Business Weekly E-Newsletter
November 3-7, 2008
Arkansans FOR the Secret Ballot Continues Education Process
“Arkansans FOR the Secret Ballot—Protect your Privacy at Work,” the coalition formed by the State Chamber/AIA to oppose the proposed federal Employee Free Choice Act (EFCA), aka Card Check, continues with its education efforts throughout the state.
State Chamber/AIA staff including President and CEO Randy Zook, Executive Vice President Kenny Hall and Senior Vice President – Programs Susie Marks have been traveling throughout Arkansas recently making presentations before civic organizations and businesses in various locales including West Memphis, Maumelle, Morrilton, Batesville and Ashdown. Several chambers of commerce and civic organizations including those in West Memphis and Morrilton have issued resolutions opposing EFCA.
EFCA is a drastic and dangerous piece of legislation that if passed will be the most radical change to labor law in more than 60 years. It will be brought before Congress in early 2009. The proposal takes away the long-held tradition of using secret ballots for union elections. Instead, the union leaders propose using a card check system – a process where votes are cast in public and can be collected by union leaders at a worker’s job, home or on-line.
What you can do:
· Join the coalition by calling the State Chamber/AIA office and ask to be added to the Arkansans FOR the Secret Ballot coalition.
· Send a letter (by fax or to district offices) to Senators Lincoln and Pryor and your Congressman.
· Make an appointment to see Senators Lincoln and Pryor and your Congressman and tell them how this will affect your business and the community.
· Write a letter to the editor of your local newspaper.
· Spread the word about EFCA and ask other members of your community to join the Arkansans FOR the Secret Ballot.
All State Chamber/AIA members are strongly encouraged to spread the word about this issue to fellow members of the business community as well as to employees. It is vitally important that our members of Congress hear the business perspective on this issue.
If EFCA passes, it will strip workers and businesses of critical rights and protections. Please join the Arkansans FOR the Secret Ballot and help us protect privacy and promote democracy in the workplace.
Employer Taxes Going Up?
With layoffs increasing and jobless claims at a seven-year high, 15 states are at risk of insolvency in their unemployment trust funds. That could mean increases in payroll taxes on employers to make up the gap.
By Tom Starner
Human Resources Executive Online
As if the current economic crisis and possible recession weren't stressful enough, some employers may have to pay more to keep dwindling unemployment funds solvent.
Fifteen states are seriously at-risk of having to borrow from the U.S. Treasury to pay unemployment benefits, according to Douglas Holmes, president of Strategic Services on Unemployment and Workers' Compensation, a Washington-based organization that provides research and consulting on unemployment-insurance policymaking.
That means employers in some of those states probably will have to pay more in unemployment taxes to make up the shortfall -- certainly something no employer needs these days.
"It's significant that balances in selected states are low because we are going into the season where claims tend to increase," says Holmes.
UWC says the 15 at-risk states are Arkansas, California, Indiana, Kentucky, Michigan, Minnesota, Missouri, New Jersey, New York, North Carolina, Ohio, South Carolina, South Dakota, Texas and Wisconsin.
Of those, California, Michigan, Missouri, New York, Ohio, South Carolina and Wisconsin are in the most danger.
The unemployment situation is expected to get much worse as the current economic turmoil continues.
According to the U.S. Bureau of Labor Statistics, the unemployment rate was 6.1 percent as of September 2008, a rise from 4.7 percent the year before (raising the number of jobless to 9.5 million, a 2.4 million boost).
In addition, the Labor Department reported on Oct. 20 that the four-week moving average of U.S. jobless claims hit its highest level in seven years. On average, new jobless claims rose to 483,250 for the week ending Oct. 11 -- the highest since 2001.
According to Holmes, about one-third of the jobless collect unemployment insurance from state governments.
Unemployment insurance is operated by states under federal guidelines, and states set their own benefits and tax rates, Holmes says. States collect payroll taxes from employers to pay for jobless claims, with the state legislatures setting the tax rates. On average, employers pay about 2.5 percent on the first $11,500 of wages.
Some states have boosted the amount of benefit payments, but have not yet increased payroll taxes -- creating the gap in the trust funds, he says.
The federal government is required to loan states money when trust funds run short. In most cases, he says, employers typically wind up paying higher unemployment-insurance taxes to make the trust funds solvent.
Holmes says his organization identified the at-risk states based on their state unemployment-insurance trust-fund balances as a percentage of total wages in the state.
"Some of these states have trigger taxes that may automatically provide revenue to reduce the likelihood of borrowing," he says, adding that balances in state UI trust-fund accounts typically are at their lowest in March, because first-quarter UI taxes have not yet been received but claims typically peak toward the end of January.
