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- We are not long from the end of 2022.

What will it look like to look back on '22?

Many of us will bid a fond farewell.

I'm Chris William, and welcome again to the most widely watched and longest running program on Carolina business, policy, and public affairs seen every week across North and South Carolina.

This time, we're going to unpack current events, as we always do.

And later on, we're joined by the Secretary of Transportation in The Old North State.

Eric Boyette joins us again.

And what are those issues that are priorities for transportation and infrastructure?

We'll find out in a moment.

We start right now.

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(dramatic music) On this edition of "Carolina Business Review," Patrick Woodie, of the NC Rural Center, James McQuilla, from the Orangeburg County Chamber of Commerce, and special guest Eric Boyette, North Carolina Transportation Secretary.

(dramatic music) - And just like that we find ourselves now in the middle of the holidays.

We welcome our panelists back, James and Patrick.

Guys, good to see you and happy holidays.

James, I'm gonna start with you.

You know, all of a sudden it seems like we have now gotten past the midterm elections, I think, thankfully for a lot of us.

But this idea now that the economy, seemingly, has taken front and center for a lot of folks, because housing starts have declined, interest rates have gone up.

It seems almost wobbly and it seems that way almost overnight.

And I don't wanna put words in your mouth, James, but do you get that sense?

Are you hearing from, not just folks in Orangeburg County, but your constituents about this?

- Definitely.

I think the fact that, you know, inflation is real.

This is not a news story that people are watching.

It's every single day we're watching the price of gas go up.

We're watching the price of food go up.

We are not watching, we're actively participating in trying to live our daily lives and do the things that we typically do while having to pay more for the things that I mentioned, food, gas, entertainment.

And so, travel, all of those things cost more.

And it's not just us hearing about it costing more in different parts of the country, it's everywhere.

And it's affecting business owners.

It's affecting employees.

It's affecting everyone.

- You know, Patrick, same question.

Inflation is not a new phenomenon.

Certainly, historic inflation is not a new phenomenon now.

But is it worse?

Is it better?

Is it mostly behind us or people have accepted it and wearing it?

What's your sense, rural communities as well, as just in general?

- Well, my sense is it's affecting virtually everyone, as James just said.

But I also think there's some real contradictions in what we see there are.

There's evidence that some things are going extremely well.

Unemployment rates have come down, even in our most rural counties.

You know, there's quite a few employment opportunities at this point in time.

At the same time, prices are rising.

That's a concern for every family in the state.

So, I've never seen a time where you have mixed, all the things that we typically look at are not telling us the same thing, in terms of, there's a lot of evidence that the economy is still pretty robust, going pretty strongly.

And there's some other signs that things ought to be slowing down.

- We have two things that have happened recently, in both Carolinas.

In South Carolina, the announcement about a month ago, James, that BMW was making a $1.7 billion additional investment in the upstate.

And then they talked about adding 300 jobs.

And I'm gonna get to you with that, Patrick, because Microsoft recently announced and everything else.

But James, where are 300 jobs gonna come from?

How do they do it?

What's the magic bullet?

Is it technical colleges?

Do you have a plan?

How do we fill these jobs that are needed?

- That's the $64,000 question.

(James laughs) I mean, what you're seeing is people moving around.

You know, unemployment in South Carolina is at or just below 3%.

I mean, if you wanna work, you can be working.

There's probably more jobs than folks available to work them.

So when you see a company say, we're gonna be able to bring in 300 more folks, we may have to have some folks moving from North Carolina to South Carolina to take some of these jobs.

You know, I'm being facetious there a little bit, but we're gonna have to be creative because you don't want to continue what we are seeing, and I was speaking with one of our larger employers yesterday, Allied Air, and you know, you don't want to see folks leave one company to go to another company because that's not helping the situation.

That's gonna leave someone without what they need and that's problematic.

So we've gotta figure out other ways to, as you mentioned, maybe go to the technical schools, some of the four year schools, and even recruit out of the high schools.

I think people have forgotten that young people graduating are adults, okay.

So in the past they went from the high school to regular employment.

That was how things work.

And we may have to look to the past to figure out what we need to do in the future.

- Patrick, this situation is exacerbated because economists will say it's not, and I'm paraphrasing this, but economists have said this is not the great resignation.

This is actually a demographic problem.

And the fact that the boomers are leaving the workforce and Gen X, Gen Y, millennials, et cetera, et cetera, do not have nearly the number in their cohort to backstop the boomers that are leaving.

So if that's the case, again, what's the silver bullet?

Maybe not even the silver bullet, but what would be at least an acceptable solution here?

