For Members Only is published monthly by NCCBI when the General Assembly is not in session

House, Senate again adopt district maps
that GOP says will be overturned in court

NCCBI News Carr to lead NCCBI Economic Development Committee Watts Carr of Greensboro (right) will become chair of NCCBI’s Economic Development Committee next month, succeeding Lew Myers (left) of Freelon & Associates in Durham. Preceding Myers in the role was former Senator James Broyhill (center). Carr currently is chairman of the Piedmont Triad Partnership for Economic Development. He is former director of the N.C. Department of Commerce's Business and Industry Division and has served on several state boards and commissions, including the Economic Development Board of North Carolina and the Governor's Commission to Promote Government Efficiency and Savings on State Spending.

Big crowd expected at Economic Forecast Forum
About 500 business leaders are expected to gather in Cary next month to hear experts discuss financial trends that will impact the economy in the year ahead. The 2004 Economic Forecast Forum, a joint presentation of NCCBI and the N.C. Bankers Association, will feature presentations by several speakers, including Graham Denton, the Bank of America executive who is president of the bank’s North Carolina operations.

The forum, seen as one of the biggest power lunches in the state, will provide NCCBI members with insights into how the state and national economies will fare during 2004. Attendees will be presented with a wealth of data predicting trends in interest rates, credit availability and employment. The event will be held on Jan. 5 at the Embassy Suites hotel in Cary.

NCCBI and the Bankers Association teamed up last year to present the inaugural Economic Forecast Forum. That event, staged at the Capital City Club in downtown Raleigh, was a complete sell out, prompting this year’s event to be moved to a larger facility to accommodate demand. The cost of the event is $50, which includes the luncheon and all materials. Members who would like to purchase a table to guarantee your delegation sitting together can purchase a table of ten for $500. Seating is limited.

In addition to Denton, other speakers include State Treasurer Richard Moore and Dr. Harry M. Davis, the economics professor at Appalachian State University who is the economist for the NCBA. Gov. Mike Easley also has been invited to participate

NCBA and NCCBI wish to recognize companies who are sponsoring the event. Platinum sponsors include Bank of America, BB&T, Blue Cross and Blue Shield and RBC Centura. Gold sponsors include BellSouth, First Citizens Bank, Gateway Bank & Trust / North Carolina's Northeast Partnership, GE Mortgage Insurance Co., GlaxoSmithKline, Haynsworth Baldwin Johnson & Greaves LLC, Kilpatrick Stockton LLP, Management Assistance: Programs & Services (MAPS), Progress Energy, Sprint and U.S. Trust Co. N.A.

Additional information about the event and a registration form is available at the NCCBI web site, www.nccbi.org. The Bankers Association is handling registration. To register, call the NCBA at 919-781-7979.

Members asked to serve on policy committees
We rely on the policy committees to develop legislative positions that provide a framework for NCCBI’s work with the N.C. General Assembly. The committee structure provides our members with an opportunity to hear firsthand from state policymakers on a variety of issues and a real chance to make an impact on the laws and regulations that govern the state’s business community. We are in the process of updating our committee membership lists and adding new members. If you are interested in serving on a committee, contact Debbie Twiford, legislative assistant, at dtwiford@nccbi.org. Following are the NCCBI policy committees and a brief description of each:

Economic Development: Works to sustain a strong business climate through support of workforce development programs, the state ports, improved water and sewer service, business growth and recruitment incentives, the seven regional partnerships and travel and tourism.

Education: Supports continued high accountability standards for public schools and a strong system of community colleges and public and independent colleges and universities. NCCBI advocates strong teacher training programs and funding for information technology.

Environmental Concerns: Examines legislative and regulatory issues related to the environment with subcommittees looking specifically at air, water and solid waste issues.

Health Care: Works to control the rising cost of health care coverage for employers. Health care mandates are opposed as they drive-up costs of premiums and can limit business’ ability to provide coverage for their employees.

Legal Issues and Workplace Policies: Explores issues related to the courts and how state laws impact employment and business operations. Legal reform continues to be a major focus, and the committee continues to support changes to limit punitive and non-economic damages.

Taxation & Fiscal Policy: Researches tax issues and advocates changes in tax policy to keep North Carolina business-friendly and competitive with other states.

Transportation: Supports dedicated funding for all modes of transportation to meet current and anticipated needs. The committee also supports legislation requiring state and federal agencies to better coordinate their decision-making processes regarding transportation and economic development to prevent delays of much-needed projects.

