(The Center Square) – Monthly records for new business filings for July and August reflect the continued outpouring of excellent rankings for North Carolina as a place to live, work and do business.
Sustaining that momentum, however, could rest on a pending request for additional manpower from the General Assembly.
Secretary of State Elaine Marshall highlighted the record number of new businesses and annual report filings at this week’s Council of State meeting. She reiterated her call for more positions in the department to keep up with demand.
“The funding and staffing levels approved by the General Assembly are not coming anywhere close to keeping pace with the current intense demand for our agency,” Marshall said. “Our businesses pay for these services and deserve better. We are doing what we’re doing, but not at the rate the business community has become accustomed to.”
North Carolinians had 16,133 new business filings in August and 14,324 in July, eclipsing records for those months of 15,169 and 13,910, respectively, set in August 2020 and July 2021. The state is on pace this year to reach the second highest total on record for new business creations with 121,062 through Aug. 31. That number totaled 178,300 in 2021 and 127,000 in 2020.
New business creations have jumped 76% since 2019, when the total through August numbered less than 69,000, according to a department release.
“Mid-2020 is when we started to see a significant increase,” Liz Proctor, a department spokeswoman, told The Center Square. “You can draw your own conclusions on why.”
In addition to an increase in new businesses, the secretary of state’s office also set a record for the number of annual reports filed through August with more than 550,000, or 70,000 more than last year and 144,000 more than in 2019.
The momentum follows pandemic lockdowns that caused widespread business closures and job losses and drove down small business sales in the state by 20% or more. Surveys of small businesses during the shutdown showed nearly 60% faced the prospect of permanent closure, according to Carolina Across 100.
Tax policies and regulatory reforms from the General Assembly have helped to fuel a comeback from the pandemic that has resulted in numerous national awards from business trade publications and recognition of the Old North State as the best in the nation to do business for two consecutive years.
Marshall, a former state senator and the first woman in statewide office when elected to her current position in 1997, has worked to accommodate the business boom despite staffing levels that have remained largely unchanged since 2019.
While the department has leveraged “web wizards” to guide online business filers and streamline the process, a pending budget request to increase funding and staff is key to continuing the trend that’s currently taking a toll on the department in a number of ways, said Tim Crowley, the department’s communications director.
Processing times for business filings have increased from what was one to two weeks to six weeks or more, he said, while processing backlogs that are typically resolved during the summer are stretching weeks longer. Calls to the department’s business service center have also increased by about 7,000 per month over last year, when officials submitted a budget request for 19 additional positions – seven related to the increased workflow, he said.
“We have … over the last several weeks been meeting with legislative leaders on a revised set of positions based on the increase” in work since the initial request, Crowley said.
The addendum includes an additional eight staff positions, 10 more temporary call center workers, and an extension for seasonal work contracts from three and a half months to six, with a total cost of between $1 million and $1.9 million, he said.
“We think it’s very critical because (the state’s streamlined, transparent business filing system) is our competitive advantage,” Crowley said.
