Senator Debbie Clary

From the desk of Senator Debbie Clary…

Being a “new year,” it is beneficial to look back at what we have, and have not, accomplished during the previous year.  I thought you may enjoy a quick summary of the past year and a glimpse for 2010.  The John Locke Foundation has accumulated some of these interesting demographic and economic measures, which are displayed in the tables below:

NC Fast Facts (FY 2010)…

Demographics… 

NC State Government…

Tax Rates…

General Fund Appropriations…

General Fund Availability…

Transportation…

 2010 “New Year” Outlook…

Included in a report entitled, “General Fund Revenue Report and Economic Outlook,” the NC Fiscal Research Department gathered information from various sources to detail expectations for 2010.  Some of the main points are highlighted below:

• Moody’s Economy.com forecasters significantly lowered their expectations for growth in the State’s personal income for 2010.  They now forecast 1.9% growth, which is half of what was in previous forecasts (3.8%).  Wage & Salary income, the major component of personal income, is estimated to have fallen 4.4% in 2009 and expected growth for 2010 is approximately 1.8%.
• From September through November the State’s economy added almost 16,000 jobs (seasonally adjusted).  However, this still leaves employment short of pre-recession employment by almost 240,000 jobs.  Many of the State’s industries have begun to increase output, yet this has had little impact on full-time employment.  Only the Health & Education Services and Government sectors had year-over-year growth in November.
• For 2009, the Construction, Manufacturing, Mining, and Wholesale Trade sectors experienced the biggest losses in employment.  The Government sector is the only one expected to realize any employment gains for the year.
• The housing market in the State appears to have bottomed out.  Existing home sales are no longer in decline and prices are starting to stabilize in some areas.  Nonetheless, the market is still struggling.  As of November, Residential permits for new construction were still in decline, and existing home sale prices across the State were down 1.7% for the third quarter of 2009. 

Now is not the time to raise taxes, experiment with new Use Taxes or fees, or to fund unnecessary and fiscally irresponsible projects.  Instead, we need to address unemployment, immediately!  Our number one priority for this “new year” should be to significantly reduce, or eliminate, the 240,000 jobs lost due to the recession.  Furthermore, with 11.0% statewide unemployment, consumers are not able to spend the money necessary to stimulate the economy.

Want to see back issues of Senator Clary’s Newsletters or view interesting News Clips? …

Please visit our site at:  www.senatorclary.com.

Monthly Mailings 

Now that the session has come to an official adjournment until May, 2010, we will be sending the e-Newsletter monthly instead of weekly.  During the interim, I am in the district working on constituent issues as well as my business, Millennium Marketing and MMG LIVE Networking.  The Raleigh office will remain open Monday thru Friday with my Legislative Assistant, Misty Greene.  You can reach us at debbie.clary@ncleg.net or debbie@senatorclary.com or if you prefer to call, the number is 919.715.3038.  We check our mail daily and will get back to you as soon as possible.  I would like to emphasize how thankful I am for your readership, comments, and input throughout the “long session.” 

Thanks as always for your support and for the honor and privilege of serving as your Senator!

From the desk of Senator Debbie Clary…

I hope everyone had a relaxing Thanksgiving Holiday!  It is just a few short weeks until the Winter Holiday Season.  In our Special mid-November Newsletter, we briefly updated you on the recent “push” for Tax Reform.  Provided by the Interim Joint House and Senate Finance Committee, the information below provides an interesting perspective on the NC Sales Tax Rate and its evolution over time. 

A Historical Look at Taxes 

Sales Tax Revenue

Rate Changes 

 1933:      3% sales tax rate

 1991:      4% sales tax rate

 2001:     4.5% sales tax rate, temporary

 2006:     4.25% sales tax rate, temporary

 2007:     4.25% sales tax rate, permanent

 2008:     4.5% sales tax rate, Medicaid swap

 2009:     5.5% sales tax rate, temporary

 2009:     5.75% sales tax rate, Medicaid Swap

 Current NC General Rate

 The General State Tax Rate is 5.75%.  The 1% increase enacted this year is scheduled to expire July 1, 2011.

