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State Government
Senators Introduce Small Business Health Insurance Act PDF Print E-mail
State Government
By Administrator   
Wednesday, 20 February 2019 11:04

Senators Joyce Krawiec (R-Forsyth), Dan Bishop (R-Mecklenburg), Chuck Edwards (R-Henderson) and Ralph Hise (R-Mitchell) introduced the Small Business Health Care Act which would provide small businesses with a cost-effective option to offer their employees health insurance plans that would include many state and federal consumer protections, including the requirement to cover those with preexisting conditions.

The bill would loosen the current restrictions on Association Health Plans (AHPs), which allow groups of small businesses to band together for insurance policies. This would allow those small businesses to receive the same health benefits as large corporations.

“Between reducing the tax burden and improving the state’s business climate, we have instituted a number of policies since 2011 that have allowed small businesses to thrive, yet so many of them are still unable to afford health insurance,”said Bishop. “This bill is the missing piece of that puzzle that makes high-quality health coverage for employees an affordable option for small business owners.”

A June 2018 ruling by the U.S. Department of Labor paved the way for these changes by loosening Obama-era restrictions on AHPs that were designed to force more small businesses onto the costly small-group market. The Small Business Health Care Act would take advantage of these loosened restrictions and amend North Carolina’s insurance code by doing the following:

  • Allow small employers, including people who are self-employed and sole proprietors, to join an AHP
  • Allow small businesses from the same or different industries to join an AHP
  • Allow small businesses located in North Carolina, and business located in bordering states to join the same AHP.
  • Reduce the period of time that an AHP has to be in existence in North Carolina to offer health benefits to its members from five years to two.

“This bill would put small businesses on a more level playing field with large companies, making it possible for them to offer more attractive benefits packages to recruit the best and brightest talent,”said Krawiec.

According to the nonpartisan Congressional Budget Office, these modifications to North Carolina’s insurance code could potentially benefit up to 110,000 North Carolinians. 

 
Cooper Opposes Pay-As-You Go Proposal For School Construction PDF Print E-mail
State Government
By Administrator   
Wednesday, 20 February 2019 10:42

The Senate Rules Committee hs voted for a proposal to fund school construction and renovation out of the State Capitol and Infrastructure Fund (SCIF) rather than through a school bond put to a vote of the people. 

Governor Roy Cooper opposes this method. 

“North Carolina should put a school bond to a vote so the people can decide whether to fix our old schools and build new ones. Skimming money that should go to teacher pay raises and other school funding is like using your gas money to buy a car. A successful school bond is a smarter way to do business because it locks down financing now and still leaves funding to get good teachers and principals in the classrooms.”

 
Governor Cooper Inducts North Carolina’s Ninth Poet Laureate, Jaki Shelton Green PDF Print E-mail
State Government
By Administrator   
Tuesday, 19 February 2019 10:19

 Governor Roy Cooper inducted North Carolina’s Ninth Poet Laureate, Jaki Shelton Green, at a ceremony in the North Carolina State Capitol.

Green is the first African American and the third woman to serve as the state’s ambassador for poetry and the spoken word. Green succeeds Shelby Stephenson, who was named poet laureate Feb. 2, 2015.

The ceremony included readings by both Stephenson and Green.

“Jaki encourages us to open our minds to the importance of telling stories from the heart and from personal experience,” said Governor Cooper. “She has encouraged North Carolinians to create poetry and contribute to the voice of our state — an uplifting voice that documents the expressions of a diverse people who are shaped by their experiences, their communities, and the history of North Carolina.”

A native of Alamance County, Green has been active in North Carolina’s literary and teaching community for more than 40 years. She has penned eight books of poetry, co-edited two poetry anthologies and written one play. She is a 2014 North Carolina Literary Hall of Fame inductee and was the recipient of the North Carolina Award for Literature in 2003.

Green currently teaches Documentary Poetry at Duke University Center for Documentary Studies. Over the last 40 years, she has taught poetry and facilitated creative writing classes at public libraries, universities and community colleges, public and private schools and with literary organizations across the U.S.

