In one of my past posts, I quoted our Legislative Liaison in Raleigh as saying that this session of the General Assembly will boil down to a struggle between rural North Carolina and the metropolitan areas.
HB298. If passed this bill would have ended the state’s 6-year-old policy
of subsidizing solar farms and other forms of renewable energy and would have placed over 300 Cleveland County jobs in jeopardy. Schletter, a German firm that recently announced a project in Cleveland County that will create 300 jobs, made the move to North Carolina based upon the incentives offered by NC
Renewable Energy and Efficiency Portfolio Standards. HB298 would have ended those incentives, thus killing Schletter's project. Our thanks to Rep.Moore for preserving those jobs.
Monday, April 29, 2013
Thursday, April 25, 2013
Updates
The state House passed a bill Wednesday requiring a photo ID at the polls by 2016. This has been a hotly contested debate but looks like the Republican back bill has enough support to get to the Governor's desk.
HB298 was defeated in committee yesterday and for all intents and purposes is dead. The Committee on Public Utilities and Energy voted 18-13 on Wednesday to kill the proposal that would have ended the state’s 6-year-old policy of subsidizing solar farms and other forms of renewable energy.This bill really struck home as Cleveland County is home to several solar farms and just recently announced the creation of 300 jobs by Schletter, a company that makes rack systems for the solar farm industry. Schletter made their decision to located in North Carolina and in Cleveland County, in part, based upon the tax incentives provided by the NC Renewable Energy and Efficiency Portfolio Standards. Rep. Hager, who filed the bill, said the bill would end a state policy of subsidies for industries such as wind, solar and other alternative energies. Those legislators voting against the bill were wary of dismantling a complex state policy, which had taken months to negotiate.
Senate Bill 14: Increase Access to Career/Technical Ed. was signed by Governor McCrory on February 18. This bill takes significant steps to strengthen North Carolina’s talent and workforce development by directing the state Board of Education to develop career and college endorsements for high school diplomas, increases access to career and technical education teachers in public schools, and increases community college enrollment in career and technical education in high need employment areas. Hopefully this will aid the schools and community colleges in meeting the manpower needs of our local industries. We will see how it will be implemented.
Wednesday, April 10, 2013
Governor's Budget
The following is an overview of the Governor's budget and a summary of S363 which is written by James Harrell, Legislative Liaison for Cleveland County. Mr. Harrell keeps his fingers on the pulse of the General Assembly and will be making periodic reports for the Chamber. I hope you enjoy his comments.
Cleveland County Chamber Legislative Update
4.02.2013
GOVERNOR’S PROPOSED BUDGET
New Republican Gov. Pat McCrory recently unveiled a $20.6 billion proposed state budget, calling it the first step toward correcting the state’s fiscal condition and addressing several festering operational failures before he embarks in future years on long-term strategic initiatives. McCrory’s budget proposal, which goes to the General Assembly, represents a 2% increase over the $20.2 billion budget for the current fiscal year. The governor’s proposal eliminates the state’s estate tax, valued at $109 million over the next two years, but doesn’t change the state’s income, sales, motor fuel, or corporate taxes. McCrory said separate legislation this year will tackle tax reform (discussed in the following section of this article), and that the changes will be revenue-neutral. Bowing to recent trends, the budget would increase Medicaid spending by $185 million next year and another $390 million the following year, while also setting aside a Medicaid reserve of $180 million to absorb a potential shortfall like those of recent years. It boosts IT spending by about $60 million across several agencies. Teachers and state employees would get a 1% pay raise, and retiree benefits would go up 1%.
