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.
ALL POLITICS ARE LOCAL …
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.