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March 11, 2003
For immediate release
for more information, contact
Steve Tuttle, 919-836-1411

NCCBI Endorses Governor’s Budget Framework

RALEIGH -- NCCBI, the state chamber of commerce, announced today that its Executive Committee had voted to endorse as a package several government reform and budget initiatives made by Governor Mike Easley in his State of the State speech and proposed budget for the coming biennium. Specifically, in its lobbying activities NCCBI will:

• Support the proposed cap on state spending.
• Support legislative session limits.
• Support the level of spending cuts proposed in the Governor’s budget.
• Support implementation of the recommendations contained in the Governor’s Commission to Promote Government Efficiency and Savings on State Spending.
• Support a constitutional amendment to grant line-item veto power to the Governor.
• Not oppose the Governor’s proposal to freeze the existing tax structure for a period of two years.

“We believe these proposals, taken together, constitute a road map that will help return North Carolina to a sound financial footing and set the stage for a more efficient, more accountable state government in the near future,” said Jim Hyler of Raleigh, the First Citizens Bank vice chairman and COO who is the current NCCBI chair.

One of the taxes scheduled to expire on June 30 is the 8.25 percent state income tax rate on high-income individuals, one of the highest rates in the nation. It was raised from 7.75 percent by the General Assembly two years ago in one of the first steps taken to deal with the state’s current budget crisis. Continuing it for two more years, as Governor Easley has proposed, would generate more than $120 million in additional tax revenue, according to the Governor’s Office. Another tax scheduled to expire is the additional half-cent on the state sales tax. Continuing it for another two years would generate more than $734 million in additional tax revenue.

Hyler said deciding not to oppose continuing the existing tax structure “was a tough decision for us because NCCBI is opposed to higher taxes. But the times demand some flexibility. The Governor has taken a reasonable approach in his budget that during this economic downturn deserves an in-kind response from not only NCCBI, but also everyone. We’re all in this together.”

NCCBI President Phil Kirk said the Executive Committee’s action demonstrates that “the business community will accept its share of the financial pain necessary to achieve a greater good. Our state has suffered through an extended period of budget uncertainty that if allowed to continue would hurt our economy.”

Hyler emphasized that NCCBI’s position on continuing the taxes “is built on good faith that the Governor will hold the line on his proposed cap on state spending, follow through on spending cuts and begin implementing steps to bring about structural reform to take cost out of state government.”  He added that NCCBI would press for ending the higher taxes effective in 2005.

About NCCBI: With about 2,200 member companies of all types and sizes, North Carolina Citizens for Business and Industry is the state’s largest and most influential business group. A nonpartisan, nonprofit membership organization, NCCBI was founded in 1942 and has served for the past 25 years as the state Chamber of Commerce, and is recognized as such by the U.S. Chamber of Commerce. NCCBI also is the official state affiliate of the National Association of Manufacturers. NCCBI’s broad mandate is to improve the quality of life for all North Carolinians, a goal it pursues by working to safeguard the state’s favorable business climate, by improving educational opportunities for everyone and by maintaining a clean, healthy environment. Manufacturers represent the largest group of members in NCCBI, but the association’s broad base includes all kinds of businesses, large and small, as well as most of the colleges, universities and community colleges in the state. Most local chambers of commerce also are NCCBI members, as are dozens of trade groups representing specific businesses and professions. NCCBI members employ more than one million people in the state.

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