- Well, I think it's really critical at all levels that we focus on the entire population.

So we need to be focused on upscaling the skills of our adult workforce that are still working.

We've gotta recognize post pandemic in this, if we are indeed post Covid, post pandemic, or at least have learned how to live with it, you know, everybody everywhere is rethinking everything about their lives.

And many people are making decisions to live life differently and to do things differently.

And it's going to take a while for all of that to kinda sort itself out.

In the meantime, with the job announcements we've had, the really strong positive, we probably never had a bigger year in North Carolina than some of the announcements we've had over the course of the last 12 months.

And, you know, it's an all hands on deck.

Community colleges are going to be critical, but also our universities are going to be critical in filling those jobs of the future.

But we cannot neglect for a minute focusing on the adult workforce and trying to move them up within the sectors that they're in, attract them to sectors where there's great demand.

It's a daunting task, no question.

But in North Carolina, at least, community colleges are gonna be a critical part of the solution.

- Yeah.

Patrick, thank you.

Daunting is probably an understatement.

Maybe confusing is also can be thrown in there.

And speaking of community and technical colleges, next week on this program, he is the head of the South Carolina Technical College system, as it's called in South Carolina.

His name is Dr. Tim Hardy.

He will join us.

Maybe he has some answers to that.

Before that and now let's bring into the dialogue someone who has been here before.

He knows a little something about economic development and transportation and infrastructure, et cetera, et cetera.

He is the Secretary of Transportation in The Old North State.

We're glad to have back on the program, Eric Boyette.

Your Honor, welcome back and thank you for joining us.

- Thank you, Chris.

Thank you for having me.

Glad to be here.

- Well, let's unpack this a little bit, Your Honor, and let's take a look at Mr. Secretary, the idea we've been talking about the economy.

And I know, just to talk about roads or transportation and infrastructure or rail, et cetera, et cetera, which I'm sure we'll get to.

But as you heard the dialogue, as you think about it, sir, do the priorities change with DOT funding and projects and the deployment of capital, based on what this new economic model looks like now that's right in front of us.

Do you think differently about this?

- So, you know, Chris, what we do, what we've done, you know, our team is really engaged with our partners.

You mentioned, you know, the community colleges, but we also are engaged with our business community to talk about, you know, when we talk about workforce, you know, looking at, you know, the remote work assignments, you know.

How does that impact our travel?

We're really doing, you know, we've done studies on our roadways and we did notice during Covid, you know, it was our peak times were flattened.

And we noticed the peak times were averaged across all of our network times.

But now we've noticed the peak times are coming back, but they're not really peak anymore.

You know, we still have those peak hours in the mornings, in the afternoons, but we still have high demand traffic throughout the day, which is different for us.

So our models are changing.

Our average daily traffic is, you know, is something that we monitor, but we also have to continue to look at, you know, what the communities need.

And work with our metropolitan planning organizations and our rural planning organizations and partner with them on, you know, they are our community eyes and ears, and they tell us what their needs are.

And for us, we do, as many of you know, we do a 10 year state transportation improvement plan, and we just finished our draft for that.

And working with our metropolitan planning organizations, NPOs and RPOs on that is really important, Chris.

And that was one of the things, we actually gave them options this year for the first time ever to swap projects.

Are there projects that you need that are not in the current step that you need so we can take some off the books and put new ones in.

So it was really a change this year for us going through that capital program and really looking at the traffic demands.

And as you mentioned, you know, our economic growth.

You know with our major announcements that we've been very fortunate here in North Carolina to continue to provide that infrastructure for, you know, those capital improvements.

So it has been an interesting two years, let's put it that way.

- I would say that's probably also an understatement, Your Honor.

Let me just do a quick follow up on something.

Can an agency like DOT, and it's a big one, of course, can you be nimble enough to pivot quickly if you see a change in, as you described, the dynamics around peak times are not peak times anymore, but they are, but they're changing?

So as we continue to unfold this model about, what is hybrid working?

What will it look like in a year?

Is it gonna be different?

Can you pivot quickly enough to move with that?

- To your point, we are large.

And we plan, you know, 10 years out, but we also are looking at a five year model.

So something our team is doing instead of the 10 year model that we, you know, we have to be physically constrained with our federal partners, but we also are looking at a five year model to actually, can we be a little more nimble?

But for us, the great news is, you know, it's not just highways.

You know, we have so many different modes of transportation that we support and our rail, for example, for September and October, we've had the highest months of ridership that we've ever had.

So I think for us, you know, making sure that we, you know, make sure the public understands that highways is one facet of our modes of transportation in North Carolina, and ensure that they're aware of all the public transportation that's available and the different, just different modes.

