- North Carolina reaches a near half billion dollar settlement to clean up eastern North Carolina water supplies.

And is enough money from North Carolina's education lottery funding, funding our educational systems?

This is State Lines.

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(upbeat music) - Welcome back to State Lines for this weekend.

I'm Kelly McCullen.

Joining me today, great group of analysts for the topics we must discuss.

Patrick Newton, working hard for the North Carolina Forward Party.

Hi Patrick.

- Happy to be here.

Thanks Kelly.

- Former State Senator Mike Woodard is in seat two with Brooke Medina of the State Policy Network.

Hello you two.

- Hello.

- Hey there.

- Joe Stewart's in seat four.

He is the political analyst, can talk about just about anything.

Just ask him any question.

- The Swiss Army knife of State Lines.

- Well we need you Joe.

It's good to see everyone.

We wanna start this show discussing the deal.

North Carolina has reached nearly $600 million in value with the company Chemours and DuPont over PFAS contamination.

The agreement includes about $455 million that will be spread among 11 local governments in the state that were affected by pollution from Chemours' failable works plant.

That money will help provide clean drinking water and address PFAS contamination in Southeastern North Carolina.

Chemours says it's already spent nearly $1.2 billion cleaning up the failable site and fulfilling other requirements Joe.

DuPont and sister company Corteva are legally liable to cover any future payments should Chemours somehow, bankruptcy, be unavailable to do so Joe.

All right, Southeastern North Carolina.

I'm from there.

One of those counties is Sampson County.

That's my home county.

I've been drinking the PFAS I guess.

Not that I'm biased, but what is 40, 455 million split 11 ways?

Yeah, this is a interesting challenge.

I mean, the facility was originally constructed in the 1970s and right there on the border of Bladen County and Cumberland County.

It wasn't until about 2017 where it was identified that these chemicals and the challenges, they're often referred to as forever chemicals.

They're used commercially because they're resistant to water and oil and stains.

So they're in fabric, they're in firefighting foam.

They're even in the bags that microwave popcorn comes in.

It's widely used, but it doesn't break down easily.

And so it lasts a long time when it is in the contaminated state in soil and water.

And this has been found to affect 3.5 million North Carolinians but 500,000 people along the Cape Fear River Basin are impacted it because that's where their drinking water comes from.

So in effect, this will be a 15 year payment for these local governments and for the state to mitigate the impact of these chemicals having been placed into the Cape Fear River out of this manufacturing facility for so long.

And so it will cover the cost of remediation and updating water filtration systems to try to address this issue.

- Brooke, why wouldn't $1.2 billion has already been invested without a judicial order or a lawsuit settlement.

Why is that not sufficient in this case?

- Well, I think Joe highlights the scale of the damage that was done.

And I think that that's something that, you know we could talk about from Raleigh, but the weight of that you're from Sampson County, the weight of that really sits with those people that were victims of that.

So I think that that's part of it.

But I do wanna just highlight a little history lesson if you will, which is that back in 2017 when a lot of this came to light then Governor Cooper really downplayed a lot of this.

There was not a five alarm fire like there eventually turned into be.

So I think it's, this is certainly these are certainly good steps forward to doing some sort of justice on behalf of those that have suffered under this.

But also I think we need to come to terms with Attorney General Jackson taking these victory laps and doing the little press publicity on it.

But then a member of his own party and colleague was the one that actually didn't even deal with it properly in the first place.

And I just wanna remind North Carolinians of really what that looked like back in 2017.

- What about Brooke's point, Mike?

- Well, hats off to the local officials and advocacy groups all through the Cape Fear Basin because they started raising that flag in 2017 and they were persistent and kept plugging away.

County Commissioner, City Council, I know a handful of state legislators from that basin where I have been pushing two governors, two attorney generals, a handful of DEQ secretaries.

So hats off to those local officials who were on this from day one.

So they deserve a lot of credit for that and for getting there.

- Is it worth being a political issue?

I mean, it's Senate season and Jeff Jackson could take a victory lap and then people could come on the other side and said, well, there was a Governor Cooper, there's also a legislature out there too.

- Yeah, there is.

And you know, credit to DEQ.

- Oh, you were there too then.

- I was there.

So I remember this.

But credit to DEQ, the scientists there who did a lot of work and folks in the Attorney General's office, two attorney generals.

So while AG Jackson's getting the victory lap now, AG Stein was there and his team started working on this.