In 1982, when the country suffered a major recession, unemployment funds in a large number of states became insolvent. That occurred, Holmes says, because the states faced a multiple downturn" scenario. For example, the recession and the oil crisis compounded the job losses in 1982 -- and state trust funds did not recover easily.
"At that time, the states were not able, through tax increases, to generate enough in their balances," he says. "It caused a significant number of states to go into debt."
Since then, many states have enacted solvency taxes, which trigger an automatic tax increase if funds get below a certain level, helping states avoid having to borrow from the Federal government. Holmes notes, however, that even though a state has a low balance, it doesn't necessarily mean it is at risk.
"Concerned employers have to look at a combination of factors that would make a state go broke. For example, what trigger taxes are in place? Or what is the status of local economy?" he says. "A state like Texas may have a low fund balance, but it may not be losing employment as much as an Ohio or Michigan. Texas can weather a downturn."
Holmes says that by using the UCW measure (trust fund percentage of total wages under 0.5 percent), the 15 states noted are at risk of having to borrow soon -- by early 2009.
"Some have tax increase triggers and some don't," he says.
For now, to predict how the current situation will affect employers in at-risk states, one needs to look at the recessions of past 20 years.
"If there is impact on employers beyond what we are already seeing, it will be felt a little bit later," he says.
"In 1987, we had the stock market crash, but the effects on unemployment were not felt until 1988 and 1989, when there was a significant increase in claims. Will we see the same double hit? We're already headed into a recession, and the stock market is not in good shape right now.
"At this point, we know unemployment tax rates will go up on average in the next four years based on the normal way the economy works," he says. "Beyond that, it depends on the depths and turns of the economy."
Next Small Business Council Meeting Scheduled for November 11
The State Chamber/AIA Small Business Council will hold its next meeting from 11:30 a.m. to 1 p.m. on Tuesday, November 11 in the Conference Room.
Tamika Edwards, Community Affairs Specialist for U.S. Sen. Blanche Lincoln, will provide a presentation on “Governmental Issues Facing Small Business.” There will also be a legislative update.
Woodland International Research Group is sponsoring the lunch. Since this is a catered function, we need as accurate a count as possible. If you wish to attend, please contact Jeff Thatcher at 501-210-4205 or jthatcher@arkansasstatechamber.com .
Small Business Council meetings are open to all members of the State Chamber/AIA.
Below is the schedule for future Small Business Council Meetings through May 2009. The meetings will be held from 11:30 a.m. to 1 p.m. in the Conference Room at our Little Rock office unless otherwise indicated.
Thursday, January 22, 2009 - Government Regulation
Thursday, March 19, 2009 - Employee Benefits
Wednesday, May 6, 2009 - Information Technology
Two Important State Chamber/AIA Committee Meetings Scheduled
The State Chamber/AIA’s committees on Workers’ Compensation and Unemployment Insurance/HR will meet in November to discuss negotiations with labor over proposed workers’ comp and unemployment insurance legislation for the 2009 session.
The Unemployment Insurance/HR Committee will meet at 9:30 a.m. on Tuesday, November 11 and the Workers’ Comp Committee will meet at 10 a.m. on Monday, November 17. Both meetings are very important and will be held in the State Chamber/AIA Conference Room.
Leadership Arkansas Class III Upcoming Sessions Slated
Leadership Arkansas Class III will hold additional sessions during the coming months throughout the state.
Upcoming sessions include:
- Session II – Tourism, December 4-5, Eureka Springs;
- Session III – South Arkansas Economy, January 22-23, 2009, Magnolia;
- Session IV – Legislative, February 23, 2009, Little Rock;
- Session V – Economic Development, March 26-27, 2009, Fort Smith;
- Session VI – Northeast Arkansas Economy, May 21-22, 2009, Jonesboro;
- Session VII – Northwest Arkansas Economy, June 25-26, 2009, Fayetteville.
- Leadership Class III Graduation will be held June 26, 2009 in Fayetteville.
All sessions will be in conjunction with State Chamber/AIA regional board and membership meetings.
Leadership Arkansas is a program designed to take a statewide view of the economic and political challenges that face Arkansas. The program offers leadership opportunities that expand the impact of community leaders across the state. Created by the State Chamber/AIA, Leadership Arkansas builds a sense of statewide community by identifying and training individuals with the passion and commitment to become personally engaged in issues, programs and activities aimed at building a better Arkansas.
The Chairman for this year’s Leadership Arkansas class is program founder Paul H. Harvel. Curriculum Chairman is Michele Bond of Tyson Foods. Leadership Arkansas Class III is sponsored by Southern Bancorp of Arkadelphia.
