- A state house committee recommends a statewide vote on local property tax caps.

And we're less than one week away from the convening of the 2026 legislative short session.

This is State Lines.

- Quality public television is made possible through the financial contributions of viewers like you who invite you to join them in supporting PBSNC.

(upbeat music) ♪ - Welcome back to State Lines.

I'm Kelly McCullen.

Joining me today is Maggie Barlow of Maven Strategies.

To her right, Theresa Kostrzewa of Capital Advantage.

Chris Sinclair of the Sinclair Agencies in seat three and former North Carolina State Senator Mary Wills Bode in seat four.

Hello everyone.

- Hello, hello.

- Good morning.

- Four days away and things get really busy for all five of us, I do believe.

A state house select committee is recommending this week a statewide vote on whether future county level property tax increases should be limited.

The choice could appear, is likely to appear on the 2026 midterm ballot along with the US Senate race you must deal with, congressional and legislative races.

It appears the proposal will ask for state constitutional amendments to limit future property tax hikes, not allow for increases or other flexibility.

I'll let the analysts dive into that.

The plan needs House and Senate approval at a higher rate than a simple majority and the governor, Chris, cannot veto a constitutional amendment referendum bill but it's gotta get that, what, 60% majority in both houses.

- Yeah, typically it would be really hard to get it on the ballot but it seems like this one's got some real momentum and we were talking about that before we came on.

It's an interesting topic.

A lot of states around the country have caps on property tax.

I think that the House and Senate or maybe the House has got a little more ambition around this than the Senate but they're in the right vein of the voter in a lot of respects because if you poll voters around the state, the top issue is cost of living but right behind it is cost of housing.

And so property taxes, obviously, for those who own homes, getting a break there.

If you're capping it, you're not having to worry about that as much but housing, the rising cost of housing is a huge issue.

Something has to be done.

Voters need something done and I think it's really front and center on the voters' minds.

So this gets to half of it in terms of housing because not everybody owns property but I think the legislature's equally got to come in and do something at the local level to do something about what's going on with red tape and regulation, the supply of housing, the shortage that we have in the state.

It's housing, the rising cost of housing is a huge issue and we've got to tackle that from all fronts.

- Mary Wills, there is a bipartisan flavor with this.

We've had Democratic representatives on some quite progressive and liberal going, yeah, the county governments have really raised not just the valuations, the House is worth more but they're leaving those tax rates nice and high and really creating a windfall for county government and even their voters are saying, hey.

- Sure, but I think it's easy for politicians to promise lower taxes when they are not the ones that bear the responsibility of then cutting those services associated with those lower taxes.

And when we talk about counties and what their property taxes go to, we're talking about salaries for a sheriff's department, we're talking about EMS so that when you call 911, someone will show up.

And we're talking about water and sewer maintenance facilities.

These are core services that people rely on to survive.

There's not a lot of fraud, there's not a lot of waste in these county budgets, especially as compared to the legislature and the affordability crisis is real but what I would say to the legislature is they need to do their job and work on the affordability crisis.

They need to pass a budget.

They don't need to be worried about what other people are doing.

- But Mary Wills, we had running water and sewer for decades before these huge tax revenue increases hit the county level.

EMS still answered the calls.

This is a new phenomenon.

- Well, it is because of inflation and rising costs and we're all bearing that equally and I'm not trying to minimize that because it's very real but I think the legislature needs to explain to North Carolinians why working families pay more in income tax than multimillion dollar corporations and they have a lot of tools in their toolbox to address the affordability crisis for North Carolinians and they're just not doing their job.

- Maggie, Republicans will say if you reduce taxes it does help the affordability issue.

Of course, you run some campaigns there.

What would you advise a generic candidate on your side of the equation if they're approached with this idea of capping property tax or giving legislators the permission to cap property tax increases?

- Well, actually, Kelly, legislators already have that authority.

It's capped at $1.50 and there's a lot of question out there like does this constitutional amendment even do anything at all?

And I think that's a really good question.

I think what Chris said that this is a lot about what the voters want.

The voters, they want lower taxes, they want affordability addressed but is this really doing anything?

I mean, if you look at that committee, it's all their frontline targeted members.

They're all in seats that they could lose come November and this is an opportunity for them to do something that, look at it, I don't really think this constitutional amendment is needed.

It's already capped at $1.50.