 The Local Tax Rate varies:

– In 91 counties, the rate is 2%, for a combined State and local rate of 7.75%.

– In Alexander, Catawba, Cumberland, Haywood, Martin, Pitt, Sampson, and Surry, the rate is 2.25%, for a combined State and local rate of 8%.

– In Mecklenburg, the rate is 2.5%, for a combined State and local rate of 8.25%

 Items that are subject to state sales tax are also subject to the local sales and use tax. 

Food Exemption 

Food for Home Consumption Exempt (from State rates; however, a 2% Local Rate remains) unless it is defined as:

– Dietary supplement – Vending machine item – Prepared food – Soft drink – Candy 

Food for Home Consumption looses its State Sales Tax Exemption if:

– It is sold in a heated state – It consists of two or more foods – Foods are mixed or combined by retailer – It is sold with eating utensils 

Current Economic Development Exemptions

 Major Recycling Facilities

 Interstate Air Couriers

 Interstate Air Passenger Carriers

 Interstate Air Businesses

 Datacenters

 Railroad Intermodal Facilities

The complexity and inefficiency of our current tax code system results from a disregard for responsible spending.  Instead of focusing on how to expand our Sales Tax Rate, we should be turning to a “reformed” system of budgeting.  As Winston Churchill once said, “We contend that for a nation to try to tax itself into prosperity is … like a man standing in a bucket and trying to lift himself up by the handle.”  We, as both a State and a Nation, need to step out of the bucket and turn our focus to unemployment.  Are increasing Sales Tax Rates going to help address unemployment?  Unfortunately, NO!  These increasing rates are only going to fuel more unaccountable and inefficient spending and increase the overwhelming tax burden on all North Carolinians.

Want to see back issues of Senator Clary’s Newsletters or view interesting News Clips? …

Please visit our site at:  www.senatorclary.com.  Also, please refer to our website to see both the tax reform and small business press releases.

Monthly Mailings

Now that the session has come to an official adjournment until May, 2010, we will be sending the e-Newsletter monthly instead of weekly.  During the interim, I am in the district working on constituent issues as well as my business, Millennium Marketing and MMG LIVE Networking.  The Raleigh office will remain open Monday thru Friday with my Legislative Assistant, Misty Greene.  You can reach us at debbie.clary@ncleg.net or debbie@senatorclary.com or if you prefer to call, the number is 919.715.3038.  We check our mail daily and will get back to you as soon as possible.  I would like to emphasize how thankful I am for your readership, comments, and input throughout the “long session.” 

Thanks as always for your support and for the honor and privilege of serving as your Senator!

From the desk of Senator Debbie Clary…

First off, I hope everyone had a fun and safe Halloween weekend!  Since this is the last newsletter before Thanksgiving, I would like to wish everyone a Happy Thanksgiving!  Please be safe during any of your travels.

As a North Carolina State Senator, I do not have a vote and I typically do not get involved in issues outside of the realm of my work.  However, I am receiving an inordinate amount of calls and emails about the national healthcare debate.  I would simply like to share a few thoughts with you!

My thoughts on the national healthcare debate!

You likely have seen a reference to “rationing of care” in the media regarding Socialized Medicine.  In particular, regarding Socialized Medicine, you likely have seen “rationing of care” in regards to the elderly.  The phrase/concept of “Rationing of Care” seems to confuse many people.  Rationing is an Economic phenomenon.  Maybe this will help you explain the concept to friends:

(1) The demand for health care leads to a supply of health care.  That is, a market has been created,

(2) Demand and supply for health care intersect at price,

(3) “Price” is how a market rations. 

In regards to Health Care, if you add 19 million uninsured to the current health care system, demand suddenly increases (Demand Shock).  Supply (health care providers, hospitals, etc.) can not adjust quickly enough to the sudden increase in Demand.  Hence, price rises as the market “rations” through price until which time Supply can adjust (build new hospitals, train new doctors and nurses, etc.).