McCrory said his top three governing priorities are the state economy, education, and government efficiency. One of his top initiatives is a two-year effort to develop a new state economic-development strategy and a new state branding campaign across several agencies “to promote North Carolina as the best place to live, work and play.” McCrory said expanding the budget more will have to wait until problems are fixed and revenues rise. “We’ve had to make some tough decisions on this budget,” McCrory said at a news conference in the Capitol, flanked by his cabinet. “Our state has a strong foundation, but the foundation has some cracks in it. Our immediate task is to fill in those cracks so we can have an even stronger foundation. … This budget funds our priorities, rebuilds our reserves, and strengthens our foundation for future generations.” McCrory said he has reviewed every line item in the 323-page budget, which he said Budget Director Art Pope developed in consultation with the cabinet, the Office of State Personnel, and top House and Senate budget-writers. Pursuant to state law, the General Assembly will turn McCrory’s budget into a bill of its own – and then resume work on their own version, perhaps using McCrory’s as a starting point. The Senate will go first, with a budget bill expected in May, after the April tax returns are in. Then the House will have a go at it in May or June, with a compromise likely in June. Then McCrory will face the choice of signing the budget, as is expected, or vetoing it. In the unlikely event that he vetoes the legislature’s budget, Republican lawmakers have more than big enough majorities in both chambers to override the veto. But for the next six weeks or so, McCrory’s budget proposal will be the one on the table for debate.
Tax Reform
Last week the Senate Finance Committee met to discuss the first of at least two bills that comprise much awaited proposals to reform the tax code in North Carolina. S363 Business Tax Reduction and Reforms was presented by the primary sponsor Sen. Andrew Brock. Presenting to a full room of reporters, lobbyists and legislators, Senator Brock explained that the bill had essentially two major parts that do the following: 1) repeal state and local privileges taxes, and 2) repeal the franchise tax and replace it with a business privilege tax applicable to all businesses with limited liability. Senator Brock went on the say that S363 is one component of a larger plan to overhaul the state tax system and make it one more conducive to economic growth. He indicated that the other components that have not been introduced yet would address income and sales tax issues.
S363 proposes to repeal both state privilege taxes and local government’s authority to impose local privilege license taxes. The state currently levies privilege taxes on attorneys and other professionals, banks, loan agencies and installment paper dealers. The taxes collected would amount to approximately $27,000,000.00 for fiscal year 2014-15. Local governments have authority now to levy local privilege license taxes on business that are not exempt from such taxes under state law. These taxes have evolved into gross receipts taxes that provide significant revenue for some local governments. This tax has also been controversial. The Retail Merchants Association has advocated for repeal of this tax in the past. Andy Ellen, President of the Association, spoke at the Senate meeting to make that request again and offer an endorsement of the work of the Senate Finance Committee. The net revenue loss to local governments from the repeal of local privilege license taxes would be a total of $75,000,000.00 for fiscal year 2014-15.
The second major part of S363 repeals the franchise tax and replaces it with a business privilege tax applicable to all businesses with limited liability. Currently, C corporations pay a franchise tax at the rate of $1.50 per $1,000 of the largest of three alternative bases. Those bases are:
1. The amount of the capital stock, surplus, and undivided profits (net worth base) apportionable to the State
2. The book value of real and tangible personal property
3. 55% of the appraised value of property in the State subject to local taxation
S363 would replace the franchise tax with a new business privilege tax that would essentially be a simplified version of the business franchise tax. One base calculation would be allowed, and that would be the amount of capital stock, surplus, and undivided profits apportionable to the state. All limited liability companies would have to pay the tax. The minimum tax would be $500 per entity and a maximum of $5,000.00 per LLC with the existing cap on the C corporations remaining in place.
Senate Finance Committee co-chairs, Senators Rucho and Rabon encouraged committee members and members of the public to study the bill and its impact and be prepared to offer further comment when the other parts of the reform package are revealed. Those additional parts of the tax reform package are expected before the new Senate bill introduction deadline of April 4th.
Cleveland County Chamber Legislative Update
4.02.2013
GOVERNOR’S PROPOSED BUDGET
New Republican Gov. Pat McCrory recently unveiled a $20.6 billion proposed state budget, calling it the first step toward correcting the state’s fiscal condition and addressing several festering operational failures before he embarks in future years on long-term strategic initiatives. McCrory’s budget proposal, which goes to the General Assembly, represents a 2% increase over the $20.2 billion budget for the current fiscal year. The governor’s proposal eliminates the state’s estate tax, valued at $109 million over the next two years, but doesn’t change the state’s income, sales, motor fuel, or corporate taxes. McCrory said separate legislation this year will tackle tax reform (discussed in the following section of this article), and that the changes will be revenue-neutral. Bowing to recent trends, the budget would increase Medicaid spending by $185 million next year and another $390 million the following year, while also setting aside a Medicaid reserve of $180 million to absorb a potential shortfall like those of recent years. It boosts IT spending by about $60 million across several agencies. Teachers and state employees would get a 1% pay raise, and retiree benefits would go up 1%.
