2009 Legislative Session Mixed Bag for NC Employers
Chamber Encourages State Leaders to Do More to Keep & Create Jobs
The NC General Assembly’s 2009 legislative session has adjourned. What are the results from this year’s session for North Carolina employers? In simple terms, legislative outcomes could have been better. At the same time, if not for the efforts of our state Chamber and broad coalitions of employer members and other pro-jobs allies, they could have been a lot worse.
While balancing a two-year state budget in the worst economic recession in a generation was no easy task for legislators, the North Carolina Chamber is disappointed that more wasn’t done outside of the state budget process to help NC employers keep and create jobs. The status quo is not the answer to economic recovery or jobs growth.
Our Chamber understands and will continue to tell state leaders that the answer lies in being proactive and making changes that will help struggling businesses of all sizes survive the economic storm. We will continue to work between legislative sessions and during the 2010 Short Session to reduce the cost of doing business, protect and improve our regulatory and legal climates and promote tax changes that increase our state’s competitiveness and the competitiveness of North Carolina employers.
Our Chamber faced an uphill battle for nine months as lawmakers tackled an economic crisis that resulted in a 20 percent drop in state revenues and a growing state budget deficit. While the state budget dominated the attention of legislators and the media this session – and demanded our Chamber’s attention and efforts as well – several other bills were filed and debated that ran counter to talk from leaders and policymakers about job retention, creation and economic growth. The North Carolina Chamber’s advocacy team worked full-time to prevent several bills from passing that would have raised the cost of doing business in our state, created uncertainty for employers at the worst possible time, cost North Carolina jobs – or all three.
When our state Chamber unveiled its legislative agenda in January 2009, we made it clear that our objectives were to deliver public policies that would help strengthen North Carolina’s struggling economy and position our state to lead in job creation on the other side of economic recovery. The most challenging economic and legislative climate in recent history unfortunately resulted in our Chamber having to play defense to protect the jobs and the job providers we have, however.
With the involvement of our members, local chambers of commerce and allied business and economic development organizations, our Chamber was able to defeat or significantly improve numerous anti-jobs, anti-growth measures that were introduced during the session, ranging from costly regulations to disastrous proposals to alter our civil liability system.
Chamber, Pro-jobs Allies Rallied to Protect Jobs & NC's Future
The North Carolina Chamber’s 2009 legislative agenda was focused on economic recovery, growth and job retention and creation. Our agenda was derived from research, credible data and direct member input. Our advocacy work in the General Assembly centered around three policy areas that are critical to a thriving economy: 1) Competitiveness, 2) Infrastructure, and 3) Education and Workforce Development.
Below is a summary of key legislative outcomes from the 2009 Long Session of the NC General Assembly:
Competitiveness
Position (Taxes): The North Carolina Chamber supports smart tax policy changes that will ensure North Carolina employers are competitive in a global economy. Changes in corporate tax policy should be comprehensive and should provide the certainty and predictability employers need to provide North Carolina families with good jobs.
Results (Taxes): The NC General Assembly passed a $19 billion state budget that contained a tax package worth nearly a billion dollars. While a billion-dollar tax increase is tough pill to swallow in this economy, it became clear early in the session that it was unlikely that legislators would balance a state budget for the next two years without raising additional revenue.
Our state Chamber focused on results versus rhetoric in the debate about taxes. We were at the table on behalf of employers pressing our message that any tax changes should incorporate the principles of competitiveness, certainty simplicity and fairness, and should encourage – not discourage – investment.
While we are certainly not pleased about tax increases and employers will no doubt shoulder part of the burden as a result of the tax package that passed, legislators at least chose to spread the pain pretty evenly among taxpayers in the state with a temporary one-cent sales tax increase and temporary surcharges on personal and corporate income taxes owed. (North Carolina employers pay 40 percent of sales tax collected in North Carolina and many small businesses pay personal income taxes as opposed to corporate.)
Additionally, our state Chamber prevented some harmful tax proposals that would have hurt our state’s competitiveness and the ability of North Carolina employers to compete from becoming law during the session, including mandatory combined reporting and the “throwback rule.” Click here to learn more about the state budget tax package, as well as harmful tax proposals that did not pass due to the work of our state Chamber and broad-based coalitions focused on job retention and creation.
Position (Legal Climate): The North Carolina Chamber will work to identify opportunities to improve our state’s legal climate. Our legal system must be fair and balanced for all parties and should not encourage unnecessary litigation that adds costs and prevents employers from creating jobs.
