North Carolina’s Winning Formula for Business
NC Chamber President & CEO Gary Salamido and NC Chamber Chair Sepi Saidi, CEO of SEPI, Inc.
#1 Doesn’t Happen by Accident
CNBC announced North Carolina as its top state for business and the celebrations commenced. People from all corners of the state seem to be excited, and we are certainly chief among them. But how does a state become the top state for business with the nation’s strongest economy?
It certainly does not happen by accident.
Perhaps the reason the NC Chamber team was so excited by the news is that this is what we do every day. Our vision is to, “establish and maintain North Carolina as a national leader for private sector job growth, making North Carolina a top state in which to work and live.” The NC Chamber mission is, “to research, develop, advocate, and communicate for solutions and policies that produce a nationally competitive business climate in North Carolina.”
The CNBC ranking was followed by North Carolina taking the top spot for Best Business Climate in the nation in Business Facilities’ 18th Annual Rankings Report. All after the Tar Heel State won Site Selection’s top spot for Business Climate last fall, and the last iteration (2019) of Forbes’ “Best State for Business” rankings had North Carolina on top, as well.
The greater theme here is that North Carolina is now consistently topping the charts. It does not happen by accident. This is something that has been years in the making.
Your Business Advocate
The last decade plus, the NC Chamber has led a focused effort in the legislative, regulatory, and political arenas to proactively drive positive change, ensuring that North Carolina is one of the best places in the world to do business.
It is not one issue that moves the needle but a consistent focus on education and talent supply, a competitive business climate, and infrastructure. The NC Chamber has prioritized these focus areas together to achieve a strategic regional, national, and global competitive advantage for North Carolina. It’s a formula for success and here is how it was implemented.
Education and Talent
The NC Chamber Foundation led the Hire Standards, NC coalition to educate North Carolinians on the importance of high academic standards. This coalition joined the voices of our state’s military, teachers, business leaders, police chiefs, parents, and local chambers of commerce. We monitored the work of the Academic Standards Review Commission and submitted recommendations to the commission. In addition, the Hire Standards, NC team worked with other education groups, especially educators, to produce additional emails, calls, position papers, and testimony for submission to the commission. We remained committed to maintaining our state’s high academic standards, which are still in place today.
At this time, the NC Chamber Foundation is leading the Institute for Workforce Competitiveness. As North Carolina and the nation face workforce challenges, changes, and opportunities, the states that successfully address these challenges will be best positioned for economic competitiveness.
Competitive Business Climate
Tax often leads the competitiveness conversation and North Carolina is no different. A decade ago, the Corporate Income Tax Rate was 7% and the Personal Income Tax Rate was 8%. Comprehensive reform of North Carolina’s tax code has not occurred since the 1930’s. Today, the Corporate Income Tax Rate sits at 2.5% and the Personal Income Tax Rate is 4.9%. Pre-reform, the Tar Heel State’s tax system ranked 44th in the country—meaning that only six states had less-competitive tax codes than North Carolina. Today, that same ranking puts us at 11th in the country.
Tax is more than the corporate and personal rates. Ten years ago, North Carolina had a growing, multi-billion-dollar debt to the federal government to cover its unemployment benefits. The system received the worst scores in the nation for determining whether someone is initially eligible for benefits and tracking when those getting benefits are no longer eligible. The benefit is funded exclusively by employers, and they were paying a surcharge to cover the cost of borrowing money to pay some of the best benefits in the nation with poor oversight. Following NC Chamber-championed reforms, the employer surcharge is eliminated, there is a $2 billion surplus in the fund, benefits are competitive with neighboring states, and there is a focus on reemployment.
Workers’ compensation is an area where years of collaboration from all stakeholders yielded results for North Carolinians. The NC Chamber was key to an effort to modernize North Carolina’s workers’ compensation laws to ensure greater certainty for businesses while providing for injured workers’ medical needs, getting employees back to work as soon as possible, and ensuring that those permanently disabled receive needed benefits.
Protecting North Carolina’s environment while ensuring we can continue to grow at the speed of business is a fundamental balance the NC Chamber advocates for daily. A decade ago, our state’s regulatory environment included regulations that were duplicative and inconsistent with federal regulations, hindering growth and investment. A frequent, consistent focus in this space has created a balanced, modernized regulatory environment, including significant reforms to the onerous State Environmental Policy Act, which had not been updated since the 1970s.
The NC Chamber advocates for policies that will foster certainty and predictability in our legal system, providing job creators the transparency and clarity they need to do business. Erratic court decisions, shifts in the courts, changes in policy, and the growing influence of personal injury attorneys in our state government all have an impact on our state’s competitiveness, as well as a fluctuating ranking. To restore confidence in the state’s civil justice system, the NC Chamber established the NC Chamber Legal Institute. As North Carolina’s organized voice for legal policy development and analysis, the NC Chamber Legal Institute is charged with developing legal strategies to protect North Carolina businesses at the legislature and in the courts.
North Carolina has honed its economic development process and it is an issue that brings our entire state together, as cited by CNBC in its story on our ranking. The launch of the public-private partnership Economic Development Partnership of North Carolina, coupled with the collaborative approach to results-based incentive packages, has made our state a true contender for growth investment. The NC Chamber’s role is to create a competitive environment for the team at EDPNC to sell. We take our role in that process very seriously.
The one area where our state has never drifted from the leaderboard is our right-to-work status. North Carolina always has one of the lowest rates of private-sector union membership in the nation and our RTW law declares that the right to live includes the right-to-work, which shall not be denied or abridged on account of membership or non-membership in a union. The NC Chamber will work tirelessly to protect that right.
Infrastructure
Sufficient physical infrastructure, including transportation, water and sewer, energy and broadband, is key to competitiveness, particularly as our state continues to experience rapid population growth.
The NC Chamber has a history of leading on infrastructure issues. In 2015, we launched our NC Can’t Afford to Wait initiative, which helped secure more than $1 billion in transportation revenue for our state, including millions in recurring revenue – the first true long-term transportation funding reforms passed in North Carolina since 1989. We continued that success in 2019 and 2020 with our NC Can’t Afford to Stop Coalition – the successor to that first initiative – which helped pass legislation that infused almost $300 million into DOT by way of the Highway Trust Fund and Build NC bonds.
In 2022, Chamber-backed policy made it into the state budget, allocating a percentage of the total sales tax collected for transfer from the state’s General Fund to the Highway Fund and the Highway Trust Fund, ultimately transferring more than $600 million annually. This sustainable revenue stream for key infrastructure investments is a huge step in the diversification of transportation funding. North Carolina is only second to Texas in its number of state-maintained roads.
What’s Next?
We are not finished. The mission and vision of the NC Chamber are laser-focused on our state’s success. Everything we do is about people. Jobs and a strong economy keep communities healthy. Other states are no doubt watching and your NC Chamber team is focused on staying ahead of the competition.
Thank you to our members, allied organizations, policymakers, and all of the many stakeholders with whom we have collaborated for your continued support and engagement as we work together to stay at the top.