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Sunday, February 14, 2010 10:44 PM


Utah Proposes Scrapping 12th Grade; Nevada Rations Diapers; Harrisburg Heads For Bankruptcy; NBA Lockouts Loom


Here is a quick roundup with a general theme of "Hard Times".

12th Grade Optional

Utah considers cutting 12th grade -- altogether

At Utah's West Jordan High School, the halls have swirled lately with debate over the merits of 12th grade. The sudden buzz over the relative value of senior year stems from a recent proposal by state Sen. Chris Buttars that Utah make a dent in its budget gap by eliminating the 12th grade.

Buttars has since toned down the idea, suggesting instead that senior year become optional for students who complete their required credits early. He estimated the move could save up to $60 million, the Salt Lake Tribune reported.

The proposal comes as the state faces a $700-million shortfall and reflects the creativity -- or desperation -- of lawmakers all over.

"You're looking at these budget gaps where lawmakers have to use everything and anything to try to resolve them," said Todd Haggerty, a policy associate with the National Conference of State Legislatures. "It's left lawmakers with very unpopular decisions."

"The bottom line is saving taxpayer dollars while improving options for students," said state Sen. Howard A. Stephenson, a Republican and co-chairman of the Public Education Appropriations Subcommittee. "The more options we give to students to accelerate, the more beneficial it is to students and taxpayers."
Jordan Utah School District To Lay Off 500

Jordan District to lay off 500 employees because of $30M shortfall
The Jordan School District will lay off 500 employees by July 1 as part of an effort to make up for a $30 million shortfall.

By a 6-1 vote, the Jordan Board of Education approved options to reduce the 2010-11 budget, which include personnel cuts, programs and services cuts, transfer of expenditures to other programs, compensation adjustments, class-size increases, and possible tax increases.

Between now and the end of March, the board will determine which positions and programs will be eliminated. As many as 250 teaching positions and 250 administrative/support staff positions will be cut.
Not a single teacher need be cut. All it takes is unions to lower salary demands and/or pensions. Any cuts are the direct responsibility of the Teachers' union.

Harrisburg Pennsylvania Heads For Bankruptcy

Harrisburg excludes debt payments from 2010 budget
Harrisburg, Pennsylvania, moved a step closer to defaulting on a bond payment when its city council passed a 2010 budget that does not include $68 million in debt repayments on an incinerator.

Without the debt provision in the $65 million budget, the state capital may miss a March 1 payment of $2.072 million, a rarity for a municipal bond issuer.

Joyce Davis, a spokeswoman for Mayor Linda Thompson, confirmed the council's decision -- taken at a special session on Saturday -- and said the mayor is not commenting for now on the implications of exclusion of the debt payments from the budget.

The council also defeated a plan to sell city assets to help pay down the debt which is guaranteed by the city on behalf of the Harrisburg Authority, a separate municipal entity that owns the incinerator. Council members also rejected Thompson's plan to raise property taxes and water rates.
N.B.A. Lockout Likely

Falk Says N.B.A. and Players Headed for Trouble
A year ago, during a wide-ranging interview to promote his book, Falk — the N.B.A.’s first superagent and a longtime confidant of Michael Jordan’s — warned that the league was in economic distress, that the owners would be seeking huge concessions from players and that a lockout was possible, perhaps even likely.

Falk predicted then that the N.B.A. would seek a hard salary cap, shorter contracts, a higher minimum age for incoming players, elimination of the midlevel cap exception and an overall reduction in the players’ percentage of revenue.

When the N.B.A. and the players union opened negotiations this weekend in Dallas, every item on Falk’s list was in play, as part of the league’s initial proposal.

Billy Hunter, the union’s executive director, called the proposal oppressive Friday, after a 90-minute negotiating session that he described as contentious. Predictions of a lockout are common among players and owners.

the signs are troubling, and the sides have rarely seemed so far apart. About half of the league’s 30 franchises are losing money, according to some estimates. Owners want a radical restructuring of the economic system, starting with a hard salary cap to replace the current soft-cap system. The union is in favor of maintaining the status quo.

Falk has been a player agent for 36 years, but he shares the view of league officials that the N.B.A.’s economic system is broken. Small-market owners cannot keep pace with their big-market peers. Players with modest skills are making too much money, leading to a decline in the quality of play.

Falk blames the union, which in its zeal to protect the salaries of rank-and-file players, accepted maximum salaries on superstars in 1999. The result is a system that guarantees tens of millions of dollars to modest bench players like Jerome James and Brian Cardinal via the midlevel exception.
In the grand scheme of things, will it matter if the N.B.A. folded? Other than vendors selling beer and guys on the cleanup crew etc., most would not miss it. If half the franchises are losing money, the owners only have themselves to blame.

Owners don't need salary caps, they just need common sense. All they need to do is stop bidding incredible amounts for players. They have a chance to put their foot down now and negotiate a better contract. The ball is in the owners' court. A nice two year lockout would set the appropriate tone.

Downtown Minneapolis Hooters Hasn't Paid Rent For A Year

Party over for Hooters downtown?

The Hooters in downtown Minneapolis owes more than $350,000 in rent, utilities, taxes and penalties, and the landlords are taking the restaurant's owners to court to force them to pay up.

Block E Realty claims Hooters' owners, John and Steven Marso, haven't paid the monthly base rent of $9,218 for their prime skyway location at N. 6th Street and Hennepin Avenue S. for nearly a year and a half.

The suit, filed in Hennepin County District Court on Jan. 21, said the restaurant also owes at least $105,000 in operating costs, $58,000 in taxes and $33,000 in utilities, phone lines and other services.

The Marso brothers operate the downtown Hooters and another one in Burnsville under the name Twin Wings of Minneapolis. The Burnsville restaurant is delinquent on $47,947 in property taxes for 2009, according to Dakota County records. The Hooters that Steven Marso owned in St. Cloud closed in January 2009.
Nevada To Ration Diapers, Dentures, Hearing Aids

NEVADA'S BUDGET WOES: Dentures, diapers for elderly out under proposed reductions, officials say
Poor people eligible for free Medicaid health care no longer would receive eyeglasses, dentures, hearing aids or as many adult diapers under the $109 million in social service spending reductions proposed by Gov. Jim Gibbons.

"We are down to the ugly list of options of where we can cut," Department of Health and Human Services Director Mike Willden told members of the Legislature's Interim Finance Committee on Tuesday.

The state would save $829,304 by reducing the number of adult diapers that incontinent disabled and elderly people would receive. The reduction was mentioned repeatedly Tuesday as the most horrendous example of a budget cut.

Eligible people now receive 300 diapers per month; that would be cut to 186, which, according to the Health and Human Services agency, is in line with national standards.

But Washoe Legal Services lobbyist Jon Sasser predicted that elderly people will be spending hours per day "with poop in their diapers."

"It is abhorrent to be discussing this," Buckley said. "Are we really going to tell the elderly we are cutting them off dentures and hearing aids and diapers? I don't know how we can look the elderly in the eye."

When questioned about the proposal, Gibbons' communication director, Daniel Burns, said the state simply does not have the money. If legislators do not want to take the limit off diapers, the governor will support them if they find something else to cut, he said.

"The state can't pay for everything," Burns said. "The governor realizes some adults have to wear diapers. This is a serious (recession)."
Recovery? There is no recovery. Things are going to get worse for states, not better.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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