- [Kelly] The Trump administration sued North Carolina over incomplete voter registrations, and the idea that state revenue goals should be met before tax cuts take effect is proving triggering.

This is "State Lines."

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

I'm Kelly McCullen.

Joining me today, a great group, I consider them VIPs, especially political strategists of Next Strategies.

Nexus Strategies.

Morgan Jackson's here.

- Thank you.

- Senator Jay Chaudhuri represents Wake County and the Democratic Party.

To his right, Representative Kelly Hastings of Cleveland and Gaston Counties, and tons of committees and appropriations and all sorts of big chair-sounding titles there in Raleigh.

Good to have you back, sir.

- Yes, sir, good to be here.

- Thanks for making that drive from halfway across the state to this studio.

- Thank you, sir.

- Colin Campbell, fresh from Durham from the WUNC Radio Studio.

It's good to have you.

- Good to be here.

- Let's talk about the Trump administration.

It officially sued North Carolina's Board of Elections this week.

The Department of Justice is sued as targeting voter registrations that do not contain identification numbers whole or in part.

The Board of Elections previously has acknowledged the registration omission, but it wasn't corrected in time for the 2024 election.

DOJ attorneys say North Carolina violated a 2002 elections law by not telling voters they must have offered a social security number or a driver's license number when they registered to vote.

Without either, a voter was to be assigned a unique ID number.

Morgan, here we go again.

I thought Jefferson Griffin and that lawsuit cleaned this up, and here comes Mr. Trump.

- Listen, this lawsuit should concern every voter in North Carolina, and the reason it should is these are over 200,000 voters, many of them who've been voting legally for over 20 years.

And now, one of the things you mentioned is you have to, according to your registration, have either appended to it, a social security, your last four, or driver's license number.

All of these voters who've been voting in the state for a long time due to a clerical error of that not being on a form have shown their ID in order to prove who they are.

And they've done it multiple times to be able to vote.

I think the real concern is that this sort of collusive lawsuit is a backdoor way to try to disenfranchise 200,000 voters.

And that's, listen, that's all the way across the state.

That is a big number.

That's three, four times the number that even Jefferson Griffin challenge.

But yes, this is a continuation of those challenges that both the North Carolina Supreme Court and a Republican federal judge said these voters should not be held, they should not be held harmful because of a clerical error.

- Representative Hastings, so the thought about this, even if you have an improper voter ID, if your name's there, the address matches up, you're still showing your photo ID when you go to a North Carolina precinct, you now have a GOP Board of Elections.

Should they have withheld the lawsuit and let the new leadership do its job in Raleigh with the Board of Elections?

- Well, this is the United States of America who's filing this lawsuit.

And you have now a new state auditor, Dave Bullock.

You have a new executive director of the Board of Elections.

You have a new board, and I've talked to them, and they are committed to cooperating with the United States of America in making sure that we don't have a voter fraud in North Carolina.

And as you alluded to, yes, we do have, at our behest and work and effort, we do have voter ID.

There's one thing interesting about this.

If you'll remember, not too many years ago, we had another collusive lawsuit in this state that was under the previous Board of Elections, and the big difference about that collusive lawsuit is it appeared to the public that they were trying to reach an end that was not in the public interest.

In other words, they were trying to overturn a duly passed, on a bipartisan basis, signed by a democratic governor, election law, and they were trying to overturn an election law via a collusive lawsuit.

That was not in the public interest.

That was not to help prevent voter fraud.

Whereas, in this instance, they are working for the public interest to prevent voter fraud along with the United States of America and the Department of Justice.

- Senator Chaudhuri, why would a federal lawsuit be necessary, to Representative Hastings point, Republicans say they would cooperate with the Feds now?

So now is defense cost?

I don't know if you have to defend such a thing, or just do what they want you to do.

- Well, I mean, I think your question is the right one, and the State Board of Election has acknowledged that they are gonna make efforts to fix some of the issues that they've identified, but, I think, as Morgan talked about, you have a White House that basically, I think, questions the rule of law, that's doubling down on a Republican Supreme Court Justice candidate that tried to throw out 65,000 voters off the role.

Then you had a lawsuit filed by the Republican party before that that tried to throw off 200,000 voters off the role.

And I think the real question is, even though we have this lawsuit and there's been an acknowledgement by the State Board to do something, I mean, you have an element of the party that's been pushing this big lie, and then I think there's a real question about whether you have a post-election purge that basically endangers more than 200,000 voters that get thrown off the roll.

