Presentation TitleMonth 00 > 2007

Chapel Hill-Carrboro ChamberGovernment Affairs Report

Gary Salamido

November 1, 2012

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2012 Session Recap

> Education Reforms

> Unemployment Insurance Fund

> Infrastructure – Transportation

> Energy Production

> Regulatory Reform

> Business Climate Reforms

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2012 Session RecapEducation & Talent Development

Problem>Inflation-adjusted cost of a complete K-12 public education and percent change in achievement of 17-year-olds, since 1970

Solution>Excellent Public Schools Act

(included in H950):> Aligns with several priorities of the

North Carolina Chamber’s Education Vision Plan

> Promotes public-private partnership through streamlined lateral entry

program> Reading-intensive instruction ensures solid learning foundation by

third grade

>State Budget (H950):> Strengthens community college system by reinvesting $12.1 million in

critical areas> NC Back-to-Work Program

Prepared by Andrew J. Coulson, CATO Institute (cost): Digest of Education Statistics 2009, Table 182, CPI adjusted to constant 2010 $. Missing values linearly interpolated or extrapolated. Running 13 yr total (i.e., K-12) spending per pupil. (scores); NAEP, Long Term Trends report.

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2012 Session RecapEnergy Security

Problem>Growing population amplifies energy needs

>NC sitting on the sidelines- competitive disadvantage

Solution>“All of the Above” Energy Strategy>SB820: Clean Energy and Economic Security Act

> Begins establishing the regulatory infrastructure needed to support shale gas extraction operations

> Provides additional safeguard by requiring the General Assembly to authorize hydraulic fracturing in a future session

75% NC voters support

increased access to domestic oil and

natural gas resources,

including energy from shale

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2012 Session Recap Regulatory Reform

Problem> Over 15,000 state agency regulations created in

past decade – more than all SE states combined!

Solution> H952: State Air Toxics Program Reform

> Exempts emission control sources from regulation under the state Air Toxics Program if subject to regulation under the federal Clean Air Act

> Brings NC’s air-toxics program in line with other southeastern states> Makes state air-toxics program more efficient and cost effective

> S810: Regulatory Reform Act of 2012> Includes requirements for agencies to provide private businesses

advanced notice on audits> Lengthens solid waste permit from 5 years to 10 years

$1.7 trillionannual

price tag of regulations

on Americans

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2012 Session RecapWater Resource Planning

> Eased restrictions on use of reclaimed water and treatment storage facilities

> Promoted creation of new water supply through funding for additional reservoirs

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2012 Session Recap Business Climate

Problem > Open-ended enforcement – lacked certainty> Contingent fee-based auditing threatens a fair and impartial

evaluation of tax

Solution> S824: Expedite Rule Making for Forced Combination

> Develops guidelines around corporate tax filings and streamlines the process that tax professionals use when making that determination

> Promotes a more competitive tax climate by providing greater certainty in state tax laws on the issue of combined tax returns

> H1025: Extend Tax Provisions> Extends tax credits scheduled to expire on January 1, 2013 for one year

> H462: Contingency Contracts for Audits/Assesments> Prohibits unfair contingency audits; effective for counties and cities July 2013-2015> Authorizes comprehensive legislative study on issue

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2013 OpportunitiesTo Create Jobs and Promote a Pro-Business Agenda

> Strengthen Talent and Workforce Development System

> Modernize State Tax Code

> Restore Solvency, Integrity and Affordability to the Unemployment Insurance Trust Fund

> Protect NC’s Growth and Water Needs

> Encourage Adequate Support for State Transportation Network

> Continue Updating Workers’ Compensation System

> Provide Greater Protection through Tort Reform

> Protect and Attract Jobs through Continued Regulatory Reform

> Strengthen “All of the Above” Energy Production Strategy

> Promote Business Voice in Health Care Exchange Set Up

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2013 OpportunitiesEducation Reform

> Support digital learning through Virtual Education initiatives

> Promote early learning and pre-k programs> Literacy and early childhood development

> Promote performance based expectations> High performance standards

> Continue supporting STEM initiatives

> Promote School Governance changes

 

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2013 OpportunitiesTax Modernization

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2013 OpportunitiesUnemployment Insurance Reform

> Part of a national UI system: “safeguard for individuals against distress for a short period of time after they become unemployed.”

