Daily Digest 5/9 - Spain Treasury Only Entity Able To Get Funding, Street Repair Budgets Cut, Beef Prices Way Up
- Long Term Unemployed Californians' Benefits Will End
- UK nuclear build requires taxpayer rescue
- Mayor Emanuel Pushes Pension Reform In Springfield
- U.S. Millionaires Told Go Away as Tax Evasion Rule Looms
- California’s Revenue $2.44 Billion Below Projection
- Spain Says Treasury Is Only Entity Left Able to Get Funding
- Detroiters, merchants sue owners of blighted properties
- Demolitions leave an urban prairie
- Louisiana colleges will seek a $25-per-credit 'sustainability fee'
- SF teachers set for strike vote amid budget woes
- Local street repair budgets being cut
- Italy facing uphill battle to ratify EU's fiscal compact
- N.J. municipalities guaranteeing more debt of private developers, other towns, Moody's says
- A million more households sink into debt
- Merkel rejects renegotiating fiscal pact after French votes
- Jefferson County Makes Alabamians Suffer Cost Boost: Muni Credit
- Philadelphia Schools Say $94M More From Property Taxes Next Year Won’t Be Enough
- EU hints at further deficit flexibility for Spain
- $83 Million Deficit Projected for Palo Alto
- Beef prices way up and likely to remain high
- Tuition rising 8.5 percent at Miss. universities
- Dallas School District budget includes 2.1 percent tax increase
- Legal battle brewing over camera tickets, towing
- More traffic cameras coming to metropolitan DC area
- Bank of Japan buys record amount of stock ETFs
- Villaraigosa seeks another boost in parking ticket fines
- Chief: Traffic cameras to generate $3 million a year
- Move to collect school lunch debt stirs controversy
California's Employment Development Department is warning long term unemployed people that their benefits will be cut off next week. The state was recently notified that it no longer qualifies for the federal funds because its unemployment picture is looking better.
The cut-off of federal funds affects 93,000 people who have been drawing unemployment beyond 79 weeks. Those individuals will no longer get unemployment checks from the so-called "Cal-Ed" program, even if they are in the middle of the 20 week cycle.
Britain's aim to expand its fleet of nuclear plants by 2025 will take place only if the taxpayer absorbs the burden of spiralling construction costs, allowing private companies to invest in the sector, a senior analyst said.
Nuclear energy policy in Britain faces major setbacks following reports that the cost of replacing ageing reactors increased dramatically in the past year, making power produced from new plants not affordable without government help.
“Already, Chicago faces $20 billion in unfunded liabilities for its six separate pension funds,” he said. “Unfortunately, this is only the beginning. Forecasts for the future show the burden on city taxpayers rising rapidly.
“In less than six years, payments to meet our pension obligations will comprise 22 percent of the city’s entire corporate budget. That’s $1.2 billion and doesn’t include pensions for the teachers and employees for our park district.”
“I don’t open U.S. accounts, period,” said Su Shan Tan, head of private banking at Singapore-based DBS, Southeast Asia’s largest lender, who described regulatory attitudes toward U.S. clients as “Draconian.”
The 2010 law, to be phased in starting Jan. 1, 2013, requires financial institutions based outside the U.S. to obtain and report information about income and interest payments accrued to the accounts of American clients. It means additional compliance costs for banks and fewer investment options and advisers for all U.S. citizens living abroad, which could affect their ability to generate returns.
“The task of crafting a credibly-balanced budget has been made more difficult by a nine-month revenue shortfall of $3.5 billion,” said Chiang. “Without a timely, financeable budget plan, the State will be unable to access the working capital needed to pay its bills later this year.”
Prime Minister Mariano Rajoy said the debt agency is the only borrower left in Spain that can finance itself on markets as banks, companies and regional administrations have been shut out.
“Today, the Treasury is practically the only one that finances itself on the markets,” he said in the Senate in Madrid today. Being locked out of debt markets isn’t “theoretical” as it’s “happening to the immense majority of regions, our whole financial sector and most big companies.”
Detroiters regularly board up and mow the lawns of abandoned properties in the city's absence, but taking neighbors to court is an escalation of residents' battle with blight. Mayor Dave Bing has made razing vacant homes a priority, but there are still about 34,000 buildings in the demolition process.