“I want to add my personal congratulations to Jaki Shelton Green, for her appointment a Poet Laureate,” said Susi H. Hamilton, secretary, N.C. Department of Natural and Cultural Resources. “Jaki is not only an accomplished writer and poet, but she is deeply devoted to encouraging diverse voices across the state to tell their stories through poetry and spoken word. She will be a wonderful Poet Laureate.”

Green plans to focus her efforts on the creation of documentary poetry, working with North Carolina communities to explore the ways they document their unique regional histories and significant historical events.

 

Last Updated on Tuesday, 19 February 2019 10:20
 
State Revenue Expected To Exceed Forescast By $150 Million PDF Print E-mail
State Government
By Administrator   
Friday, 15 February 2019 10:30

The Fiscal Research Division and the Office of State Budget and Management have reached consensus on the revenue forecast for the 2019 biennium. This report summarizes the forecast. Forecast Summary The forecast expects FY 2018-19 collections to be above the budgeted amount by $150.8 million (0.6%) and expects stable, modest growth to continue during the upcoming biennium. The current-year anticipated revenue surplus is mainly due to Sales tax collections, which were helped by the U.S. Supreme Court’s June 2018 ruling that required remote sellers to begin collecting Sales tax on their sales in the State. The State’s economy is now fully in the expansionary phase of the business cycle, which is producing solid employment as well as individual wage growth.

Accordingly, the biennium forecast assumes these economic conditions continue through the end of FY 2020-21. Current Fiscal Year Revenue The consensus forecast represents a cautious approach that reflects a continuation of steady economic growth. The forecast projects that total baseline revenue (i.e., total collections adjusted for tax rate and base changes) will grow this fiscal year at a pace near the long-term average growth rate of 4.5% By June 30th, General Fund revenue is forecast to increase by 2.2% over the amount collected in FY 2017-18. This surplus will be driven by strong Sales tax collections, better-than-expected withholding on Personal Income, and a significant increase in Investment income due to rising interest rates.

The result is revenue reaching almost $24.1 billion, yielding an estimated surplus of $150.8 million (0.6%) over the $23.9 billion budgeted amount. As a reminder, April always has the potential to be a unpredictable collection month in which income from dividends, capital gains, and business income can vary considerably from year to year, which result in sizable swings in income tax collections. The added volatility from federal tax code changes due to the federal Tax Cuts and Jobs Act compounds the difficulty in estimating net State revenue Table 1. General Fund Consensus Summary ($ in Millions) Fiscal Year Revenue Change 2017-18 $23,565.9 n/a 2018-19 (est.) $24,080.8 $515.7 2019-20 (est.) $24,814.1 $733.2 2020-21 (est.) $25,801.4 $987.3 2 General Fund Revenue Update February 13, 2019 from April 15th tax returns. Potential tax changes at the federal level could impact the timing of gains and losses taken by taxpayers when filing their 2018 taxes and 2019 estimated payments. This possibility increases the odds of an “April surprise.” Personal Income Tax Personal Income tax collections are estimated to finish below the forecast by 0.4%, mainly due to the federal Tax Cut and Jobs Act. Taxpayers reacted to the legislation’s enactment by making higher-than-normal estimated payments in December of 2017. Those overpayments added to last fiscal year’s over-collections. The result was that in January 2019, taxpayers reduced the amount of their final estimated payments on the 2018 tax year, and these payments were $148 million below what would have been expected. The forecast assumes that the drop in estimated payments will not impact final payments or refunds in April. Offsetting most of the reduction has been solid growth in Individual wages. Withholding revenue is running nearly 1.4% above forecast for the first seven months of the fiscal year. Sales and Use Tax Sales tax revenue is estimated to be ahead of the budgeted forecast by 1.5%. Sales tax collections began to gain momentum in the last fiscal year, and collections stabilized as consumer confidence grew. Gross collections are above forecast, in large part because of the U.S. Supreme Court’s June 2018 ruling in South Dakota v. Wayfair, Inc., which granted states additional authority to require retailers to collect and remit sales tax. However, due to a jump in taxpayer refunds, net Sales tax collections do not fully reflect the increase that Wayfair brought. Refunds are $105 million higher than the target projection for the first seven months. Part of the reason refunds are higher than expected relates to the timing of when refunds are paid. Refunds that were expected to be paid out in June did not show up until August and were $70 million higher than was projected for that month. Business Taxes Business tax collections on Corporate income, the Franchise tax, and the Insurance gross premium tax are projected to finish close to their original projections and are expected to finish a combined $16.5 million above target. Non-Tax Revenue A final component of this fiscal year’s surplus comes from Non-Tax revenue, particularly Investment Income. Earnings on the State’s cash holdings have increased significantly. Rising interest rates have increased the expected return and are projected to be $44.3 million above the original forecast. Outlook for the 2019 Biennium Since the end of the Great Recession in 2009, the economy has made steady gains, adding 75,000 to 95,000 jobs per year. However, overall economic activity has remained at or slightly-below average.