However, price will not be allowed to rise under Socialized Medicine.  If the mechanism “price” is distorted, then true rationing occurs (long waits for services….it’s the only other rationing technique available if price is not allowed to rise).

Rationing goes a step further:  Supply, in the medium and long run, will be constrained regarding adjusting to the increase in Demand as price is distorted.  Hence, Supply will not adjust (no new hospitals built, decline in doctors and nurses, etc.).  Supply will not increase due to price distortion leading to Supply Constraint, which, once again leads to continued rationing.

In regards to the elderly and rationing, it becomes more of a Political-Economy argument.  The argument goes like this: if a liver transplant is needed by a 30 year old and a 70 year old, and if the Government is involved and has panels that determine “need,” the 30 year old gets the nod.

Another part of the argument for the elderly is: rationing will cause long waits for service, which may take so much time the elderly expire during the long wait time.

The final part of the argument is Medicare is being raided for money to pay a Socialized Health Plan.  The reduction in Medicare funds means health care providers will be reimbursed less.  The lower reimbursement is a form of price distortion meaning rationing for the elderly gets ratcheted up to another level.

Want to see back issues of Senator Clary’s Newsletters or view interesting News Clips? …

Please visit our site at:  www.senatorclary.com.

Monthly Mailings

Now that the session has come to an official adjournment until May, 2010, we will be sending the e-Newsletter monthly instead of weekly.  During the interim, I am in the district working on constituent issues as well as my business, Millennium Marketing and MMG LIVE Networking.  The Raleigh office will remain open Monday thru Friday with my Legislative Assistant, Misty Greene.  You can reach us at debbie.clary@ncleg.net or debbie@senatorclary.com or if you prefer to call, the number is 919.715.3038.  We check our mail daily and will get back to you as soon as possible.  I would like to emphasize how thankful I am for your readership, comments, and input throughout the “long session.”

Thanks as always for your support and for the honor and privilege of serving as your Senator!

From the desk of Senator Debbie Clary…

Although my office has already sent out our November newsletter, we have decided that a couple of recent updates warrant a “special,” mid-month newsletter.  I will also take this as another opportunity to send wishes for a wonderful and blessed Thanksgiving!  Here, below, is what has been going on with regard to Tax Reform and Small Business:

 Tax Reform… 

Members of both the NC House and Senate Finance Committees met last week to debate reforming the tax code.  This proposed “reform” would lower the state sales and income taxes, while extending the sales tax to services like auto repair, home improvement, and warranties.  In a recent study conducted by the Civitas Institute, 58.5% of polled voters said they would oppose such a plan.  Here is the full breakdown of the poll:

I agree with Civitas Institute Senior Legislative Analyst Chris Hayes’ statement, “Voters are skeptical of any move by the legislators to ‘reform’ the tax code. Having been lied to repeatedly about the expiration of supposed temporary taxes, voters have little faith in the General Assembly when it comes to taxes.”

This plan is not a “reform”: it is simply a reallocation of taxes.  Instead of finding new, creative ways of disguising taxes from a disgruntled base, we should be looking at more responsible and accountable spending, as well as zero-based budgeting, as a better solution.  I agree with the majority on the issue and will not support this “reform.”

Small Business …Senator Clary ranked among the top …

In a recent study conducted by the NC FreeEnterprise Foundation, Senator Debbie Clary has been ranked among the highest in the NC Senate as voting positive for small business in NC.  These “ratings” are derived from the voting records of state lawmakers on key business issues, during the past session, and a survey of North Carolina business leaders and government affairs professionals representing a wide range of industries, interests and geographic areas across the state.

On this topic, Senator Clary stated, “Being a friend of small business simply translates into working for more jobs in our community.  Our work in the General Assembly is to set the stage for local commissioners and economic development teams to build a North Carolina that is ready to do business.”  Small business is the key to many of our current problems; therefore, it makes sense to support such initiatives.

To see the complete NC Senate rankings, please click here.

Want to see back issues of Senator Clary’s Newsletters or view interesting News Clips? …

Please visit our site at:  www.senatorclary.com.  Also, please refer to our website to see both the tax reform and small business press releases.

