Text formatting

I am working on some t-shirt designs and I need to be able to adjust letter spacing.

It's been some time since the last time I did this but I seem to remember having this option in a pallet on the right side of my screen / work area.

I have the Character Formatting pallet open but the only options I see there are a dropdown "Character Shift" with three options ... Angle, Horizontal Shift, and

Vertical Shift. All of which are grayed out.

Is there something I'm missing?