Archive for January, 2017

READY TO ROLL

The 170 members of the N.C. General Assembly are in session and there is a sense of anxiety—ready to move on with a long list of issues, i.e. education and tax reform, and sorting out relationships with a new President and administration in Washington and a new Governor and administration in Raleigh. Legislative Republicans have an overwhelming majority in both the House and Senate but there is a new wrinkle: a Democratic governor with deep experience in the General Assembly and a new Democratic minority leader in the House.

In both Chambers today there was a let’s-get-down-to-business mood. The ceremonial festivities were held two weeks ago. Dozens of bills—some addressing serious objectives and some frivolous—are ready to be introduced.

MACHINERY TAX BILL

Rep. Chris Malone(R)

Rep. Chris Malone(R)

Rep. Chris Malone(R) of Wake County is poised to push the bill that will exempt manufacturers from sales or excise taxes on new manufacturing equipment. We are committed to working with him on behalf of textiles and hosiery manufacturers. The current tax is 1 percent on equipment and generates $12 million revenue to the state—a tiny bit of a $23 billion budget.

This year the crafting of a legislative version of the 2017-18 budget begins in the Senate under the leadership of Senators Kathy Harrington of Gaston County, Harry Brown of Onslow County, and Brent Jackson of Duplin County. Sen. Jerry Tillman of Randolph is a senior chair of the Senate Finance Committee and has supported past efforts to eliminate the tax. Sen. Robert Rucho who fought removal of the machinery tax did not seek re-election.

Gov. Roy Cooper also is required to submit a budget to the General Assembly. But as was the case with Gov. McCrory, the document is not expected to influence legislative leaders.

THE TRUMP LINK TO TEXTILES

When Pres. Trump appointed Wilbur Ross to be Secretary of Commerce, he created a conduit to his administration for the textiles industry and retailers. Among Ross’ extensive holdings were VF Corp. and Cone Mills, both impacted by NAFTA. Ross maintained North Carolina connections through the N.C. Citizens for Business eand Industry, now the N.C. Chamber. NAFTA was adopted in 1994 and was the first major step that lead to the shakeup of American manufacturing. President Trump will put Secretary Ross on the front lines in the process of renegotiating trade agreements to replace NAFTA. That process will be in full swing by the end of this month.

HOSIERY AND TEXTILES LEGISLATIVE DAY

We will have details about a bloc of rooms at the Holiday Inn, Raleigh, for the participants in the annual trip to the General Assembly. The date is March 14 for dinner and March 15 for meetings with representatives and senators.

WE NEED YOU

If you have not done so, now is the time renew membership in the Hosiery and Textiles Governmental Affairs Council. Every company membership is important. We are expecting a challenging year with more hours in the halls of the General Assembly. Also, we need funds for HOSEPac before January 25. HOSEPac checks must come from personal contributions, but they are investments in the future of our research and technology centers.

HTGAC Day at the Legislature: March 15

REMEMBERING VANCE

The death of Vance Richardson, former president of Clayson Knitting, last month marked the passing of a strong advocate for American manufacturing. Richardson died in his automobile which wrecked near his pallet manufacturing company in Montgomery County. Vance joined other manufacturers in the Carolina Hosiery Association in trips to lobby members of Congress in Washington. Vance and his wife, Doris, made their home in Pinehurst, enjoying life on the golf course and at dances.

TRADE BATTLES REDUX

President-elect Trump has named a Washington lawyer with a trade protectionist record to be the nation’s chief trade negotiator. Robert Lighthizer, a native of Ohio, a large manufacturing state, sends a message that Trump is serious about pursuing trade agreements that support his made-in America priorities.

Sen. Orrin Hatch, chairman of the Senate Finance Committee, was cautious in his appraisal of Lighthizer’s appointment. “As the world and our economic competitors move forward to expand their global footprints, we can’t afford to be left behind in securing strong deals that will increase our access to new markets for American-made products and services,” Hatch said.

The impact of the Trump administration’s policies—including perhaps import taxes on goods made outside the U.S—on hosiery and textile companies could be significant. However some Democrats from manufacturing states have indicated support for restrictions on imported goods.

Two decades ago congressional approval of NAFTA and later CAFTA sharply divided the hosiery and textiles manufacturers. Large companies, pushed by their national retailer customers, supported the open borders agreements. Scores of family-owned companies, unable to compete with low wages and fewer regulations in offshore locations, closed their doors.

AND AWAY WE GO?

Within in the next two weeks a new era in government is ushered in North Carolina and the nation. When the N.C. General Assembly convenes, Wednesday, January 11, scores of new senators and representatives will be sworn in with a let-the-party-begin atmosphere. There will be new names among the leadership ranks and an agenda that will include a new governor of a different party. Tension over possible new elections for the Legislature could signal a tumultuous session. Republicans still have an overwhelming veto-proof majority and Gov. Roy Cooper has a bully pulpit with the media.

The bright side of the upcoming session is the economic health of the state. Revenues for the last fiscal year came in $200 million over budget, most of which went to help victims of floods in the east and fires in the west. The state’s savings account or “rainy day fund” is over $1 billion for the first time in history. Even so, North Carolina’s spending on education ranks near the bottom among U.S. States and the GOP has an inter-party lawsuit going on over who controls the agenda for education policies and spending—the Board of Education on the new superintendent.

Gov. Cooper, who was sworm into office minutes after midnight January l, has started putting together a cabinet, naming James Trogden, Secretary of Transportation, and Michael Regan head of the Department of Environmental Quality. Legislators, continuing their determination to set the state’s agenda, approved a bill requiring General Assembly approval of the Governor’s cabinet appointees. Former Gov. Jim Martin has criticized the Legislature’s move.