- [Kelly McCullen] Legislative Republicans continue negotiating a state budget as Democrats urge them to allow Medicaid expansion to proceed, budget bill or not.

This is, "State Lines".

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

Joining me on this week's panel is Anna Beavon Gravely of NCFREE; to her right, Senator Benton Sawrey of Johnston County; Representative Allen Buansi of Orange County debuts on the show.

Good to see you, Allen.

- Good to see you too.

Good to be here.

- Well, and making a 2023 debut and new to "State Lines".

Asher Hildebrand, Duke University Public Policy Professor, and you've worked in campaigns, you know all sorts of political things, Asher.

Thanks for coming on the show.

- Thanks for having me.

- Well, I'm glad you're here, because we want to start talking about budget and Medicaid expansion.

The Democratic Party's leadership is calling on House and Senate Republicans, telling them, "Please reach a deal on a new state budget bill."

The new budget year started July 1st, so everything's on hold.

House and Senate Republicans still negotiating a deal.

They seem to differ on the level of tax cuts and budget reserves as the main sticking points.

Democrats really want the Republicans to allow Medicaid expansion to proceed independently of any budget bill that may or may not get passed because, Benton, sorry, that Medicaid expansion law requires a budget bill to be passed, or Medicaid expansion dies in North Carolina.

Since we're gonna, we've been betting all week with these casinos we'll talk about a little bit later, are we gonna have Medicaid expansion?

Are we gonna have a budget?

- We're gonna have a budget, we're going to have Medicaid expansion in North Carolina.

Negotiations are ongoing.

You know, we've had really productive conversations over the past two weeks.

I know that President Pro Tempore Berger, I know that Speaker Moore have been meeting, I know the staff and senior leadership has been meeting.

Offers are being exchanged.

I think you hit the nail on the head of what the issue is.

It's really the tax package at this point.

You know, the Senate obviously wants more aggressive cuts on the taxes.

I think the House probably wants some revenue triggers and things like that.

You know, personally for me, you know, what I hear is that our tax cuts have really impacted and made a big difference in what's going on with North Carolina's economy right now.

You know, since we took over in the majority in 2010, we have led the way in reducing North Carolina's personal income taxes, the effective rate; we've reduced the corporate income taxes, the effective rate; and we've also expanded the standard deduction as well.

You're seeing record surpluses, you're seeing record economic growth, you're seeing record people moving here, and that's because we have such a favorable tax and business climate, and we need to continue doing that in North Carolina.

And, you know, I think that's where we're gonna get as a state, when the budget finally does pass.

- Representative Buansi, talk to us about this budget bill.

Democrats not at the table on this one.

The statistics aren't there for you right now.

But your thoughts?

It's a big budget; Democrats would get Medicaid expansion.

- Yeah, so as you said, right now, budget's being negotiated by Republican legislative leaders.

And we're two weeks now into the fiscal year.

That means that we've got state employees who don't have raises.

We've got teachers, like my auntie, who actually teaches elementary school, who don't know, you know, what or when they'll be paid in the next year.

And that's an untenable situation for a lot of North Carolinians.

- Paychecks aren't stopping; the government is funded.

You're talking about that you want to know what your pay raise is going to be.

- Exactly, exactly, I'm talking about pay raises.

And I mean, in a state that values teachers, we've got tens of thousands of teachers, that's really not a good situation for them to be in, to not have certainty, especially with the school year getting started in the next month.

I will say with respect to Medicaid expansion, I mean, one thing that we have said this week is that echoing Governor Cooper's call to decouple Medicaid expansion and the budget.

There's no reason for Medicaid expansion to be tied to the budget.

We could have, you know, allocated the funding needed to implement Medicaid expansion, but another choice was made.

The results of that, unfortunately, I think is gonna hurt a lot of North Carolinians.

We're gonna see North Carolinians not get the care that they need for a longer period of time.

And you know, especially in this day and age, that's really not a good situation that folks should be in.

- Asher, talk about the politics of this.

Two great sound bites right there.

I've heard the Republicans and Democrats.

But we gotta cut a deal here.

Republicans run this state.

What's wrong with just getting in a room and hammering this deal out in about two days?

- Well, you asked the question, I think it's a good one.

And you know, really to Representative Buansi's point, I mean, my kid just finished an entire year of kindergarten with no certified teacher in the classroom.

Not for lack of trying, right?

Over the last year, he lost his art teacher, his Spanish teacher, and his principal.

And that's in a pretty well-resourced school district, right.

