- [Narrator] Governor Stein says federal funding for Hurricane Helene recovery efforts is moving much too slowly and Medicaid could reduce the payments it makes to doctors, hospitals, and nursing homes.

This is "State Lines."

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[upbeat music] ♪ - Welcome back to "State Lines."

I'm Kelly McCullen.

Come on in and sit down for the half hour 'cause at this table you'll be joined by Dawn Vaughan of the News & Observer, political strategist, Kimberly Reynolds of Maven Strategies, public relations consultant, Pat Ryan to her right and our good friend, WUNC Radio's Colin Campbell, Chief Legislative Correspondent, or you have a fancier title than that.

- Capital Bureau Chief.

Same title as Dawn, actually, yeah.

- Battle of the Bureau Chiefs here.

- Yeah.

- Battle is the battle of the Bureau Chiefs and people that give good advice to their respective teams.

And so it's all going...

The mastermind group is here.

Let's talk about North Carolina.

Governor Josh Stein, he's asking the Department of Homeland Security Secretary, Kristi Noem why federal Helene Recovery funds were being delayed.

The governor says there were $291 million in recovery projects in this state that need federal funding, but the Secretary Noem had not signed off on application paperwork, some of it dating back to February, 2025.

Homeland Security officials have confirmed this week, those funding applications have been signed off very recently though.

Funds are now flowing from DC.

Most of the approved federal funding, however, reimburses the state and local governments for their cleanup costs, Colin.

So Governor Stein must write letters to the White House.

They did it for Joe Biden's administration as well, but then goes to the press, has a press conference, seems to get better attention.

Is that the way the game's played?

- Yeah, I mean it's all about, you know, seeing who's gonna be accountable for the delays and at different stages of the recovery process, it's different levels of government.

Initially the pressure was on Congress to pass the recovery bill.

That put all the processes down towards these federal agencies like FEMA and like HUD.

And historically they've been really slow to get the money out to the states and then when the states get it and the state's slow to get the money out to the actual communities that need it.

So this whole process takes entirely too long because you have all these different layers at which there's sign offs and red tape and forms and processes you have to go through.

Meanwhile, people in Western North Carolina are still wondering, you know, why nothing's really happening.

- So then you add the politics on top of it, right?

So all that you said is absolutely true.

Like who's in charge?

Nobody knows.

Everyone's in charge.

Nobody's in charge.

So what that means is it's in the governor's interest and I think he's made a smart move here to get out in front of it and say, "Well, perception's reality.

"If I start now saying the feds are the reason "things are taking a long time, then people are less likely "to blame me in three, six "or nine months when something goes wrong."

'Cause something will go wrong.

It always does.

- Yeah, it gets to the state level and the state agencies are slow to get it out.

- Right, so because it's such a mess and such a complex web of things that nobody can figure out, it's actually in the governor's interest to get out in front and say, "It's those guys who are to blame for everything.

"It's not me."

- Kimberly, I thought the same thing.

Governor Stein's getting ahead of a problem he doesn't have, you know, complete control over, smart move?

- Absolutely, I think that's part of his role as the governor is to be a persistent advocate for the state, for the people of Western North Carolina.

You know, we've said before, I think I said before when I came on here, hurricane relief should be bipartisan.

And so we knew he had to work with the Trump administration.

I think, you know, I've heard numbers between 50% and all the way up to 70% that the federal government is responsible and typically and historically pays for hurricane relief.

And so I think the money is there and it's his job to go and help.

And the people that are really suffering are the local governments where tourism isn't coming back because they can't rebuild.

The people of North Carolina.

And it's his job to go out there.

And if he has to cause a stink and have a press conference, he benefits, but more importantly, the people of North Carolina are gonna benefit.

- On the political side, you worked with Lieutenant Governor's office back in the day.

How- why does it have to be so formal?

Why can't a governor call a secretary?

And it's only 50 US states and only one needs the recovery that we care about.

It's North Carolina.

Why can't it be just so business-oriented and let's solve a problem?

- That is an onion I'm not sure we have time to unpeel right now.

- Because then you can't write a press.

