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Senate | April 9, 2013 | Committee Room | Senate Finance

Full MP3 Audio File

And welcome, we'll begin today with the introduction of our Sargent of Arm's staff Anderson Meadow, Earnest Sheryl, Justin Owens, And Steven Wilson. We have the four corners covered. Ready for prayer. Our pages today are Samatha Sparks, my niece, from South Port, Morgan Bass from Farmville, Morgan welcome. Sophia Stoddard from Rollsville. ?? barefoot. And Ruth Smith from Wilmington. Senator Goolsby's page. So welcome to you all, I hope you're enjoying your time in the senate today. Ladies and gentlemen we're going to talk about income tax reduction and reform. This is simply informational meeting today. And we will, after senator Rucho presents we will open the floor, of course with questioning and comments from the committee and then from the members of the public. If you'd so like. This is just part of a, our goal to create a comprehensive new and fair tax program in North Carolina. The bottom line being to enhance the economy and to create jobs. It's not an easy task, but we're going to go through this step by step. And at the end of the day, not today, but when we get things together, we will wrap everything into one package and then present in that way. So with that, I'll recognize my co-chair, Senator Rucho. And he will do today's presentation. [SPEAKER CHANGES] Thank you Mr. Chairman and members of the finance committee. Thank you. This is the next installment of comprehensive tax reform. And ladies and gentlemen of the finance committee and audience. This is a very very critical issue for the state of North Carolina. And as you can see, the amount of time that we're spending getting this information out so that we cannot only inform our colleagues in the senate and hopefully in the house, but also the public and business community because we would love to have their input as we move forward. Because as senator Rabin alluded to our goal is to create positive economic activity, job creation and long term prosperity. And the only way you can do that is by doing comprehensive tax reform and changing what is a outdated 1930 model of both economic model and also the tax policy. So to do so is very critical for this general assembly. We're going to be discussing today Senate Bill 677 corporate income tax reduction and reform. Senator Clidefeld presented some good information the other day on his bill. Senator Brock presented some good information on the simplification and transparency of the franchise tax and trying to again make it both simple and closing as many of the loophole tax preferences that have, have actually gone through this entire tax system and we're going to go ahead and continue today in that same vein. I think you have a summary sheet in front of you that you can follow. I'm going to briefly outline some overview and then Jonathan Tart and I think Mike Hannah will provide us some information regarding some more details on this and then I'm sure Senator Rabin will open it for discussion of the committee. But what the goal is starting in 2014, we would drop the corporate income tax rate to 6.5%. We in 2015 going to 6.25, 2016 and after 6. And hopefully to zero as revenues allow. What this does is it starts to dismantle one of the onerous taxes in our tax ?? because economists will tell you that income taxes, when you tax investment, you tax savings, you're basically having the detrimental effect on

economic growth and job creation and as was eluded earlier, we're talking about 61% of our revenue stream is based on income taxes both corporate and personal. What we are trying to find is a broad based tax policy that will eliminate the owners taxes, provide us an opportunity to create a pro-growth economy and then in doing so, be able to create the jobs that each of us promised as we were running for election. The second part, and again having talked with many, many people and many, many business people, talked about what was an issue dealing with the apportionment factors, and I do have a chart I'll provide you. We're on a limited budget in the general assembly so we could only get two color copies, but needless to say, we will be able to explain very clearly what we are trying to accomplish with this. We want to move towards a single sales factor apportionment over a three year period of time. Now, we aren't leading the charge on this Virginia, Georgia, and South Carolina have already moved in this direction and they did it for a number of good reasons. One of them being simplicity, but also what this does is encourages corporations to move their operations and their jobs to North Carolina by emphasizing less on taxes and put it on the issue of sales tax, excuse me their issue of their goods and/or services. This involves a multi-state business apportionment, both on income and on franchise tax. What we have as part of this bill is a three year transition, going from what today is a double weighted factor. Now, I'm going to pass one of them around, just for you to see it and then, I'll pass the other around. The point being is today, there are three factors sales, property, and payroll. Now, what the property and payroll are, are investments in North Carolina because people will put that money into North Carolina if they find it to be a reasonable investment and one that isn't taxes ??, and on the payroll that is what you create jobs. Well, in 2013, which is what we presently have today, we have