Archive for July, 2014


We were warned. In May when hosiery and textiles executives visited the office of Rep. Bryan Holloway, it was obvious that he was not a happy camper after reviewing the Senate budget proposal. “I hate to say this, but we are going to be here until August,” Holloway said.. That lament was sounded as leaders in the Legislature were predicting an adjournment in early June. Now, eight weeks later there is no 2014-15 budget and silence reigns supreme. Last week, the Senate sent over its seventh version for a budget, reducing proposed teacher salary increases from 11 to 8 percent and leaving teacher assistants in pre-K and first grades. The House is demanding teacher assistants through the third grades and pay increases for teachers at 6 percent.

And then there is Medicaid. The Senate wants a complete overhaul, including a separate department. The House and the governor are opposed but the Senate has pushed ahead with legislation to make deep changes in the program.

The Senate continues to push bills through the process while the House is on recess and waits for budget conferees to produce a compromise edition. August is one week away.


STATE VERSION. The North Carolina Senate has approved legislation that enables small and medium-sized companies to raise capital with “crowd funding.” The phenomenon started two years ago on internet sites such as Kick Starter. One hosiery manufacturing entrepreneur raised $100,000 and with the help of the Manufacturing Solutions Center has set up production in the Hickory area.

The state legislation allows a company without an audit to raise up to $1 million from investors who can put up to $2,000. “Accredited” investors, including professional entities, have no cap. Start-up companies with certified audits can raise up to $2 million. The companies are required to disclose that securities being offered are “high risk” and that investors may be subject to a tax on a share of taxable income.

In a related provision called the “New Market Jobs Act of 2014” investors who commit capital for a seven-year term in the form of a loan or equity (stock) investment to borrowers in low-income communities can receive a tax credit for 58 percent of the investment.

Rep. Tom Murray of Wake County is the lead sponsor for the act which also has been approved by an overwhelming House vote.


OR NOT. The late U.S. House Speaker Tip O’Neill used to say all politics are local. He meant grass-roots power trumps all.

But local governments are restricted—limited–in their taxing authority under new legislation adopted by the N.C. Senate.

First, local sales taxes are capped at two and a half cents. Counties with 2 per cent taxes now can raise another half-cent levy with these options: quarter percent for education…or…quarter percent for transportation including roads…or quarter percent for general government such as libraries, water and sewer needs, law enforcement, etc. Pick two out of the three. The state associations representing boards of county commissioners and city governments opposed the bill, calling for more study.

The House could refuse to take up the bill in the short session, forcing the delay.


With only a few House members around, the 2014 session of the North Carolina General Assembly plodded toward adjournment. The Senate had scheduled sessions, but no committee meetings were scheduled. No bills for debate, no bickering between the Chambers.

Senate budget conferees met after the session Tuesday with the lottery and salaries on the agenda. Both are sticking points as the senators insist the House projections for lottery receipts are way too optimistic. The Senate has proposed an 11 percent salary increase for teachers; the House 5 percent. Salary increases for other state personnel range from 2 percent to a $1,000 bonus.

Community College and Higher Education budgets are not in contention. Last week the House and Senate leaders agreed on compromise figures for Medicaid reserves during an open session scheduled by the Senate Appropriations Committee. Senators were surprised with Rep. Nelson Dollar, senior chair of the House Appropriations Committee immediately responded with House proposals.


are conferees of the House and Senate supposedly hammering out compromises for the new fiscal year budget. Hundreds of items will be put on the table, including appropriations for the Manufacturing Solutions Center and Textile Technology Center. The Senate included $150,000 in additional funds for each center to help manufacturers recruit and train new personnel needed for the return of made-in-America production. The House did not. But we are encouraged that House leaders have promised to add the funds during negotiations.

Most veteran observers believe the Legislature will adopt a budget the week of July 14 and go home. However the second primary next week could affect the timetable or put adjournment into the weekend with midnight sessions.


Last week Gov. Pat McCrory made national news with his warning to coastal residents to take Hurricane Arthur seriously. “Don’t put on your stupid hat,” the governor advised. This led Gary Pearce, a popular blogger to urge the governor to carry the message to legislative budget negotiators: don’t put on your stupid hats…get a spending plan and go home.


A German textile manufacturer says it plans to open its first U.S. operation in Mount Airy at an 18,000-square-foot distribution center. Südwolle Group, a 94-year-old family owned company based in Nuremberg, makes pure wool and wool-blend worsted spun yarns for weaving, and circular and flat knitting. It also has operations in Australia, China, Italy, Poland and Romania. The site is a vacant warehouse, and it’s projected to open this month. The company did not say how many jobs it expects to created with the center. It said it would announce full details at the SpinExpo trade show in New York City on July 15 – 17.