You can't read about it in the newspaper.

You can't write a press release about it.

- Well, I think it's that, and then I think there's just so much tension that this is a different kind of environment that we've had before.

And I don't think those lines of communication, whether it's from just the party perspective or something else, or as open as they might've been in the past.

- Dawn, it does seem Governor Stein, someone got results and he was there in front of the microphone to get money flowing, if a bit slow and behind schedule.

But it is flowing.

Is this gonna be enough funding to pacify state leaders, to keep the citizenry safe and happy in Western North Carolina as we pivot towards other storms?

- Well, I mean, what if the government actually was efficient, right?

Then, you wouldn't have these dueling, you know, "It's their fault.

No, it's their fault."

And no one wants the blame.

Everyone wants the credit, you know, when the money actually shows up.

People want, like, show them, give them the money so, like, the problem is solved instead of, like, mucking up the gears.

And so Stein's move is- it's public pressure, and sometimes public pressure is how things get done.

And then, of course, the Feds are like, "No, you're the problem.

No, you're the problem."

Let's bring up former Governor Cooper, who actually is already campaigning for US Senate.

- Yeah, he was in Chimney Rock this week.

- Exactly.

So everyone's using it to their advantage, hopefully maybe their personal political advantage.

Hopefully the result is the real advantage of the people, the businesses that are suffering.

Give them the money, solve the problem.

- And Helene was what, 10, 11 months ago now?

10 months ago now.

Hurricane Erin was out there this week causing the Outer Banks a bit of trouble.

Governor Stein has declared a state of emergency to lift some regulations on delivery trucks, trigger those anti-price gouging laws.

Storm surge flooding covered those roads out there with sand and debris.

Dunes, as always, are washed out.

And if you live out there or are vacationing out there during this, you had no business being in the water.

- Have enough money in their account to respond to the storm.

Clearly, we need to engage with the general assembly to make sure that going forward we have adequate resources to respond to storms like this.

We don't know what the extent of the damage is going to be.

If it ends up being substantial, then at that point we're gonna have to reach out to the federal government to help us with the recovery.

And we just have to wait and see.

I'm hopeful that they will respond favorably.

- And the hope is there.

Hope is not a strategy for storm relief, I don't think.

But now here's Erin.

And now the Outer Bank says, "State of emergency, help us.

Helene people, help us."

Lot of hands are out now.

Where does Governor Stein go, and how does he prioritize?

- You know, I think the Erin thing might be a little bit easier since it seems like most of the infrastructure damage is gonna be on NC 12.

And DOT is gonna work to try to get that highway back open so the tourism dollars, you know, middle of the summer, continue to flow to Hatteras and to Ocracoke where they've been evacuated this week.

Overall though, I mean, the storm surge can amount.

I mean, hurricane season's not over yet.

We're still, you know, dealing with, as we mentioned, Helene.

There's still some lingering stuff from Florence and Matthew years before that.

So the challenge is how to manage for these immediate responses with the long-term.

And I think we've typically done pretty well on the immediate response between FEMA and state agencies.

It's this long-term recovery where you really have to rebuild houses and businesses that just seems to take forever.

- Go ahead.

- Yeah, this is gonna be something that continues to impact North Carolina for decades and probably forever.

So long as North Carolina exists, right?

We're gonna get hit by hurricanes.

And Colin's right.

There is some muscle memory there in the immediate response.

It doesn''t seem like there's gonna be too, you know, extensive damage.

It's mostly wave action, which could impact like houses along the beach, right?

But yeah, it's just something has to change in how we handle long-term disaster recovery in this country.

Hurricane after hurricane in North Carolina, going back to the '70s, and '80s, and '90s, it's always been this long drawn out problem.

That's because it's a broken federal recovery process.

And that's not gonna change right now.

- Kimberly, looking back like what Floyd was 1999, that was the one that caused the state so many problems in Eastern North Carolina.

It does seem that governors, Republican and Democrat, since then have gotten a lot better with emergency response.

Everyone seems on the ball.

I know I set myself up for criticism there, but this was seen pretty fast for me, as a viewer, watching the governor and his team in action.

