So it will depend on how - if he prevails, continues serving as pro tem in the new legislative session.

Will his caucus line up behind him and my money is that they will.

- Every vote must be counted.

The House Committee investigating if or how to remove local property taxation procedures are now focusing on a possible state constitutional referendum as a solution.

That means you voters could decide whether local property tax increases should be capped to a degree.

Supporters want that state constitutional amendment because should lawmakers pass a state law could simply be repealed by future legislators.

House Speaker Destin Hall's office says many counties have raised taxes beyond the county's population growth percentage plus the inflation rate which that math, talk about math, Skye.

That's a formula I remember going back to the old days of minority leader Skip Stam.

Grow your budget by inflation plus population growth.

I think we've I think the hands been tipped hasn't it?

- Yeah this constitutional amendment proposal that was presented in committee is really interesting because it says to the voters you direct the General Assembly to cap this and right now there is a state statute that does that and I believe it's a dollar fifty for every one hundred dollars but it would direct them to do it so every two years that could change and it's only the cap portion of levying taxes.

It doesn't do anything about revaluation that you hear about people complaining over and over so it is just one portion and Chairwoman Julia Howard said this in committee.

This is complicated.

These solutions that we're presenting today are not going to solve the problem.

- Mike I think Representative Howard has said nineteen iterations of a possible constitutional amendment referendum or at least the wording of the language.

This is a big deal.

Whatever came out of Florida really got up here and stuck.

- Last time I was here we talked about this issue and I said I would hope that the legislature would slow down and look at this because it's complicated and I think that's exactly what Representative Howard said in committee this week is that and she asked the speaker to let this study committee continue its work through the legislative session and not rush anything in the short session.

I'm hopeful that's what we'll do.

This is a very complicated issue, has repercussions through all one hundred counties and all five hundred municipalities and I certainly hope the legislature will take time to look at it and consult their local governments.

- Jim how off base are county commissions and how they're setting their rates because everybody that owns a house love the value of their house going up and in some cases the taxes have gotten a lot higher but the price values a lot higher too.

- Sure so I think any time you're dealing with some type of mass system right it's not going to be as accurate on a per home basis and they do this in that fashion.

I think that we all hate property taxes everyone agrees on that but everyone most people still want services.

Florida's a lot different you know you think about the money they get from tourism municipalities counties must have revenue to grow but I'll want to say two things revenue neutral is not tax on your home neutral meaning the homes even if you're revenue neutral at the county level what thirty forty percent of them can still increase what they pay so it is not a panacea.

I also think when we start talking about the Tabor number only growing by inflation plus the is inflation and rate of growth.

- Tabor number explain that for folks.

- It came I learned about it for taxpayer bill of rights something they have done out in Colorado that works if you're paying your bills today so if you're meeting all of your needs today that's a reasonable growth rate but it's like me having money left over because I didn't pay my car payment well I can't go by Tabor right I can't just make that adjustment I have to have that flat line where I am paying all of my bills now I can control my growth.

- Yeah you look at some of these local governments that have gotten themselves into a hole like the city of Rocky Mount and it's like does that kind of growth percentage allow you to fix those kind of problems when when you have those things crop up in local government where they suddenly need a lot more money for the next couple years but maybe that's not in line with their growth.

- You know I'm a local government guy came up to local government and always fought for them but I think local governments have got to have the conversation Jim mentioned it is in those years when your property gets revalued often the tax rate would drop to keep it revenue neutral so that taxpayers are paying the same and I think what we've seen Representative Pare, I think started with this because she's experienced it Wake County we've seen in a number of other counties is that in reval years when your home is revalued and usually goes up in value a lot of local governments have also raised their tax rate at the same time so it's a double whammy.

I got hit with that in Durham this year my value my house went up great for me but my tax rate went up too.

- Speaking of the Constitution though it's important to note that our state Constitution states that it has to be uniform across the state so you can't say well Wake County payers can pay a little bit more than maybe Nash County payers can so that levy or whatever is going to happen has to be uniform across all 100 counties.

- Colin, cynics will say it's a bad turnout year for Republicans but if you tell a Republican they can vote on our conservative they can vote on a property tax cap in this state just show up in November.

They're going I think they're going to do it is part of that the game too?

- I'm sure that's certainly an element of it and that's why we're talking about doing it as a constitutional amendment.

They can do this without a constitutional amendment but it does mean that a future legislature could change that typically future legislature is not eager to suddenly pull back some tax restrictions and let taxes go to town but I think that's that's why this has some juice.

I think we may see some other things too like the changes to loopholes for hospitals or for apartment complexes or sort of an easier lift to kind of make the burden a little bit more fair for places that have gotten a little out of whack and who's not exempted from paying property taxes but certainly you know people aren't that excited about Michael Whatley's Senate campaign they might be more excited about lowering their own property tax rates.