And as I said, DEQ secretaries.

So, but yeah, politicians taking a victory lap for something they may or may not have done.

Never heard that before.

So yeah.

- Well, Jeff Jackson closed the deal pattern.

However, when it came to PFAS, buying the products that have PFAS in it, how do you gauge victimization?

Is it if we choose to ingest this chemical, we're not a victim, but if it's in our water and we didn't ask for it, we are.

And I don't want to be flippant about this.

- No, no.

So, I mean, this is obviously an important issue.

And I would echo what the Senator said for local communities to fight as hard as they did to get the compensation that they deserve.

But I'm really more just encouraged about, you know, this coming to the forefront in terms of topics of conversation, not so much the politics of it, but access to clean drinking water.

I mean, that's a serious issue, you know, worldwide.

It's tragic.

We take it for granted in the United States, but as we've seen here, there's plenty of places in the United States and specifically in North Carolina where citizens don't have reliable access to clean drinking water.

And that's something that I hope our, you know, our governments collectively from top to bottom can rally together and make sure they can always provide.

- Down in Wilmington, they've put huge filtration systems in.

And from what I've read, jacked up the water bills.

We got the old tariff debate coming, Joe.

A settlement comes into local government.

Should that be handed back to the rate payer in form of lower bills?

Should it be moved towards even better remediation of PFAS and other chemicals that might be in our water supply?

- This is a tremendously difficult issue in terms of how those resources are applied.

I think the local officials are gonna have to figure out that appropriate balance.

They wanna make sure, these are known carcinogens.

They wanna make sure that there's a remediation to get them out of systems and that they're being appropriately filtered.

And in terms of what rate payers have had to pay so far for the capital investments to do that, they'll have to figure out what's in the best interest in the long run.

But these funds will be coming into these localities for 15 years.

And so this is not an immediate solution kind of problem.

- Should local voters look at those county commissions receiving those 15 years worth of payments more closely with the cash coming in?

I don't know if it's earmarked for clean water or is it earmarked for the county general fund?

Awfully enticing to have a windfall.

- If I lived in the Cape Fear Basin and drink that water or my business relied on that water, I'd be keeping an eye on those county commissioners and local governments on how that money was spent.

But don't forget some of it's spent at the state.

And back to the question about how much these companies have spent so far, don't forget the EPA was involved with that too.

And so there was a lot of question around, was the federal requirements or fines stringent enough on these folks?

And that's why the state I think continue to persist.

- Brooke, does money make it all go away and does it make it better after all these decades?

- That's a question people have asked over the arc of history and it doesn't make it all go away.

There are times when you look for some sort of pay out from a corporation to make reparations if you will, but that doesn't change the fact that there are people that now have cancer or other sort of sicknesses and illnesses that are dealing with the fallout.

- And I don't know what PFAS does to you.

I'm not a scientist.

We'll let you do your own research folks.

Now this next topic, get the email ready.

This is one everybody talks about.

A new state audit is out.

It examines exactly how much education lottery revenue is reaching North Carolina education.

Lottery sales are up substantially, but the share transferred to education has fallen from 23% down to 16%.

State law requires at least 38% cash transfer.

Ticket sales are up 51% over two years as digital lottery tickets have gained very high popularity.

The state auditor says lawmakers have a decision to make.

Should they use the lottery to maximize education funding or just maintain a minimum share of revenue for education as a guarantee Mike?

Those questions weren't asked in, was it 2004 or five when this lottery debate was going on?

I don't remember it being in either or, but the auditor lays it out here 20 years later.

- Those questions have been asked since we discussed the lottery.

I remember what Ricky Ricardo used to say to Lucy, you've got some splainin' to do.

(laughing) I know a few legislators who I think are gonna be looking to the lottery commission and lottery officials, but to themselves as well, and have a lot of splainin' to do whether when they come back in the fall session or when they reconvene for the long session in the new year.

And I think thanks to the auditor's office for looking at this, peeling back the layers of this, because we really need to have a serious conversation around what these lottery funds are doing.

I hear from school, I heard from school districts all the time, and frankly from parents.

Every night we hear on the lottery drawing that since it's beginning in 2006, the lottery has put $13 billion into our public education system, and people don't always see what that 13 billion has done.

And now these numbers shine an even brighter light on how that functions.

They've gotta have some serious conversations on Jones Street and in the commission.

