Governor Signs Pro-business, Pro-jobs Bills

Chamber’s Member-Driven Agenda Results in Better Business Climate

As the unifying voice for business in our state, the North Carolina Chamber pursued an aggressive agenda this legislative session aimed at capitalizing on opportunities to improve our state’s business climate and strengthen our competitive position.  Since lawmakers left Raleigh, Governor Mike Easley has signed into law all of the bills our Chamber championed to reduce the cost of doing business in our state and to attract, retain and grow jobs. 

Following through on being a member-driven organization, our state Chamber developed a pro-jobs Competitiveness Agenda that represented the interests of all sizes and types of businesses throughout North Carolina.  Our priorities for the 2007 legislative session represented the issues that you told us you wanted us to work on this year (at “listening meetings” last fall, on Business Ballots distributed via broadcast fax and email, and in our first annual CEO poll).

The North Carolina Chamber, with support from policy makers on both sides of the aisle, was able to deliver results to our customers this session that will sharpen North Carolina’s competitive edge in the intense, ongoing state-to-state race for jobs and commerce.  By building broad coalitions of members, allied business organizations and local chambers that were able to garner support from numerous pro-business, pro-jobs legislators, our Chamber helped make North Carolina an even better place in which to live, work and do business. 

Chamber Recognizes Lawmakers
for Supporting Pro-Jobs Policies

The North Carolina Chamber thanks the Governor and leaders in the majority and minority parties of both the state House and Senate for acting on opportunities identified by our members and extensive data analysis to improve our state’s business climate.  In today’s fiercely competitive global economy, continuous improvement is necessary in order for North Carolina to maintain its position as a leader among states in economic development and growth.  Our Chamber’s bills passed this legislative session with bi-partisan support in both chambers of the General Assembly -- thanks to a number of pro-jobs lawmakers who support our mission to make sure North Carolina is in fact the best state in the country in which to do business.  This year’s legislative victories largely reflect our members’ top concerns: taxes, healthcare costs, and regulatory reform.  

Phase-out of Taxes Will Make
NC Manufacturers More Competitive

Our Chamber thanks House Speaker Joe Hackney and the House leadership for making elimination of sales and excise taxes on energy sold to manufacturers a priority during budget negotiations.  Our Chamber also thanks Rep. Earline Parmon (D-Forsyth County) for her long-time support of North Carolina manufacturers on this issue.  Our Chamber also thanks Sen. Linda Garrou (D-Forsyth County) for being the sponsor of this bill in the Senate.

According to a legislative fiscal note, the Chamber-backed energy tax exemption that passed will save North Carolina manufacturers roughly $176 million over the next five years.  North Carolina was one of the few states in the southeast that had imposed these taxes on manufacturers (Alabama and Georgia being the others).

Tax Relief Delivered for Small Businesses

Our Chamber recognizes President Pro Tem Basnight and the Senate leadership for making a reduction in the state’s top personal income tax rate – a “small business tax” – a priority during budget negotiations despite almost universal characterization of this issue as simply a “tax cut for the wealthy” in the media. 

Our Chamber successfully worked with lawmakers to deliver the scheduled 0.25 percent reduction in the top PIT rate this legislative session (significant because it had been postponed twice before).  The quarter-percent reduction in North Carolina’s top PIT rate will save small business taxpayers and others $40.8 million during 2007-2008 and $93.7 million during 2008-2009.  This is an important small business tax reduction because many small businesses pay personal income taxes rather than corporate (and 75 percent of North Carolina businesses have 10 or fewer employees).  At 8 percent, North Carolina had one of the highest top PIT rates in the country.

Tax Appeals Process More Fair and Predictable

Our Chamber thanks Sen. Dan Clodfelter (D-Mecklenburg) for sponsoring an important bill to reform our state’s tax appeals process, and for making it a priority issue in the legislature this session.  Our Chamber also thanks Rep. Deborah Ross (D-Wake) and Rep. Pryor Gibson (D-Anson) for guiding Senate Bill 242 through the House.

Reform of our state’s tax appeals process was a top priority for the North Carolina Chamber. The key component of the legislation that passed provides taxpayers, both individual and corporate, the opportunity for an independent hearing outside of the Department of Revenue prior to having to pay taxes in dispute.  This legislative victory will go a long way in improving North Carolina’s position relative to its peer states in the never-ending competition for business investment and jobs.

