| |

NC Senate Releases Tax Reform Proposal State Chamber Seeks Input from Members
Just yesterday, on April 22nd, the NC Senate unveiled a comprehensive proposal to overhaul North Carolina’s tax system and raise over $1 billion over two years to address the state’s projected revenue shortfall. The Senate’s proposal is very broad and complex and it’s unclear yet what its impact on North Carolina employers would be overall. Here are some key provisions of the tax reform proposal:
• Would lower personal income tax rates (from 7.75%, 7% and 6% percent to 7.5%, 6.5% and 5.25%, respectively), but expand the tax base to federal Adjusted Gross Income (AGI) and limit credits and deductions. • Would lower the corporate income tax rate from 6.9% to 4.5% over two years. • Expands the franchise tax to all limited liability businesses. • Lowers state sales tax rate from 4.75% to 4% and broadens the base to additional services. • Increases excise taxes on alcohol and tobacco.
The North Carolina Chamber is a member-driven advocacy organization with a diverse group of members representing employers of all types and sizes. As such, we will continue to seek input from our members on proposed tax policy changes as they move through the legislative process. To review news articles about the Senate’s tax reform proposal, click on the following links:
Click here to read an article from The News & Observer (Raleigh), 4/23/09 Click here to read an article from The Winston-Salem Journal, 4/23/09 To review the proposal, click here.
To contribute feedback on the proposal, please email North Carolina Chamber Legislative Assistant Debbie Mueller at dmueller@ncchamber.net.
Our state Chamber has consistently said that any tax reform proposal should incorporate key principles of competitiveness, certainty, simplicity and fairness. Additionally, we have said that we hope that lawmakers avoid taxing business-to-business services – to the extent possible – because that would harm both consumers and employers by raising costs. It has also been our position that lawmakers should avoid taxing investment because that would have a negative impact on growth and job creation. Look for updates from the North Carolina Chamber in future editions of this e-newsletter or in Action Alerts or other correspondence from the North Carolina Chamber.

Workers’ Compensation Bills Need Attention Chamber Engages Business in Education, Advocacy Efforts
While there is agreement within the business community that a comprehensive overhaul of the current workers’ compensation system is needed, attempts to advance meaningful reform have proved challenging. Among the most significant workers’ compensation cost-drivers for NC employers – and what makes workers’ compensation costs in our state higher than in other states – is the fact that there is no limit on benefits. (For a thorough overview of the current system provided in an article on workers’ compensation in the June 2008 edition of NC Magazine, click here.)
But, even with these higher-than-average costs our workers’ compensation insurance rates have been relatively stable in recent years and that’s fueled the misnomer among legislators that the system is fine and no changes are needed. In the current legislative session, efforts to deal with the current economic situation facing the state are fully occupying legislators’ attention. And, the trial attorneys (plaintiffs' bar) consistently expend tremendous effort and resources to fight all proposed reforms.
The North Carolina Chamber remains committed to a strategic approach in seeking systemic change in North Carolina’s workers’ compensation system. As part of that, more education of legislators on the issue is needed to ensure a solid baseline understanding of workers’ compensation within the General Assembly. As our state Chamber works toward this goal, efforts continue with member companies and allied business organizations to support any legislation that provides reform of the current system and to oppose legislation that makes our current workers’ compensation system even worse. Click here to learn about workers’ compensation-related bills that have been introduced this session

