N.C. Senator Ellie Kinnaird's Newsletter

June 2, 2010 Newsletter

Dear Friends,

Ellie Kinnaird

Greetings from the North Carolina Senate,

This has been a difficult budget year with daily headlines about one deep cut after another into programs that have serious implications to the people of North Carolina. Prioritization is crucial but challenging; because each person considers his cause the most important. Today the House made some important decisions. They will limit enrollment at our UNC campuses, Smart Start and More at Four have been cut, and many areas that serve poor people, including prevention and intervention program have seen deep cuts. We must protect education and provide jobs for those who need work, as well as important programs. I have heard from many of you and appreciate your input on the budget.

I follow the newsletters from the Justice Center’s Budget and Tax office that cautions about deep cuts to necessary programs while not tackling tax reform and reining in special interests. Last week the HK on J had a news conference reiterating those concerns. I share them. Those who have the most to lose should not have to carry the burden. I will try my best to protect programs for those groups. Unless we craft tax reform for the future, this roller coaster will continue. On the positive side, one of the long supported measures in the legislature, the NC Housing Trust Fund, has stayed at $10,000,000 in both the House and Senate’s budget. It has helped many to buy homes when they could not get a bank loan, to upgrade existing substandard housing and for rent support for our poorest families.

There is a bill in the Senate to prohibit municipalities from providing Broadband so that everyone in their communities will have access. We know that large companies will not extend broadband into areas where they cannot make a profit. Therefore we cannot allow the phone companies to dictate where broadband can and cannot go. I have heard from many of you opposing this bill and I will work to prevent it from becoming law.

We have some bright proposals for small businesses that might relieve their burden and create jobs, which is an important task for the legislature. Among the proposals is one that would ease the burden on small retailers. It would give them more leeway in pre-paying their monthly sales taxes in advance, which can cause cash-flow problems. Interestingly, large retailers are not required to prepay. Sound familiar? Another would boost loans to small businesses and restore cuts to small-business centers at the state’s community colleges, which are a great help to our small businesses. It would give grants to young technology companies for innovative research, a real potential for growth in the future. Finally, there is a credit of $250 per person for small businesses to provide health insurance to their workers.

Last week, I argued and voted against large tax credits and incentives to potentially lure four large companies to our state. I feel this is contrary to the research on the effectiveness of these give-away programs. In addition, it shifts the tax burden to ordinary tax payers, since the revenue has to be made up some other way. Research shows that 51.7% of those given incentives do not create more jobs, and in some cases, actually lose jobs. A study from the UNC Kenan-Flagler Business School showed that the most important features that attract business are a good school system, a well trained work force (community colleges), a good transportation system and cultural amenities. I have long argued that we should put this money into our schools, community colleges and universities. Perhaps some day we will not be in this senseless competition with other states and support what we know will benefit all our citizens.

North Dakota is the only state with a surplus. Why? Because it has had a state bank since 1919. All government monies go into the bank which lends money to farmers, small businesses and homeowners for mortgages. Thus, their citizens are not suffering from the big bank’s refusal to lend money to those who need it most in a recession. Several states have introduced bills to start state banks. I am exploring the idea and will keep you informed as we learn more. Of course, North Carolina is a banking state, so the resistance will be powerful.

I close with a phrase that the UNC Women’s Center featured in their newsletter: Ubuntu - A person is a person through other persons. We must all work together for the best for everyone. Please continue sending me your comments and requests.

Paid for by Ellie Kinnaird for Senate • PO Box 668, Carrboro, NC 27510 • 919-929-1607 •