- Patrick, you're not a Republican or a Democrat, so you don't have a dog in this fight politically, but what is the social contract, the voter expectation of having a lottery called the education lottery?

- Yeah, I always found that fascinating that we've tied those two together.

Gambling can be a fun recreational activity, but it can also be dangerous and cause a lot of trouble for people.

And the fact that we chose to connect educating our children with the act of gambling, I just always found a little interesting, I'll say.

But to the point, I mean, the Senator's right.

There's some explanations that need to take place here.

I was also curious, I don't know of any other revenue stream that the state has that is so clearly and directly earmarked to specific spending.

Like for example, the money we bring in from ABC stores.

I don't see the buy more booze and you'll help our healthcare systems, or I don't know, and maybe I'm wrong, maybe in your experience, but I don't know of any other kind of one-to-one ratio where we advertise to people, hey, buy a lottery ticket, you're gonna be helping children get an education.

But if we're going down that road, and that's the message we're gonna put out, then I certainly think the government needs to stand up and do what it's promised people.

- Joe, do you think budget writers and legislators today realize that they are not meeting that minimum threshold of cash transfer to education?

Can it accidentally slide down to the teens in terms of percentage of share?

- Yeah, to Patrick's point, one of the challenges with relying on gaming receipts for an appropriate public purpose in the state, in this regard, a significant portion of what the Lottery Commission would tell you they need to use this money for is for prize winning and marketing so that people will continue to gamble.

And so to say, well, we're not able to divert as much of the proceeds for the purpose, which is the construction of public education facilities.

And the decision was made when the lottery was put in place.

Well, we can't rely on this for operational needs.

That's just, it's too inconstant for us to be confident that it would supply that.

But if it's going to buildings, then it's a little easier to understand the sort of gravy money that might be necessary.

But the problem is, state continues to grow at 100, 120,000 new people a year.

The demands on the public school system in terms of capacity building is enormous.

And I would say this, I mean, it does feel good to hear the lottery advertisements say they've given so much money back to public education, but it's really a public policy question of what's the appropriate way to collect the revenue necessary to do the things that the people of the state expect their revenue to be used for.

- And you set Brooke up perfectly.

She's from the State Policy Network.

They have an idea about everything.

What should happen with education lottery revenue?

What are good percentages and policies?

Because whether you like a lottery or not, it is very popular with North Carolinians.

- Yeah, that's a great question.

I think though that just kind of stepping back for a moment, there's two competing missions with the North Carolina lottery, and we've kind of covered that already.

One is funding education.

The other is raising revenue to continue to generate revenue.

And so these can be antithetical to one another, and that does create this tension.

Auditor Bullock in a recent interview said that the top line result of their audit was that the education lottery is probably not what you think it is.

When you think about the digital gambling that's been happening, it grew from zero to 40% of the North Carolina lottery revenue in the past three years.

So it's taking off, going gangbusters, if you will.

But with that, we've also seen an increase in gambling addictions and outreach for assistance with gambling.

So there's this tension here that I think is, that we have to grapple with, that policymakers need to grapple with.

- It's an old saying, Mike, "You must spend money to make money in business."

So is it reasonable to think the education lottery should invest more in to get more popularity for their products?

I mean, it's a market.

- Well, sure, they're gonna spend more.

But also, you mentioned in the setup to the piece, Kelly, that the technology, as Brooke mentioned, the move to digital, they have higher payouts.

So what's happening is you're becoming a victim of your own success, and that more people are using the digital.

The payouts are higher, and that's what drives that revenue down.

The raw number's the same, a little over 1.06 billion, I think, a year, but as a percentage, it's dropping.

So they're a victim of their own success.

But the other old saying I always remember about gambling is the house always wins.

- Right.

- Well, and the question is, what is that revenue coming from?

What would the citizens of the state of North Carolina have been spending that money on if they weren't gambling?

Would they have been saving for retirement, or would they have been making investments that benefit their children?

I remember when the bill was being debated originally, Skip Stam, state representative from Wake County, said the lottery was nothing more than a tax on people that are bad at math.

And so my suggestion would be, let's just impose a tax on people that are bad at math.

And so if you are bad at math, you just have to pay a little bit more to the state of North Carolina.

- Some of us are having flashbacks to that debate 20-plus years ago.

- I wanna know what folks at home think.

Email us, let us know about this.

This is a topic we can all gather around a table and discuss.

Most of us have played lottery a time or two.