If you would like to be a session sponsor or need further information about Leadership Arkansas, please call Susie Marks at 501-210-4206.
State Chamber to Host Procurement Conference
The Arkansas State Chamber of Commerce is partnering with the U.S. Small Business Administration and the state congressional offices to bring the Arkansas Procurement Opportunities Conference to Little Rock in June 2009.
The Procurement Opportunities Conference will include the Annual Small Business Awards Luncheon, networking, training and procurement opportunities. It will also feature a business exposition/matchmaking event, pairing small business owners with prime contractors, federal agencies and major corporations in a one-on-one setting.
Some 350 local and regional small business owners (SBEs, MBEs, WBEs and DBEs) will come together for a full day of procurement opportunities with 150 buyers from federal agencies, prime contractors and major corporations.
Sponsorship opportunities for this event are possible. For further information, please contact the State Chamber/AIA office at 501-372-2222.
Tax Committee Working on Dies and Molds Regulations
The State Chamber/AIA Tax Committee has been active in seeking clarification of the Department of Finance and Administration’s regulations related to the tax treatment of dies and molds for sales and use tax purposes.
The dies and molds exemption rule was last rewritten with Tax Committee input in 2006, but there are concerns that the rule is not being applied as written. Committee co-chair Jim Davis, legal counsel Mike Parker and Kenny Hall of the State Chamber/AIA staff, met with John Theis, Assistant Commissioner of Revenue Policy and Legal, Danny Walker, Administrator of Field Audit and Martha Hunt, Chief Legal Counsel for DFA on October 21 to discuss Committee concerns, and feedback the Department has received from auditors.
The Committee leaders circulated a first draft of proposed edits to the rule among the members of the State Chamber/AIA Tax Committee and received some good comments and a lot of support for clarification. Final comments were then submitted to Theis on Friday, October 31. Our recommendation was to keep all the existing language from the changes we made in 2006, but add some language to the text that would help clarify issues that come up in audits and include some additional examples provided by committee members to help businesses explain their positions to DFA auditors.
State Chamber and AIA Join Progress Arkansas Coalition
The Arkansas State Chamber of Commerce and the Associated Industries of Arkansas, Inc. recently joined Progress Arkansas as founding members. Progress Arkansas’ mission is to build consensus and support for economic, energy and environmental policies that will support growth and prosperity for the state.
Progress Arkansas was officially launched on October 28. Its membership is comprised of a variety of business and community-based leaders and organizations dedicated to promoting solutions that will benefit Arkansas.
Progress Arkansas is led by Chairman Bob Lamb. Since 1955, Lamb has been a state leader and champion for sound policies to move Arkansas forward. Recognizing that energy, economic growth and environmental policies are inextricably linked, Lamb formed Progress Arkansas to build consensus and work for solutions in these three key policy areas.
“One of the greatest strengths of Progress Arkansas is its diversity of members,” said Lamb. “Our members will play an important role in the advocacy and success of Progress Arkansas.”
Fundamental to the programs and initiatives of Progress Arkansas is the development of educational materials, such as issue briefs and fact sheets on energy, economic development and environmental policy issues. Progress Arkansas will also organize events and forums to bring Arkansas’ leaders together to discuss important policy challenges.
The coalition’s first issue brief, “Powering Arkansas: A Profile of the State’s Growing Electricity Demand” and other resources and materials can be found on Progress Arkansas’ website: www.progressarkansas.com .
Progress Arkansas’ founding members are:
- Arkansas Economic Developers
- Arkansas Electric Cooperatives
- Arkansas Environmental Federation
- Arkansas Municipal Electrics
- Arkansas Oklahoma Gas
- Arkansas State Chamber of Commerce
- Associated Industries of Arkansas
- ASU Delta Center for Economic Development
- CenterPoint Energy
- Delta Plastics
- Empire District Electric Company
- Entergy Arkansas, Inc.
- Greater Little Rock Chamber of Commerce
- Great River Economic Development Foundation (Mississippi County)
- Metro Little Rock Alliance
- Oklahoma Gas and Electric Company
- SourceGas
- Southwestern Electric Power Company
- The Wind Coalition
Please Respond to 2008 Energy Survey
If you have not filled out the 2008 Energy Survey, which went out by e-mail to the State Chamber/AIA database on October 22, please take the time to complete it.
The State Chamber/AIA is partnering with the Arkansas Energy Office of the Arkansas Economic Development Commission, which is also working in partnership with the Arkansas Environmental Federation, Arkansas Farm Bureau and other prominent business organizations in the state for this important effort. If you have questions or need further information in regard to the survey, contact Tim Wilkins of Paliria Energy at (757) 683-5770 or twilkins@paliria.com
Welcome to Our New Members
Thanks to the following companies and organizations that have recently joined the State Chamber/AIA:
Blake Price Consulting Services
Direct Transport Solutions, LLC
East-Harding
ThermoEnergy Corp.