a double weighted factor on sales, then we have one factor on property, and one factor on payroll. In that situation that double weighted factor generates, well would actually give 50% towards sales. We want to move it to 100% of sales, which is the ultimate goal of our effort. To do so, we will move in 2014 to a triple weighted and you can see the three factors here, out of five. If you read in your summary and also in the bill, you'll see the description of this, so you will see that as we move to the next year, 2015 a larger portion is on sales. Then, lastly in 2016 it will be all on sales. What this does is we emphasize the tax liability or reducing the tax liability on both property investment and on job creation. It puts North Carolina into a competitive environment of creating jobs and creating investment, as far as the well. I'm going to pass this around on the other side to. Now, as we move forward we're also talking about eliminating the following adjustments, deductions, and credits effective in 2014. I know last year we purposely handed out what was the best bi-annual tax expenditure report that was given to everybody. If new members of the finance committee don't have it we can get it. This was just released in 2007, that's our latest number. There are $9 Billion dollars worth of tax expenditures that go basically out the back door without any approval from general assembly, because of deductions of sales tax, exemptions of sales tax, a lot of what some folks might call loopholes. Well, this bill, Senator Brocks portion of the bill, and the future portions of the bill on personal income tax, and ultimately sales

[Speaker changes.] ....do it's very best to eliminate as many of these loopholes as we can possibly do so and what that does is it makes the overall process simpler, easier for both businesses and individuals to comply with and should allow for easier compliance and a...what would turn out to be a more stable revenue stream for the General Assembly budget. Some of the other high points as we're moving through...again we're talking about eliminating adjustments, deductions and credits effective in 2014. We're talking about conforming a lot of our laws, the ones that we don't eliminate to the federal law because it doesn't give us any advantage to have two different tax systems, all it does is it makes the job of complying and enforcing it a lot more complicated. And so the next part that we'd be looking at is moving from what is an economic loss to a net operating loss and you can see the details in there. Just to briefly say that we are working on a transition plan which is under discussion to allow for that transfer to occur but we're moving from NEL to NOL, which will allow for our businesses to determine their tax liability and provide certainty which is something that we've strived from day one and I think some of you who have been here before...last year when we did the combined returns provision or the law, which has worked out very well because of the fact that it did provide simplicity, certainty to the business community when they came in to the Department of Revenue, everybody knew what the rules were, which was an unusual occurrence because too many times because of all the grey and complexity, some of the...most of the folks really didn't know what they were and it almost seemed like it was made up as it went along. So what we're trying to do from that point and here in a bigger manner, in a more comprehensive manner...trying to eliminate that complexity and the confusion. We're also going on to eliminating some additional deductions and inclusions which again are some additional loopholes. We're talking about reporting...a reporting options for inter-company interest expense paid to affiliates and what that does is it reduces corporate tax planning and provides options to treat inter-company interest/income expenses similar to how they do royalties. We're trying to make everything seem like it fits together and there is some consistency in the process. I think, at this point Mister Chairman, if Mr. Tarte would be able to go through the bill in more detail, we can probably... [Speaker changes.] Certainly, would you like to start with Jonathan or Cindy? [Speaker changes.] Well, Senator Rucho did a good job of describing any of the provisions in the bill. I could walk through the fiscal note as a guide to give a little bit more detail. If you turn...I believe it's the next to the last page in your packet, you should see a table of fiscal impact. First of all, these changes are effective starting with the 2014 tax year and, keep in mind, our fiscal year ends June 30th so, in the fiscal year 13-14, that results in a partial year impact that you see coming down that column and then the full year impact of these changes will kick in at 14-15 fiscal year. And they begin to grow a little bit in the out years and that is primarily the result of phasing in the rate reduction and the phasing in of the single sales factor apportionment. The reduction in the rate, you see there starts about 29 million dollar impact in the first partial year growing to about 169 million in 17-18 when we're at the 6% rate. The apportionment again goes from one-half weighted??????? sales to about 60% weighted????? sales in 2014 to about 70% weighted???????? sales in 2017 before the property payroll ???????? are completely eliminated, starting with the 2016 tax year. We do show the breakout between the income tax ??????? and the franchise....