- Right.

I mean, I think to everybody's point, we have experience in this and we're going to continue to have experience and we're just gonna get better and better.

But we also have to fix infrastructures underneath and get the money flowing faster.

'Cause they're gonna be more expensive, they're gonna be bigger in size, and they're gonna impact more people as we go.

So I think it's great that they're getting better at this part, but as we said, it's the actual getting the money in the hands of the communities that we have to work on.

- And for all the praise of the governor on the legislative side, for Helene, they call those committees together and everyone sat down the partisanship for the most part to really take care of the west.

So, bad governance, it's like good governance all the way around, I think.

- I think they're more on top of this and just like you were saying about with the, this most recent storm and the word experience, you know, I think that's the factor with the Outer Banks.

We're, you know, used to looking at that with Hurricane Helene was a surprise.

It's different recovery in the mountains versus the beach, and that was a pretty, you know, serious learning experience that hopefully won't be something we're gonna talk about again and again 'cause these storms are gonna keep coming.

The problem is gonna get more expensive.

It's gonna get worse.

- And Colin, there's a big difference in the immediate response and the long term response because if you're a betting person, you're gonna bet the Whatley campaign will be bringing up hurricane, long term hurricane disaster relief for Eastern North Carolina.

- Yeah, exactly.

I mean, yeah, Cooper has had struggles with that with the aftermath of Matthew and Florence.

But at the same time, I mean, you see the criticism of FEMA and the Trump administration, which I think you'll see Cooper pushing on that thread given Whatley's close ties to Trump, so this is gonna be an issue and there's gonna be a lot of finger pointing around this issue going into next year.

- Pat, what would it, what would it, what does it mean that Governor Stein, a Democrat, could call on the Trump administration and actually unfreeze funds in this case when so many times they seem to enjoy to tell Democrats, "Stick it,"?

- Sure.

I, first of all, this stuff is so complex and there's so many different funding streams and agencies involved.

Was funding actually frozen and sitting on somebody's desk pending a, like, it's really hard to unravel all that stuff.

And so is it as simple as Stein held a press conference because something was sitting under a pile of papers and then all of a sudden, they mailed the check down here to, you know, to North Carolina?

I don't think so.

Most of this is political theater, smart political theater, like I said earlier.

But yeah, this is just how this stuff works.

The dynamic between a Democratic governor and a Republican federal administration.

It's just politics.

- There you go.

The News & Observer released a story this week.

It caught my attention, in fact, about North Carolina public school leaders being, I guess, quote, nervous about recent actions.

Speaking of freezing and canceling federal fundings happened at our schools.

The News & Observer reported Wake County schools have cut nearly 300 jobs just over in Durham County.

About 140 positions no longer exist.

The state's mini budget that passed earlier this month funds some teacher raises, but other school employees are left out on.

$168 million in federal funding was frozen, reviewed, then released a couple of weeks ago.

The Trump administration appears to be requesting another $12 billion in education cuts in the new budget plan.

I like the article very, very much.

Kudos to your team, it provoked thought in me.

What does it mean to be nervous in public education right now, in your opinion?

- Well first full credit to Keung Hui, our K-12 education reporter, who's fantastic, great newsroom observer colleague.

- Big Yankee fan - Keung, that's for sure.

He also brings bagels back when he comes, goes to New York, the newsroom loves him.

And readers too, because he actually, breaks things down in a way that, school starts in Wake County, the largest school system in the state on Monday.

And there's a lot of uncertainty both at the federal level and the state level.

Again, what we are talking about, what people's expectations are for the government and actually doing your job and actually being efficient.

There's still no comprehensive state budget.

So all of these teachers, all of these staff at all pay levels are starting the school year with uncertainty about how secure is your job, is your program, is your initiative.

And then the people who are making the decisions, nobody wants to lose their job halfway through the school year.

And so that's a lot of the uncertainty around the beginning of the school year.

And so when lawmakers are back this week, are they actually going to have these raises for teachers and personnel and state employees and all of the other funding or are Senate leader Berger and Speaker Hall still gonna argue about future tax cuts or whatever else is the problem.