Please welcome these new members
New members of NCCBI for September and October include: Gregory K. Griggs, AENC - Association Executives of North Carolina, Raleigh; Bill C. Scott Jr., Alamance Foods Inc., Burlington; Dr. Sammie Potts, Barber-Scotia College, Concord; Mark A. Jones, Brasfield & Gorrie LLC, Raleigh; Jim Tobin, Brogan & Partners Convergence Marketing, Cary; John C. Howard, Caldwell County Economic Development Commission, Lenoir; Nathan H. McLamb, Carmel Contractors Inc., Charlotte; Carol L. King, Carol L. King & Associates PA, Asheville; George W. Clark, Catawba Sox Inc., Conover; Larry T. Cloninger, Cloninger Ford Toyota, Salisbury; Will Avera, Coastal Carolina Auto & Truck, New Bern; Avery Thomas, Cobb, Ezekiel, Brown and Company P.A., Burlington; Jerry Norvell, Colonial Development Company, Morganton; Sandy Richardson, Craven County Convention & Visitors Center, New Bern; Reese A. Lasher, Crest Mountain Communities LLC, Asheville; Tom Fisher, Custom Brick Co. Inc., Raleigh; Fred W. Cripps, Distribution Construction Co., Greensboro; Patricia MacTaggert, EDS-North Carolina, Raleigh; Dave Boliek, Explornet, Raleigh; Vinton E. Fountain III, Fountain Financial Associates, Inc., Wilmington; Grady Campbell, G. Campbell Construction Co., Mooresville; Gaston Campano, Glade Holdings Inc., Hendersonville; the Hon. Wayne Goodwin, Goodwin Law Office P.A., Hamlet; Stephen C. Hassenfelt, Granville Capital Inc., Greensboro; Dieter Bialek, Grasche USA Inc., Hickory; Dr. Duane H. Kirkman, Hickory City Schools, Hickory; Buddy Hilbish, Hilbish Motor Co., Kannapolis; Harry Hoover, Hoover Ink PR, Huntersville; the Hon. Julia C. Howard, Howard Realty & Insurance, Mocksville; Wendy Coulter, Hummingbird Creative Group, Raleigh; Gresham Orrison, Hunting Creek Associates, Morganton; John Branstrom, J. Branstrom & Associates Inc., Morganton; David DeVries, Kaplan DeVries Inc., Greensboro; Bonnie Hunter, Keffer Management Co., Charlotte; Steve Saucier, KidSenses Children's Interactive Museum, Rutherfordton; Don Price, Lafayette Ford Inc., Fayetteville; Jim Sari, Landmark Asset Services, Winston-Salem; William D. Inabnit, MEDI USA, Whitsett; John Minges, Minges & Associates, Greenville; Bo Massey, Mueller Distribution Contractors, Charlotte; Linda Hahn, NT Techno USA Corp, Oxford; Giff Daughtridge, Nucor Plate Mill, Winton; Timothy D. Oakley, AIA, Oakley Associates Architects, Rocky Mount; Dr. Bruce I. Howell, Office of Dr. Bruce I. Howell, Cary; Otto H. Woerner, Office of Otto Woerner, Morganton; Sparky Cullen, PCM Construction Services LLC, Cary; Tom Pearson, Pearson Land Corp., Charlotte; Mary Lawton, Polo Ralph Lauren, Greensboro; Graham Wilson, PR Street Inc., Cary; John Whitley, Regions Bank, Wilmington; Becky Handy, Tar Heel Paving Co. Inc., High Point; Stephen L. Robertson, The Robertson Group & Affiliated Companies, Mocksville; Dan Crawford, Visionair, Castle Hayne; Mark K. Miller, Weir Smith Jones Miller & Elliott, Morganton; Meg Ryan O'Donnell, Winning Strategies, Raleigh and Robert Leak Jr., Winston-Salem Business, Inc., Winston-Salem.

Names in the News
Womble Carlyle receives Thurgood Marshall award
The law firm of Womble Carlyle Sandridge & Rice PLLC has received the Distinguished Corporate Leadership Award from the Thurgood Marshall Scholarship Fund. More than 200 members of the firm, clients and guests traveled to New York on Nov. 3 to see the award presented to Keith Vaughan, chairman of the Firm Management Committee of the firm, which is headquartered in Winston-Salem. One of the Southeast’s largest full-service business law firms, Womble Carlyle has offices in Georgia, North and South Carolina, Virginia and Washington, D.C. The award is presented annually to a corporate entity professional whose record of commitment to public historically black colleges and universities, education and diversity has advanced the overall mission of developing a new generation of leaders. More than 20 Womble Carlyle attorneys have provided pro bono legal support to the fund during the past four years. Brent Clinkscale, a member of the firm, is the general counsel for the fund. The firm has assisted in presenting seminars for the Thurgood Marshall Schools and for the presidents of the 45 member institutes. Among those attending the black-tie event in New York were NCCBI board member Linwood Davis, former Gov. Jim Hunt, members of the firm, and NCCBI President Phil Kirk.