- Jim why are constitutional votes they seem to be very popular and voters to me from what I've seen this is anecdotal they do seem to pass constitutional amendments and defeat very few of them.

- I think especially when it comes to taxes there is nothing more bipartisan and unifying than everyone paying less right everyone wants to pay a lower tax number.

The constitutional amendments to Collin's point they're not going to be reversed if you ever get that to the Constitution you will not see that.

- This state can't repeal the literacy test right and the one that they need to remove and can't do that so this really does lock it in right Mike?

- It kind of locks it in yeah and constitutional amendments are always interesting one of my favorites is the with constitutional right to hunt I mean when we put that one on the ballot who was going to vote against that one so it draws people out even one that seems as crazy.

- And it's a short question on your ballot the nuance is not there for a lot of voters.

- That's exactly right.

- Skye, you said there's so many committees what if representative Julia Howard wants to take the time of the committee let it work through maybe not the spring into next year what is a meaningful amount of time to come up with policy in Raleigh and what does that really mean because so many of these study committees end up doing nothing at the end of all that work?

- Yeah well they have only been together for a couple of months and they've already submitted four draft proposals so I think that this is truly a working committee they are working and listening to all members of the committee and working through what options are and so I think by the end of the year maybe you could have three or four more pieces of legislation that could be impactful.

- Are Democrats part of the house committee you think they're engaged in this or is it is that just a show for the Republicans to show bipartisanship?

- I think they are engaged and they are part of the committee and I believe that they're taking questions from everyone and it's a concern that I think all legislators are hearing from their constituents so it affects everyone equally.

- Can voters speak so loudly to Raleigh that the games get cut and work can get done or at least heavily considered like on a real bipartisan bill that you would think would be conservative?

- Yeah no I've always believe voters and constituents can't complain loudly enough and get their legislators to take up something.

Jim's right.

Taxes is the one thing that seems to unify everybody so I bet Jim and I would agree a lot about the taxes that we're paying.

- Alright let's go to the next topic.

We'll talk about these data centers.

North Carolina town governments in some places are now beginning to push back in earnest on data center developer zoning requests.

Over in Apex North Carolina which is you know south of Raleigh they're considering a one year moratorium on data center requests.

Leaders there say the town really doesn't have a definition of what it means to be a data center.

Lee County commissioners are considering a data center request that could see the data center frack for natural gas to fuel the facility.

That meeting was absolutely packed.

Other towns and counties have welcomed data centers Jim.

They like the local property tax revenue say it's been positive.

I know your team is out there I hear crypto AI.

You're on the high tech side of this policy issue.

What are people not getting right about data centers and where should they be worried if one wants to come into their town?

- I think it's such a new space and new category that I think it is reasonable for folks to say hey we want to understand more about it.

But I think of this as like when Kodak originally invented digital film and did not want to move forward with it because it would hurt their existing market.

You know what happened right?

This is coming.

This is a change that is coming to our country.

It's a need.

We're going to have to figure this out.

We can't put our head in the sand about it.

- It's not going to go away at any rate.

- In fact it's going to come at us more quickly.

- Mike those small towns that have like data centers Apple being one, Google have some facilities I think out towards the western part of the state.

How can there be this widespread state coalition against something when parts of the state clearly report tax revenue benefits on behalf of property owners?

- Well I think there's a divide.

I think so what you're seeing is a lot of local governments particularly these rural counties that don't have big tax base can see that this hundred acre site could host one of these data centers and the value that property goes way up and that can very quickly be one of the biggest tax generators, revenue generators for that county.

What you're hearing though is a lot of concern about the amount of electricity and water that these facilities need and does that detract?

Is it going to force our power companies, Duke Energy, our co-ops to have to go so fast?

Jim's right.

I mean this cow is out the barn door and it's not going to stop anytime soon.

It's only going to increase.

We have ninety two of these centers now and I think there are a few dozen in the pipeline right now.

But it's, you've got to look at the energy usage and the amount of water that's needed to keep these facilities cool.

- I think the big concern is who's going to pay for this?

Is the entire additional cost going to come out of the major tech companies that are doing it or does it have the potential to drive power costs up for everybody else?

If they need to build new generation facilities?

Is there an environmental impact?

And the bottom line I think for some of these communities is yes it's a tax based benefit but it doesn't usually come with that many jobs.

This is not building a factory that employs eight hundred people and suddenly everybody in town can get a new higher paying job.

So there's less of an upside than there is with some other types of industrial developments that we typically see.

- Skye, what's the vibe at the General Assembly?

