State of the States

I have 5.23 acres of land I've been waiting to sell to a retired Michigan business owner - looks like my odds have increased. Perhaps all those fat UAW retirees could donate some of their precious time to the community. After all they are responsible for the current delirium.
 
Granholm failed to make case in last Michigan address

LANSING - Gov. Jennifer Granholm began with a moment of blunt honesty this week, as she delivered her annual State of the State address for the last time. "The old Michigan economy is gone," she told a joint session of the Michigan Legislature and a statewide television audience. Gone, and never coming back. "A million Michigan jobs lost over the last decade," she noted, most of them gone since she took office seven years ago, vowing to do great things. Vowing, as she infamously said during her 2006 State of the State speech, that Michiganders would be "blown away" by the enormous economic progress they would soon make.

Instead, war, a national recession, and an auto industry meltdown got in the way. For her entire two terms, Michigan has faced steadily deepening deficits, decline, and partisan gridlock. This year, lawmakers face their toughest challenge of all. Last year, they used federal stimulus money to plug an enormous deficit. That money is virtually gone now.Another $2 billion deficit is looming for the fiscal year beginning Oct. 1. State Senator Majority Leader Mike Bishop, a Republican from the affluent Detroit suburb of Rochester, has vowed to prevent any tax increases, no matter what.

Governor Granholm threw out her own challenge: No more cuts to public education, no matter what. In fact, more money. Last year, the Legislature eliminated the Michigan Promise college scholarship, leaving in the lurch 96,000 students who were counting on that money. This year, she vowed "that my budget for the year ahead will restore the Michigan Promise scholarship, identify a creative way to pay for it, and give it a new focus."

More: http://toledoblade.com/apps/pbcs.dll/article?AID=/20100205/COLUMNIST17/2050316



What it means at the local level:

Schools- my school district went from an $83 million dollar budget five years ago, to what will be a $62 million dollar budget next year. Layoffs- about 20% of employees in the school district. All custodian and bus drivers have been or are being laided off or contracted out. Administration positions are not being filled. Teachers - about 10% have taken buyouts for early retirement over the last two years, and new teachers have been eliminated. The school sold the swimming pool and the buses. Cops- Sheriff Department has laid-off 9 of about 45 positions. Jail has laid off staff too.

Not looking good.
 
It Begins: Cash Strapped Cities Begin To Crumble
John Carney | Feb. 4, 2010, 10:25 AM

Our nascent economic recovery may come too late to save many American cities from bankruptcy, which in turn will deal heavy losses to municipal bond investors and the companies that insure munis.



The latest fright comes from Harrisburg, the capital of Pennsylvania. The city is considering seeking bankruptcy protection—as well as tax hikes and asset sales—to address $68 million in debt service payments due this year.



Harrisburg does not stand a chance at making its payments. The $68 million in debt service payments is four times what the city expects to raise through property taxes and $4 million more than the city’s entire operating budget.



Ironically, the debt burden that is trashing Harrisburg was incurred to build a waste incinerator.



Bloomberg reports:



Carol Cocheres, bond counsel for the incinerator’s operator, the Harrisburg Authority, told the city council at a Dec. 14 hearing that the city is already in danger of legal action for payments that were missed last year on $288 million in debt it has guaranteed with its full faith and credit.



“There’s never been a default like this in Pennsylvania municipal history,” she said. “This is all new territory.”



Cocheres told council members that by skipping payments that are made on behalf of the authority, the city risks being sued and ordered to raise taxes or fees by Assured Guaranty Municipal Corp., formerly FSA Insurance, which has insured the bonds, or by the deal’s trustee, TD Bank.



Not that long ago, journalists and some regulators were arguing that municipal bond insurance was something of a scam because munis had such a low historical default rate. That now looks like the same kind of turning a blind eye to risk that led to the housing-led financial crisis.

http://www.businessinsider.com/it-begins-cash-strapped-cities-begin-to-crumble-2010-2
 
Colorado Springs cuts into services considered basic by many

Read more: http://www.denverpost.com/news/ci_14303473#ixzz0efC4toBM

Everybody wants something for nothing. :D

COLORADO SPRINGS — This tax-averse city is about to learn what it looks and feels like when budget cuts slash services most Americans consider part of the urban fabric.