 DSM Pharmaceuticals Inc., an NCCBI member company that is the North American subsidiary of a Netherlands concern, was one of three foreign-owned North Carolina companies recognized for the N.C. International Community and Economic Development Award for their commitment to helping the state’s non-profit community. The N.C. Department of Commerce and the N.C. Commission on Volunteerism and Community Service give the award. Businesses were selected based on the impact their company has made in their community through the success and recognition of community service programs, their executive leadership and commitment to community service, their corporate mission statement and values, and the extent of employee participation and service involvement in their local community. DSM Pharmaceuticals, which has 1,200 employees at its Greenville facility, is a supplier to the pharmaceutical industry. DSM supports the local community with education and health and wellness initiatives. They work with the Pitt County School System, Chamber of Commerce, United Way, Eastern Carolina Children’s Hospital of Greenville, March of Dimes, American Cancer Society Relay for Life, Cystic Fibrosis Foundation, The Dream Factory of North Carolina, Greenville Museum of Art and the Mediation Center of Eastern North Carolina.

Economic Development

TransPark said to be on Boeing’s short list
The Global Transpark near Kinston is said to be one of three finalists as the location for aircraft giant Boeing’s new plant to build the upcoming 7E7 Dreamliner. Cameron McRae, a Kinston businessman and member of the state board of transportation, said the Transpark is among the top three candidates for the project, which could bring as many as 1,200 jobs to the state. State officials said other contenders for the new plant likely include Charleston; Savannah, Ga.; and Tulsa, Okla. Gov. Mike Easley said he anticipated calling a special session of the General Assembly next month to deal with economic development incentives. Administration officials said they could shepherd through a Boeing package then and still make Boeing's deadline to name the location by the end of the year. In a recent letter to Easley, Senate Minority Leader Patrick Ballantine suggested that the state give the TransPark to Boeing for $1. Washington state, where Boeing now is headquartered, has offered $3.2 billion in tax breaks to keep the company there. Boeing officials visited the TransPark in September.

J-DIG attracts three more new industries to the state
North Carolina’s new economic development incentive program has attracted its fourth, fifth and sixth new industries to the state, deals Gov. Mike Easley say represent 1,780 new jobs and $75 million in new investment. In a flurry of recent announcements, state officials announced that the Job Development Investment Grant Program (JDIG) had proved instrumental in GE Nuclear Energy’s decision to move its headquarters and 200 jobs from California to Wilmington, where the GE Power Systems subsidiary already has nearly 1,600 workers; in the decision by Goodrich Corp. to move some of its New Jersey and Ohio operations to Monroe, creating 300 jobs; and the decision by A.F.G. Wipes, an Israeli company, to open a wet wipes manufacturing facility in Rockingham County.

Under JDIG, the three companies will receive cash incentives over the next several years worth up to $10 million. The money will come in the form of rebates on state personal income taxes paid by workers in the new jobs Goodrich and GE Nuclear will create.

Another JDIG grant was in the works to solidify the tentative decision by R.J. Reynolds Tobacco to bring between 800 and 1,000 jobs to Winston-Salem following its merger with Brown and Williamson, the U.S. cigarette business of British American Tobacco PLC. RJR also is seeking an extension and revision of the cigarette export tax credit as well as tax credits to remediate and donate property in downtown Winston-Salem to the city’s revitalization efforts. A special session of the General Assembly was being considered to approve those tax law changes.

RJ Reynolds said the new jobs would pay average salaries of $56,000, or over $100,000 with fringe benefits included.

GE Nuclear, which provides a wide array of technology-based products and services to the owners of nuclear power plants, will move its headquarters from San Jose to the Wilmington area in 2003 and will continue the transition through 2005. Estimated total compensation for the new 200 new jobs will average $100,000 a year.

Goodrich will invest nearly $11 million expanding its current 60,000-square-foot facility in Monroe, where an expected 300 additional workers will earn average salaries of $15-$18 an hour. The new employees will staff a customer services facility there, close to the company's headquarters in Charlotte. If the company creates all the jobs promised, the state will provide a grant equal to 70 percent of the personal state withholding taxes those workers pay, a sum valued at $5.9 million over the life of the grant. For each year in which Goodrich meets its required job-creation targets, the state will provide a grant equal to 66 percent of the personal state withholding taxes derived from the creation of new jobs. If the company creates all of the jobs it promised, the grant would be worth $2.7 million.