Has the full AI lobbying team sprung into action yet or is it still, we're still fighting at the local level and then maybe the General Assembly might would step in and try to regulate something at the state level?

- Yeah I think right now it is definitely a local fight but it's going to come up to the General Assembly but maybe you should ask the guy that's working on AI.

- We'll ask the guy.

How hard do you have to push and what is the fairness?

What is the audience right now in the General Assembly?

You just need the Republicans but what are the Democrats saying as well?

- I think this concern is something for everyone who sees the world changing around us and knows that we can't stop it.

I think patchwork regulation is a bad idea for our state.

I think we probably do need a state level solution on this.

- Will there be a state level solution or should this be fought out county by county?

A lot more stories out there for you Colin if they'll just fight county by county.

- Oh for sure but I think at a certain point there's a lot of big money behind this and it can be addressed sort of uniformly at the state level.

There's going to be a push to do that.

We're already seeing challenges.

I think Virginia's legislature just adjourned their session without a budget because they couldn't agree on whether to take away a tax credit for data centers.

So certainly the tax policy around this is probably going to be an issue here as well.

And again who covers the cost?

- No budget, that's addictive Skye.

When it comes to AI and all this, if we weren't using it, we wouldn't need data centers.

So there's something wrong if the public's fighting this too hard.

We're feeding this supposed monster.

- Yeah.

- Love it.

- Yeah.

I think to Jim's point, it's here.

You have to deal with it in some manner and it's something that all states are going to be dealing with.

Maybe us more than a Rhode Island but it's something you're going to have to address and you should be on the front end of it instead of playing catch up.

- Mike, we've got the talking robots now that will give you advice.

If we just get the flying car, it will be the future that I thought we'd have in 2000 as a little boy.

- Like the Jetsons.

- State Treasurer Brad Briner says Aetna's contract with the state health plan will be put out to bid as soon as that contract term ends.

Aetna will be completing that three year contract, Colin, in 2027.

The treasurer's office sent an email out saying the Briner administration has different priorities and a new health care contract should reflect those priorities.

Aetna won the state health plan contract from Blue Cross Blue Shield and began offering services to state employees and public school teachers in 2025.

So if you're not on the state health plan, why should you care?

Your tax dollars support state workers and if you're a state worker, this is your health insurance plan.

And for the record, Mike in his civilian life works in the health care industry is asked to step aside on this debate.

Hey, it's fair.

That's part of the transparency of State Lines and thank you so much for doing that.

- And to be fair, Kelly and I think are both on the state health plan as employees.

- And we're on the state health plan as well.

So yeah, that's transparency folks, but you don't get off the hook.

You're the reporter.

What's Brad Briner doing?

He's reformed the retirement plan in a year and a half.

And now in two years, we're going to see maybe a new or a reversion of the state health plan to new managers.

- Yeah.

So I went to the state health plans board meeting this week and the one thing they stressed was this is not necessarily we're firing Aetna right immediately with just that there's the contract is up for renewal.

We want to make sure we're getting the best deal possible with Aetna and if other insurance companies come in here with a better deal for the state.

The thing that they're dealing with is this health plan has had a pretty big deficit that they're trying to reverse.

So they've increased premiums for state employees to cover that.

They've changed some of the coverage requirements to save some money.

They're trying to steer you towards preferred providers who will give the state employees a better deal all to sort of make this sustainable for the long term.

So I think figuring out which company you contract with is a piece of that to make sure they're getting the best deal possible to make sure there's an effort to cut those costs and make this sustainable for the long term so that state employees can continue to get benefits that are often better than what they see in the private sector and the state can employ and recruit really good workers.

- Under a minute, Jim, will lawmakers stay out of this when is Briner doing the job that Republicans expect we won't need?

He won't need help if you will.

- I think Republicans and Democrats are thankful for Brad Briner.

He's one of the smartest guys I've ever met.

I think he's doing a heck of a job.

They're actually showing a forecasting a surplus now where they were down so far before.

He makes good decisions and he leads a group of people to make good decisions.

- Mike, 30 seconds I gotta be out.

Anything on the health plan?

I can't talk to you, Skye.

Violate my own rules.

Last word.

- Yeah, I think that this is something that affects a lot of people and so it's going to remain in the news when they switched from Blue Cross to Aetna.

It was a big deal.

And so looking at how that could save money is going to be a big deal.

- That's the show.

Thanks, folks.

Email me your thoughts, statelines@pbsnc.org I'll read it.

Take care and have a great weekend.

♪ - Funding for state lines is made possible in part by: - Across North Carolina, strong communities begin at home.

The North Carolina Realtors represent more than 55,000 professionals statewide focused on expanding housing attainability for all.

- Quality public television is made possible through the financial contributions of viewers like you who invite you to join them in supporting PBSNC.