N.C. Senator Ellie Kinnaird's Newsletter

June 5, 2009 Newsletter

Dear Friends,

Ellie Kinnaird

As you have been hearing, the financial picture of the state is in a dire situation, in fact ours is one of the worst in the nation because of high unemployment, loss of manufacturing and the banking failure. Our revenue shortfall is $4.5 billion for the two year budget. This means we have to cut every program beyond functionality in some cases and raise revenue significantly. I have heard from countless people as their programs have been cut. I understand that this is devastating to the people of the state and agree. But our Constitution will not let us spend more than our revenue.

While we wrestle with the budget, other bills are making their way through the legislature. This week, again as you may have read, Apple Computer was given a tax break for only that company, a bad precedent. I voted against the bill. It will only create 50 jobs, although the company will be required to invest $1 billion. Proponents say it has the potential to create thousands of related jobs, but that remains to be seen.

A report on such incentives came out this week. It was a joint study from UNC-Chapel Hill, East Carolina University and NC State economists. It showed that tax incentives have actually cost the state $1billion and lost jobs. I have argued against such tax credits for years. The report did show that the governor’s discretionary funds have benefited employment and increased revenues to the state. The recommendation was to eliminate the tax incentives entirely. Unfortunately, the report also recommended a cut in the corporate income tax to be more competitive. This in the face of our having the lowest actual taxes on corporations due to local and other low tax rates and that we are consistently rated as having the best business climate in the southeast and U.S.

We did pass upgrades to the “Do Not Call Registry, school bus safety and added the disabled to the silver alert system.

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