But I think people's patience is wearing thin as it usually does because the budget is so frequently not on time.

It is a good point when they, I have to say, when they do eventually have these raises, they will be retroactive, so it's not like they would lose that money.

But also, where is it?

It's almost September.

- Kimberly, true that the federal spending is not stable right now because of changes in policy and directions as approved by the voters at the presidential level.

And then here at the state level, we still have a budget in place.

Republican leaders were quick to say there is a budget, it just isn't tweaked for 2025/2026 just yet.

What do you say about public education?

Schools are still opening up, we're going back to school, but nerves an issue?

- I think nerves have been an issue in public school for the last decade.

I mean, being under attack isn't new to them, they have seen millions and billions of dollars go out and move to opportunity scholarships.

They have seen teachers flee to other states, they have been consistently asked over and over to do more with less.

And so imagine you're already, you haven't gotten a raise, you have higher class sizes, you feel like you're sort of under attack.

I mean, every article you read and hear and podcast are talking about public schools being under attack, underfunded.

And now you're starting the new year and it's not, even if you have a raise, the raise might not matter if you don't have a job.

And so I can't even imagine going into these schools and the morale that's happening with everybody being on edge.

Seeing your colleagues, the counselors, the people in the front desk are no longer there.

And Wake County is the fastest growing, one of the fastest growing counties.

Imagine what this means to little rural counties though, and they're already underfunded and they're already having so much trouble, they can't put the county supplement on top of it to get a teacher there.

And then this comes in.

I mean, I wouldn't wanna be in their position and they have a reason to be nervous.

- Well, my wife's a teacher, my mother-in-law's a teacher.

My wife will have all of her teacher friends over for like, wine night on Friday and she'll make some cheese and some like nice smoked meats.

You know what I don't hear them talking about in the dining room when I'm like trying to get away and, and watch the sports game or something?

They don't talk about, can you believe what Phil Berger and Destin Hall are doing with this really delayed state budget?

It's just, I get what you're saying, I get that this is the conversation among the NCAE crowd in Raleigh, but like the world isn't falling apart at schools and I don't think that teachers were at large are on the verge of breakdowns because of a delayed state budget.

From 2000 to 2019, administrative staff in this county grew by 87% at public schools.

Teachers and students grew by less than 10%.

And so like, sure, the average person looking at the news, seeing questions of federal funding freezes or investigations into whether funding is appropriate, probably think, "Oh, I like school funding.

That doesn't make sense.

I don't want to cut funding."

But go just one level deeper and look at the massive growth in administrative staff at public schools compared to students and teachers.

And you have to ask yourself, is all that money well-spent?

Has this turned into actual progress in student outcomes?

And the answer is absolutely no.

And I think that shows that money does not buy student outcomes, or at least administrative bloat doesn't buy student outcomes, right?

So rethinking how this country including this state allocate their education dollars, I think is a really prudent thing to do because something has gotta change here.

- I mean rank and file people may not know who Burger and Hall are, but people think about their own school, their own principal, their own superintendent.

- [Host] You know we haven't gotten a raise- - And the people that make that decision, I think that you think about it at the local level, but the state and federal government does impact the local level.

- This is not how you do budgets.

I mean, as a small business owner, like I know when I have to make payroll and I don't just make changes overall, huge changes to the budget a week before school starts too.

I mean, all of this is timing and these are big budgets to deal with, but having uncertainty a week before teachers are supposed to start is also interesting.

- And I just don't see a whole lot of urgency in this.

You know, I've covered a lot of budget cycles, and I've seen for that final phase where both the Senate and the House leadership are really motivated and you go down to the building and you see the teams of negotiators shuttling from one side of the building to the other with competing offers back and forth.

I was down there this week, it's really quiet.

Looks like it may be pretty quiet next week when they come back for a day or two.

I just don't see a whole lot of progress happening behind the scenes at this point.

- Well it wasn't that long ago that I recall that former Governor Cooper vetoed a state budget, vetoed a teacher pay raise, vetoed a state education budget, all separate individual bills, over the course of two and a half or three years, there was not a formal state budget because of a separate fight over Medicaid funding.

