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Senate Pulls Back on Tax Reform, Restores Local Sales Tax on Food
Wednesday, the State Senate passed a tax reform deal (in their version of HB998) that restores the local (and state) sales tax on food they wanted to eliminate in an earlier substitute passed by their Finance Committee a few weeks ago. That does not mean their plan is hold harmless to local governments, as it retains the proposed elimination of local sales tax refunds (beginning January 1, 2016). The issue of whether or not to eliminate local business privilege license fees was pushed to a legislative study committee, which will look at several issues discussed during this session’s tax reform debate.
The Senate plan also includes measures that were part of their version of the State Budget, such as elimination of some state tax set asides reserved currently for various grant programs.
Duke Energy changing course on Capital, on heels of Rate Increases
As Duke Energy moves forward with state regulators approval for its third rate increase since 2009, its new CEO, Lynn Good, has discussed her interests in changing utility regulations laws to allow regulated utilities to raise rates in order to more directly recover construction costs.
Richmond Fed Chair Jeffrey Lacker spoke on current economic conditions during a conference on June 28th
Latest commentaries from Wells Fargo:
June Employment Report (July 5th): Private sector job gains support the outlook for a continued moderate, but subpar, growth path for this year and diminish any case for dramatic weakness or recession. The private sector continues to be the driver of job growth (top graph), with gains evident in trade, finance, business services, education and health as well as in leisure and hospitality. Another drop in manufacturing is consistent with the ISM manufacturing survey results and weaker export growth…The growth in average hourly earnings improved 2.2 percent over the past year. With recently lower CPI inflation, we are now seeing a rise in real incomes and therefore expect continued momentum for consumer spending. In this cycle, the response of earnings to declining unemployment has not been as strong as in prior cycles, and therefore the gains in real income remain subpar compared to earlier recoveries.
(ISM Non-Manufacturing Index, July 5th) The service sector continues to reflect modest improvement. New orders and business activity remain above break-even, although both have moderated in June. One cautionary note is that new export orders fell below 50, and this might suggest some weakness in export growth going forward.
(Overview, July 5th) Modest domestic U.S. growth remains the outlook as both the ISM manufacturing and non-manufacturing surveys signaled continued growth but not an acceleration. Another decline in jobless claims reinforced that message… Meanwhile, the weakness in exports, due to soft global demand, reflected in a wider trade deficit, which will subtract from second quarter GDP growth.
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