Brooke, did you watch the RNC midterm convention?

- A little bit.

- A little bit.

Well, North Carolina's candidates were there just a little bit.

The committee of the RNC held its first midterm convention this week, a two-day affair in Dallas, Texas, focused on the party's 2026 candidates.

North Carolina Republican Senate candidate Michael Whatley spoke Wednesday, emphasizing his support for President Trump's agenda.

He's running a tough-on-crime campaign discussing immigration at various stops across the state.

The Democrats in North Carolina came back with some, I guess, geo-fenced, geo-targeted digital ads.

Brooke, messaging, it was discipline.

Over on the Cooper side, Nexus Strategies and the Cooper team are staying very focused as well.

Tell us about this RNC.

Laurie Buckhout was there and other candidates, but to the Whatley-Cooper race, Whatley's down 11 points, according to Elon this week.

Can he make up that ground?

He needs to find 6% somewhere and go up by 1 if you believe the poll.

- Yeah, and that's quite a bit of ground to make up.

I think that Cooper, we know, going into this has the higher name ID.

He's got a lot more support among unaffiliated voters at this point in time, which is going to be a crucial part of the decision that plays into this decision of who actually gains the Senate seat.

I think that that's particularly important.

Also, Cooper, like you said, has been incredibly disciplined with his messaging.

That's no surprise.

That is something that we come to expect from Governor Cooper and those who have consulted for him.

But Whatley has, he started with focusing more on crime in his messaging and public safety.

I think a few years ago, if he had trotted out that message, it would have really resonated.

Cooper has stayed really disciplined on the message of affordability and bringing down costs, rural healthcare, things like that.

And I think that that speaks to where a lot of the sort of swing voters in North Carolina, maybe they have voted for Trump this last election, but they also had voted for Stein.

Those crossover voters, I think that's who Cooper is targeting.

And I think those are the ones that are going to determine how this race pans out.

- Mike, is it going to be fairly easy this cycle to get a Trump-Cooper voter to vote Cooper in '26?

Or switch over to Whatley maybe?

I mean, Mike Whatley's out there working all 100 counties he's visited.

- He's working hard, but in terms of this week, you know, I asked the question, if a tree falls in the forest, did anybody hear it?

Who was watching this thing?

And those unaffiliated voters that Brooke highlighted, she's exactly right.

That's the audience that we're playing on, where this is going to be the first statewide election.

I can recall where Democrats and Republicans are about even in registration.

This guy's happy about that.

But those unaffiliated voters are now the plurality of voters across the state and in a majority of counties now.

And were those people watching this convention?

And I don't think a lot of them were.

The early numbers that we've seen just in the Friday ratings numbers said just a slight spike, not many.

Football, the NFL football debut drew more than this convention.

So did anybody hear Whatley's speech or the president's speech or the vice president's speeches this week in Dallas?

And are they winning over those unaffiliated voters where this election's gonna be?

- Patrick, this week Donald Trump has started weighing into the Senate race.

He spoke about Roy Cooper and in support of Michael Whatley.

Now news is out on Friday morning, Mr.

Trump's coming to North Carolina to campaign with Michael Whatley.

And people were saying the Republicans would give up on this race.

- You know, it's funny, six months ago, I really thought Whatley would rally a little bit more.

I mean, obviously the name recognition for Cooper's obvious.

And keep in mind that people at this table are very engaged in all this stuff, right?

But for the average voter, I'd say the election is just now starting to really kind of get on their radar.

But I'm surprised that Whatley hasn't been able to close that gap.

And I think, you know, Cooper to his credit, I think has kind of stayed one step ahead on some of the, I think, very smart moves that Whatley has made.

But Cooper's been able to counter in a lot of creative ways.

Most recently, I mean, there's a lot of ads about public safety and crime from the Whatley camp.

But then I seen a series of ads claiming that they're all untrue and that this horrible murder took place in South Carolina.

And I don't know what is true or not, or what's being spun.

But my point is, I just don't feel like Whatley's been able to kind of out game Cooper.

Every time he's made a move, Cooper's been able to counter.

At least it appears that way to me.

- Joe?

- Yeah, this is an election, a midterm election.

And typically what challenges the party control of the White House is a turnout issue.

And here it's about base Republican voters and whether they're enthusiastic at all about turning out and voting in 2026.

Some part of the perceived competitiveness of the US Senate race was the thought that we all said at the start of the, oh, 700, $800 million is gonna come into the state.