Now, his new principal and every other principal in the state are busting their tails right now to try to fill their positions, make sure that when school starts back in the fall they've got qualified teachers in every classroom.

But they're negotiating with one hand behind their back because they don't know what they're gonna be able to pay these people.

Not to mention one in four state government employees' positions are vacant.

And so, you know, I think we have to be careful about normalizing this kind of impasse.

Over the last few years, we just let the start of the fiscal year pass and extend into the fall.

But there's really, at this point, I see no reason why we can't just come to an agreement, because the impact on the people in North Carolina is real.

- Just do it, Anna Beavon, you know, that's what the Democrats say.

- And I do think so too.

- Just sign off off and go ahead.

All right, this isn't the first time a budget hasn't been approved by June 30th.

- Right.

- I think most years, they miss it.

So what's the dynamic if they wait until the summer and let some of these issues marinate, what changes in your opinion about the discussion and the ultimate negotiation between Tim Moore and Phil Berger?

- Yeah, I'm actually not sure what changes in those conversations.

I think what we really run into is an opportunity, or potentially what I'm hearing is rumors of mini budgets.

If any of the listeners remember, or the viewers remember, mini budgets from 2019, we had a ton of them.

A ton of them.

And with 2019 came a very long session.

And so once we start rolling out the idea of mini budgets, then the fear of having a really long session comes into play.

We've had promises of a shorter session this year.

However, I think once we roll into mini budgets and the conversation goes longer, I think that just seems very impossible.

- Just to respond to that, I do not think that we're at a point that we're gonna look at what we saw prior to 2020 with some of the mini-budget issues.

- I'm very optimistic.

I think everything in the budget at this point has generally been agreed to across the board.

The only outstanding issues at this point are really the tax packages and any sort of reserves that the state government's gonna have in play.

To talk about the Medicaid expansion bit just a little bit.

A big part of that isn't just the expansion aspect, but it's also the money that comes along with the expansion, the extra bonus money that's gonna come with the federal government.

You know, one goes in with the other.

It does not make sense to have a budget in place without a plan in order to spend the billions of dollars of additional funding, to come to that.

And we're looking at ways that we can really double down and address the mental healthcare crisis.

We can address the talent shortage and the pipeline with nursing, nursing facilities, getting physician assistants and people out to our rural communities and things like that.

So not only is it just Medicaid expansion as a standalone issue, but it's also Medicaid expansions coming with the billions of dollars of funding.

And we need to have a plan in place as to how we're going to spend that.

You talked about the government employee shortage and that's not limited to government employees at this point.

You know, everybody across the board is seeing a shortage of employees.

You know, I work in a law firm.

We have, you know, probably 30, 35 employees in our law firm.

We could probably hire 10 to 15 more people today if we could find qualified people in Johnson County that are willing to come and work for us.

But it's a real problem.

We acknowledge that, and we're trying to find ways to be dynamic with our salaries and benefits, be dynamic with what jobs we're being asked to be doing in state government so that we can attract and kind of modernize our state workforce going forward for the next couple years.

- Representative, does it help the cause at all for Democrats to go out there and just start complaining that there's not a budget deal when any final budget may actually be very beneficial to your constituency.

But as part of the good political game, you have to say, "Don't foot drag on our budget."

- Well, listen.

I maintain what I said before about folks, a lot of folks around the state, facing uncertainty.

And I appreciate the point you made about Medicaid expansion and that thought process.

I would say that, you know, Medicaid expansion passed bipartisan fashion a couple months ago.

It's been a few months.

And for folks, again, who are not in a good spot with their healthcare, who are suffering, for us to be two weeks now into the new fiscal year, I mean, we've had Medicaid expansion passing up for a couple months.

It's really incumbent upon us all to come to some kind of agreement with this budget as soon as possible so that the folks who need the help get the help right away.

- I almost-- this almost slipped by me, Asher.

Casinos could be part of the state budget.

Wow.

[laughs] That's what they're saying.

I guess for those who worried that sports gambling might be, you know, a slippery slope towards other things, maybe those concerns are born out and the senator can fill us in on the state of play of those negotiations.

But it's looking like there might be at least some possibility that we could see casinos in North Carolina beyond the Indian reservations where they currently are.

And if you would've told me that 10 or even five or maybe even three years ago, I probably would've said you're joking.

- Ann Bevin, the market is speaking.

There's a casino right now in Danville, Virginia.

It's right there and North Carolinians love it.