A.F.G. Wipes Inc., a subsidiary of an Israeli company, will locate its first U.S. operation in Rockingham County, bringing 200 jobs and a $25 to $30 million manufacturing facility over the next four years. A.F.G. Wipes Inc., which will manufacture wet wipes, is the sixth recipient of the state’s new JDIG program. Under the J-DIG agreement, for each year in which the company meets the required performance targets, the state will provide a grant equal to 60 percent of the personal state withholding taxes derived from the creation of new jobs. If the company creates all of the jobs called for under the agreement and sustains them for 10 years, the agreement could yield maximum benefits to the company of as much as $1.6 million over the life of the grant.

The state Commerce Department estimates that over the life of the grant the project will

generate a cumulative gross state product value of more than $194 million and produce a cumulative net state fiscal impact of $750,000.

The Job Development Investment Grant initiative, proposed by Easley and the state Economic Development Board, awards up to 15 grants annually to strategically important new and expanding businesses and industrial projects. These grants are only awarded to projects whose benefits exceed their costs to the state and which would not locate in North Carolina without the grant. Cumulative annual grant amounts are capped at $10 million.

In other economic development announcements, state officials said:

 Elkay Southern Corp., a division of Elkay Manufacturing Co., will add 68 new jobs to its existing facility in Lumberton, expanding its workforce to 450 people. The company manufactures stainless steel sinks.

 GOJO Industries has chosen Laurinburg to manufacture its instant hand sanitizer, creating 250 jobs and a $10 million investment. The company will occupy an existing facility donated by Abbott Laboratories. GOJO received $250,000 in One North Carolina money to be used for new equipment and building renovation.

 Penn Ventilation-Lau Industries said it invest between $1.5 million and $2 million expand its Columbus County facility and add 60 new jobs. Penn Ventilation is a part of the Air System Components group of Tomkins Industries. The Tabor City product lines are being transferred from the company's Junction City, Ky., facility, which is slated for closure. This transfer will further expand the facility's line of commercial and industrial air movement products used within the construction industry. The company will receive $57,000 in One N.C. Funds and a package from the local community.

 MRA Industries of Clinton Township, MI, is expanding its business to include a new 50,000 square foot facility in Cleveland County. This $4.5 million expansion will mean 15 to 20 new jobs this year and an additional 45 to 50 within the next three years. MRA Industries, a division of Anderson-Cook Inc., is a manufacturer of machined components for the automotive and powertrain industries, supplying to Original Equipment Manufacturers (OEM) and their suppliers. The new facility will be located on a seven-acre parcel in the Cleveland County Industrial Park in Kings Mountain. Construction will commence this month with building completion expected in April 2004.

Environmental Issues

DAQ plans hearings on particle pollution non-attainment areas
The state Division of Air Quality will hold public hearings soon in Charlotte, the Triad and in Hickory to receive comments on the designation of North Carolina areas deemed to be in non-attainment with the federal particle pollution standard. Non-attainment areas are regions that do not meet federal air quality standards for pollutants such as fine particles or ozone. Particle pollution consists of very small particles and liquid droplets in the air. Particles can be harmful to breathe and contribute to haze and other air quality problems. The U.S. Environmental Protection Agency (EPA) sets non-attainment boundaries based on recommendations from the states, and the designations can have important implications for growth and development.

At the upcoming meetings, the N.C. Division of Air Quality (DAQ) will receive input on recommendations on non-attainment areas for the annual fine particle standard. DAQ staff also will present information on air monitoring, motor vehicle use, population density, air quality modeling and other factors used in determining non-attainment areas. Gov. Mike Easley must submit the North Carolina recommendations to the EPA by Feb. 15, 2004, and the EPA plans to designate non-attainment areas by Dec. 31, 2004.
 
The DAQ will need to develop air quality plans for controlling particle pollution in non-attainment areas. These plans would include specific proposals for curbing particle-forming emissions, such as measures to reduce emissions from cars, trucks, and industries and power plants. The designations also give the EPA and the states the authority to review proposed highway projects and long-range transportation plans.

North Carolina's non-attainment recommendations are likely to include the Charlotte, Triad and Hickory metro areas. Monitoring in these areas has found that fine particle levels exceed the federal 24-hour standard. The DAQ has scheduled meetings in each of these metro areas at the following dates and locations:

Charlotte: Tuesday, Dec. 2, 3-5 p.m., Charlotte-Mecklenburg Government Center, Room 267, 600 East Fourth St.
Hickory: Wednesday, Dec., 3-5 p.m., Hickory City Hall city council chambers, Julian G. Whitener Municipal Building, 76 North Center St.
Winston-Salem: Thursday, Dec. 4, 3-5 p.m., Forsyth County Main Public Library Auditorium, 660 West Fifth St.
 