And I didn't hear that- - When you give him line item veto.

- Put that in a campaign ad.

Not for this, but I've been around 20 years, I have never seen a budget cycle where the state budget writers might have done a favor to themselves by waiting because of the federal cuts that are coming along, that the state budget may need to be adjusted midstream.

Would you say that's accurate, Pat?

- In terms of education funding?

- Or any kind of funding, I've never seen where the federal budget makes the state budgets just so- - Well, yeah, there's certainly that going on.

I know that we're gonna talk about Medicaid in a couple minutes, and that certainly is applicable.

I think it's not until '27 or '28 that those effects start being felt though.

- We're thinking about it in '25- - We should be, absolutely.

Yeah.

- All right, back to you, Pat.

North Carolina's state elections officials continuing their work to correct and clean up incomplete voter registrations.

Over 20,000 registrations are now correct to include those ID numbers they were missing.

The Trump administration is suing North Carolina to find and correct all incomplete voter registrations.

There's an online database you can search, look up Registration Repair Project.

It aims to find the remaining 82,000 of you voters in need of submitting ID numbers to state elections officials.

Pat, they are at work.

I don't know what to make of it, the lawsuit's floating out there.

Was that necessary?

But hey, here we are.

- Yeah, I don't know if it was necessary or not.

I mean the bottom line is there are tens of thousands of voters who, through no fault of their own, did not properly register to vote.

They've been voting for 20 years with an improper registration, okay, it's not their fault, but it's still a problem, right?

So the Board of Elections under new management now is rightly, I think, setting out to fix that problem in what seems to be a pretty prudent way.

I think it was a unanimous vote on the Board of Elections, both Democrats and all three Republicans supported this plan, and they're allowing improperly registered people to go and fix the registration.

In the meantime, they can cast a provisional ballot if they haven't heard about it yet or done something to fix it, not being deleted from the system.

The law wasn't followed.

It's a problem, it's being fixed.

I think that's just sort of end of story in my opinion.

- Kimberly, is this as bipartisan as, as Pat portrays it?

- Well, I mean, if it's unanimous on the board, it was that day.

- Yeah.

- But I just think we, the issue is always just, to Pat's point, the voters did nothing wrong.

And so they need easy access.

They've got the website up, but it's still hard to reach people.

I mean, you have 62,000 people that still haven't done it.

So I think if they continue to make it easy, if their votes continue to count, that will be the most important part.

It's when you start throwing out voters, saying the votes are illegal and doing those things.

And with this administration, I just, I feel like there are some nefarious things that always are leading this.

- So, for clarity, it was 80,000 total, they've deduced 20, there's 60,000 left.

I misspoke in my script.

I know I'll get called out on that.

So 62,000 voters out there may not be able to cast ballots in the future, so they better get to work to correct their ID, right?

- Well, if people are watching the show and, you know, consuming all our local media, they'll know about it.

Of course they've been contacted, right?

I mean, so hopefully they'll sort it out soon.

- Alright, Colin, are people paying attention to voter registrations?

- That's what I wonder about is, you know, people are gonna get these things in the mail and you know, I get a ton of stuff, most of it junk, in my mailbox and I'm not great about sorting through the stuff that looks important.

So I'm sure some people are gonna be in that boat and not realize it.

What'll be interesting to see is whether the political parties get involved at some stage and try to reach out.

If you're a registered Democrat, a democratic operative knocks on your door and tells you you might wanna fill out this form.

If you're Republican, it's someone from the Republican party who comes and tries to make sure that your vote's gonna count next time around so they don't lose you from their particular, you know, party's vote count.

- And that's a good thing.

- I understand that 'cause you can almost, it's easy to throw away that little sticker you get from DMV 'cause it comes in a plain envelope and- - Yeah, I've been guilty of that for sure.

- That's heartbreak.

I tell you.

North Carolina's Medicaid program is scheduled to reduce reimbursement payments it makes to participating doctors and healthcare facilities.