Impact us as taxpayers do a portion of their franchise tax base as well if they’re multi-state. The next item is this bill does conform with the federal treatment of losses. Currently tax payers have to do separate calculations for the federal NOL and North Carolina NEL. This would eliminate that. Next on the list, corporations currently are entitled to a deduction for their charitable contributions. Generally speaking that is up to 5% of their income. This bill would eliminate that deduction. Also, under current law, corporations that receive a deduction for dividends from subsidiaries have to allocate a portion of their expenses to that non-taxed income. However there’s a preference in the law for bank holding companies and for electric power holding companies that limits their liability under this provision. This bill would take away that tax preference for those entities. There is also under current law a credit equal to 25% of the appraised value of property donated for conservation purposes. This bill would eliminate that credit, with some savings there. And then finally the last item on the fiscal table is to eliminate a number of miscellaneous tax credits, deductions and exclusions from income that are in excess of what’s allowed for federal tax purposes. So this is another effort at simplification there. So the bottom line on the state impact is a revenue loss of about 32 million in the fiscal year 13-14, about 111 million 14-15, 235 15-16, 331 for 16-17 and in the fifth and the last year we have showing about 345 million. There is some local impact with the bill. Under current law 7.25% of corporate income tax collections are accredited to the public school building capital fund. So to the extent these changes reduce corporate income tax collections, there would be some impact on that local fund. If you turn to the next page of the fiscal memo, if you’re interested in more of the detail, there at the bottom of that page, the top just talks about the rate change and the apportionment that we’ve covered. At the bottom you can identify some of those miscellaneous tax credits that are being eliminated. And on the last page, well page 4 there, that fiscal note. In the middle of the page, the bulleted items. That identifies a number of deductions that are in excess of what’s allowed for federal tax purposes. That would also be eliminated. And finally, the bill does repeal some obsolete provisions. If you get to the bottom of that page there, payments associated with some disaster relief reserve funds are also eliminated in the bill. [SPEAKER CHANGES] Senator Rucho, would you like to? [SPEAKER CHANGES] Yes sir. Thank you Mr. Chairman. Thank you Mr. ?? for helping explain what this bill is trying to accomplish. As was discussed when Senator Brock presented his information, you have to take into consideration the fact that again, this is one portion of a comprehensive plan and the reason why we broke it up is because of the complexity of each of these pieces. We want members of the finance committee and the public to understand this portion along with the part that Senator Brock presented the other day, and don’t get confused about the fact that you see negatives on state impact and the local impact because once the package is put together, you will see that the liability for the locals will be approximately revenue-neutral. And you will also see the state liability not in the negative range, where there will be either revenue-neutral or some savings in that sense. So I want you to understand you need to take this on as one portion of about four pieces of comprehensive tax reform. Mr. Chairman, any questions? [SPEAKER CHANGES] Thank you sir. Questions from the committee? Senator Tucker. [SPEAKER CHANGES] Thank you Mr. Chair.

[SPEAKER CHANGES] Rucho, I know you’re about being revenue neutral, I know you’re about economic growth because of this tax reform. All of those things have been your mantra ever since you embarked on this, what I call difficult task to do. Things like people who manage assets, their expenses to manage those assets are going to be eliminated from the deduction. Do you think that those fees will be passed on to the individuals who own those investments? [SPEAKER CHANGES] Senator, Tucker, what we’re trying to do with this is, if you put together the parts and say for example, corporate income tax is being decreased, the single sales factor is another issue that what we’re finding the way of saving the cost in there. So I think when you add it all together, we hope to approximate revenue neutral. And to be honest with you, the only groups who may impact differently would be ones that have received the tax preferences that we talked about in this expenditure book. And So when you look at it on a comprehensive basis, I would suspect, that, at least for these portions, let’s not talk about the sales tax part because that’s gonna have to be presented at another time where we’re going to find some of this revenue stream that we’re going to make up with. I would suspect that there wouldn’t be any significant impact there. [SPEAKER CHANGES] Follow up, Mr. Chiar. [SPEAKER CHANGES] Yes Sir. [SPEAKER CHANGES] Two More questions: explain to me what you’re doing about corporate charitable contributions, that certainly impacts the community, and then if I understood you correctly, you made the statement about 7.5% of corporate tax that goes to counties for schools, how is that gonna be replaced? Because you elimate that, and we’re certainly going to hear from back home. [SPEAKER CHANGES] Well, I’m going to let Mr. Charter explain that part of it, if I can. But I will talk to you about the corporate tax charitable contribution. What we are trying to do with the overall package, Senator Tucker, is to try to treat everybody the same. And what that means is, if corporations choose to support a charity of their choice, they can do so, but it shouldn’t include everybody else paying for that choice to be able to move that charitable deduction. Right now, if I give a charitable deduction, as far as my business is concerned, you’re helping to pay for my charitable choice. And I don’t believe that’s fair because if you run through the entire