And I know that there's this political debate about it-- philosophical debate-- but is the public on board whether you're conservative or liberal?

They want to have an option to go see Aerosmith at the casino and play the slots, right?

- Yeah.

It does seem that public opinion is moving more in favor of casinos, but you still have a very strong constituency of far-right individuals who are not in favor of this.

And I think they're gonna have some challenges moving forward.

- There are enough far-right votes to stop anything like that?

What's this?

I mean, how do Republicans battle that one?

That's an internal fight, right?

It's a family fight, right?

- It's a difficult question.

It was not that long ago that republicans in the North Carolina General Assembly opposed to the North Carolina Education state lottery system.

I mean, I recall that occurring and the fight that occurred in 2005, 2004, '5, and '6 over that specific issue, and now we're having a conversation about casinos.

But I think it's... You know, one thing that keeps coming up time and time again is that we already have three casinos in North Carolina.

We have one in Cherokee, the Catawba.

And, excuse me, we have two.

But then we also have the casinos opening up in Danville.

We have the river boats are leaving out of Myrtle Beach.

So it's all in our borders.

It's in our state.

So the question is how much revenue are we losing out on as a state from this lack of casinos?

And I don't know, I mean, we're not a state that has a gambling history or a gambling tradition by any stretch.

So there are regulatory questions that must be addressed.

There are geographic questions that must be addressed as to where are these casinos are gonna be located.

You know, one proposal we've talked about is, you know, trying to find places in, you know, underdeveloped or underserved areas and using these as an economic engine.

And then it spurs the question like, okay, so does it make sense to put something like a casino into an area that's already struggling?

Or does it make sense to locate in a metropolitan community like Charlotte or somewhere in the Wilmington area where there's already a tourism or high net worth income base that can, you know, support a casino with an airport or something like that.

I don't know what the answer is gonna be to that.

And it's, personally, a question that I'm struggling with.

- I find the... You brought up the lottery.

I think the difference between the lottery and the feelings around the North Carolina lottery and then the feelings around the casino to be super interesting.

That dynamic in how you justify being against the lottery or have voted against the lottery as lawmakers and then are looking toward casinos as an outlet for economic growth is just super interesting because they feel like two sides of the same coin.

- I mean, we're really overlapping.

I mean, we're seeing almost an obituary a week from legislators that were were in power during that debate.

And I mean, no offense, time takes care of this.

- Yeah, yeah, yeah.

Yeah.

That's a great point.

But I still think you have a lot of the same issue groups that are gonna be on both, on the same side of anti-lottery that are gonna be anti-casino, but then you might have some that are breaking with some of the tradition to be pro-casino because of the economic input.

- Let's talk about economics.

CNBC says North Carolina is the number one state for business, Anna Bevin.

Second number one annual ranking in a row for our tar heel state.

Workforce was credited with being a prime driver for why we are the best state to do business, AB.

The economy plays third, and from what I read and researched, it seems like North Carolina's gross domestic product is somewhere around a half a trillion dollars a year.

CNBC also rated North Carolina 38th in health, lifestyle, and inclusion.

And they credit the passage of that recent 12-week limit on elective abortions as hurting lifestyle, health, and inclusion.

- And then right next door of all things Virginia is number two.

Does it matter that CNBC thinks we're number one in America for doing business, 'cause people seem to feel good at least in the triangle in Charlotte.

- Oh, I think it definitely matters.

I think this is a rarity for a state to get it back to back.

And you mentioned the lifestyle.

- [Kelly] I don't know what the- - Health, lifestyle and inclusion- - [Kelly] Right.

- Measure, that's a new category that's been brought into the CNBC ranking.

And I think what it represents is an overall indicator of the movement for business to be more involved in economic, or in social policy, and how that's just in conflict.

And voters are very divided on whether they want their business to be involved in social policy or they don't want to, or they don't want their employer to be involved in social policy.

And you've seen polls all year long in previous, even during COVID we saw polls where voters were just not on the same page as CEOs and business leaders on that involvement in social policy.

Representative Buansi, your thoughts on being in the top business climate?

Bipartisanship is being given credit for making Apple, Google, and all these other great companies, Toyota, come to this state.

So Democrats and Republicans aren't fighting on this front.

You both seem to wanna make money and bring jobs.

- Absolutely, I mean our state works best when Republicans and Democrats are working together.

We've seen that a number of economic development projects come to North Carolina, as you said, as a result of the collaboration between legislative leaders, the governor, the North Carolina Department of Commerce, North Carolina Department of Environmental Quality, these have all been major players in making sure that we are bringing jobs into North Carolina.