Results (Legal Climate): There were two key proposals introduced this session that would have had a disastrous impact on our state’s civil liability system, expanding liability for North Carolina employers in an unfair and unbalanced way. Our state Chamber led a broad coalition to improve an ambiguous bill that would have expanded liability for products (Statute of Repose), created enormous uncertainty for employers and raised business costs. We also delayed passage of a bill that would significantly alter our state’s competitive liability system in order to make further improvements to the bill (Uniform Apportionment of Tort Responsibility). Click here to review the bill that passed and the one still pending that impact our state’s legal climate.
Position (Regulatory Environment): The North Carolina Chamber will oppose new laws that increase the cost-of-doing business and threaten jobs, particularly during this time of economic uncertainty and unprecedented job loss. Our state Chamber will work to prevent proposals that would do irreparable harm to North Carolina’s business climate.
Results (Regulatory Environment): The majority of our Chamber’s advocacy efforts this session centered around defeating proposals that would have added tremendous costs and regulatory hurdles for North Carolina employers at time when they can least afford it. With involvement from our members and partners, we were able to derail proposals ranging from mandatory paid sick leave to one that would have effectively halted an industry that was recruited to the state. Click here to review these bills that did not pass this session.
Position (Workers’ Compensation): The North Carolina Chamber will work to reform North Carolina’s workers’ compensation system to return it to its original intent: meet the healthcare needs of injured workers, provide those workers with reasonable compensation for lost wages while injured and return them back to work as soon as possible.
Results (Workers’ Compensation): Our Chamber supported legislation that would have improved our state’s workers’ compensation system, but is disappointed that the General Assembly did not pass it. We are pleased to report, however, that we helped defeat several bills that would have raised workers’ compensation costs in our state and further undermined a system that already has significant problems. Click here to review the workers’ compensation bills that the North Carolina Chamber worked on during this legislative session.
Infrastructure
Position (Transportation): The North Carolina Chamber will continue to stress a comprehensive, balanced set of solutions, both short-and long-term, to address our state’s significant transportation infrastructure needs, but also on how to reform the system to ensure that our tax dollars are spent in the most efficient, effective manner possible.
Results (Transportation): Our Chamber is pleased to announce that legislation passed this session that will reduce congestion on our roads, improve our environment and lure more jobs and investment in our state. The Intermodal bill that passed was backed by our state Chamber and was a recommendation of the 21st-Centurty Transportation Committee, on which several Chamber members served. Click here to learn more about the Intermodal bill that passed.
Education and Workforce Development
Position: The North Carolina Chamber will continue to promote new skills for a new economy. Our state Chamber cannot stress enough the importance of emphasis on science, technology, engineering and math (STEM). Making STEM programs for students and teachers a priority will position North Carolina at the front of the race for jobs and investment in the coming decades. The future requires new skills and higher standards.
Results: Our Chamber is proud to have supported an initiative during this legislative session that creates a new commission to implement educational programming tied to economic development and job creation in North Carolina. The Joining Our Businesses and Schools (JOBS) Commission bill that passed will implement innovative educational strategies to prepare North Carolina and the next generation to compete and win in the global economy. Click here to learn more about the JOBS Commission.
The Time is Now: Employers Must Engage in Shaping NC's Future
Being focused on Shaping North Carolina’s Future requires an understanding that while legislative sessions may temporarily adjourn , our advocacy efforts to keep and create good jobs and grow our state’s economy never do. There has never been a time more important for North Carolina employers to engage in shaping the future. After all, the private sector is North Carolina’s economic growth engine.
The truth is that there appears to be a disconnect in both Raleigh and Washington, DC, that could prolong the recession and stall economic recovery. Employers are increasingly under attack, which is nothing short of amazing considering all the talk about keeping and creating jobs.
The time is now for state leaders and legislators to do more to help North Carolina employers keep and create jobs and grow our state’s economy. And the time is now for an organized business community to fully engage in shaping North Carolina’s future.
Look for a future publication of THE BUSINESS Advocate that will highlight some of the opportunities that were missed by lawmakers this session that would have gone a long way toward keeping North Carolina employers competitive and attracting more jobs and investment to our state. In the interim between legislative sessions, the North Carolina Chamber will continue its ongoing efforts to involve our members in developing our 2010 pro-jobs legislative agenda.
Our state Chamber looks forward to working with lawmakers on major issues critical to our future, such as overhauling North Carolina’s tax code and decreasing the regulatory burden in our state. Even more important, however, we look forward to engaging our members, who have a vested interest in North Carolina’s future and the well-being of all who live and work here. If this year’s legislative session was any indication of what’s to come, it will take all of us working together to keep North Carolina on track and ensure it’s a leading place in the world to do business.
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