Overall, this appears to be a 3% reduction that could take effect on October 1st with some services like nursing home care and hospitals facing between eight and 10% reductions.

State officials report a $319 million shortfall in spite of new state funding contained in the recent mini state budget.

That was 600 million.

But Kimberly, the plan cuts are designed to be reversible if legislators in Congress get it together and wanna backfill.

- Right, I mean, I think what concerns me is it sounds nice, it can be reversible, but if you start looking at communities and doctors decide to no longer accept Medicaid patients, I have a hard time believing once they've changed everything and they're getting money in different ways, that they'll just say, "Oh, let me go and do that now."

And again, we're always saying, I feel like a little bit of a broken record here, this disproportionately, I think, is gonna impact rural areas and then people are not gonna be able to get the care that they need.

And they're already struggling to have some of the right doctors that they need and they're driving 20, 40 miles away to get healthcare.

And on top of that, you said 3% for doctor reimbursement, but then you went down and you saw the nursing home reimbursement, it was up to eight to 10.

And 61% of people in nursing homes rely on Medicaid.

And so when you start looking at those cuts, how is their care gonna be impacted?

I mean, this is down to the patient care and we just have to make sure that that's protected even when you're looking at these big cuts.

- But Dawn, they say it's being set up to be reversible at the state level.

Services could resume October 2nd if the state legislature, let's just say that at this time, steps in with an extra 319.

- Well, here we've got, again, some pressure, right?

Some, you know, public pressure and what are you gonna do?

So there's, I'm interested to see what lawmakers get done, the few days and if they really are done for the year or if they're gonna come back for another day here and there.

But the mini budget did a lot of like, you know, pressing needs, but not everything.

And again, I feel like this is kind of the theme of what we're talking about today, you need to finish the job, make sure that, you know, like what people are expecting, like at least the bare minimum is delivered by the government.

I think you're seeing, combine this with the first thing that we talked about here, which was the federal coverage fund.

You're seeing kind of an emerging style of tactics from the Stein administration, how to fight Republicans at the state level and the federal level without being enmeshed in these, like really challenging culture, social issues, you know, women in sports kind of stuff.

So is there a problem here, probably, is it as severe as the PR sort of announcement would suggest it is?

I'm a little bit skeptical of that.

I mean, the Stein administration has every incentive to make this sound like the world is ending.

It's good politics, it helps Democrats and the legislature.

You have pressure on an industry that's probably friendly with a lot of Republicans in the legislature to basically press that industry to then pressure the Republicans in the legislature because these guys don't want to have eight and 10% cuts, right?

It makes the legislature look inapt, et cetera.

It's all like a part of a larger sort of political and communications undertaking.

And again, it makes sense.

So I bet, I don't know, but I bet that they're probably looking for legitimate items to make sound just a little bit worse as they go about this campaign.

- Colin, I can't blame the Medicaid office for reporting this is what we're going to reduce.

It seems to be fairly factual and clean.

I like nice clear communication.

- Yeah, this seems to come down to this disagreement over the math involved.

So the mini budget they passed included some funding for Medicaid rebates it's called, but essentially growth in the program, change in cost.

But that number was less than what Department of Health and Human Services had requested.

And when we asked budget writers about that, they said, look, we came to a different conclusion on what the right number was.

So this seems to be an outgrowth of that, of DHS saying, well, if you don't follow our number, this is what we've gotta do.

And it'll be interested to see if lawmakers go back and say, oh, maybe we did the math wrong, or they say, no, you're still wrong.

Our math is right and you've got as much money as you need to get the job done.

- And legislators are back next week, which we'll have a few bills to chase, probably veto overrides and all sorts of good things.

I'm down to my last 30 seconds.

Thank you so much for being on a fast-paced show.

A lot to get through next week would be fun as well, but we'll have you back soon, all four of you.

More importantly, thank you for watching "State Lines."

I appreciate seeing you and hearing your emails or reading your emails.

I can't hear them.

Email me at statelines@pbsnc.org.

I'll read it, I'll write you back.

I'm Kelly McCullen.

Thank you as always for watching and supporting PBS North Carolina.

We'll see you soon.

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