A last thing I will say, in 2023, the general assembly passed a bill that would prevent our state from joining the Electronic Registration Information Center, which was a Republican-started effort to clean voter rolls, and they decided to prevent our membership from joining that, but that has been the single best way to address voter fraud and the fact that voters appear on voter rolls, but yet they've decided to do away with that.

- Colin, an effort like this, is it forward looking?

Does it change the results?

We've discussed the Supreme Court race ad nauseum, so we can look forward to '26 under cleaner rolls, under solidified registrations?

- The challenge here is, I mean, now we're no longer talk, like you say, we're no longer talking about whether votes that have already been cast should be counted or not.

That ship has sailed.

Now we're talking about, do people who filled out the forms the right way, do they have to make some extra steps?

I mean, and what process is gonna be made to notify people if they need to go fill out that form again?

I mean, we're talking about hundreds of thousands of people.

I know I, for one, am not great about going through my mail that comes in the mailbox, and doing what I'm supposed to do.

So I think there will be some people who go to vote either in the municipal elections this year, or in the midterms next year, get to the polls, realize their voter registration's no longer active because they missed a mailer, or they missed some sort of outreach.

So they've gotta fill out these forms again.

So I think that's the thing to watch.

How do you implement this?

And the order from the Trump administration says, "Do it within 30 days," which is not a lot of time.

- Short period of time.

Our next topic will be a major negotiating point in the upcoming North Carolina budget bill negotiations.

It's about tax cuts and using possible economic triggers.

The State House proposes having North Carolina revenues meet certain goals before state income and corporate tax rates can continue what's already been a years long decline.

Over in the Senate, its budget writers believe it's time to remove revenue triggers, and this lower tax rates, in a so-called clean manner, because they're saying it would spur growth at a time when revenues are dwindling and the economy could use a boost, Representative Hastings, as far as I'm told, and I hear from multiple people, this one issue may stop the State budget dead in it tracks for 2025.

- Well, I'm not sure about that.

It could.

I mean, we've been through this before, and as a former finance chair, no longer even on the finance committee.

But I've seen these negotiations go back and forth and, you know, I think it's important since Republicans won control of the General Assembly in 2010 and we were sworn in in 2011, it's more important to think about what we've done, how we've protected the taxpayers.

So the income tax has gone from 7.75% to soon to be 3.99%.

That's a significant tax cut for people who need money to survive.

Our corporate tax has gone from 6.9, hopefully soon to be zero, that will help spur business and provide jobs for people who need to earn a living for their families and help support government.

And also we allowed the sales tax to move from 5.75 to 4.75%.

When we did that, that was about a billion dollar a year tax cut.

But in today's dollars, that's about $2.4 billion.

We eliminated the estate tax.

A lot of people don't remember that.

We also eliminated a surtax.

And if you'll remember, a surtax is a tax on a tax.

And our predecessors passed that into law and we got rid of that.

And so, and also we raised the standard deduction.

So we've done a lot since 2011 to protect the taxpayers.

- But the question is, 2025 and should the state have economic triggers in line, so if the state collects enough tax revenue, tax rates go down, and if not, tax rates hold where they are.

Because those are settled deals.

This is a whole new deal, and every budget's a new bill.

- Sure.

And it's not law until it becomes law.

And so we're under a current statute right now regarding the tax cuts that I just mentioned.

And so who knows what the final agreement will be.

But it is important to remember what we've done since 2011 to protect the taxpayer, make our state competitive from a business standpoint and from a tax standpoint.

- Senator Chaudhuri, your side of this.

House Democrats went along 93-20, and then we'll see how that plays out with the final budget if it comes out.

Your thoughts on triggers.

You're not gonna stop tax cuts, at least not yet.

So triggers or no triggers?

- No triggers.

I mean, it's great Representative Hastings talking about 2011, I wanna talk about 2025 because this is, I think the rivalry and the difference of opinion between the Senate, Republicans, and the House Republicans are significant.

And it's significant because one chamber wants to push for continued tax cuts, it's gonna benefit corporations and the wealthiest in our state.

And you got another chamber that I think is reasonable in accepting what the fiscal outlook is gonna be for the state.

I mean, let's think about this.