So sometimes, no matter who's in charge, a caucus will do something because they think it's gonna help them in the next election.

However, in my opinion, this is actually not a quote unquote Republican issue.

I think that there will be a whole bunch of Democrats that vote for this.

Not being able to afford a house or groceries or gas, the cost of living, the affordability problem is immense in the entire country and I'd be surprised if 90% of that body does not vote to put this on the ballot.

- But do they need to?

- But I don't think that's the point.

- I think the challenge is that there are 100 counties in North Carolina and there are very different drastic needs, county by county.

What Bertie County needs in a cap is very different than what Mecklenburg County needs.

And so, if I were in the legislature, I would task the counties to come up with their own cap and also reevaluate more frequently than every eight years.

Eight years is a long time to go in terms of reassessment and there can be a lot of accumulation of property value that changes within that eight years.

- Chris, I don't wanna put you on the spot on this.

May not be your issue, but I have gotten viewer emails suggesting you need to bring up this topic of how developers are setting up a 99.9% for-profit development and then a 0.1% or 0.01% non-profit.

They're getting affordable housing, tax abatements and cities like Raleigh say we're $800,000 in a deficit because of these developers.

Is that fair?

- No, I don't think that's fair at all.

I think it's extremely hard for developers to get from point A to point B in any development.

I was talking to a developer that took 12 lots in Weddington, North Carolina from start to finish.

Took him one year from the time he put this application in until he was cleared to build those homes.

One year.

Carry the cost of that.

Local governments have got to come to the table.

There's a thing, the White House released a report.

We are 10 million units short across this country in housing.

We are 750,000 units in North Carolina.

We need an all the above strategy at the local level to deal with the shortage that we have of housing in North Carolina.

And I think the legislature's got to say to the local governments, not only on the property tax, but now on the bureaucrat tax that exists at the local level.

These developers from start to finish have a big, huge chunk of red tape that they have to go through.

And it's coming from the local level.

Something has to be done.

The average age, the first time home buyer, 40 years old.

That's ridiculous.

It's time for the legislature to do something and come to the table.

There are a number of bills that have been introduced and it's time for the local governments to get on board to figure this out.

We are in a shortage for some folks.

We are in a crisis for others and we've got to address it.

- Theresa, you say this is not really a partisan issue.

However, if you put a tax cut or tax caps on a ballot, the cynic in me, going back to the old social warrior days of 2012 says, this is being done to turn out Republicans.

But would Democrats be as excited to vote yes or no?

You think so?

- Absolutely.

I think what's going on in our country right now in terms of people being able to live and take care of their children is so acute that everybody cares about this.

It's not a partisan issue anymore.

- Maggie, what do you think about that?

I mean, anytime there's an amendment, it turns out people who, if they don't care about the legislative and congressional races, they're gonna care about local.

I have to say they're gonna care more than anything else.

- Right.

I don't know how much this is really gonna turn out more voters.

I do think that people are going to be concerned about the issue, but I mean, it is a midterm election.

If they were doing this during a municipal election or some other time, it may have a bigger impact.

- Got it.

We're gonna talk about the full state House and Senate resuming legislative business on April 21st, just next week.

Short legislative session, they always call it.

Bills that passed at least one legislative chamber are still technically alive as are potential veto override efforts.

State budget negotiations can certainly continue as the current budget year ends June 30th, in theory.

Of course, the budget just rolls on.

Any legislation that isn't passed this session would need to be refiled as brand new legislation the 2027 legislature convenes in January, February, Theresa.

So now it's do or die.

What must they do?

What needs to die this spring in terms of legislation?

- Well, pretty much I think everything is gonna die other than the budget, right?

Here's the bottom line and here's what's at stake.

Nationally, we have all seen in other special elections that Republicans are getting pummeled.

You have a legislative district in Texas that was in what, like an R17, that then that individual lost by 11.

So members are quite worried.

I had one legislator tell me that if you're in anything less than an R plus 15 district, you should be worried.

So first of all, what's at stake?

Not just the super majorities, but maybe in some case in the House, the majorities.

So, but beyond that, right?

After two years of not having a budget, they have to get a budget, and I think that they will get a budget.

But the first thing that they're going to need to do is they need to decide what is our revenue number, what is the availability?

And that's the battle between the House and the Senate on what are we gonna do about the tax cut?

I understand they're working on a compromise between the House and the Senate so they can settle that.