Monthly Mailings

Now that the session has come to an official adjournment until May, 2010, we will be sending the e-Newsletter monthly instead of weekly.  During the interim, I am in the district working on constituent issues as well as my business, Millennium Marketing and MMG LIVE Networking.  The Raleigh office will remain open Monday thru Friday with my Legislative Assistant, Misty Greene.  You can reach us at debbie.clary@ncleg.net or debbie@senatorclary.com or if you prefer to call, the number is 919.715.3038.  We check our mail daily and will get back to you as soon as possible.  I would like to emphasize how thankful I am for your readership, comments, and input throughout the “long session.”

Thanks as always for your support and for the honor and privilege of serving as your Senator!

FOR IMMEDIATE RELEASE

Contact:   John L. Rustin
               Executive Director
Phone:     919-896-8347
Email:      jrustin@ncfef.org
Web:        www.ncfef.org

NC FreeEnterprise Foundation Releases Business Ratings of 2009 N.C. General Assembly

In light of current economic and employment conditions, 2009 Business Ratings provide valuable insight into the performance of state lawmakers on key business issues during the 2009 Legislative Session.

RALEIGH (November 10, 2009) – The North Carolina FreeEnterprise Foundation released today its Business Ratings of the 2009 North Carolina General Assembly.

The 2009 Business Ratings provide an analysis of the actions and attitudes of state lawmakers toward business-related issues during the 2009 Legislative Session. The Ratings are derived from the voting records of state lawmakers on key business issues and a survey of North Carolina business leaders and government affairs professionals representing a wide range of industries, interests and geographic areas across the state. (Download the complete 2009 Business Ratings Report.)

 
“The 2009 Business Ratings come at a time when jobs and the economy are top issues on the minds of North Carolinians,” said John Rustin, Executive Director of the North Carolina FreeEnterprise Foundation. “We are pleased to provide this valuable insight into the performance of state lawmakers on issues critical to business and industry in our state, which is the engine that drives our economy and provides jobs for our working families.”
 
Sen. David Hoyle (D-Gaston) topped the list of state senators with a rating of 90.8, and Sen. Neal Hunt (R-Wake) earned the second-highest rating in the Senate with an 89.5, making him the highest-scoring Senate Republican.

Rep. Thom Tillis (R-Mecklenburg) earned the highest score in the state House with an 89.6 and Rep. Marilyn Avila (R-Wake) earned an 88.3, the second-highest rating. Rep. Jim Crawford (D-Granville) was the highest-rated House Democrat with a score of 82.9, putting him at tenth overall in the House.
 
“We congratulate all members of the North Carolina General Assembly who supported free enterprise principals during the session, especially those who rated in our ‘Base’ category and consistently upheld pro-business ideals,” said Jay Rouse, Director of Government Affairs for the North Carolina Association of Electric Cooperatives and Chairman of the Board of Directors of the North Carolina FreeEnterprise Foundation. “These lawmakers demonstrated a level of understanding and commitment to our state’s business community that is vital to maintaining a positive economic climate in North Carolina.”
 
This year, 21 of the 50 state senators received a Business Rating of 70 or higher, placing them in the “Base” category and identifying them as consistent supporters of the free enterprise position. Fifty-seven out of the 120 members of the state House scored above 70 and earned the “Base” designation.
 
NCFEF’s 2009 Business Ratings of the North Carolina General Assembly is available in its entirety here.

About the NC FreeEnterprise Foundation:

The North Carolina FreeEnterprise Foundation, Inc., is a statewide, nonpartisan research and education organization that serves business and industry by providing innovative educational programs, nonpartisan political research, and objective analysis to foster informed civic involvement, promoting the ideals of the free enterprise system.

Civitas Poll: Voters Oppose Tax Reform Plan

Civitas Staff  |  November 2, 2009

2:1 Against Taxing Service While Lowering Rates

Raleigh, N.C. – With the N.C. House and Senate Finance Committees set to convene in Raleigh tomorrow to debate reforming the state’s tax code, a new poll released today by the Civitas Institute shows that a majority of voters are opposed to the central plank of the plan – reducing state sales and income taxes while extending the sales tax to services.