I will say too, that we should be doing as much as we can to further support that.

That means making sure that we are properly investing in our community colleges, so that we have a trained, homegrown workforce.

That means also making sure that we take some of these culture war issues out, because that's not good for a business climate.

It's not good for business to have to continually deal with issues that seek to separate us and divide us.

And so if we can also do that, I think we can get to an even better place and maintain that number one status.

- Senator Sawrey, let's talk about that, number one for business.

Money talks above anything else.

And all of a sudden this summer is the year that conservatives have apparently figured out how to apply cancel culture on brands that they disagree with.

Not necessarily North Carolina, but how does that distraction over there, 'cause it gets tiresome even at home, talking to your family about these bills and things.

But we get down to business, I have a good job because of the climate created by Democrats and Republicans right now.

- So and you referenced it earlier and the statistics true and I believe this was talked about a couple weeks ago on the show, but over 60% of employees do not want their company to engage in politics.

They want their company to to be a company that's engaged in providing a good product, a good service, a good wage, a good salary, a stable income, something of that nature.

They're, they're not concerned about the politics of the company.

They want their company to stay out of politics.

What the General Assembly has done this year, is not something that's proactively going out and seeking a culture war.

It's a reaction to what we're seeing occur with activists from out of state trying to impose a set of values through corporate DEI policies or some type of corporate activism, which are beyond the bounds of what employees want, which is beyond the bounds of what customers want, which really strays beyond what a corporation should or shouldn't be doing.

We live in a capitalist country.

The goal is to move the ball forward with growth and an economic engine.

To the point, the CNBC rating is great.

It's something we can point to and that we can say that North Carolina is number one at, and it is, it's unique that we have it two years in a row.

But what I think really, really speaks to the power of what North Carolina and other states like North Carolina has done, is that I saw that the southeast United States has surpassed the northeast United States, including New York City and Boston, and some other cities, as the largest concentration of GDP in the United States.

So take the subjective rankings and and take the 38th in the nation in and health and lifestyle and so on and so forth, what they want to do, however they wanna rank.

And I disagree with that because I think obviously, passing pro-life measures should be something that supports life, but that's CNBC's position on the topic.

But money speaks and where the money is and where the growth is and where the people are and where the income is and where the manufacturers are locating, that's in North Carolina.

And it's because people at the General Assembly have worked hard to create a strong workforce, their community college system, a favorable regulatory environment, and a favorable tax environment.

We're gonna continue to do that.

- Asher, last word on this.

We can talk, we've talked culture wars for weeks on "State Lines," but for once we can talk business and North Carolina has a nice climate.

As much as we like to fight on Twitter and on Facebook and in the news and read the articles, jobs are here and they're good paying jobs and they're corporate jobs.

- They're here for now.

And I don't like to be the skunk at every picnic, I think there's a lot of good to be had here, including especially, our world class workforce, right?

But I will say that I think right now we're reaping the benefits of the last few years of relative bipartisan cooperation on the economy.

That includes investments in workforce, investments in education, but it also includes avoiding these hot button issues.

And to me that 38th in life, health, and inclusion, should be a flashing red light, right?

Because for a lot of businesses, that's not a matter of politics.

That's now a matter of the bottom line.

They cannot attract the type of workers they want to attract if it's not an inclusive environment, if they're not supportive.

And so, we might we might be on a little bit of a sugar-high, I hope we stay there.

But if we want to compete in the long-run, we've also gotta focus on making a welcoming environment for workers and businesses.

- Let's talk about political environments.

The political party is calling itself "No Labels," and it wants access to North Carolina ballots.

No Labels submitted a petition with enough signatures, apparently to be considered for the 2024 ballot, but the State Board of Elections isn't so sure.

Those who signed that petition, Asher, were adequately notified of the political party's purpose, which apparently you must tell, if you're gonna start a new party, you need to tell people what they're signing up for.

Governor Pat McCrory, or the former one, and Benjamin Chavis are in-state supporters.

And Mr. McCrory says state elections leaders are creating hurdles for third parties.

It's not the first time I've heard that, Asher, the Greens had some trouble a couple years ago.

I think going all the way back, Libertarians have some state law changes.

Your thoughts on these third parties.

Can they spoil?

Can they get enough votes to win an election?

- I think the short answer is no.

But for those who haven't heard of this group, No Labels was founded over a decade ago.

- With the ostensible purpose of creating space for people who didn't want to be pigeonholed in one of the two major parties, right?