You got growing cost of services, you've got a rebuild Western North Carolina, and you've got a national outlook that says there's a one in three chance that we're gonna have a recession.

And if you ask me, and I think if you ask House Democrats and Senate Democrats, they would much rather take a conservative outlook on how we're gonna build out this budget that's more a kin to the House Republicans than it is to the Senate Republicans.

- Morgan, the politics of tax cuts.

Roy Cooper had eight years of economic growth and with Phil Berger and with Tim Moore.

So hand in hand here with you, he fought a lot, but about triggers the tax rates have gone down.

Businesses certainly come in, revenues are certainly up, just not as high as they would've been with higher taxes.

That's the argument.

How do ordinary people interpret this?

They want low taxes.

- So ordinary people like the idea of low taxes like the way it sounds.

What they don't like is when you have masses cuts to services to really critical services like healthcare and public education.

And that's what we see that goes hand in foot.

or hand in hand, excuse me, with these massive tax cuts, I think one of the reasons Governor Stein has pushed for a pause and a freeze on these tax cuts is because we have a fiscal, listen, any non-partisan observer, economic observer, will tell you we are headed towards a fiscal cliff in this state because we have had such excessive cutting of taxes, the state is not gonna have the revenue in hand to pay for the services needed.

Just yesterday, a non-partisan group came out and said, "Next year and the year after, "we're gonna have $200 million left."

Because what's happening around the country, as you see it, is a lot driven by inflation, is that people are shrinking their spending and when you shrink their spending, that's less revenue for state and local governments and the federal government.

And so, I think one of the reasons you saw Democrats, and the governor in in particular, encourage Democrats in the House to vote for the house budget is because the Senate budget'll take 20 more billion dollars outta the state budget over the next eight years.

And I think Representative Hastings and the Republicans in the House came up with something that at their plan was much more reasonable in saying, "All right, if we're gonna cut taxes in the future, "that needs to be tied to certain triggers "on economic growth so that we're not cutting meat "and not cutting bone from the state."

- I've been seeing Robert Reeves, the House Democratic leader, do some tweets and other make other comments, how can democratic voters out there that support you lock, stock and barrel see 93 House members vote, most of the Democrats, and not feel that Democrats are supporting GOP policies?

- Listen, I'd say this all the way around.

I think GOP policies are in alignment with Democrats finally, they're talking economic triggers on tax cuts, they're talking about real teacher pay raises, something we haven't seen to this level in General Assembly and in well over a decade and I applaud the Republicans in the house for doing that and I think those are the two things that Democrats can say, "This really moves our state forward, "instead of sends us backwards."

- Kelly, just quickly, first of all, Republicans have passed teacher pay raises and not only teacher pay raises, but pay raises for all state employees and we've had the private sector to consider and that's why we've cut taxes for them.

We can't forget the private sector.

So, and also since 2011, most of our budgets have been on a bipartisan basis.

Even when we had to override democratic governors, we had Democrat members join us to override the gubernatorial vetoes.

- Yep.

Nothing like you saw this past budget.

So whatever you wrote at least has got, you know, got support one time.

We'll see about if the veto comes out on a budget deal, we'll see how the house Democrats vote then.

- Well, I think it's gonna end up where they are on the tax package and also where they are on teacher pay.

- I mean, so teacher pay in the Republican House budget makes it the highest starting teacher pay in the South, which is a significant boost in teacher pay.

- And we've been raising teacher pay since 2011, 2012.

- We're all boost the same.

Colin, we're over in this segment.

However, Mr. James emailed me, he says, you know, you talk about triggers on the show as if everyone knows what a trigger is.

Can you give us an eighth grade explanation of an economic trigger?

- Trying to put this in sort of the layman's terms.

- Please do.

- These scheduled tax cuts, they go into effect when the state hits a certain level of revenue.

So if we don't make more money, there's not revenue growth, the tax cuts don't go into effect, tax rate stays what it is.

If we make more money, the taxes go down.

Where it gets a little bit tricky is that the way these current triggers are set up, the taxes will still go down even if the state's revenue growth is not huge and if it go goes up too much more, it'll go down again, so that's the worry that of this fiscal cliff and that's why the House is basically not giving up on the tax cuts.

They would happen eventually, but effectively delayed until the overall revenue number is a higher number.

- So it's a speed issue between the.

- The Republicans budget-wise.

- Yeah, we're not talking about tax cuts or no tax cuts.