Thanks to Our Pinnacle Members
We wish to express special thanks to all of our Pinnacle investors, the respected companies that support the State Chamber/AIA at the highest annual investment levels. We appreciate all that they do for us.
APEX
Alltel Corporation
Entergy Arkansas, Inc.
Wal-Mart Stores, Inc.
SUMMIT
Chesapeake Energy, Inc.
Cox Communications
Cranford Johnson Robinson Woods
Tyson Foods, Inc.
XTO Energy, Inc.
PEAK
Arkansas Blue Cross and Blue Shield
Arvest Bank
AT&T Arkansas
CenterPoint Energy Southern Gas
Electric Cooperatives of Arkansas
FedEx Freight - East
Georgia-Pacific Corporation
Harps Food Stores, Inc.
Kraft Foods
Oaklawn Jockey Club
Pathfinder Exploration LLC
SemGroup LP
Southern Bancorp, Inc.
Southland Park Gaming & Racing
Southwestern Energy Company
State Farm Insurance
Verizon Wireless
Weyerhaeuser Company
Windstream Corporation
CROWN
Acxiom Corporation
AEP Southwestern Electric Power
Albemarle Corporation
Alcoa Inc.
American Greetings Corporation
America's Car-Mart, Inc.
Arkansas Employees Federal Credit Union
Arkansas Farm Bureau Federation
Arkansas Oklahoma Gas Corporation
Arkansas Western Gas Company
Bank of the Ozarks
CardinalHealth
CenterPoint Energy Gas Transmission Company
Crossland Construction
Deltic Timber Corporation
Dynegy
Entegra Power Group LLC
Evergreen Packaging Company
Farm Bureau Mutual Insurance Company of Arkansas, Inc.
Forest Oil Corporation
Glad Manufacturing/A Clorox Company
Golden Living
International Paper Company
Kimberly-Clark Corporation
Lion Oil Company
McKee Foods Corporation
Metropolitan National Bank
Murphy Oil Corporation
Nabholz Construction Corporation
National Center for Toxicological Research (NCTR)
Nucor-Yamato Steel
OG+E
Pfizer Pharmaceuticals
Philander Smith College
Potlatch Forest Products Corporation
Pulaski Technical College
Rheem Air Conditioning Division
Riceland Foods, Inc.
Signature Bank of Arkansas
Simmons First National Corporation
Stephens, Inc.
Storm Cat Energy
Suez Energy North America
The Clorox Company
The Trane Company
US Bank
Waste Management
Wright Lindsey & Jennings
Calendar of Events
November 11 State Chamber/AIA
Unemployment Insurance/HR Committee Meeting
9:30 a.m.
Conference Room
State Chamber Building, Little Rock
November 11 Small Business Council Meeting
11:30 a.m. to 1 p.m.
Conference Room
State Chamber Building, Little Rock
November 17 State Chamber/AIA Workers’ Comp Committee Meeting
10 a.m.
Conference Room
State Chamber Building, Little Rock
November 19 New Member Lunch
11:30 a.m. to 1 p.m.
Conference Room
State Chamber Building, Little Rock
December 4-5 Leadership Arkansas Class III
Tourism Session
Eureka Springs
January 12, 2009 87th General Assembly Convenes
January 22, 2009 Small Business Council Meeting
11:30 a.m. to 1 p.m.
Conference Room
State Chamber Building, Little Rock
January 29-30, 2009 Leadership Arkansas Class III
South Arkansas Economy Session
Magnolia
February 23, 2009 Leadership Arkansas Class III
Legislative Session
Little Rock
March 19, 2009 Small Business Council Meeting
11:30 a.m. to 1 p.m.
Conference Room
State Chamber Building, Little Rock
March 26-27, 2009 Leadership Arkansas Class III
Economic Development Session
Fort Smith
May 6, 2009 Small Business Council Meeting
11:30 a.m. to 1 p.m.
Conference Room
State Chamber Building, Little Rock
May 21-22, 2009 Leadership Arkansas Class III
Northeast Arkansas Economy
Jonesboro
June 25-26, 2009 Leadership Arkansas Class III
Northwest Arkansas Economy
Fayetteville
June 26, 2009 Leadership Arkansas Class III
Graduation
Fayetteville
April 18-21, 2009 Washington Fly-In and Congressional Dinner
Crystal Gateway Marriott Hotel
Arlington, Virginia