North Carolina has taken substantial steps to control fine particles, ozone and other air quality problems in recent years. In 2002, the legislature passed the Clean Smokestacks Act, which requires coal-fired power plants to reduce their nitrogen oxide (NOx) and sulfur dioxide (SO2) emissions by about three-fourths over the next 5-10 years. NOx and SO2 contribute to the formation of fine particles in the atmosphere. Between 1999 and 2001, the legislature passed bills that enhance and expand the auto emissions testing program from nine to 48 counties by 2006.

In October, the DAQ began forecasting daily particle levels in the Charlotte metro area, in addition to ozone forecasts it does between May and September for metro areas across much of the state. In the Triad, the Forsyth County Environmental Affairs Department has issued year-round particle forecasts for several years. Also, the state’s 2004 Mobile Source Emissions Reduction Grants program will focus on projects that reduce school-bus emissions, which can contribute to particle pollution.

"The steps we've already taken should bring us close to complying with the fine particle standard across North Carolina," DAQ Director Keith Overcash said. "The designation of non-attainment areas will help us focus attention on areas with the most serious particle pollution problems."

The Division of Air Quality will accept written comments on the non-attainment designations until the end of December. For more information about particle pollution and other air issues, visit the DAQ web site at www.ncair.org  or the EPA web site at www.epa.gov .

Congress approves more money for port deepening project
The 2004 Energy and Water Development Appropriations Act, passed by the U.S. House of Representatives late last month, includes good news for the Wilmington Harbor Deepening project. The appropriations bill includes $17.5 million for the project’s main feature – a deeper channel to allow larger ships to bring more cargo into the Port of Wilmington, generating more jobs in North Carolina –and it remains on track for completion in March 2004. Dredging work overseen by the U.S. Army Corps of Engineers will increase the depth of the Cape Fear River navigation channel to the port from 38 feet to 42 feet, allowing a container ship to carry 10,000 tons more cargo into or out of the port. Financial constraints affecting its entire budget caused the U.S. Army Corps of Engineers to cut back work on its programs nationwide this year. With strong support from the North Carolina Congressional delegation, though, the Wilmington Harbor project is one of a very few which will receive more money for the coming fiscal year than was proposed in the president’s budget.  The bill – including $6.9 million for the port’s normal maintenance and operations dredging – now moves to the Senate for final approval before being sent to the President for signature. Gov. Mike Easley has consistently expressed his support of the project, and his budget for the current year reflects it. Even with state budget shortfalls, the state’s 2004 budget continues funding at the required level, nearly $7 million this year. Federal navigation projects are cost shared 3:1; for the Wilmington Harbor Project, the state is responsible for 25 percent of the project costs.

N.C. ski industry’s economic impact exceeds $120 million
In just four months, the ski industry helped contribute more than $120 million to Western North Carolina’s economy during the 2002-03 season, according to a study conducted for the N.C. Ski Areas Association by Appalachian State University economics professors Steven W. Millsaps and Peter A. Groothuis. Millsaps and Groothuis surveyed a random sample of skiers at five of the state’s seven resorts to learn about their demographic and socioeconomic characteristics, criteria for selecting ski areas, skiing ability, intent to return for future visits and their spending patterns while visiting a resort area.



State Government News

Voluntary contributions may cut your 2004 UI tax rates
Many North Carolina employers have been notified that they may be eligible to reduce their 2004 Unemployment Insurance tax rates by making a voluntary tax contribution by Dec. 17. The ESC has identified employers who might benefit from making a voluntary contribution this year. ESC staff members in local and branch offices can assist employers in determining how a contribution could affect their 2004 tax rate. Employers may also use the Voluntary Contribution Calculator on ESC’s web site (www.ncesc.com). “A contribution of as little as one dollar may reduce an employer’s 2004 tax rate,” said ESC Chairman Harry E. Payne Jr. “Voluntary contributions will be applied to the balance of an employer’s UI tax account, and could result in significant tax savings next year — money employers can then use to build their business and create new jobs.” For additional information about making a voluntary contribution, employers may contact the ESC’s Status Unit at (919) 733-7156, or may contact a Tax Auditor at their nearest ESC office.