"I used to live here," said Lena Merecki, visiting a friend on Goodyear, where she grew up. "It is much more beat-up than it was. It seems like emptiness now." Matt Cummings has a similar feeling when he returns to his old Broadway-Fillmore neighborhood: "It's a ghost town. They just move the crane right down the street."
Faced with more budget cuts, Louisiana's state colleges and universities are seeking a new fee to cover part of the loss. The plan, said Commissioner of Higher Education Jim Purcell, is to ask the state Legislature to approve imposing a "Sustainability Fee" of up to $25 per credit hour to supply funding that could offset loss of state funding.
The district's estimates are grim: Overall, the district would get $5,242 per student under the governor's current budget, down from $5,776 in 2008. If the $5 billion in cuts are triggered, city schools would lose another $370 per student.
"No matter what we say, they're under the illusion there's all this money out there," said Superintendent Carlos Garcia. "I don't know what to say. They don't believe us."
Many local cities are putting road repair and maintenance on the backburner in the face of revenue cuts, resulting in aggravated drivers, damaged cars and ultimately more costly repairs down the line.
Safety and road repairs are the two areas that taxpayers, when surveyed by cities, say they want their tax money spent on. But, an extensive examination of road work spending by the Hamilton JournalNews shows most local cities have slashed the amount spent. In 2012, Middletown cut money budgeted for road repairs by more than $2 million. Hamilton cut its road repair budget by $3 million, a reduction by more than half of its 2011 expenditures. City officials said cuts come because of a loss of revenue for the cities, particularly the state's elimination of its local government fund and the estate tax.
Mario Monti, the Italian prime minister faces an uphill battle to ratify the EU's fiscal compact following local elections results which saw a swing to the centre left as voters gave the thumbs down to his government's tough austerity measures.
New Jersey municipalities increasingly have guaranteed the debt of private developers and other entities since the financial crisis, a strategy that puts their balance sheets, credit quality and taxpayers at risk in the event of someone else's default, according to a recent report by Moody's Investors Service.
The percentage of another entity's debt that's backed by a local government's general obligation pledge has tripled since 2008, from 7.9 percent to 23.7 percent last year, analysts for the rating agency wrote last week.
A total of 1.2 million households in the UK have sunk into debt and are struggling to pay bills since the start of the double-dip recession in September. The number of ‘stable’ households – those with some money left over after bills are paid – is also at its lowest level since the coalition came to power in May 2010, according to a survey by insurer Legal & General (L&G).
German Chancelor Angela Merke on Monday ruled out renegotiating Europe's new fiscal pact on budget control and austerity, saying the "correct" path of combating eurozone debt crisis would not be toppled simply due to country leader changes. Speaking at a press conference in Berlin, Merkel said reopening talks on the fiscal compact agreed during the European summit in March "simply won't happen", dismissing repeated calls from France 's President-elect, Socialist Francois Hollande.
Cities and towns in Alabama are paying a penalty six months after Jefferson County filed the nation’s biggest municipal bankruptcy.
Investors demanding extra yield to buy the region’s debt blame elected officials, especially lawmakers in the Legislature who have failed to help the county come up with new revenue to maintain services for its 660,000 residents. Jefferson officials have fired hundreds of workers and consolidated offices, lengthening lines for chores such as renewing drivers’ licenses.
The Philadelphia School Reform Commission, facing a huge deficit, presented its budget to City Council today with a strong pitch for more money.
The School District of Philadelphia says that without an additional $94 million from the mayor’s “Actual Value Initiative” property tax overhaul (see related story), schools may not have enough personnel to open in the fall......The school district faces a $218-million deficit next year, even assuming that the district gets that extra $94 million from the city.
Madrid has already been given leeway by eurozone partners to reduce its deficit this year to 5.3 percent of gross domestic product -- as against the 4.4 percent of GDP initially decided, from the 8.5 percent logged last year. But it still has to hit the target of 3.0 percent next year -- the notional EU limit flouted by most since the financial crisis -- and many economists already forecast Spain to fail as it struggles under deep recession, sky-high unemployment, and a rake of bad debt slewing around its banks.
