State Government

NCCBI Unveils Economic Growth Strategy

The debate on how to improve North Carolina’s economic development policies came to a head last month when NCCBI unveiled a strategic plan that is the product of months of research and discussion. NCCBI President Phil Kirk released the plan during testimony to the General Assembly’s Joint Select Committee for Economic Growth and Development.

Among the organization’s recommendations is a more competitive tax structure, including lowering the state corporate income tax and marginal personal income tax that are higher in North Carolina that any surrounding states.

Kirk also pushed for increased funding for business recruitment incentives, and more stable and consistent funding for the community college industrial training programs.

Kirk said that with the reality of budget constraints “our recommendations are primarily focused on reinforcing winners, cutting the costs of doing business, and investing in educational and training infrastructure that meets the demands of today’s modern society.”

In offering the recommendations to the blue-ribbon panel, NCCBI said competition for new business investment has never been more rigorous. Existing companies are facing huge pressures to keep their doors open.

To meet these challenges, Kirk said NCCBI believes in a strategy that addresses continued long-term initiatives in such core areas as education and infrastructure improvements. But any strategy must include other steps that will produce immediate benefits for North Carolina’s competitive edge, encourage existing businesses to grow and entrepreneurs to launch new endeavors, Kirk said

“Our recommendations today are primarily focused on reinforcing winners, cutting the costs of doing business, and investing in educational and training infrastructure that meets the demands of today’s modern society,” Kirk said.

Following is a summary of the NCCBI plan:

More competitive tax structure
Reduce corporate income tax to less than 6 percent.
Reduce highest marginal personal income tax rate to less than 6 percent (anticipated phase-in).
Make adjustment to tax treatment of subsidiary dividends.
Broaden eligibility for research and development tax credit.
Eliminate the capital gains taxes on start-up companies which sell out or go public within seven years (to keep these “serial entrepreneurs” in state).

Reinforce our competitive strengths
Eliminate caps to strengthen Job Development Investment Grant program.
Continue and increase funding for One North Carolina Fund
Modify Bill Lee Act to maximize return. This would include elimination of wage test and simplification of bill’s interpretation so that businesses could adequately take advantage of the credits.
Advocate for full funding of the Community College System’s training programs, including Focused Industrial Training and New and Expanding Industry Training, full funding for enrollment growth in the University of North Carolina and the Community College systems, and support equity in funding for high-demand occupational extension continuing education courses in the community colleges.
Support additional Business and Technology Telecenters.  Four telecenters were established in rural counties with the financial aid and technical support of the Rural Internet Access Authority.
Vigorously support passage of Local Option Project Development Financing.

Marketing North Carolina
Emphasize importance to “brand” North Carolina. Funds needed to develop and advertise “brand.” Require coordination of marketing efforts by North Carolina’s economic development organizations (Commerce and Partnerships) and find new sources of funding for marketing the entire state.
Give higher priority to appropriations for promotion and development of the state’s travel and tourism industry.  Specifically, serious consideration should be given to the goals of the North Carolina Board of Travel and Tourism.
Existing Industry Call Program needs more manpower to ensure consistent communications with existing businesses. 

Develop and execute a broad, proactive strategic plan
Aggressively work to expand North Carolina’s military bases.
Anticipate and make plans for continued funding of the state’s infrastructure needs (i.e. water and sewer and transportation needs, including the state ports).
Use state model for biotechnology for emerging technologies, such as nanotechnology.
Support NC Rural Center’s Business Resource Alliance to assist entrepreneurial ventures across the state.
Develop and fund a strong “grid computing” network in North Carolina.  This concept would further assist rural areas of the state.
Encourage and support targeted university economic development initiatives, including bioprocessing, technology transfer and the economic development portal.
Authorize the issuance of limited obligation bonds to fund site acquisition and development for large, high-impact projects.

Permitting issues and coordination between businesses and state agencies.
Conduct comprehensive review to address the following:
Ensure that state environmental regulations are consistent with federal regulations.
Ensure that environmental regulations have predictability and clarity.
Discourage state agencies from being in conflict with each other on implementation and enforcement of regulations.