I think for us that's how we become more nimble is to have more options and more tools in our toolbox for our citizens.

- Let me bring the panelists in James and then Patrick.

- Well again, I agree.

I think we have to be creative.

- And I'm sorry, James, do you have a question for the Secretary?

- Well, actually, I don't have a specific question, but I was agreeing with the fact that we have to be creative and be nimble fo change to occur.

In my mind though, I'm wondering, are we not seeing something, are all the experts, and I think we can consider ourselves economic experts of some type, are we not seeing something in this new millennia that's keeping us from figuring out why there's still inflation when the job numbers are, you know, the job market is good, the unemployment numbers are low.

We're arguing whether or not we are actually even in recession because there's still so much growth and so much money in the economy.

Is there something we are not seeing that we need to be looking at in order to, you know, to right this ship?

- [Chris] Go ahead, Secretary Boyette.

- I think James, I think, you know, I think that's part of the problem is we're trying to define, you know, where are we?

You know, and I think we're in a point in history that we can't look back.

You know, we always look back in our history to try to define, you know, are we back in a recession?

Where are we?

I don't think we can.

I think we're in a situation with, you know, what Covid brought upon us with economic growth that we're seeing, it's just something new that we're all having to deal with and find our way forward.

And I think through, you know, a great leadership, partners like Patrick in North Carolina just working towards, you know, things like broadband expansion.

You know, that continues even though we've got, you know, we've got this cloud of people talking about recession and everything, but we continue to move forward.

And I think for us, that's what we focus on.

We don't try to focus on where we are.

We focus on where we need to be.

And I think for us, that's really what's positive for what we're trying to get accomplished for our citizens.

- Patrick.

- Mr. Secretary, it's great to see you.

You have more than your share of daunting challenges that you're overseeing.

I was very honored to serve on a commission that you pulled together to take a look at the long term funding needs of transportation in our state.

And we know we got a revenue problem.

We got a revenue problem today, and it's gonna be exacerbated as we move into the future and as we make a transition to EVs and hybrid vehicles.

Could you just speak for a minute about, you know the need to really change the revenue funding sources that your department deals with?

And do you feel like we're making progress in the direction of modernizing that revenue structure?

- Absolutely.

And you know, I always like to talk about revenue, Patrick, so thank you.

It really, you know, the NC First Commission really did a great job, great group of thought leaders, policy makers that came to the table, nonpartisan, looked at transportation funding and brought in great ideas.

Those great ideas were then handed over to our General Assembly who then created an NC 10 Committee and now are continuing that effort.

We were very fortunate during this last budget session to receive additional funding, about $600 million over three years, staggered through 2, 4, and 6% increase.

Very, very thankful for, you know, all of our partners and our General Assembly and our governor for signing that budget bill.

So that that money is part of that transformation.

I think everyone knows, it's back to your point about a silver bullet, it's not the silver bullet.

It's the beginning of that modernization.

And those talks and conversations are continuing as we speak for that future revenue generation.

Because honestly, when, you know, when we looked at our program for the next 10 years, we were about $13 billion over program.

What that means is there was that much work that our communities and our citizens need in each and every part of our state and region.

And they asked and said, "This is what we need."

But our future revenues would not cover those needs.

So with the IJ or the bill, the bipartisan infrastructure law, that cut that back to about 8 billion, and now with this injection of some of the, you know, beginning parts of the revenue we're seeing out of the modernization, it cuts it back to about eight and even further.

So we're continuing to look at revenue and Patrick, you know as well as I do with the economic growth that we're seeing in our region, we have to continue to provide the infrastructure that's needed for these, you know, opportunities.

It's just a great way for us to have conversation because we all know the gas tax was great at its day.

We know in the future it will not be the sustainable revenue funds that we need in transportation going forward to maintain our 82,000 mile of roadways, 18,000 bridges and cohorts.

It's not gonna do it.

- So Secretary Boyette, to unpack that a little bit more, when you look at revenue sources and it can't just be General Assembly or taxes on traditional internal combustion engine, and you look at the Turnpike Authority and you've seen some success with toll lanes and toll roads, not just in Charlotte, but in Raleigh as well.

Do you rethink, and now that you've got some history with, in specifically toll lanes in the Charlotte region, which is a public private partnership, has that informed the way that you're going to approach structuring any deals going forward?

And is that a source of growth and revenue?

Could you bank on the idea that you can work out a deal and look at toll roads as a way to do it?

- You know, and I think, Chris, for, you know, tolling, we look at it as a tool in a toolbox.

