Thursday, December 2, 2010

Public Policy Update: Governmental Affairs Task Force Discusses Tax Reform and Education

The Governmental Affairs Task Force of the Asheville Area Chamber of Commerce convened on November 30, 2010 to discuss tax reform in North Carolina and priorities for education legislation.

Brian Balfour, a budget and tax policy analyst with the Civitas Institute in Raleigh made a presentation to the Task Force on the status of tax reform in North Carolina. In 2009 the North Carolina Senate created the 21st Century Tax Rate Reduction and Modernization Plan to examine options for reform. Tax reform has long been discussed for North Carolina due to declining revenues, which is largely due to the current tax structure relying heavily on the personal income tax.

North Carolina currently has extremely high tax rates, which makes it hard for the state to be competitive in attracting business. The Tax Foundation’s 2011 State Business Tax Climate Rankings have North Carolina ranked 41 out of 50 (best is 1, worst is 50). The 21st Century Tax Reduction and Modernization Plan is complex but essentially calls for a lowering of the tax rate by expanding the base of taxable services.

It is important to note that the leadership of the North Carolina General Assembly has said that tax reform will not be dealt with in the 2011 session. Instead the General Assembly will focus on balancing the state budget. The Asheville Area Chamber of Commerce will continue to monitor and watch this issue as it unfolds.

Dr. Hank Dunn, President of A-B Tech; Allen Johnson, Superintendent of Asheville City Schools; and Dr. Tony Baldwin, Superintendent of Buncombe County Schools also joined the Task Force to present their legislative priorities to the Chamber. All three recognize the state budget deficit will have tremendous impacts on education in the Asheville area. They asked business leaders to recognize the long term impact a year of education funding cuts can have on business and providing the quality workforce they need.

On the cutting block is Dual Enrollment, which is a partnership program with high schools and community colleges that allows high school students to enroll in college level classes. The educators would love to see this program funded as it provides access to college for many students who would never see a college classroom. This program also accelerates the entrance of a highly skilled workforce into area industries since students can complete their college education in a shorter time period. The educators also recognized they will face staffing cuts and said they are prepared to deal with the situation this will create.

The Chamber will continue to advocate for the school systems in Western North Carolina, which train the workforce our businesses require.

The next Governmental Affairs Task Force meeting will be on Tuesday, January 4, 2010 from noon until 1:30 pm at the Chamber of Commerce. If you are a member of the Chamber and have any interest in this group please contact Jeff Joyce at

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