> Fully funded by employers> 6.0% FUTA federal tax, 5.4% tax credit in a federally-compliant

state program > Net federal unemployment insurance tax rate = 0.6%> State unemployment insurance taxes (SUTA) fund statewide

unemployment compensation benefits and build reserves

> Approximately 3,000,000 covered employees in 2012

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> Great Recession leads to prolonged unemployment

> Insolvency – 4th highest federal UITF debt in the country

$2.8 billion

> Increasing tax on jobs – fully funded by employers

> Broken UI system – focus is on paying benefits verse

who receives benefits

> System focus is on unemployment verse reemployment

> Benefit system that pays out more than it takes in

> #1 Impediment to Job Creation

Unemployment Insurance SolvencyNC Employers Bear Weight of DEBT & JOBS TAX

$395 Million Price Tag for Employers in 2012 with “Do-Nothing”

Approach

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FUTA Tax Cost Per Employee

UI Solvency: Do-Nothing Approach

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Bottom Line – Doing Nothing in 2012 Cost Employers $395 Million Statewide

> REAL SOLUTIONS for 2013 from the Chamber Study> Solvency Reinvigoration – enact legislation to provide special tax financing - will

return to solvency quicker and less expensively> Improve Program Integrity – establish a program and enforce new requirements

based on being able, available and actively seeking work, require work registration, and 21 other measures outlined in the NC Chamber Foundation’s UI study

> Unemployment to Reemployment – improve alignment or workforce training and education programs, streamline, enhance accountability and increase use of technology in agencies, as well as 8 other measures in the NC Chamber Foundation’s UI study

> Affordability Solutions – enact common-sense reforms to align tax revenues with benefits and to be competitive with other states – proposed benefit changes would NOT affect existing benefits being paid to unemployed individuals and make adjustments in 28 other ways outlined in the NC Chamber Foundation’s UI study

Unemployment Insurance Reform

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2013 OpportunitiesWater Resource Planning> Facilitate permitting and operation of Aquifer Storage and Recovery

Systems to allow usage of treated potable water, raw water and finished water

> Align groundwater and drinking water standards for Aquifer Storage purposes

> Create additional statewide storage opportunities> Identify and permit abandoned quarries

> New reservoir construction > Identify permitting hurdles for those facilities

> Simplify permitting process for reclaimed water projects

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2013 Bridge to a Stronger Future Powering North Carolina’s Economy, Transportation Paves the Way(updated document)

Priorities – > NC has identified more needs than available transportation dollars – maintenance not free

> Integrated system of transportation and commerce assets that enables goods to move effectively and efficiently into and out of the state

> Vital to NC’s ability to create jobs and to recruit and retain business

> Maintenance and construction of surface road and highway infrastructure, continued improvements to NC Ports System and freight rail optimization

2013 OpportunitiesTransportation and Infrastructure

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Transportation & InfrastructureThree Focus Areas

> System Needs> Highway Connectivity> Integrating Freight Needs into Statewide Planning> Maritime Improvements and Clarification of Needs> Rail Efficiencies

> Diversification of Revenues> In light of increased efficiencies in vehicles, use of alternative vehicles, political pressures

and strain on global oil demand, the current revenue stream is unreliable and unsustainable. > Local/Regional Options Needed> Transportation Improvement Use Fee Study – detailed study of strengths and weaknesses

of vehicle miles fee and other user fee opportunities > Transportation Funding Reform – should be included in any tax modernization discussion> “All of the Above” Energy Strategy with certain percentage of state royalties directed to

freight modes of the transportation system

> Organizational Enhancements> Coordination of Foreign Trade Zones and Transportation Planning > Improved Project Delivery and Streamlined Regulations > Economic Development Regions – review of the benefits and risks of aligning funding

divisions to economic development regions> Expansion of NC Mobility Fund to leverage federal dollars> Transparency – continue and expand prioritization process

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Transportation & InfrastructureCurrent Involvement

> I-95 Economic Assessment Advisory Council Member

> NC Maritime Strategy Advisory Council Member

> NC Logistics Task Force Member