The Spanish economy shrank by 0.3 percent in the first three months of 2012 after a similar contraction in the previous quarter.
The amount of cash Palo Altans are pouring into City coffers is steadily increasing, yet still not keeping pace with the skyrocketing costs of employee pensions and health care, according to a forecast presented to City Council Monday.
If measures are not put into place to reverse that trend, the City is in danger of being a combined $83.4 million in the hole by 2022, according to the “General Fund Long Range Financial Forecast,” produced by the Administrative Services department.
And because of last year's extreme drought in the cattle cradle of the Southwest, many ranchers liquidated herds they couldn't afford to feed. Meanwhile, the export market for U.S. beef remains strong. In response, prices have risen significantly since 2010, with some beef cuts jumping more than 30 percent.
The average retail price in March for USDA Choice-grade round steak was $4.81, up 13 percent from two years ago, according to the U.S. Agriculture Department's Economic Research Service. Choice-grade boneless sirloin was $6.53, up 16 percent. And ground beef was at a record $3.02 a pound in March, 11 percent higher than last year and 35 percent more than in 2010.
Tuition will rise about 8.5 percent, on average, next year at Mississippi's eight public universities.
The increase was approved Monday by the College Board, finalizing an amount that was discussed last month. In-state students taking two semesters of full-time classes will pay an average of $5,906 for the 2012-13 school year. That amount will be $459 higher, on average, than this year.
Cost cutting, a small tax increase and careful financial management are the key elements of Dallas' 2012-13 budget, which the school board reviewed at Monday's work session.
The $32.9 million balanced budget includes a potential $1.25 million in cuts, none of which are expected to affect students' education, district officials say.
The average household pays approximately $800 in property taxes; with a 2.1 percent increase, that amounts to $37.59 more on the tax bill, according to Business Manager Grant Palfey.
Dayton last month began towing vehicles of owners with two or more unpaid red light citations in an attempt to collect millions in unpaid citations. That resulted in an increase in ticket collections — people paid 6,184 camera-generated tickets worth about $566,000, according to the Dayton Municipal Court clerk’s office. Of that, Dayton will receive around $370,000, more than twice the highest amount the city has collected in one month in camera-generated tickets, according to city records. The rest of the money will go to RedFlex, the company that owns and operates the cameras.
Opponents say the cameras fleece motorists and may not always be accurate. The cameras certainly rake in cash. Montgomery County netted $9.7 million from camera-issued tickets in 2011. D.C. Mayor Vince Gray used camera-ticket revenue to help plug a $172 million budget deficit.
The Bank of Japan stepped back into the stock market Monday, making its largest single-day purchase of exchange-traded funds to date, though the move failed to prevent a sharp fall for the Tokyo equity market.
The Japanese central bank said it spent 39.7 billion yen (about $500 million) buying up stock ETFs as part of its ongoing asset-purchase program, breaking a previous record of ¥28.5 billion, set on April 16.
Los Angeles Mayor Villaraigosa is pursuing another big boost in parking ticket fines, leaving some of them 70% to 90% more expensive than the year he was elected — and several times the region's inflation rate.
With the latest proposed hikes, the city would collect about $40 million a year more than during Villaraigosa's first year in office, much of it from street-sweeping violations that leave many residents fuming.
Solomon said the cameras will make Methuen a safer place to drive. But they also offer a potentially lucrative source of new revenue. Trial cameras at three city intersections recorded 206 red-light and right-turn violations over a 12-hour period in late March. The intersections are: Broadway and Route 213 near the MSPCA; Burnham Road at Haverhill Street; and Marston's Corner (Howe, Jackson, Pleasant and Pleasant Valley streets).
Using that sample, Solomon estimates nearly 2,000 violations occur there each week, and roughly 100,000 a year. Excluding right-on-red violations, the number drops to 80,000. At $100 per ticket, that's translates to between $8 million and $10 million in new revenue.
Michael Kirk said he couldn't believe his ears when he asked his daughter how her day went at school Friday.
"She said at lunch time some kids had to collect money for the other kids to eat," Kirk said. Several kids went home that day saying they or their friends had been singled out and embarrassed in the cafeteria because their parents were delinquent on their lunch bills.
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