A State-by-State Round Up of Recent Political and Legislative Changes Affecting Business Expansion Plans
The November 2011 elections brought some state leadership and legislative changes that will affect companies' business and expansion plans.
Jason Hickey, President, Hickey & Associates, LLC (Winter 2012)
Over the last few years, there has been a lot of political transition, debate, and public disillusionment. In kind, our leaders have responded with a new set of legislative and regulatory proposals that will undoubtedly affect site location projects far into the future.
Following is an overview of the most recent elections, the leadership shaping key decisions, and the policy impact expected:
Kentucky - Incumbent Steve Beshear (D) won his reelection bid for governor of Kentucky taking 55 percent of the vote. Beshear is expected to continue with his jobs plan, including newly modified economic development programs.
With the current fiscal situation, the Commonwealth must cut spending to balance a budget that has relied heavily on federal funds the past couple of years.
Louisiana - Bobby Jindal (R) was elected governor for another four-year term, winning 66 percent of the vote. The GOP also took majority control of both chambers, taking control of the state Senate and gaining seats in the state House.
A ballot issue to prohibit levying new taxes or fees upon the sale or transfer of immovable property was passed by Louisiana voters during the November elections.
Mississippi - With Governor Barbour (R) serving his final term in office, Lieutenant Governor Phil Bryant (R) won an easy gubernatorial race to become governor of Mississippi. Bryant's economic development efforts look to support a regional "Jobs Task Force," seek partnerships between businesses and schools, as well as support missile defense interest in the state. Governor Bryant's agenda includes "keeping taxes low, strengthening education and work force training, and removing the unnecessary regulations that burden our existing businesses and discourage new industries from opening their doors here."
Interestingly, Mississippi Republicans took majority control of the state's House of Representatives for the first time since Reconstruction.
New Jersey - A redrawn map of legislative districts made a Republican takeover of either the state Senate or Assembly a challenge as the new map favored incumbents. The election of all 120 legislative seats ended with no change in party ratio in the Senate, while one Democratic seat was picked up in the Assembly.
On the ballot, voters approved a plan to allow betting on sports and athletic events, despite a current federal law that has only granted Delaware and Nevada permits to bet on sports and athletic events. Federal law would have to change for New Jersey's law to take effect.
Virginia - The Virginia Senate will have a 20-20 split between Democrats and Republicans, with Lieutenant Governor Bill Bolling (R) casting tie-breaking votes that will allow the GOP to organize as the majority party.
Governor Bob McDonnell's agenda includes increasing transportation funds to help spur job creation, shrinking the public employee pension fund, and reforming education. One proposal of the McDonnell administration is to bring back legislation cutting the business and professions occupational license tax and the tax industries pay on machinery and tools.
The Governor has also proposed creating an Interstate 85 Economic Development Zone that would include U.S. 460. Companies within the zone engaged in maritime commerce could operate income-tax-free for their first two years in operation.
Other Legislative Updates
Alabama - Both House Democrats and Republicans have outlined the year's agenda with the main focus for both being job creation. A key Republican priority, supported by Governor Robert Bentley, includes a proposed constitutional amendment that would allow a business creating new jobs through a new or expanded plant to keep a portion of its workers' state income taxes to help pay for the cost of construction.
California - Governor Jerry Brown (D) signed two recent bills:
SB617: Requires state agencies to evaluate new regulations if they have an estimated $50 million economic impact or more on particular businesses.
AB29: Establishes the Governor's Office of Business and Economic Development, making permanent the office originally established by former Governor Arnold Schwarzenegger.
Colorado - Governor John Hickenlooper (D) has established a new approach to economic development, dubbed the Colorado Blueprint, which is based on gathering information on what various regions of the state consider important in improving the economy. With a budget deficit looming, local economic officials are worried the state's Enterprise Zone program may be a target of budget cuts as legislative leaders look for additional revenue.
Connecticut - Governor Dannel Malloy (D) recently signed a bipartisan jobs package that included: Creation of the Small Business Express Package providing $180 million in small business assistance; Shortening of permitting timeframes and eliminating some state regulation for businesses; $25 million available to start-up companies for loans, investments and matching grants; and Work force development fund increases.
Delaware - Tim McLaughlin has been hired as director of Business Development, and Bob Merritt as Capital Resources director, at the Delaware Economic Development Office.
Florida - HB 507 is being proposed to remove the job creation or retention requirements for state manufacturers to be eligible for a tax credit, as equipment retooling requires large capital investment.
After a recently signed bill, Governor Rick Scott (R) will now have authority to approve incentive packages up to $2 million without the approval of the legislative budget committee.