McCrory said his top three governing priorities are the state economy, education, and government efficiency. One of his top initiatives is a two-year effort to develop a new state economic-development strategy and a new state branding campaign across several agencies “to promote North Carolina as the best place to live, work and play.” McCrory said expanding the budget more will have to wait until problems are fixed and revenues rise. “We’ve had to make some tough decisions on this budget,” McCrory said at a news conference in the Capitol, flanked by his cabinet. “Our state has a strong foundation, but the foundation has some cracks in it. Our immediate task is to fill in those cracks so we can have an even stronger foundation. … This budget funds our priorities, rebuilds our reserves, and strengthens our foundation for future generations.” McCrory said he has reviewed every line item in the 323-page budget, which he said Budget Director Art Pope developed in consultation with the cabinet, the Office of State Personnel, and top House and Senate budget-writers. Pursuant to state law, the General Assembly will turn McCrory’s budget into a bill of its own – and then resume work on their own version, perhaps using McCrory’s as a starting point. The Senate will go first, with a budget bill expected in May, after the April tax returns are in. Then the House will have a go at it in May or June, with a compromise likely in June. Then McCrory will face the choice of signing the budget, as is expected, or vetoing it. In the unlikely event that he vetoes the legislature’s budget, Republican lawmakers have more than big enough majorities in both chambers to override the veto. But for the next six weeks or so, McCrory’s budget proposal will be the one on the table for debate.
Tax Reform
Last week the Senate Finance Committee met to discuss the first of at least two bills that comprise much awaited proposals to reform the tax code in North Carolina. S363 Business Tax Reduction and Reforms was presented by the primary sponsor Sen. Andrew Brock. Presenting to a full room of reporters, lobbyists and legislators, Senator Brock explained that the bill had essentially two major parts that do the following: 1) repeal state and local privileges taxes, and 2) repeal the franchise tax and replace it with a business privilege tax applicable to all businesses with limited liability. Senator Brock went on the say that S363 is one component of a larger plan to overhaul the state tax system and make it one more conducive to economic growth. He indicated that the other components that have not been introduced yet would address income and sales tax issues.
S363 proposes to repeal both state privilege taxes and local government’s authority to impose local privilege license taxes. The state currently levies privilege taxes on attorneys and other professionals, banks, loan agencies and installment paper dealers. The taxes collected would amount to approximately $27,000,000.00 for fiscal year 2014-15. Local governments have authority now to levy local privilege license taxes on business that are not exempt from such taxes under state law. These taxes have evolved into gross receipts taxes that provide significant revenue for some local governments. This tax has also been controversial. The Retail Merchants Association has advocated for repeal of this tax in the past. Andy Ellen, President of the Association, spoke at the Senate meeting to make that request again and offer an endorsement of the work of the Senate Finance Committee. The net revenue loss to local governments from the repeal of local privilege license taxes would be a total of $75,000,000.00 for fiscal year 2014-15.
The second major part of S363 repeals the franchise tax and replaces it with a business privilege tax applicable to all businesses with limited liability. Currently, C corporations pay a franchise tax at the rate of $1.50 per $1,000 of the largest of three alternative bases. Those bases are:
1. The amount of the capital stock, surplus, and undivided profits (net worth base) apportionable to the State
2. The book value of real and tangible personal property
3. 55% of the appraised value of property in the State subject to local taxation
S363 would replace the franchise tax with a new business privilege tax that would essentially be a simplified version of the business franchise tax. One base calculation would be allowed, and that would be the amount of capital stock, surplus, and undivided profits apportionable to the state. All limited liability companies would have to pay the tax. The minimum tax would be $500 per entity and a maximum of $5,000.00 per LLC with the existing cap on the C corporations remaining in place.
Senate Finance Committee co-chairs, Senators Rucho and Rabon encouraged committee members and members of the public to study the bill and its impact and be prepared to offer further comment when the other parts of the reform package are revealed. Those additional parts of the tax reform package are expected before the new Senate bill introduction deadline of April 4th.
Subscribe to:
Posts (Atom)