Tax breaks proposed to protect N.C. jobs
By Thomas Russell -- Furniture Today, February 4, 2007
High Point — Draft legislation suggested by a committee of industry supporters would allow tax incentives and property tax breaks to be used to protect remaining furniture manufacturing jobs in North Carolina.
It also would provide $2 million over the next two years to the state's community college system to fund a Furniture Technology Center at Catawba Valley Community College in Hickory, N.C. The facility would train workers and develop new technologies to help the furniture and textile industries remain competitive in the global economy.
Another provision would create a $5 million, interest-bearing North Carolina Furniture Fund over the next two years. It would be administered by a 13-member group called the N.C. Furniture Council to promote and create jobs in the state's furniture industry.
The recommendations were discussed at a meeting of government and community college officials and furniture industry representatives held at the High Point Chamber of Commerce in late January.
The proposals are largely in response to declines in the state's furniture manufacturing industry.
From the first quarter of 1996 to the same period in 2006, state officials report that the number of workers in household and institutional furniture manufacturing and in the office furniture and fixtures segments fell by 25,634 jobs, to 50,870. Officials from the state's budget office estimate this has resulted in $414.9 million in lost wages.
Industry officials at the High Point meeting supported the draft legislation, saying it would represent an investment in the state's future, not an entitlement or handout for certain companies.
"If we take these entrepreneurs and employees and empower them to be innovative, the combination would be awesome," said Jay Reardon, president of manufacturer Hickory Chair, whose employees were instrumental in helping the company shift to a lean manufacturing model.
Eric Schenk, chief operating officer of manufacturer Century Furniture, said that helping furniture companies also helps protect the jobs of industry suppliers.
"We need to keep a strong manufacturing base," he said. "We view this not only as an investment in our employees, but also as an investment in our factories and in our state."
The draft bill has not yet been introduced in the North Carolina General Assembly.
As proposed, the bill would create the N.C. Furniture Fund and the Furniture Technology Center would be created by July 1, 2007. The property tax exemptions would be effective for taxes imposed on or after July 1, 2008.
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