According to the poll of 600 likely voters, 58.5 percent said they would oppose a plan by the N.C. General Assembly that would reform the state’s tax code by lowering the state’s sales and income taxes but would begin charging sales tax on services like auto repair, home repair and warranties. Only 27.8 percent of voters indicated support for the plan and 13.7 percent said they were unsure.

“Legislators face an uphill battle in attempting to convince North Carolina voters of their plan to reform the state’s tax code,” said Civitas Institute Senior Legislative Analyst Chris Hayes. “By a 2-to-1 margin, voters are opposed to a reform plan that would supposedly lower the rates but expand the base.”

Opposition to the tax reform proposal has been consistent throughout the year according to Civitas poling results. In May, 51 percent said they opposed the proposal in a Civitas poll.

Similar polling this summer found that the little support the plan has drops considerably if rates are not lowered or if overall taxes are increased similar to a proposal floated by the N.C. Senate earlier this year.

“Voters are skeptical of any move by the legislators to ‘reform’ the tax code. Having been lied to repeatedly about the expiration of supposed temporary taxes, voters have little faith in the General Assembly when it comes to taxes,” added Hayes.

The Civitas Poll is the only monthly live-caller poll of critical issues facing North Carolina. Full results of the poll will be revealed on the Civitas Institute’s Web site at www.nccivitas.org in the coming weeks.

Full text of question:

Do you support or oppose a plan by the General Assembly that would reform the state’s tax code by lowering the state’s sales and income taxes but would begin charging sales tax on services like auto repair, home repair and warranties?

SUPPORT – 27.8%
Strongly Support – 12.0%
Somewhat Support – 15.8%
OPPOSE – 58.5%
Somewhat Oppose – 14.0%
Strongly Oppose – 44.5%
DON’T KNOW – 13.7%

Click here for full results and crosstabs.

This poll of 600 likely general election voters in North Carolina was conducted October 20-21, 2009 by McLaughlin and Associates of Alexandria, Virginia. All interviews were conducted via telephone by professional interviewers.

Interview selection was random within predetermined geographic units. These units were structured to correlate with actual voter distributions in a statewide general election.

The poll of 600 likely general election voters has an accuracy of +/- 4.0% at a 95% confidence interval.

From the desk of Senator Debbie Clary…

Program Evaluation Reports 

Every year, reports are put together by the Program Evaluation Division of the NC General Assembly.  Their findings and recommendations often lead to important legislation.  Below are a few summaries of recently published reports:

Enhanced Services for Mental Health

Findings indicated a total of $2.4 billion was spent on enhanced services from April 2006 through February 2009, $827.2 million of which was North Carolina’s share of the costs.  Analyses suggest effective planning and better oversight could have avoided costs of $498.5 to $635.3 million, of which $177.4 to $226.2 million would have been North Carolina’s share of the avoided costs.

Water and Wastewater

Funding for water and wastewater infrastructure in North Carolina is provided by six state funding entities, each with its own mission, goals, and objectives.  Without an effective oversight agency or comprehensive strategic plan in place to coordinate activities, water and wastewater funding is provided in a complex and fragmented manner.  The General Assembly should direct the State Water Infrastructure Commission (SWIC) to develop a statewide strategic plan and needs assessment for water and wastewater infrastructure funding and require better oversight of water and wastewater funding by either authorizing SWIC to coordinate and oversee the system or by establishing a single water and wastewater authority.

Vehicle Inspections 

Vehicles registered in North Carolina are subject to two types of inspections: safety inspections, which examine various mechanical systems, and emissions inspections, which ensure proper functioning of pollution controls.  North Carolinians spends $141 million annually on inspections.  No evidence exists showing the safety inspection program is effective, it is not possible to determine how much vehicle emissions inspections contribute to the improvement of overall air quality, and program oversight by the Division of Motor Vehicles (DMV) is inadequate.  The General Assembly should reevaluate the need for a safety inspection program, consider exempting vehicles from the three newest model years from safety and emissions inspections, and require DMV to manage the programs to ensure results.