And then I believe once they settle that, it's gonna roll.

They'll take the budgets that they had last year.

There will be some changes.

They will do Medicaid rebase, but I think they're gonna focus and they're gonna be out in July, early July.

- Maggie, the governor's position in this, he's warning you keep cutting taxes, you're gonna structurally cause a budget deficit that no amount of economic growth can fill.

So he's out there with that Medicaid rebase, which is state Medicaid funding.

If you're the governor, do you have any leverage at all?

- Well, at this point, the legislature really has the control with the budget.

And Theresa's right, they do need to get a budget passed.

That is something that has gone on too long without one.

And that should be the priority.

There are a lot of other legislation that could happen, but I did see Speaker Hall put out that schedule yesterday that they plan to be done July 2nd.

I think this is gonna be kind of a get in and get out, I hope.

(laughing) And they need to get in and do the budget.

- Mary Wills, politically, all these purple districts out there, places where Democrats could win, where Republicans currently serve.

Do those particular legislators need a budget passed?

- I think they do.

I think the people of North Carolina expect them to get a budget passed.

And this has been one of the most unproductive legislative bienniums in modern North Carolina history.

We've only passed, the legislature's only passed about 100 bills.

To put that in context, about 15 years ago, they were passing between 600 to 700 bills.

- Some people say that's very effective governing, like get in and get out, don't do anything.

- Well, that would be true if we've solved all of our problems and life has gotten less complicated.

But in fact, it's the opposite.

And I think to Theresa's point, the people of North Carolina are frustrated with the lack of productivity, and they're making their voices heard at the ballot box.

- Chris, you're a policy guy, and everyone's saying it's a budget year.

Budget can contain policy, but budget's mostly cash.

Do people who need policy changes in the state need to wait until 2027 to see who the new Senate President pro tem is, see what happens in the House?

- I don't know, I think there's sort of a mystery in what's gonna happen with Senator Berger and his unfortunate loss.

And in my view, it's an unfortunate loss because I think he's done more to help this state get the balance sheet of this state in order than anybody else, and he's had one frame, and that's making sure that we are open for business and that our taxes are low, and that we can attract and grow.

I think he's done a very good job of that.

The question I have is, does he say, I'm going to try to push through some things that I didn't get through?

Do I still have the ability as the leader, and he's still the leader until December, do I push through the rest of my agenda in the Senate and try to rally around with the House so that we can get some things done that I didn't get done as the leader?

That's an unknown to me.

And the question is, do those three Democrats that lost in their primaries, and they're like, do we just get on board and push things through?

I think those two unknowns in this session may contribute to a more active session, who knows?

- Theresa, do Republicans in the House give some ground to the Senate to get Phil Berger some flowers on the way out of office, like a hospital or like a casino?

- Oh, definitely not that casino.

No casino.

- Too soon, too soon.

- No, I do think that the Children's Hospital situation is going to see a resolution.

I'm hearing that there's a movement on the part of the Speaker and in the House, and I think that that's a wise thing.

It's always unfortunate when great ideas end up becoming political footballs, right?

And I personally think a UNC Children's Hospital, or actually a North Carolina Children's Hospital is a great thing for the state of North Carolina.

I mean, if you look at what happens nationally when standalone children's hospitals are built, the people, the talent that comes in, the inventions, the creations, the business spinoffs, aside from the fact that you're saving so many children's lives, it's a great thing for the state of North Carolina.

- Well, but back to Phil Berger receiving some kudo or flowers from his caucus and from the House side, he's gone, and so do you expect a fond farewell, or do you expect those that are still left behind to start jockeying for position for leadership?

- Well, I think that's definitely already happening.

I mean, two of the three people who want to take over as Speaker pro tem are in his inner circle.

So I think it's gonna be very interesting to watch to see what happens, and it's not just three Democrats that lost in the primary.

There are Republicans that lost in the primary, too, and it's gonna be interesting to see what they wanna get done.

- A 42-page report was released this week with proposals affecting state mental health policy.

Potentially, the House Select Committee on Involuntary Commitments suggests using mobile crisis teams and telemedicine to initially screen people who might have been arrested and are facing potential involuntary commitment.

They also want broadened permissions for who can do these screenings.

House members want a plan from the Department of Health and Human Services on filling vacant jobs in mental health facilities.