package, what we are trying to do is make sure that everybody is treated the same. And that if you decide to make a choice with your money, then you do it of your own volition because you believe that charitable organization merits your decision. It shouldn’t be because of a tax policy. Economists will tell you: taxes should not impact business decisions, and that’s what we’re trying to avoid across the board. [SPEAKER CHANGES] Thank you, sir. [SPEAKER CHANGES] And he has one question, Mr. Chairman. [SPEAKER CHANGES] Under the current statute provides for 7 1/4% of corporate income tax collections to be transferred to that public school capital fund. However, those transfers have been suspended since 2008; haven’t been made. The appropriations decision I think is the best answer I can give you. [SPEAKER CHANGES] Apparently, Senator Tucker, it hasn’t been fulfilled. So in essence, there’s no loss. [SPEAKER CHANGES] Senator Hise. [SPEAKER CHANGES] My question is on the single bills factor. I guess the first is just trying to come up with a clarification and make sure I’ve got this right. We have three ratios we look at: payroll, property, and sales. And we already double-weight sales. So in one year we’re going to add sales in three times to the formula than the next year, then five times to the formula, then we’re kind of getting rid of everything else except sales. Is that an overall description? [SPEAKER CHANGES] Yes sir, it’s exactly correct because in reality we would welcome businesses from out of North Carolina to come here, and to invest their money, as far as not being taxed on property, not to be taxed on jobs, payroll. So therefore they would only be taxed on a sales component. And from what I understand from Senator Rabin, everyone will be treated the same in that basis. So we are encouraging investment…

...in North Carolina. And if we make any error, what we are trying to do is, be sure that North Carolina Companies, the ones that are here that are employing North Carolinians, can either expand or do well here. And that's why this is there. This is why we are moving to the sales factor. Mostly for simplicity and the like. And I will tell you, the simplicity makes the overall administration easier. Now, I would be thrilled to sit down and tell you exactly how to formulate that. But I would probably bore you to death. You and I can probably talk about it in more detail. To calculate the fact that as we go from 2013, 2014, the corporate liability will be reduced because of the sales factor. And ?? Yes Sir. With the category of details, I guess my questions are coming around. If a business in North Carolina makes an internet sale, for the company,where... is it the customers of North Carolina that count towards North Carolina's portion of the sale or is it... I know that we are kind of dancing around some Federal issues but I am trying to see how this plays in with internet sales. Senator [sp] Roocho would you like Jonathan to handle that or...?? Okay, go ahead. Right now, something that we had been struggling right along is internet sales. It's in the vicinity of $200,000,000.00 and plus dollars that we'd loose that opportunity. And what's bad about it is, a brick and mortar, mom and pop businesses that exist in North Carolina; that hire North Carolinians to be employed in their area to their economic disadvantage because of the fact that at least whatever the sales tax is, they are at an economic disadvantage. We are going to do everything we can under the law to go after this area of... of course this is out of the realm because it is in sales tax, but we are going to do our very best to go after their...And I think they're some changes happening now as we speak. A number of internet companies have negotiated with South Carolina, Virginia, Massachusetts and the like. I think some handwriting is on the wall. I think that what will happen sooner than later, that because of individual state negotiations, congress will start to lead from the rear and actually pass some legislation that will allow for states to collect internet sales in a manner. The other part that you are alluding to is the fact that, in North Carolina today, and I'm hoping everybody understands this. You buy something, you paying sales tax. You buy something from out-of-state, you still have the liability of a use tax. And you have the obligation to pay that tax. And so that is in place and I am sure that the Department of Revenue will aggressively enforce this as we move closer to a consumption based tax. And, therefore, the people that do buy out-of-state will have their obligation to pay that sales tax in the State of North Carolina, since that's where the end product was purchased. Thank you. Senator Heist would you like Jonathan to follow up? Let me, Let me say something ?? been looking for..When we are looking at the ratio of sales to the company, which, is it the North Carolina side or the out-of- State side that internet sales are falling into in that ledger? I guess you can work on it from a number of ways depending on the scenario you want to discuss. I will present one for you. If you have a North Carolina business that is making internet sales of goods. If the destination, the consumer is out-of-state, that will be an out-of-state sale. Right now, you have a property payroll of sales factor where the sales factor is double weighted. So for example if, the company had only 2%.., big company, they're spread all over the country, they had only 2% of their sales in North Carolina, but they had 50% of their property payroll here, then out of the current formula with twice the sales and using those other factors,?? you're going to get about 25% apportionment factor. So 25% of their income will be apportioned for taxation. If you go to a single sales factory, you would have 2% of it apportioned in that example for taxation. Very good. Senator Jenkins? Thank you Mr. Chairman. Senator [sp] Raycho, as you've outlined, I think I'm correcting what I am getting ready to say is that, they are four pieces to your tax modernization. The corporate income tax piece which we are looking at here. The business or franchise tax that Senator Barrack presented a couple weeks ago...