But until now, the organization has never fielded candidates for office.

And what it's now doing is essentially threatening to say "if we have Donald Trump and Joe Biden as the nominees for the Republican and Democratic parties in 2024, then we will run our own candidate," right?

And so they're trying to get on the ballot in all these states as a way of laying the groundwork to make good on that threat.

Now, a lot of observers think that if they follow through on that, that could sort of act as the spoiler and probably have the practical effect of handing another election to Donald Trump because the idea is a No Labels ticket, perhaps led by Senator Joe Manchin from West Virginia, would pull more Democratic votes than it does Republican votes.

That shouldn't really matter for ballot access though, right?

If you play by the rules, you should get on the ballot.

The problem is, in other states, No Labels has not really been playing by the rules, right?

You mentioned, I think in Maine, it was accused of misleading voters as to the purpose of its ballot petition.

In Arizona, it's being investigated for failing to disclose donors, which every political party has to do.

And so the State Board of Elections has said, "okay, we're gonna take a pause.

We're gonna look into this a little bit more."

They're meeting next month, they'll take it up again, so I expect this will be resolved soon.

But to me, y'know, ultimately No Labels, or any third party, has to decide is it gonna be a dark money organization or is it gonna be a political party?

And if it's gonna be a political party, then it should play by the rules of any other political party.

- This show's in good stead, public policy professor, on the day we can talk about a third party.

Anna Beavon, what's the point in being in a third party if the best anyone tells you you're ever gonna be is a spoiler, 'cause I would run wanting to win?

- Yeah, I totally get the appeal of wanting to be part of this No Labels party, I really do, with the rising number of of unaffiliated voters who just seem very dissatisfied with Republicans and Democrats, and so there's an idealist approach to this party.

However, we remember that there are two political parties for a reason.

There is the fundraising mechanism that really holds these together and why you would choose to align with a Republican or a Democrat or with the Republican or Democrat Party because of the fundraising mechanism.

Like, that's hugely helpful.

We see it specifically in third quarter finance reports.

But also we've yet to see a platform other than "we don't like these guys", and that's also important when we talk about party structure.

- Benton, third parties, are they...?

Publicly, sure, we're all about democracy, but, you know, you wouldn't want to lose 15% to some moderate party, and Joe Manchin would be popular with moderate Republicans, I would think, as our Presidential candidate as a third party ticket, right?

- I don't know if Joe Manchin would carry the weight with moderate Republicans necessarily.

I do think that, and we've all seen the polling data sitting around this table with everybody, that there's a certain percentage of each party that shows there's concern about Joe Biden as your nominee or Donald Trump is your nominee.

And I think that's probably what the No Labels Party is really, you know, attempting to seize on.

Y'know, we saw it with Ross Perot, I suppose, and that obviously had kind a negative impact on George H.W.

Bush back in the 1992 election.

I think this time would probably have a more negative impact on Joe Biden's election, just because of his age and some of the frailties that he's showing.

And then there's some dissatisfaction with his current incumbency.

But I'll say this about the party, we saw in prior elections the state board play games with the Green Party and the Green Party's ballot access issues, so we have a state law.

If No Labels complies with the state law, then I fully expect the State Board of Elections will do what it should do and grant them the access that state law in North Carolina permits and allows.

- Alan, would the main parties defend third parties?

I mean, Democrats didn't like the Greens ' cause they do, they clearly siphon off votes in a close race against Democrats.

- Well, we are for democracy and we are for making sure that folks play by the rules, do what they're supposed to do.

And as Asher said, with respect to the No Labels Party, for North Carolinians, it's important that they know what they're getting themselves into.

It's important that they know what positions a party has, especially when it comes to important issues of the day like public education, healthcare.

We don't know that to date from that particular party that's trying to organize, and so I'll just maintain that it's important that we've got political parties that play by the rules.

We've got track record, of course, with Republicans and Democrats.

Right now, presently, those are the parties that will give voters some degree of clarity in terms of who they're voting for and what they stand for.

- They're your last word.

Welcome to our show.

Hope you'll come back [Alan chuckles].

We're out of time.

Ashler, good to see you again.

Make time for us.

Anna Beavon, always great to see you.

Benton, thanks for coming up and seeing us.

We'll have you on all during the off session.

And thanks to you for watching.

Email your thoughts and opinions directly to our team, statelines@pbsnc.org.

We'll read every email.

I'm Kelly McCullen.

I appreciate you watching and hope to see you next time.

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