Representative Hugh Blackwell said openly, "The state has 300 open mental health beds," Mary Wills, and you can't put patients in it because there's no one there to work those facilities.

- Correct.

- And are Republicans gonna wanna hear a report from DHHS that just says, "Give us more money"?

- Well, here's the problem, is that we have 900 North Carolina state mental health beds and a third of them, 300, are vacant, and that amounts to about $1.5 billion that was spent building those beds that are not being used.

And so North Carolinians are paying the price, both in taxpayer dollars, but also in unmet mental health services needs.

And when I was serving in the Senate, it was devastating to have parents who had children in crisis who couldn't get a bed and just had to wait and had to wait, and that's agony.

And so the legislature really needs to get serious about how we're gonna recruit, train, and retain mental health service providers across our state, because this is an issue that's not going anywhere.

It's here to stay.

- Chris, what's your experience with these big reports that come out of committees?

Are they well-researched?

Are they politically focused?

Do they actually aim to solve a problem or just raise awareness of an issue and someone else can solve it?

- I think it's all of the above.

- Oh, that's not the answer I was wanting.

I wanted one thing.

- I mean, sometimes you get some really good policy.

I think if you look at the genesis of this committee, it comes out of, really, out of public safety and the tragic death of the young lady in Charlotte on the light rail.

You have local governments saying, look, we know we have a mental health crisis locally.

We have a lot of homeless.

We also have a public safety crisis in some of our big cities.

And I think the legislature was right to come in and do something about public safety, particularly in Mecklenburg County.

But I had an opportunity to sit down with the city council person there in Charlotte, and she was focused on the mental health aspect.

It's not an either/or thing.

I think we've got to do both.

We have to make sure our communities are safe.

But if mental illness is contributing to public safety, we've got to do something about that as well.

But just throwing money at it doesn't make a lot of sense in all cases, but it's not an either/or in my view.

But the genesis of this comes out of public safety.

It's tragic that we have a system built in the 1970s that hasn't caught up to today's needs.

That is a tragic situation we find ourselves in.

And so we've got to address the mental health aspect for sure.

- Theresa, with Republicans saying at the front line should be social workers, mental health, these are things they attack Democrats for wanting to do with the local police department.

How do we square this suggestion?

- Well, I think everyone has come to realize, including not only Republicans, but the first lady as well with her reentry 2030 program, mental health and public safety oftentimes go hand in hand, right?

And so, and then you're talking about not just taking care of that person when they're having problems, but then once they're in the system, when they're in a prison or they're in a jail, what are we doing to help them get educated, learn, then be productive once they get out of the system?

So it's really a combination.

And the more that those two aspects are working together, the better it's gonna be for citizens in North Carolina.

- What's the best approach of an elected leader or even a candidate trying to formulate a policy decision?

Because if you go too hard on the police, you lose the left.

If you go and wanna incorporate the social work side of it, they'll say, "Ah, soft police work."

I haven't heard a solution yet.

- Well, it's because it's a huge issue.

And it's one that we really haven't come up with a great solution for yet, but it's great that both sides of the aisle see it as the issue that it is, and it needs to be addressed.

Having a mental health illness is not unlike having any other kind of illness.

We need to make sure that we're providing the resources, and it's not just when it's in crisis state, which is what the law that was passed last year, that now a lot of that was about things that they had done.

They were relying on emergency rooms to determine if people should be committed.

And then it tried to go back to the police officers and the sheriffs didn't want that.

So it's like this football that keeps getting tossed around.

But the biggest thing to come out of this is that all sides are in agreement that this is a huge issue that we've gotta figure out a solution for.

- Well, before we can increase mental health, we have to worry about the Medicaid state funding shortfall.

And you have this next segment, Maggie, where Governor, Maggie, Josh Stein is publicly expressing optimism that our state's Medicaid funding shortfall will soon be resolved.

While the governor pushed for Medicaid spending cutbacks last October, legislative Republicans always said, Medicaid had funding until spring 2026.

Eh, I guess it did.

The governor's team says legislative financial analysts agree that Medicaid is in fact $319 million short.

By the way, the governor said that was the number back in October, see how we got here.

There's been disagreements over that dollar amount for a while, and while Medicaid funding would normally be part of a broad budget bill, House Speaker Destin Hall's team says, "Expect a standalone bill, Maggie."

Take the standalone bill, separate it from the budget, get this done, 319 million too.