So we got the personal income tax piece and the sales tax last consumption piece to go. Is that correct? [SPEAKER CHANGES] Yes, sir. [SPEAKER CHANGES] Follow up. What is your schedule on, on getting the other two pieces so that we will be looking at the whole? [SPEAKER CHANGES] I think each person should really spend some time in understanding the components. We are working diligently trying to get information on how to be sure that the municipalities and the counties are kept as whole as all possible and that information is challenging to find, but we believe we are in the process of gathering that information and I would suspect either next or the week following, you should, probably the week following, you should be able to see the other components come into play. [SPEAKER CHANGES] Follow up. Because it would take, if I'm understanding it with these pieces, to stay revenue neutral, we've got to find some revenue, which would be the sales, the consumption piece of it. [SPEAKER CHANGES] I would say you're right. [SPEAKER CHANGES] So a couple of weeks would be the target for it, because I saw on WRL today, I know I'm not supposed to ?? for them but, that the governor of Louisiana has pulled back his bill that was similar to this bill. [SPEAKER CHANGES] Well, I think what I gathered from Indiana, and if you look at in studying these issues, you see some of the areas in some of the different states that have not succeeded, and if you look at Louisiana, well I'll take you back, if you look at Georgia when they first tried to do this, that was something that I believe we all discussed while you and Senator Clodfelter were putting that together, what they did is they put together a blue ribbon commission of past governors and business people and backed by just a past governor and they were looking at raising a billion dollars in new revenue and they didn't once get the support of the legislature engage in the process. We're doing it from the ground up. I believe Governor Jindal made the same mistake. The Governor came down from the top down and decided to tell the legislature how to implement this, his tax form. I believe his tax form has a lot of merit. We have a lot of similarities, but what we're trying to do is work it from the bottom up. Get the legislature fully engaged, if everybody agrees with the fact that the existing tax structure, the existing economy needs to be changed because it no longer meets the needs of a growing 21st century state, then this general assembly will help make that decision and drive it up to the top and that is the proper way to do it and that's why we're following that model. [SPEAKER CHANGES] Senator Walters? [SPEAKER CHANGES] Thank you mister chair. I'm looking at expenses, eliminating expenses for reforestation cultivating commercially grown trees. Is that for, part of the forest development program where the industry pays a severance tax at the first point of manufacturing? Can I get a clarification on that? [SPEAKER CHANGES] We can check to see if it is part of that program. We have checked with the department trying to figure out the origins of it. What is clear is that a person is able to deduct more then they would be able to deduct under federal law and I believe part of the premise of the bill was to try to conform as much as possible to federal law and have fewer adjustments. But we will continue to track down if that's part of the program. I'm not aware of it and I hadn't found that link, but it may be and I will continue to look. [SPEAKER CHANGES] Follow up. [SPEAKER CHANGES] Senator Walters, may I add to the fact that as Cindy alluded to, ?? alluded to, the goal is to try to treat everybody the same, and not give special preferences to certain groups. We were trying to make sure that an investment should stand on its own merit, and not have government winners and losers, because in essence that's the plan that we're trying to dismantle and that really is the plan that presently exists that is not allowing us to have the economic growth and the jobs that we would all be very happy to receive. [SPEAKER CHANGES] Senator Walters. [SPEAKER CHANGES] Thank you Senator Rucho, and I understand that but the industry at this point is paying a special severance tax for forest development and that is the point. If staff would just get information for me. [SPEAKER CHANGES] We'd love to do that. Thank you for your feedback. [SPEAKER CHANGES] Members of the committee. [SPEAKER CHANGES] Senator Allran. [SPEAKER CHANGES] Thank you mister chairman. First thing I need to do is apologize for coming in late, but I was, it was, there was a necessity for me to meet with some of my local people in regard to all of this. Senator Rucho