We're essentially talking about do we cut taxes in the next year or two or do we cut taxes maybe five or six years down the road?

- And what if there's a recession that results in the fiscal cliff?

I won't call it a cliff, but say we go in the hole $100 million in state revenues, I mean, absolute deficit.

What happens then?

- Yeah, so the tax rates don't go back up.

So once you've hit that revenue trigger once, even if the revenue's declined because of a recession, you're not gonna go back and change that unless the legislature comes back and acts and says, okay, we actually are gonna raise taxes now.

- And Representative, last week, the Senate was laying out a soundbite that says, if you don't cut taxes, you're raising taxes.

How is holding tax, legally is holding tax rates level a tax hike?

- Well, I was not privy to that communication, so I'm not exactly sure what was said and what was not said.

But all I can hang my hat on is since 2011, we've cut taxes for the people to protect the taxpayers.

I don't know what will happen in the future, but there is no question since 2011, we have helped the private sector, we've helped the public sector, and we've cut taxes for everybody in North Carolina.

And those are the things that I know for sure right now, today at this moment.

- Morgan, I don't think I'm gonna crack him on this one.

- It doesn't sound like it.

- Doesn't sound like it - Doesn't sound like it.

No, no.

House and budget, House and the Senate budget negotiators will also determine if UNC system campuses need to raise tuition for the first time in nine years.

As budget writers look for these cuts, university system cuts could be offset with the revenue from those tuition hikes.

The Senate is making some targeted cuts in its budget bill, including to PBS North Carolina.

The House budget gives the UNC system Board of Governors the power to make its own budget decisions as long as budget reduction targets are met.

Of course, PBS North Carolina is part of the UNC system budget.

Something I've said for 20 years, every time we talk about a budget, we're funded by the budget.

All right, Senator Chaudhuri, tuition increases on some students to generate revenue after nine years.

I think I saw where President Hans said he'd like to have made it 10 years, but may not, may come up a little bit short.

Is this a deal that can be worked out?

- I mean, look, I think this is gonna be part of the grand bargain that happens between the Senate and the House.

I mean, you can't pay for tax cuts without figuring out a way to have additional spending cuts.

And so those have to come from the university.

So the Senate's got about $70 million in spending cuts for the university system.

Would also include scholarships, we can talk about that as well.

The House has more spending cuts, $80 million first year, $100 million second year offset by tuition increases.

But as you mentioned, university system's gonna have that discretion.

I mean, look, I think one of the questions we should talk about is how you deal with these cuts in relation to what's happening nationally.

We've got some of the world class universities we have in the state that are seeing cuts in federal funding, but also cuts that are going to the university.

And it really, I think, poses a dilemma for the universities that have been a large economic driver in this state on how you try to balance what's happening at the national level with these additional spending cuts.

- Colin, I'll go to you on covering this.

This university budgeting is always very, very complex.

We're certainly part of it here.

What are you making of the politics of this asking for tuition hikes now?

It has been nine years and there's been a lot of inflation since then.

That's just a fact.

- Yeah, and certainly if you compare UNC system tuition to private school tuition, I mean, that's obviously gone up dramatically over this time where UNC system tuition has been flat.

And some of this is recognizing that even if you do this, there's still budget cuts.

I mean, the House budget I think targets the UNC system with I think it's a $60 million cut with the Board of Governors being the ones to decide.

The Senate budget had some cuts, but it's target specific things, like PBS North Carolina.

So, you know, we're looking at tight times for the university no matter what.

And if you raise tuition that offsets some of that at least.

- Representative Hastings, just reading comments in the media from high level UNC people, they wanna refocus the university on teaching and on service and on core mission, and of course it's easy to whip on the bureaucracy, if you will, or the administrative state of the university.

If you're a student out there, if you're a parent of a student, what do you make of the proposals that are out there right now regarding UNC funding and how it might affect tuition rates?

- Well, once again, let's remember that primarily the budgets that have passed since 2011 have been on a bipartisan basis.

So whatever cuts they're talking about, it's been on a bipartisan basis.

But look, the funding of education is complex.

It's what, half of our budget, half of our state budget.

The other part that takes it to 70 billion is partially federal money, but half of our state money goes to education.

It's complicated.

We now have public private partnerships.

I chair Capital, one of the chairs of Capital.

You see a tremendous amount of money going from the state capital infrastructure fund to the universities.

You have auxiliary funds.