- Well, you said it would be funded through spring of 2026.

We're in spring of 2026.

That $319 million, I think people are mostly in agreement on, we need to get that money funded so that 3 million North Carolinians, one out of every four who are relying on this for their health insurance, providers who are concerned about going out of business, that those individuals know that they will have health insurance.

The DHHS secretary says it will end in May, but this needs to be done.

I don't know if they can get a budget passed that soon, but something needs to happen, and it needs to happen right away.

- Standalone bill like this, just popping out $319 million, that's not an insignificant amount of millions to find this late in a budget year.

- They're gonna find it, and I think they're gonna do it next week.

I mean, they know they need to, they knew in the fall, and they had a little standoff with the governor, which they won, and they are gonna fund Medicaid, and I think within a week.

- Chris, the governor was right on his side too.

He said $319 million, and Mr.

Berger comes on the show, says, "No, it's not, we don't believe that necessarily."

Well, it was $319 million.

I mean, everybody's right, right?

- Well, they gotta get the math.

They gotta go on the same page with the math.

Is it 190 million, or is it 319 million?

And I think they've gotta figure that out first.

And then from there, I think that on the Republican side, they're saying, "Look, if we're gonna, "look, we have three million plus folks "that are on Medicaid, we have to fund that, "but we also have to make sure the money is accounted for, "and being accountable is not being obstructionist.

"It's just, we've got to make sure with, "I mean, just turn on the TV screen, "and you can see the fraud, waste, and abuse "in a lot of government funding programs "going on around the country."

So A, get the math right, what's the shortfall?

Number one, 'cause I don't think it's 319 million, and B, make sure the money is spent wisely, and there's not any fraud.

There's a number of cases that have been introduced in North Carolina, so you gotta get those two things, and you can have both.

- Mary Wills, the auditor Boliek is out there.

I think he's gonna look into DHHS.

I guess time is too critical now at this point if there's to be waste found in DHHS, and it be in a different budget cycle, is that?

- Well, I mean, I think we can all agree we don't want waste, fraud, and abuse.

I think that's across the board.

Yeah, I mean, we can agree on that for sure, and we should do what we need to do to make sure that waste, fraud, and abuse is eliminated, but I think the other issue is just the cost of healthcare.

We're always gonna be having these conversations about a deficit if we don't get a handle on the cost of healthcare.

We're always gonna be subject to, we're facing a budgetary shortfall.

What are we gonna do?

Even if we get waste, fraud, and abuse down to zero, the cost of healthcare is just gonna keep increasing unless we really get down to business and figure out how to stem the tide of the massively increasing healthcare costs people are experiencing.

- Maggie, how much should North Carolinians put in responsibility onto a state legislator to bring down the cost of healthcare compared to the massive amounts of federal money and federal policy that influence healthcare?

- I think everybody has a role in it.

I mean, we wanna make sure that we have healthy North Carolinians, and our legislator is responsible for that, as are our local governments.

Everybody has a role to play in that because it's such an integral part of everyone's everyday life.

- So last 90 seconds, Theresa, you're doubling down.

We'll have a Medicaid bill next week.

Nobody's gonna hold you to it.

You think it's gonna happen?

- I do, I do.

- Yeah!

- 319 million.

- I didn't say the number.

- Oh, you won't go that far.

What else happens next week as we head in?

Do the legislators get off to a great start, or is it just a resumption of sort of the molasses pace of back and forth negotiations between the House and Senate leadership?

- If I had the answer to that, I'd be a wealthy man.

- You're on the show.

We expect you to know all the answers.

Mary Wills, is this making you miss office, and are you ready for a try again at it?

- Absolutely, I miss serving the people of North Carolina.

I miss being able to help solve problems.

It's a difficult time to be in politics.

I commend all the people down at the legislature who I hope will be working hard on behalf of their constituency, and I look forward to seeing what they can accomplish.

- Sounded like a great stump speech.

Thank you for being on this week, and it will just get more exciting through the summer if you like politics.

I do, I'm glad you watched the show.

You're most important to us.

Email your thoughts and opinions to statelines@pbsnc.org.

I'll read that email, I promise.

I'm Kelly McCullen and thanks for watching.

See you next time.

(upbeat music) - Quality public television is made possible through the financial contributions of viewers like you, who invite you to join them in supporting PBSNC.