Excessive Industrial Machinery Regulations Eliminated

Our Chamber thanks Sen. David Hoyle (D-Gaston County) for sponsoring an important economic development bill this session that established that industrial machinery is not subject to regulation under the North Carolina building code – and for pushing Senate Bill 490 against early opposition.  Thanks also to Sen. Jim Jacumin (R-Burke) and Rep. Drew Saunders (D-Mecklenburg) for helping with the bill in their respective chambers.

 North Carolina was one of the few states that mandated a machinery listing and labeling requirement through the building code process. The legislation lowers business costs for companies already operating in North Carolina, and makes the state more attractive to companies seeking to locate here.

Measure to Control Rising Healthcare Costs

Our Chamber thanks Sen. David Hoyle (D-Gaston), who – with help from Sen. Tony Rand (D-Cumberland) – found a way to establish a high-risk pool for North Carolina residents in need of health care who cannot get it due to lack of insurance without raising costs on business. Sen. Hoyle recognized this as an important priority for the state, but one that the state should fund as opposed to NC employers.  Establishing a high-risk pool should help all healthcare consumers, businesses among them, manage rising healthcare costs by funding coverage for previously uninsured residents whose care is often subsidized through higher healthcare premiums from employers and private-market consumers. 

Our Chamber and business allies in the healthcare industry worked to make sure that funding for a high-risk insurance pool did not raise business costs – as our members have told us repeatedly that they are buckling under the pressure caused by increasing healthcare costs.  The version of the high-risk pool bill that passed established that the pool will be state-funded as opposed to assessments on insured consumers.

What are Chamber Members
Saying about This Year’s Session?

The North Carolina Chamber’s Competitiveness Agenda was built upon direct member input collected at meeting across the state, through e-newsletters and online poll questions, and in our Chamber’s first annual CEO poll.  You told us what you wanted us to work on this year.  Then, we took your input and compared it to numerous national rankings and studies and our own first-ever Annual Competitiveness Index (ACI).  Through this process, we surfaced real opportunities to deliver results that improved North Carolina’s business climate.  So, what do you have to say about the session’s outcomes?

Our Chamber has received a great deal of positive feedback about our pro-jobs victories this legislation session.  We are always interested in hearing more from our members, however.  Take time to read what other members have said about our work this year and then offer your feedback through the poll question on the left side of this e-newsletter, or via email by clicking here. 

• Fletcher Steele, President, Pine Hall Brick
  (Energy Tax Exemption for Manufacturers)
  “It’s a $10,000 a month savings for us. It’s not a small issue. North Carolina is one of the leading brick manufacturers in the country. Still, we compete heavily with companies across the southeast with shipments and exports outside the state. This energy tax exemption helps level the playing field and certainly makes North Carolina manufacturers more competitive.”
  
  
• Jim Anthony, CEO, Anthony & Co.
  (PIT Rate Reduction)
  “Tax rates and policies matter a lot to all business owners, whether they speak up about it or not. Notwithstanding the fact that we have some of the highest quality of life in the nation, tax rates do matter. What growth might we see in business relocations, expansions, and formations if we had tax rates that were lower than our neighboring states instead of substantially higher? We should not be charging higher taxes because we can get away with it, because that train runs out of gas soon.”
  
  
• William W. Nelson, partner with Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan and a past chair of the NC Bar Association Tax Section.
  (Reform of Tax Appeals Process)
  “The North Carolina Bar Association supported passage of Senate Bill 242 because it clearly simplified North Carolina’s tax appeal procedure and moves the taxpayer’s prepayment hearing to an independent Administrative Law Judge. These changes promote fundamental fairness and due process in the tax system.”
  
  
• Donny Hicks, President, NCEDA
  (Economic Developers Association)
  “Senate Bill 490 is extremely important legislation, because it clarified the Building Code Council’s current definitions concerning industrial machinery labeling. The current interpretation of the codes has already harmed North Carolina’s competitiveness, causing NC to lose jobs, possible business expansions and potential new recruitment projects. NCEDA applauds the efforts by the General Assembly, the North Carolina Chamber and many others who have worked to correct this issue. The overwhelming support for Senate Bill 490 in the legislature has preserved North Carolina’s reputation as a desirable place to do business and saved numerous current and potential jobs for our state.”