We actually, back to the conversation around our MPOs and RPOs, you know, we try to provide the data and the facts for, you know, that region to understand the options they have available.

And you know, the tolling is definitely an option.

The public private partnership is as well, but we wanna make sure that we are not deciding that for any of our communities.

We want to make sure that our communities have all the fact and the communities need to decide what's important for them and what makes the best interest for that community and what they need to move forward.

It's our job to execute on that and make sure we deliver what we said we were gonna deliver what they want, they need, and they will utilize.

- James, do you have a question?

- I do.

You know I'm a big proponent of innovation and really for the last, I think 40, 45 years, we've been discussing between North and South Carolina, the idea of a potential light rail system, maybe from Charlotte to Columbia.

Is there an opportunity still for both the NCDOT and the SCDOT to work together to make something like that happen?

Because I think it would help us all in the region, even with the idea of workforce and how it can be expanded.

- James, I agree and we've partnered with Virginia on an S line project that will carry, you know, commuter real not only through Raleigh, through, you know, Henderson through parts of our state, northeast up to DC through Virginia and south is the future.

So we always, and my partner Christy Hall and I have conversations about this.

Christy's my counterpart in South Carolina who I deeply think the world of, great individual, great professional.

We've had those conversations and it is, but I just want that train to run one way, James.

I want all the people to come to North Carolina to work.

- Yeah, I'm sure you do.

Do you talk to Christy Hall a lot?

What are those conversations like?

- Yes sir.

It's really good.

We actually, especially during storm events, she and I will reach out.

During the recent winter weather, we kind of partner to make sure that, you know, we're in lockstep with our approach to make sure that, you know, there's no border when we're working together and the citizens are what's most important to both of us.

And we make sure that we are, you know, in step and we know, you know, if we need partnership in the border, we always do.

It's just a good, I can't say partnership enough 'cause that's what it is.

And I really appreciate not only her partnership but her friendship as well.

- Patrick.

- So Eric, we look to you to meet all the transportation needs of the state, but we often forget that DOT in its own right is a major employer and you have major workforce needs and challenges and you're looking well into the future to see, you know, where's your engineers coming from, where are all the different levels of expertise that you need.

And I wonder, I know, I wanted to call out the work you've done and really reaching all the way down even into high schools and middle schools and elementary schools to get young people thinking about the careers of the future.

And many of those are in your department.

And I know you're really concerned about meeting, just having the workforce that you need to meet the needs of this state.

- Yeah, and Patrick, thank you.

And we're, you know, it's a good partnership.

And if I haven't said it once, I'll say it 100 times.

That's one of the things I hope that during my reign here and my administration here with my staff is the partnership piece.

And Patrick, you're right.

We've got a 22, this morning, it's 22.10% vacancy rate for our entire agency.

So, you know, think about DMV.

DMV's the one because that's the public facing arm of our agency.

And you know, we have people standing in line and, you know, they're not sure why they're having to wait.

But when they get in the building and they look and they see there's six terminals that we have available and we only have two open and we get the question, "Why don't you open the other four?"

We're starting to hand 'em applications and say, "Look, do you wanna work for us because our workforce is so low."

You know, we're trying to get that message out that, you know, help us help you.

You know, schedule appointment ahead of time, don't wait until the last minute.

You know, and to Patrick's point, we are reaching down into high schools.

Anywhere and everywhere they'll let us come in and talk about transportation.

Not just engineers.

You know, we have auditors.

We have accountants.

You know, we are about a 9,000 employee driven, big construction company.

That's the way I look at it.

So we have a lot of different opportunities here.

We've got our DMV arm.

We've got turnpike as you mentioned.

We've got a great port.

We have two deep water ports and inland port.

We have a global transport.

We've just, you know, aviation, rail, you know, we have a lot to offer.

So trying to go out and get that message out and talk about how great it is to work in this agency is something that we do each and every day.

Our staff does.

They do a great job in their communities because if you think about it, you know, in these 100 counties that we serve, the agencies, the units there, they work in these communities and the people know them.

So if they'll go out into these communities and talk about the jobs they do each and every day, it just helps us grow.

So we're doing everything we can.

- Mr. Secretary, thank you.

We're literally out of time and we have so much more to unpack, but thank you for your leadership.

Thank you for agreeing to come on and talk about some of these issues that probably aren't everyone's favorite, but we appreciate your leadership.

Happy holidays to you and thanks for joining us.

- Thank you.

Happy holidays each and every one of you.

- Thank you, sir.

Patrick, goodnight.

James, goodnight.

Until next week, I'm Chris William, goodnight.

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