Archive for August, 2015

THE TRAIN IS LEAVING THE STATION

Finally, there is indication that House and Senate conferees are beginning to craft a 2015-16 State budget. We know that expenditures and revenues (hopefully) will be about $21.23 billion—two percent more than the current budget. Soon we will know how that money is to be spent.

The final figure is over $400 million less than the schedule approved by House chairs. It is over $200 million above that put together in the Senate. Most of the adjustments will be be in the public education expenditures where the future of teacher assistants is at stake. Also on the firing line is a 2 percent increase for state employees.

A top aide to Speaker Tim Moore confirmed chairmen of various appropriations committees were to start refining new budget numbers today (Wednesday). The figures were to be ready for top chairs in the House and Senate by noon Thursday. Work was to continue over the weekend. The goal is to roll the spending plan out to committees and the chambers next week. A new continuing resolution set a budget deadline for September 15. The Manufacturing Solutions Center and the Textile Technology Center will continue with appropriations received in last year’s budget—about $820,000 each.

DOA: 800 PERCENT TAX INCREASE

Top House Finance Chairs have assured the HTGAC that the proposed privilege tax increase for manufacturing equipment is dead. Currently the tax on equipment is capped at $80. The Senate budget raised the tax to $500 per machine. While the budget is still a work in progress, top representatives and senators have insisted the increase will not be adopted. One top chairman wants to eliminate the tax completely.

A WORD ABOUT HOSEPAC

Over 20 years ago, hosiery leaders established a Political Action Committee (Hosepac). This provides contributions to the campaigns of legislators who have worked actively on behalf of the hosiery and textiles industries. These legislators have sponsored bills, and worked behind the scenes in committees to protect funds for the centers and head off threats in regulatory issues. Hosepac is the vehicle to keep them in the General Assembly.

Contributions must come from personal accounts. In the past, individuals have sent $250, $500 or $1,000 contributions to the PAC. This year it is especially important. Candidates will begin fund-raising events in December. Look for mailings from us.

SPECIAL THANKS

As the 2015 session seems to be winding down, it is appropriate to recognize support from people who have helped the HTGAC in the Legislature. They include Kevin Howell, legislative liaison for N.C. State University, Dr. John Hardin, president of the N.C. Board of Science and Technology, and Michael Houser, a veteran lobbyist who worked closely on our agenda.

Teamwork bring credibility to our council, our members, our companies, and our research and training centers. Thanks, guys.

A hint: This HTGAC team is working on a special undertaking that could revolutionize research and development and training services for hosiery, fibers, and textiles.

TABOR

The North Carolina Senate this week started rolling out a bill that would allow voters to determine if state spending should be limited by the constitution. The “Taxpayers Bill of Rights” legislation would cap the state income tax at 5 percent, limit state spending to the rate of population growth and inflation, and require that 2 percent of state revenue be put into a rainy day saving account until it reaches $2.5 billion.

Originally each of these proposals would have been voted on individually. But Senator Brent Jackson, the bill’s sponsor, said they will be combined into one proposal. If adopted by the legislature, the proposed constitutional amendment would be on the 2016 spring primary ballot. The bill has to be approved by the House and because it would amendment the constitution, a three-fifths of both Chambers must sign off. While this would affect future spending, the current Legislature has not moved on the current budget process.

NEW SENATE STRATEGY

In face of fierce opposition in the House, the Senate agreed to remove some policy issues from the budget. Instead the senators voted separate bills to redistribute sales taxes and provide funds for recruiting new business to the state. Senator Harry Brown, author of a bill to take more sales tax revenue away from point of sales for redistribution to poorer, less populated counties, retreated from taking 80 percent to 50 percent. Larger counties would lose millions of dollars which would be made up with higher property taxes. Many House members were not impressed. House and Senate budget conferees have major hurdles ahead, including layoffs of teacher assistants, revenue shifts to the backs of manufacturers, and appropriations to public education.

NOTE

The Senate version of the budget raises the privilege tax on manufacturing equipment from $80 to $500 per machine. The Hosiery and Textiles Governmental Affairs Council is pushing for a repeal of this increase with help from House members. One hosiery manufacturer who recently purchased 75 new knitting machines, said the Senate proposal would have added $37,000 to the tax liability—the equivalent of one new machine.

NEW TEXTILE FIRM

A new cotton yarn manufacturing company is locating in Martin County, NC, in the heart of the state’s cotton-growing region. AR Textiles Ltd., an Indian firm, is receiving $114,000 in state job development funds (JDIG). The Rural Economic Dedvelopment Center gave Martin County $750,000 to make improvements to the site for the plant. Rao Palaparty, vice president of AR Ltd said the average wage will be $26,300.