A major jobs bill was filed in the North Carolina Senate Wednesday, focused on making North Carolina a competitive leader in retaining and attracting jobs while dramatically improving the tax climate for new and existing businesses. The bill will:
- Reduce and simplify state corporate taxes by moving to a single sales factor in 2016, ensuring businesses are not penalized for making long-term investments in the state by purchasing property and hiring large workforces. Many neighboring states, including South Carolina, Virginia and Georgia, use a single sales factor formula, and this has put them at a competitive advantage over North Carolina.
- Create a new economic development tool for attracting major manufacturing projects– like automobile and aerospace manufacturers – that commit to investing at least $1 billion and creating at least 2,500 new North Carolina jobs. The tool will be housed within the existing Job Development Investment Grants (JDIG) program, but not subject to the cap.
- Lower the corporate income taxto four percent beginning in 2016 and three percent beginning in 2017, making North Carolina’s rate the lowest in the Southeast and keeping the promise of lower corporate taxes state leaders made in 2013.
- Implement safeguards to the JDIG fund, including a quarterly allocation requirement, to ensure funds are awarded and administered responsibly and not exhausted within a short period of time.
- Ensure that struggling, mostly rural counties also benefit from the JDIG program.Last year, three counties with a median income of $56,796 – Wake, Mecklenburg and Durham – received almost 90 percent of the funds designated for the entire state. The bill will guarantee projects in North Carolina’s other 97 counties – where the median income is only $40,175 – receive more than half of funds going forward.
“This balanced plan will not only help North Carolina attract new jobs, but will also provide a real boost to the job-creators already making a valuable investment in our state’s economy – instead of simply asking them to pay for new businesses to move here,” said Senate Leader Phil Berger (R-Rockingham.) “By equipping Gov. McCrory with stronger tools to recruit major manufacturers, helping level the playing field for allocating economic development funds, and providing much-needed tax relief, we will empower the entire state to grow and prosper.”
Sen. Rick Gunn (R-Alamance) is filing a separate bill Wednesday to provide an additional
$5 million to the JDIG fund for the remainder of the year. This will allow the General Assembly to work on a comprehensive overhaul of economic development programs that will focus more on benefitting the entire state. It will also allow the administration to replenish the JDIG funds they exhausted early into the fiscal year.
“Secretary Skvarla informed the General Assembly yesterday about three manufacturing prospects that are moving on a tight timeline,” said Gunn. “This infusion of additional JDIG funds should allow the Commerce Department to move swiftly on these deals as we continue working toward a comprehensive economic development solution.”