Bills Propose Costly Mandate on NC Employers
“Mandatory Paid Sick Leave” is being proposed by a coalition of unions, trial attorneys, and social advocacy non-profit organizations. Similar proposals have been introduced in a number of states and in larger cities – however, if this bill passes, North Carolina would be the only state in the southeastern US where companies would have to bear the cost of a “Mandatory Paid Sick Leave” law.
North Carolina employers want to take care of their employees, and we know this because they’re our state Chamber’s members. They certainly do not want their employees coming to work sick. Our employer members also recognize the importance of competitive benefits in attracting and keeping the best employees. It is the position of the North Carolina Chamber, however, that employers should be able to decide what types of benefits work best for them and their employees – not the government and not a one-size-fits-all mandate.
Mandatory paid sick leave would drive up the cost of doing business in our state at a time we can least afford it. In this time of record-high unemployment when employers are already struggling to keep the jobs they have, taking any action that will make jobs cost more is probably not wise policy-making and will likely cost North Carolina more jobs. Click here to learn more and to join our state Chamber’s grassroots coalition to protect jobs and oppose the sick leave mandate on North Carolina employers.
The Fight against Check is not Over!
Thanks to involvement and action from a united business community significant headway has been made toward preventing the economically poisonous legislation commonly referred to as “card check” from passing Congress. In recent weeks, unions have been dealt a major blow in their ongoing campaign to pass their card check bills as support in the US Senate – generally acknowledged as the primary battleground for the legislation – has deteriorated. The fight is far from over, however!
While our state Chamber is encouraged by the recent decisions of key US senators to oppose card check legislation in its current form, unions are not giving up and are investing hundreds of millions of dollars in T.V. and grassroots campaigns across the country to push their top legislative priority through Congress and to the President’s desk. “Anyone who thinks the battle over the Employee Free Choice Act is over is wrong with a capital W,” said Richard L. Trumka, secretary-treasurer of the AFL-CIO. “We are more determined than ever and the expenditures on ads and massive field operations show that we are putting 100 percent of our efforts behind this bill.” Click here to read more.
Join Your State Chamber & NAM for a Labor Policy Forum
The North Carolina Chamber and the National Association of Manufacturers (NAM) will host a Labor Policy Forum on May 20, 2009 at the Sheraton Four Seasons in Greensboro where experts will discuss unions’ card check legislation, along with a host of other labor policy proposals. While the focus of the Forum is the impact of these proposals on North Carolina manufacturers, owners, executives and employees of all types of businesses are welcome to attend and learn more about potential law changes and how they would radically alter employer-employee relations in our state and country. Click here to find out more about the Labor Policy Forum or to register for the event.
 Chamber-Backed Transportation Bill Passes the NC House
North Carolina has been one of the fastest-growing states in America. The growth of our state has brought challenges along with opportunities, including significant transportation challenges. This is why the North Carolina Chamber, along with many of its local Chamber partners and other pro-jobs, pro-growth allies, is supporting House Bill 148: The Congestion Relief and Intermodal Transportation 21st Century Fund. Also called the “Intermodal Bill,” House Bill 148 passed the NC House on April 22nd. The legislation would give voters in communities across North Carolina an opportunity to approve funding options for local transit to improve North Carolina’s transportation infrastructure, reduce congestion on our roads and strengthen and grow our economy.
Our state Chamber acknowledges and thanks all of our members who responded to our recent Action Alert on the Intermodal Bill and contacted their representatives in the NC House to ask them to support the bill. House Bill 148 is an important step toward improving transportation infrastructure in North Carolina. Efficient and accessible local transit systems serve to reduce traffic congestion, benefit the environment and make our state more competitive when it comes to luring jobs and investment.
House Bill 148, the Intermodal Bill, now moves to the Senate for consideration. Click here to learn more about the bill and check on its status as it moves through the legislative process.

Chamber’s NC Magazine Expands Online: Check it out!
NC Magazine, the official publication of the North Carolina Chamber, has expanded online. Coinciding with our 67th Annual Meeting, our state Chamber and NC Magazine publisher S&A Cherokee launched a new online presence for the magazine on April 2nd with an Annual Meeting Recap that included video interviews, Gov. Perdue’s remarks, stories and a photo gallery. This new media property adds value for our Chamber’s members and magazine readers and advertisers by providing the means to deliver real-time news about issues important to North Carolina businesses. If you have not already done so, check out NCMagazine.com today at http://www.ncmagazine.com/ (Mag).
| |