That may not be the case now where funds won't be deployed necessarily for key things that help down ballot Republicans, like turnout the vote efforts or voter contact efforts for base Republican voters.

People that would vote for Republican if they just turn out.

I think the challenge for Michael Whatley at this point is the polling doesn't seem to show him having the capacity to close it at this point.

And so we'll just see how it plays out.

But the consequence may be for down ballot Republicans, state legislative candidates, if there's not the enthusiasm for the top of the ticket race, the US Senate contest, are there some contest on the ballot for state, House and Senate where Democrats now suddenly advantaged because Republicans locally aren't turning out because of the dynamic in the Senate race?

- And Mike, to your point, this whole show is in a bubble of sorts.

We talk politics every week.

The campaign isn't old to us, but is a campaign new for the average voter in the state?

- Right, no, that's exactly right.

And I think two things that I would say as we move forward to look at, number one, the president said again this week, I think I put me on the ballot, vote as if I'm on the ballot.

And that's a double-edged sword.

It might help with some of the base turnout, but it's gonna motivate a lot of the people who have concerns about the Trump agenda.

Second Joe hit it is the money.

Will the money flow in?

We're inside of two months.

We're in that post-Labor Day push.

And will the Republican dollars come here or have they got to spend money in states like Texas, Iowa, Kansas of all places, and potential flip from Democrat to Republican in New Hampshire this week?

So watch how the money flows and see if that can come and help Whatley.

And will the money that would have gone to Cooper if he maintains his kind of lead be able to be pushed to down-ballot races for the Democrats?

And will that enable them to maybe secure some spots where they thought to be in more of a battle and now they can free up some of that funding?

- Final topic, last three minutes of this show, I wanna tip my hat to Matthew Sasser over at the NC Insider.

His report caught my attention about a growing need for special education services in North Carolina's public schools.

Nearly 221,000 students ages 3 to 21 were identified as needing some form of special education service as of December 2025.

Another 65,000 students have been identified for potential services next school year.

The US Department of Education lists North Carolina among 33 US states that need some federal assistance to serve students with disabilities.

The statistics are this, nearly 40,000 of our students have autism.

More than 70,000 have a specific learning disability that is being addressed.

And Patrick, our state has 1,500 special ed job openings in 24, 25.

And I don't think funding got a lot, they got somewhat better this school year, but it's still 1,500 jobs spread out across the state.

- Yeah, this one's actually pretty near and dear to my heart.

I served on a board for adults with developmental disabilities for years.

And in that case, we had about 85, 90% of our funding came from the state.

And the balance was raised through private funding, and that was really able to make the change.

And when I saw this issue on our agenda, my General Assembly representative, Sarah Crawford, is very active with autism and does a lot of great work.

My point is I think it's an opportunity for public and private funding to come together to try to find some of these solutions.

'Cause there's a real need, as you just outlined in the numbers, and we need to find some ways to address it.

- I have two minutes to get around the table, but Mike, as school choice comes online, students can be chosen to go to other academies, leaving the public schools with a variety of niche education services they need to supply.

Is it a funding problem, a school structure problem?

How do we get these students addressed?

- I think it's a funding problem.

I mean, one of the things that still hurts my heart is that the lack of spending we've had in all of these areas, whether it's for children in our schools or IDD, intellectually developmentally disabled adults in our communities, the state has woefully underspent in all of these areas and really needs to step up.

- In our last minute, Brooke, finding these students that need these, and it's not special education classes.

It may be reading, it may be comprehension, those specialty needs.

Can the state address it, or will it forever be a problem for us?

- Well, I sure hope we can address it.

I mean, we owe it to these kids to address it.

I don't necessarily agree that it's strictly a funding problem.

I think it's a funding allocation problem, and I think there's a difference in that.

- 15 seconds, Joe.

- Yeah, this population has grown dramatically over the last few years, and it's in part because we've become much better at identifying these distinctions among young people.

So undoubtedly, we do need a better plan to make sure the instructional abilities of these young people is not lost because we don't have the resources.

- I'm glad we had time to get to this topic.

It's a big deal for many families.

Thank you so much, folks, for watching, and thank you for appearing on "State Lines."

If you have an opinion about any of our topics, email me.

I'll share it, statelines@pbsnc.org.

I'm Kelly McCullen.

I appreciate you watching us every weekend.

Thanks for watching.

I'll see you next time.

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