The State’s economy is now fully in the expansionary phase of the business cycle, which is producing solid employment as well as individual wage growth. Accordingly, the forecast assumes steady, solid growth throughout the upcoming biennium. The employment outlook for the State is expected to continue following the upward trend established at the end of the last Personal Income taxes remain on track for FY 2018 -18, although the federal Tax Cuts and Jobs Act caused some changes in taxpayers’ withholding practices. Sales tax growth is strong, partly due to a June 2018 U.S. Supreme Court ruling about the collection of taxes for online sales. The “Wayfair decision” has led to increased sales tax collections from retailers who are located outside of North Carolina. Business taxes include the Corporate Income tax, the Franchise tax, and the Insurance gross premium tax.

All three of these sources are running close to target for the current fiscal year. Corporate Income tax, the Franchise tax, and the Insurance gross premium tax. All three of these sources are running close to target for the current fiscal year. 3 General Fund Revenue Update February 13, 2019 downturn. Employment is expected to experience steady gains of 1.2% in each year of the biennium. Employment is closely tied to personal income, and projected employment gains should improve the prospects for better income growth. The forecast envisions 1.9% and 4.0% growth in Personal Income tax collections for the respective fiscal years (growth rates include tax reductions for 2019, enacted in 2017). Those numbers are built primarily on the anticipation of employment gains continuing to place upward pressure on wages. Wage and salary growth has been well below expectations, not keeping pace with the improving overall economy.

Recent data on wages suggest that trend is starting to change. According to the US Bureau of Labor Statistics, inflation-adjusted average hourly wages increased by 1.6% in 2018. Sales and Use Tax Sales tax collections are forecast to increase by 5.3% and 4.6%, respectively, this biennium, which is slightly above average. A key reason for above-average Sales tax collections is the Wayfair decision. In FY 2019-20 alone, revenue is expected to increase by $125 million as a result of the decision. Several other factors influenced the forecast. Rising individual wage growth combined with lower energy prices, which are expected to persist through 2019, continue to free up consumer income for other purchases. Business Taxes Corporate Income tax collections are often volatile, and after several years of double-digit growth, corporate profits are expected to moderate over the next several years. The 5.7% growth expected over the biennium will be offset by the State’s Corporate Income tax rate reduction that takes effect with the 2019 tax year. The 3% tax rate from 2018 was lowered to 2.5% in 2019.

 

The result is that net Corporate Income tax collections will fall by 1.6% in the upcoming fiscal year and grow by 6.3% in the following year. The Franchise tax and the Insurance Gross Premiums tax are far less volatile and growth over the biennium is expected to average 2.7% and 3.0%, respectively. Recap The revenue outlook for the 2019 biennium reflects a forecast for solid economic growth. Employment growth is projected to continue at its current pace throughout the biennium. The forecast envisions economy to remain stable throughout the forecast period. Below are key income indicators that influenced the forecast. Source: FRD estimates based on national and state forecasts provided by Moody

Last Updated on Friday, 15 February 2019 10:36
 
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