A lot of universities are using auxiliary fees.

It could be for housing, health, technology, athletics.

So it's a complicated mix of finance when you start talking about exactly how the university system is going to be funded.

So I think a lot of things are on the table, but I'm not sure exactly what will end up happening.

I know what the current status is, but I do know that it's complicated.

And then you also have people who don't really get to take advantage of the university system.

Maybe they never are able to go to a university.

And so we have to keep those people in mind.

So it ends up being a complicated scenario.

- Morgan, I've not heard much out of Governor Stein on this issue.

I do remember him wanting to beef up the community colleges 'cause if we're gonna onshore all this manufacturing, so does he keep his powder dry with UNC focused elsewhere in higher ed or is there enough firepower to go around to make comments, to make positions and statements about everything about the book?

- Well, listen, I think the governor has been, over time, believes that tuition needs to be kept as low as possible.

He sees, as Senator Chaudhuri mentioned, the universities in the state are our economic engine.

They are the golden goose.

And what you don't do if you're trying to create more jobs and create more opportunity for people is kill your golden goose.

And I think one of the big concerns about the tuition hikes and doing it is look at even the really conservative UNC board of governors who just voted two months ago, three months ago, to not raise in-state tuition at all.

And the reason they did that is because they said, it decreases opportunity for people and it also isn't necessary at this time, because families are struggling with everything costs more, from eggs to gas to anything you buy.

And so, our state is built on the backs of a strong public university system and public education that says we want people to have opportunity, opportunity for a better job.

And if I'm a working family that's already struggling with cost, when you raise tuition, you put that opportunity for your kids further outta reach.

- I wanna ask you the last topic, we got about three minutes left, but Governor Josh Stein's efforts to retain power to appoint the State Board of Elections directors was stopped by the North Carolina Supreme Court recently.

It gives Alderman Bullock the power to appoint State Board of Elections members, including elections boards in all 100 counties.

There is no federal court appeals option since the lawsuit involves a state constitutional matter.

Here's what the question surrounds, whether the governor is the chief executive of our state or if the council of states elect members what are there, 10 of them, if I do my math correctly.

Do they share executive level responsibilities?

Morgan it's more about... Not about bullock in elections is what does it mean to be governor in this state?

- What it means to be governor is you are by definition in the constitution, the chief executive officer of the state.

We have Republicans have been trying to take the Board of Elections away from the governor now for nine straight years.

Multiple court decisions have shot that down.

They put it on the ballot to give voters a chance to vote on whether the governor should control the elections or not.

Two thirds of the voters of the state rejected, the move from the governor to the General Assembly or to Republicans in elective office.

What we saw is the big concern about this at the end of the day is politicizing the election system.

Look at the first thing the auditor and the board did.

First of all, they fired an executive director who is nationally recognized as having run some of the best elections in this country over the last decade.

Somebody whose career was administering elections.

They hired a professional partisan operative who had never worked in elections ever to take control of the Board of Elections.

And I think it should concern everybody out there that this is about picking winners and losers.

And instead of professionally administering election, - This might be the last word, representative Hastings.

- Kelly, the North Carolina Constitution is pretty clear on this issue.

When it talks about other elective offices, other council of state positions, it says that their duties are to be prescribed by law.

And that's what this does, it prescribes their duties, a council of state member prescribes his duty by action of law and the Constitution's pretty clear.

- We've talked about prescribed by law.

Jay, you got 10 seconds.

- I think Justice Earl said it the best in dissent, "You don't go to your accountant to help count votes."

- Okay well, that's our show for this week, a lot of great topics, there'll be more next week.

Thank you for watching.

Morgan, good to have you on.

Heard we lost a friend of "State Lines".

- We did, we did.

We lost the Doranne Manus the two weeks ago who was 96 years old, the queen of Carthage and sort of a second mother to me, and about everybody in that town growing up.

Was a faithful "State Line" viewer every night.

Loved you Kelly.

- We loved her.

- Passed away at 96 but she's deeply and sorely missed.

- Senator, Representative, Colin, always great to have you on.

More importantly, thank you for joining us.

Email statelines@pbsnc.org, we'll read that message.

I'm Kelly McCullen, thanks for watching.

I'll see you next time.

[bright orchestral music] - [Announcer] Quality public television is made possible through the financial contributions of viewers like you, who invite you to join them in supporting PBS NC.