Alcohol Beverage Control

North Carolina’s Alcohol Beverage Control (ABC) system is outdated because it has not kept pace with demographic and economic changes, and state statutes limit effective management of the system.  The mission of local ABC boards is not clearly defined, and some boards use the lack of a clear mission to as a reason to justify ineffective and inefficient store operations.  Regarding “standardization,” North Carolina regulates the sale of liquor differently than other states.  The current ABC system can be modernized by defining the mission of local boards, providing management tools for better oversight of local boards, and modifying outdated statutes.

Please click here for access to additional program reports.

Taxes …

Following the passage of the budget and adjournment of the Senate, our office received several questions regarding the Income Surtax.  Dedicated to preventing tax increases and promoting efficient spending and Zero-Based budgeting, I did not support the surtax provision.  However, the description below describes the changes.

How the Surtax Works …

The surtax is in effect for the 2009 and 2010 tax years and is based on North Carolina Taxable Income (not Federal AGI), as recorded on Line 13 of the North Carolina D-400 tax form.  North Carolina Taxable Income is the net of North Carolina deductions, exemptions and other various additions and deductions (i.e. Bailey settlement, NC 529 Plan, etc).  The dollar amount reported on Line 13 establishes what surtax rate is imposed.  The surtax is then imposed on the amount of North Carolina Income Tax (D-400 Line 14).

For example, if a taxpayer filing as a single had income of $87,500 and deductions and exemptions totaling $12,500, their NC Taxable Income (Line 13) would be $75,000. The NC Income Tax (Line 14) would be $5,235 and the surtax amount would be $104.70 ($5,235 * 2%).

Want to see back issues of Senator Clary’s Newsletters or view interesting News Clips? …

Please visit our site at:  www.senatorclary.com.

Monthly Mailings

Now that the session has come to an official adjournment until May, 2010, we will be sending the e-Newsletter monthly instead of weekly.  During the interim, I am in the district working on constituent issues as well as my business, Millennium Marketing and MMG LIVE Networking.  The Raleigh office will remain open Monday thru Friday with my Legislative Assistant, Misty Greene.  You can reach us at debbie.clary@ncleg.net or debbie@senatorclary.com, or if you prefer to call, the number is 919.715.3038.  We check our mail daily and will get back to you as soon as possible.  I would like to emphasize how thankful I am for your readership, comments, and input throughout the “long session.”

Thanks as always for your support and for the honor and privilege of serving as your Senator!

Senator Clary Opposes Federally Mandated Renewable Energy Standards

Shelby, NC -   Senator Debbie Clary opposes any federally mandated increase to the Renewable Energy Standards passed by the North Carolina General Assembly in 2007.  In a letter to Senator Kay Hagan, dated October 5^th, she asks Hagan to “please consider the standards that were passed in 2007, Senate Bill 3.”  The bill sets a standard of generating 3 percent of the state’s electrical needs from sources such as wind, hydro power, solar power, hydrogen and biomass by 2012.  The percentage would increase every three years until it reached 12.5 percent in 2012. 

North Carolina was the first state in the Southeast to set Renewable Energy Standards.  Environmental groups, energy producers, agricultural interests and business owners worked together to support the passage of the law.

Clary states in her letter that her “fellow North Carolinians are concerned. They are concerned mostly about their futures, and more importantly, job growth.”  She goes on to say, “There are communities with unemployment rates as high as 16 percent and no sign of new jobs on the horizon.”

“The loss of high paying manufacturing jobs, an unemployment rate approaching 16% in my district and pleas for help coming from countless displaced middle class citizens offers proof  that it is the wrong time to add this burden of higher energy costs to our people” she adds.

“I support the development of alternative fuel sources, and the 12.5 percent standard is an aggressive threshold and one that works well in North Carolina,” she said.  “The one size fits all mentality that exists in Washington is a harmful approach for North Carolina.”