North Carolina is Open for Business
Leaders in Raleigh sent a strong message during the 2011 session: North Carolina is open and ready for business. Legislation passed this year demonstrates that the best state for business can get even better.
In the midst of vast economic challenges, political leaders from both parties listened to our state’s job creators and acted decisively to spur further job creation. As a result, companies who already employ millions of North Carolinians can plan with more certainty for what it will cost to relocate or create more jobs in the Tar Heel State. The North Carolina Chamber, our members and business allies have been working for decades to ensure our state’s pillars of a strong economy are advanced: education/workforce development, infrastructure/economic development and a competitive business climate.
The collective business community spent thousands of hours working together with state leaders on strategic reforms that will move North Carolina from a top-10 unemployment state to a top-10 job creation state. As we look at some major legislation passed during the 2011 session, the Chamber and our members applaud the way in which our political leaders worked in a bipartisan, collaborative way to tackle these important “jobs issues.”
Workers’ Compensation Reform
Probably the biggest win for jobs and the economy is the overhaul of our workers’ compensation system. Costs per claim have tripled since 1996, even with our workplaces getting safer. This balanced legislation received near-unanimous support, with a 46-0 vote in the Senate and 110-3 in the House. It improved benefits in many areas, like increasing temporary partial disability benefits, the death benefit for surviving dependents and burial expenses. The legislation also addresses employers’ primary concern by limiting temporary total disability benefits. North Carolina will now be in line with surrounding states by placing a 500-week cap on these benefits. Our workers’ compensation system should take care of injured workers’ medical needs and get them back to work as soon as possible, while ensuring that those who are permanently disabled receive the benefits they need. The new legislation provides needed checks and balances to our system.
Reducing Red Tape
With an astonishing 15,000-plus rules created over the past decade – or four a day! – North Carolina businesses have expressed great concern on burdensome, redundant red tape. This isn’t an environment-versus-business issue. For businesses, protecting the health and safety of their employees and the quality of our environment are top priorities. But too often we find regulations that are unnecessary or go too far. Several bills passed this session limit state regulations to thresholds set by federal rules, they require a cost-benefit analysis for enacting new rules and they restore commonsense methods to creating new regulations. We need balance – look at California, which is steeped in regulation, but near last in job creation. Our regulatory environment has a huge impact on our ability to attract new companies and on whether a company decides to expand in North Carolina.
Frivolous lawsuits also drive up the cost of doing business, and a state’s legal policy is de facto economic policy. Every year Americans pay a “tort tax” of about $800 billion, and President Obama’s debt commission recommended legal and medical malpractice reform as one solution to economic growth. A fair, balanced legal system helps strengthen our economy and attract jobs. Tort reform outlined in House Bill 542 makes sure juries hear the truth about actual medical expenses paid, which helps avoid inflated, outrageous settlements. The bill also helps encourage settlements and protects landowners from liability on trespassers. Senate Bill 33 makes medical malpractice reforms so doctors don’t practice defensive medicine that drives up the cost of medical care and harms our ability to attract new physicians to our state. We still have some hurdles when it comes to legal reform, but these changes are vast improvements over our current system.
Right-Sizing State Government
State leaders also recognized that tough times call for tough choices, making “right-sizing” state government a top priority. Leaders put $1.3 billion back in the hands of North Carolinians by allowing temporary taxes to expire as scheduled and providing tax relief for small businesses by exempting the first $50,000 of net income. Putting more resources into the hands of the private sector can create jobs. It matters to those businesses who are deciding whether to add jobs or save the money for uncertain times, and it matters to the 9.7 percent of unemployed (or 17 percent underemployed) North Carolinians when only one job is available to four job seekers. Leaders also worked to ensure important investments in education and infrastructure were maintained, both of which are critical to our economic future.
When leaders came to Raleigh in January, they pledged to focus on jobs. The conversations at the General Assembly about these issues were difficult, but our leaders listened and took action. North Carolina has a long-standing tradition that job creation is a non-partisan issue.
Working together, North Carolina can win the jobs race by proclaiming, “We’re ready and open for business!”