when we're talking ?? getting the buy-in from the grassroots ??, I am finding that one of the biggest issues from the grassroots are the cities. And if this has already been asked or brought up before I got here, I apologize. But I really do think that we need to be able to show our cities that they are not going to be clobbered by this comprehensive reform, because if they are, that is not going to be a way to bring in jobs. If the cities get creamed, they're not going to be able to attract jobs. [SPEAKER CHANGES] Senator Allran, we did discuss it earlier, but I'll repeat. What we have committed to is trying to keep their revenue level at approximately the same level as they did prior to the change. So that's what we're in the process of working on. We're trying to determine how those sales taxes are allocated and try to be sure that as some of the local privilege taxes are eliminated and the state privilege taxes are eliminated in our effort to consolidate and narrow the number of taxes on businesses, we will be working diligently to be sure that the municipalities will be treated fairly in that outcome. [SPEAKER CHANGES] Followup. [SPEAKER CHANGES] That's encouraging and very, very appreciated. Will we also be able to have it not just so that it's generic or broad in nature, but every single city, something in writing? [SPEAKER CHANGES] You will see that. [SPEAKER CHANGES] Thank you. [SPEAKER CHANGES] Members of the committee, any more questions from the committee? If not, we will take comments or questions, or comments from the public. And we have Mr. Cedric Johnson. Is he here? [SPEAKER CHANGES] Thank you. [SPEAKER CHANGES] Mr. Johnson, if you will turn on the mic. State your name, please. We will give you two minutes to carry on. [SPEAKER CHANGES] Am I on? [SPEAKER CHANGES] You have the floor. [SPEAKER CHANGES] Thank you, co-Chairmen Rabon and Rucho, and to members of the Senate Finance Committee for allowing me to speak before you on Senate Bill 677. My name is Cedric Johnson, and I serve as Public Policy Analyst with the Budget and Tax Center. And we would just like to highlight two particular issues in regards to the legislation that you're deliberating at the moment. First, cutting the corporate income tax is unlikely to promote or generate economic growth. Evidence indicates that a tax cuts approach is not a primary catalyst for promoting economic growth. Studies that examine state and local business taxes highlight that businesses care more about have a well, highly productive workforce; access to markets and suppliers; sound infrastructure; and a high quality of life for its employees, than they do about state taxes. Furthermore, cutting the corporate income tax rate is unlikely to have a substantial influence on a corporation's decision of where to expand or to locate a new business. State and local taxes paid by businesses represent less than 2% of their total business costs, on average, and corporate income taxes represents just a small fraction of these taxes, less than 10%. Thus, the benefits accrued to corporations from cutting the corporate income tax would be so small as not to justify a business expanding its operations or adding additional jobs. Secondly, evidence shows that a single sales factor system would fail to produce growth and would be a revenue loser for the state. Such a system would also pick winners and losers among businesses. Corporations with relatively large shares of their nationwide property and payroll in North Carolina, but a relatively small share of their nationwide sales in the state, would receive a tax cut, whereas corporations with relatively little property and payroll in the state, but a significant share of their nationwide sales in the state, would see a tax increase. These are two particular issues that the Budget and Tax Center urges the members of the Senate Finance Committee to be attentive to as you continue to deliberate and pursue comprehensive tax reform. Thank you. [SPEAKER CHANGES] Thank you. Yes, Senator Rucho. [SPEAKER CHANGES] We may have disagreements in economic policy. But the ?? in this General Assembly since 2011 have worked diligently in a master plan to retool the North Carolina economy, and that is with investments in education, reg reform, an independent energy policy. Of course, being able to move transportation needs, and goods and people, across, not across North Carolina, but across the globe. So it's being done in a very comprehensive manner, beyond tax reform. That is only one component to creating an economic environment

That will create the jobs that we all want. And now that we have our house, financial house, at least partially under control, except for maybe the Medicaid problem, we believe it's the right time to move forward on this and economists will tell you that taxes are a burden. When you have the highest taxes in the southeast bar-none, that puts us at an economic disadvantage in recruiting businesses here. And I'm not saying recruiting businesses by trying to to incentivize them to come and spend 90 or 100 million dollars here, but to find a place where they can actually grow, prosper, make a profit, and hire North Carolinians. So I'll say to you that this comprehensive plan has a bigger strategy because it encompasses a number of other factors rather than just tax rates. [SPEAKER CHANGES] Thank you Senator Rucho. If there are no further questions or comments. Do you have any further comments Senator Rucho? [SPEAKER CHANGES] No, sir. [SPEAKER CHANGES] No further questions or comments. Please wish Senator Brock a happy birthday when you see him. He came late and left early. And other than that, this meeting is adjourned.