State’s jobless rate falls slightly, though manufacturing declines
North Carolina’s seasonally adjusted unemployment rate in October was 6.1 percent, down from 6.4 percent n September, according to the ESC. The state’s unemployment rate is at its lowest level since May of this year, and represents a significant improvement from one year ago, when the unemployment rate was 6.6 percent. Since October 2002, total employment in the state has increased by more than 43,000, and total unemployment has dropped by nearly 21,000, indicating that the employment situation in North Carolina is beginning to improve. In addition, the state’s total labor force has increased by more than 22,000 individuals over the year, which suggests that workers are feeling more optimistic about their job prospects in an improving economy. However, employment in manufacturing continued to drop in October, losing 3,300 jobs over the month. Several service industries also showed a decrease in employment in October. The U.S. unemployment rate decreased to 6.0 percent in October, down from 6.1 percent in September.

Easley commends Washington for action on Chinese imports
Gov. Mike Easley commended the Bush Administration for moving to control the surge in Chinese imports that threaten North Carolina textile mills and jobs.  “I have been calling on Washington to initiate these special safeguards ever since I learned that China was poised to seize up to 75 percent of the remaining textile and apparel market in the United States – and so has North Carolina’s Congressional delegation,” said Easley.

“This is only the first step,” said Easley, “Now the Bush Administration must sit down with China to negotiate strong, fair limits on these imports that will provide our industry time to retool and adjust to global trade. President Bush must also recognize that initiating these safeguards represents just one small, but important step in what must be a far more comprehensive approach to sustaining our domestic textile and apparel industries,” said Easley.

As part of this comprehensive approach, Gov. Easley renewed his call for the Bush Administration to:

 Strongly address the unfair competitive advantage that China and other trading partners are achieving through the ongoing manipulation of their currency; in particular, must pursue bilateral negotiations with currency manipulators to stop this practice, and  take direct action against recalcitrant currency manipulators through the World Trade Organization;

 Direct the International Trade Commission to be far more aggressive in enforcing the provisions of existing trade agreements that support domestic manufacturers; in particular, they must do a better job of combating the unfair “dumping” of textile goods and other goods on U.S. markets, and  deal with the failure of trading partners to open their markets to U.S exports of textiles, apparel and other products, as committed in prior agreements;

 Provide the U.S. Customs Service with the additional staff and resources necessary to crack down on illegal smuggling and other customs fraud, which leads to billions of dollars in lost sales for our textile industry every year; and

 Direct the U.S. Trade Representative to cease negotiating further quota adjustments or tariff reductions in any future bi-lateral or multi-lateral trade agreements until it is clear that trading partners are not achieving an unfair competitive advantage through currency manipulation or other means.

Since 2001, North Carolina has lost more than 50,000 jobs in traditional textile, apparel and furniture industries. Many of these job losses are directly attributable to national trade policy.


Workplace fatalities in N.C. reach record low
The number of workers killed in on-the-job accidents in 2002 dropped to its lowest level since detailed recordkeeping began in 1992, Labor Commissioner Cherie Berry said. The 169 workers who died in workplace accidents in 2002 compares to 203 in 2001, 234 in 2000, a 28 percent reduction in two years.

"We believe the last two years show the single biggest improvement in the history of workplace safety in the state," said N.C. Labor Commissioner Cherie Berry. "We've worked extremely hard to bring a new level of safety for the people of this state, and we're seeing the results."

Fatalities in the state's robust construction industry dropped to 44 from 51 the year before. In transportation-related accidents, fatalities dropped to 76 from a high of 93 the year before. In manufacturing, fatalities stayed at 24, the same number as the year before. Of the total number of fatalities, 159 were men and 10 were women. There were 112 fatalities involving non-Hispanic whites, 28 non-Hispanic blacks and 25 Hispanics. Berry said some of the drop in fatalities can be attributed to special emphasis programs that target specific problem areas throughout the state. Berry also credited employers and employee groups for implementing safety programs that have reduced other work hazards. "We've emphasized from day one a willingness to work with employers to protect their workers," she said.

Wake County's fatalities rose last year, bucking the trend seen elsewhere, and led all counties with 19 fatalities, compared to 6 the year before. Mecklenburg County, which usually leads the state in workplace deaths, dropped to 15 from 18 the year before. Guilford County was third with 10 fatalities, compared to 11 the year before.


Government Efficiency

Audit says state could save money by combining aircraft operations
Consolidating the passenger and maintenance operations of North Carolina’s 68-plane air fleet could save the state substantial amounts of money each year, while possibly improving the upkeep on the aging aircraft, according to a performance audit released by State Auditor Ralph Campbell.