Illinois - The state House and Senate have passed a $330 million tax-relief package, waiting for Governor Pat Quinn's (D) signature. Much of the package is directly aimed at keeping Sears Holding Corp. and the CME Group in the state, while a small portion is aimed at aiding small to medium-sized state businesses.
Indiana - In September 2011, Governor Mitch Daniels (R) appointed Daniel Hasler as Secretary of Commerce, replacing longtime former Secretary Mitch Roob. State Republicans, along with the Indiana Economic Development Corp., supported recently passed legislation to make Indiana a right-to-work state.
Iowa - Governor Terry Branstad (R) named members to his newly created panel, the Iowa Partnership for Economic Progress, which will oversee efforts to attract new employers and expand existing businesses in the state. Panel members will help to identify job opportunities for the state, while seeking policy changes needed to create jobs for Iowans.
Michigan - Governor Rick Snyder (R) is looking to reduce the amount of funding appropriated for the Film Tax Credit program to $25 million, as well as to change the program from a tax credit to an appropriation.
Nebraska - Nebraska's Department of Economic Development Director Richard Baier stepped down last fall. In December, Governor Dave Heineman (R) named Catherine Lang to serve as director of the Department of Economic Development. She will also continue to serve as Commissioner of the Nebraska Department of Labor. During the upcoming legislative session, Governor Heineman plans to introduce legislation to merge the two departments.
Nevada - Governor Brian Sandoval (R) has named Steve Hill as executive director of the Governor's Office of Economic Development. Hill had previously been serving as the interim executive director.
New Jersey - Legislation sponsored by Assembly Democrats intended to spur economic development was released last November, with both A-4306 and A-4336/S-3052 signed by Governor Christie (R) into law in January 2012: A-4306: Establishes the Grow New Jersey Assistance Program, a tax credit incentive program for New Jersey-based companies that retain and create new jobs; A-4336: Creates a loan program within the New Jersey Economic Development Authority to help small businesses expand; and A-4337: Would establish the New Jersey Business Action Center to help New Jersey-based companies stay competitive.
The state Assembly approved a "Back to Work NJ" bill allowing unemployed state residents to get on-the-job training from potential employers. The bill is pending consideration in the state Senate.
Senate Democrats have introduced legislation focusing on renewing funding for Urban Enterprise Zones throughout the state. Funding was cut last year by Governor Christie as the zones were thought to be providing little benefit to the state.
New Mexico - Governor Susana Martinez' (R) administration is considering a wide range of business-friendly tax proposals for the legislative session that started in January.
New York - There is an effort in the state to introduce the New York Solar Industry Development and Jobs Act to create a solar renewable energy credit market by 2013.
The state Senate passed the Middle Class Tax Cut and Job Creation Plan, reducing taxes for middle class citizens. Under the bill, manufacturers will now pay a lower corporate tax rate; a $1 billion infrastructure fund will be established to help rebuild roads, bridges, and other infrastructure improvements throughout the state; and a plan has been proposed to set aside $1.5 billion to be held in reserve to potentially support job creation, local governments, and budget gap relief.
New York Governor Andrew Cuomo (D) has also announced the 720 projects chosen in 2011 by regional leaders for $785.5 million in state grants under the new state Consolidated Funding Application (CFA). The leading regions for funding are Central New York ($103.7 million), the North Country region ($103.2), and Long Island ($101.6 million). The Governor also announced a similar competitive funding round will occur in 2012.
Ohio - Ohio voters rejected an anti-union law restricting collective bargaining rights for public-sector workers.
Oklahoma - A legislative task force assigned to evaluate state tax incentives is closing in on about a dozen tax credits that it will recommend to the state. In parallel, a second task force established to examine the overall structure of state taxes is working toward a partial reduction of income tax rates.
Texas - Proposition 4 was defeated during the November 2011 elections. It would have allowed counties to issue redevelopment bonds pledged by tax revenues from the increased property values in the redevelopment area. Under current law, cities and towns can and do issue such bonds, but counties are not listed among the authorized entities.
Wisconsin - Senate Bill 2 was signed into law during the second Special Session held in 2011. This bill allows more small businesses to be eligible to participate in the Small Business Loan Guarantee program. The bill increases the amount of loans that may be guaranteed under the program from $200,000 to $750,000 and expands the definition of a "small business" under the program from one that employs up to 50 full-time employees to one that employs up to 250 full-time employees.
Governor Walker (R) also recently signed a bill allowing the Wisconsin Economic Development Corp. access to a total of $10 million in Jobs Now tax credits starting in the fiscal year 2013-2014. Currently, the amount is limited to $5 million.
Wyoming - Governor Matt Mead (R) is proposing to double the amount of funds available to attract data centers and other digital facilities, while broadening the types of firms that may be eligible. The fund, which helps reduce infrastructure costs for potential data center-related projects, received $15 million last year.