The audit found that the departments of Transportation and Commerce, as well as Medical Air Inc., which is operated as part of the UNC Area Health Education Centers, provide passenger service to state and university employees on official business. Auditors found that the average elapsed time for passenger services, including waiting time between flight segments, was 81.8 hours per month per aircraft. Records for the last two fiscal years indicated that the three Commerce aircraft used to carry passengers were committed for an average of 52.8 hours each month. Flight records for the same period for the three DOT aircraft showed an average of 37.6 hours usage each month. Medical Air flight records indicate that its six aircraft were used an average of 154.9 hours each month per aircraft.

The report recommends consolidating the passenger and maintenance services under a single agency, similar to Motor Fleet Management, which maintains and distributes automobiles used by employees on official business. A consolidated facility could be constructed on state-owned land at Raleigh-Durham International Airport, saving lease costs of $261,000 a year now paid by the state for hangars. The audit found that maintenance is a critical issue for the state’s air services, since the average age of planes operated by the state is 27.7 years. More than 70 percent of the state’s fleet is over 20 years old. The state owns 43 of the 68 aircraft it operates, with the other 25 owned either by the federal government or Medical Air.

How the state spends $71 million each day
On average North Carolina government agencies spend $71,000,000 of federal and state money every day, or nearly $3 million per hour, 24 hours a day, 365 days a year for a total of $26.3 billion. If you’ve ever wondered where all that money is spent, the recently published “Our State, Our Money, A Citizen’s Guide to the North Carolina Budget” has those answers and more. 

The North Carolina Progress Board published the guide.  NCCBI has a limited number of copies for members.  Additional copies can be obtained by contacting the board at 919-513-3900 or www.theprogressboard.org. The 32-page, easy-to-read guide is packed with numbers like these:

 Constructing a secondary road in the mountains and foothills costs $318,000 per mile.
 In 2001-02, teachers’ salaries in North Carolina ranked 21^st highest in the country.
 Over the next five years, North Carolina’s public school student enrollment will increase by nearly 90,000 bringing the total to more than 1.4 million.
 Education uses 58 percent of General Fund appropriations
 Just a little more than half of the state’s overall budget comes from general fund sources or $14.4 billion.  The General Fund is commonly referred to as the state’s budget.  The remainder of the money comes from the federal government, highway funds, and fees, tuition, interest income and receipts.

The document explains how the budget system works, major trends in the budget’s history, and the impact that federal programs have on the budget. Burley Mitchell Jr., former chief justice of the N.C. Supreme Court and vice chairman of the Progress Board, said, “Simply put, it demystifies the budget process.” The General Assembly created the board to track the state’s progress in eight key areas including health, education, workforce development, the economy, environment, infrastructure, community safety, active citizenship and accountable government.

Investment Advice

Given the scandal on Wall Street, is it smart to unload mutual funds?

By State Treasurer Richard Moore

Having endured a difficult period of negative returns in their mutual funds, investors are now facing a widening scandal in the mutual fund industry. As the headlines grow more numerous, retirees and small investors are looking for advice.

As State Treasurer, I administer the State of North Carolina 401(K) Plan that holds $2.3 billion in retirement savings for 181,000 public servants, including schoolteachers, police officers and state and local government workers. It is the largest public plan of its kind in the country. We apply a strategy of caution and care in evaluating our existing 401(K) mutual fund options.

I recommend investors proceed with the same caution and care when making decisions about their current mutual funds. It is generally a poor idea to sell a mutual fund as the bad headlines flash across the television or the top of the business page. Before you act, you need to gather the facts from your advisor or the mutual fund itself. General questions you should be asking include: How much will it cost me to sell a particular fund? What are the costs of investing in a new fund? Will I get a tax bill, if I sell?

You also need to find out if the allegations impact your specific fund. Many of these mutual fund organizations are very large, and the improper activity may have nothing directly to do with your investment. If management is taking serious corrective action - firing wrongdoers, making restitution, and adopting our protection principles - the fund may be worth keeping. You must decide if you think the mutual fund is being open and frank about their problems. If you can't get clear answers, it may be a sign that it is time to sell.

The U.S. Congress and the Securities and Exchange Commission will undoubtedly make constructive changes in the way mutual funds are governed and managed.  However, these changes will emerge slowly and they will come from regulators who have had a very poor record in recent years of protecting investors. As a result I have issued a set of Mutual Fund Protection Principles, which are available on our website at www.nctreasurer.com. These ten principles describe standards for good corporate governance and disclosure of important information about mutual funds. We will use these principles to evaluate which funds will be employed in our 401(K) program and we will build a coalition of other defined contributed and deferred compensation plans in order to send a powerful marketplace signal to the mutual fund industry.

In administering our plan I have learned that many investors do not know how much they are being charged by their funds. It is no small wonder, since the funds do not tell you. One of my principles requires mutual funds to send investors an annual statement clearly showing the fees.

The scandals have uncovered the fact that portfolio managers and other professionals have been actively trading in certain mutual funds in order to make more money for themselves. To put an end to this practice the principles require portfolio managers to own a fund for at least 12 months. Investor interests are supposed to be represented by a board of directors. To ensure that these interests are served, one of my principles requires two-thirds of the board and the chairman be independent of the mutual fund company.

The principles are common sense practices that investors - large and small - must insist upon. I believe the mutual fund industry will listen if the market's voice is loud and strong. Whether you are a large investor, like our 401(K) plan, or an individual investor, I believe you need to act like an owner. Ask the hard questions and demand sound business practices.


Talking Points
An occasional series of brief reports giving you fast facts on
critical issues, provided by the National Association of Manufacturers

ECONOMIC GROWTH AND THE ENVIRONMENT: The old debate whether growth was the enemy of the environment or the environment was the enemy of growth is over. The last three decades have proven we can have both. By all the standards in the law, our air and water have become much cleaner at the same time the economy has about doubled, and the number of Americans with jobs has increased more than two-thirds. The key to this combined success has been innovations in technology and processes.

 There is a settled consensus in America that environmental protection and improvement are important values.

 As a society, we’ve been willing to back that consensus up with dollars, spending over $2 trillion on environmental protection and improvement since the first Earth Day in 1970.

 American industry alone has spent more than half of that $2 trillion in direct expenditures on the environment.

 Two trillion dollars is a lot of money – more than many countries have totaled in GDP over the same three decades. In America, such huge amounts can only come from economic growth.

 Not only can we have both, we have to have both – because without the growth of the past 30 years, we would have been unable to fund the environmental improvements of the past 30 years.

 Without that growth we’d also have more people poor, more children poor, more children sick.

 Costly environmental regulations inhibit economic growth. Manufacturers’ have concerns about regulations that impose excessive and unnecessary costs. These are not concerns with environmental protections; they are concerns with unnecessary costs.

 Manufacturers are pro-growth because economic growth is good for the country, good for the economy, good for our companies, good for our workers and their families – and because economic growth is good for the environment.

 Government can help by using sound science to identify real environmental problems, and by working with industry to solve those problems, establish realistic timelines and foster a business climate that encourages R&D and investment.

ECONOMIC CONDITION OF THE AMERICAN WORKER: Much reporting and political rhetoric has focused on the state of the American worker and what has been termed by some "the anxious class." Anxiety does exist, but it is overstated. The blame for it has been misplaced, often for political reasons, and assigned to some imagined "corporate greed." In reality, it’s the excesses of government – and the high taxes needed to pay for them – that holds families back. Even so, the facts paint a much brighter picture of the American worker in terms of employment, compensation and empowerment.

 Despite the recent recession the U.S. unemployment rate of 6.0 percent is still 25 percent lower than the rate in Europe. Among those with a college degree, that rate is just 3 percent.

 Between 1991-2000, the U.S. economy created 23.5 million new jobs. Of these, 14.7 million (roughly 2/3rds) were high earnings occupations such as professional specialty, technicians, precision production and sales.

 Total compensation (salary plus benefits) is at an all-time high. In 2001, the average total compensation was $47,221 per year – $54,227 per year in manufacturing.

 Over 99 percent of NAM members provide health care benefits to their employees; 78 percent contribute to 401 (k) and pension plans; 54 percent have bonus plans and 35 percent have pay-for-performance incentives.

 Today’s workers are also becoming today’s owners. According to the most recent data, by the late 1990s, 15 percent of civilian employees in the U.S. were participating in employee stock ownership plans.

 The American worker is increasingly empowered. Fully 1/3 (33 percent) of NAM members offer flexible work schedules to their employees; 73 percent are teaching and encouraging decision-making by production workers on the line; and 53 percent of workers reported workplaces that used teams, committees & quality circles to improve productivity, quality and safety.

 Unfortunately, the burden of higher taxes on the average worker has created a very real sensation of "working more for less" in spite of their relative prosperity. Since 1949, the FICA tax rate alone has increased 520 percent.


How the House voted on redistricting,
final tally on concurring with Senate amendments

         Total Votes: 116   Ayes: 72   Noes: 44   Not: 2   Exc. Absent: 2   Exc. Vote: 0