More than a third of the streetlights in Colorado Springs will go dark Monday. The police helicopters are for sale on the Internet. The city is dumping firefighting jobs, a vice team, burglary investigators, beat cops — dozens of police and fire positions will go unfilled.

The parks department removed trash cans last week, replacing them with signs urging users to pack out their own litter.

Neighbors are encouraged to bring their own lawn mowers to local green spaces, because parks workers will mow them only once every two weeks. If that.

Water cutbacks mean most parks will be dead, brown turf by July; the flower and fertilizer budget is zero.

City recreation centers, indoor and outdoor pools, and a handful of museums will close for good March 31 unless they find private funding to stay open. Buses no longer run on evenings and weekends. The city won't pay for any street paving, relying instead on a regional authority that can meet only about 10 percent of the need.

"I guess we're going to find out what the tolerance level is for people," said businessman Chuck Fowler, who is helping lead a private task force brainstorming for city budget fixes. "It's a new day."

Some residents are less sanguine, arguing that cuts to bus services, drug enforcement and treatment and job development are attacks on basic needs for the working class.

"How are people supposed to live? We're not a 'Mayberry R.F.D.' anymore," said Addy Hansen, a criminal justice student who has spoken out about safety cuts. "We're the second-largest city, and growing, in Colorado. We're in trouble. We're in big trouble."
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Colorado Springs' woes are more visceral versions of local and state cuts across the nation. Denver has cut salaries and human services workers, trimmed library hours and raised fees; Aurora shuttered four libraries; the state budget has seen round after round of wholesale cuts in education and personnel.

The deep recession bit into Colorado Springs sales-tax collections, while pension and health care costs for city employees continued to soar. Sales-tax updates have become a regular exercise in flinching for Mayor Lionel Rivera.

"Every month I open it up, and I look for a plus in front of the numbers instead of a minus," he said. The 2010 sales-tax forecast is almost $22 million less than 2007.

Voters in November said an emphatic no to a tripling of property tax that would have restored $27.6 million to the city's $212 million general fund budget. Fowler and many other residents say voters don't trust city government to wisely spend a general tax increase and don't believe the current cuts are the only way to balance a budget.
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Re: Bear Cave ( Bull is Allowed! )

robo said:
" State of the States: A day of reckoning " - "The Coming Municipal Meltdown"
You need to take some time and listen to this audio clip folks if you are a longer-term investor.
Man, that was one enlightening hour! Interesting about Bond holders probably not first on the `pay me' list.
From what I understand reading my local papers, Arkansas isn't in as bad a state as some other states, but I was unable to locate the link he mentioned (on the home page) to check out the status of the different states.
Thanx, robo -
Click to expand...
Click to expand...
 
I live in Tennessee and our local school board is $500,000 over budget. Talking major cuts. The State is in fair condition but took stimulus funds. When those run out it will get ugly. This may be the next shoe to drop. My wife is a teacher so this is a big deal for us.
 
A subject worthy of its own thread.

Please share information on your States cuts and losses due to budget crunches.

My State, Missouri, is in some denial. They used Federal stimulus money to make cuts to their budget last year by replacing State money with the stimulus. That will only work until the stimulus runs out. They are projecting a recovery for this year and set the budget to match the expected recovery. I think they will be disappointed.

Next door in Illinois they are talking about up to 50 teacher cuts in one district that is not that big. The are planning for the worst case.

My local County is had a huge article done about how bad the County is doing. They had to lay off 3 road and bridge crew members out of 13 total. The Sheriff Dept. had to ask for funds from the General Fund to finish out the year and they don't think they will have enough money to provide fuel for the entire year.
 
robo

robo

Well-known member
Re: Bear Cave ( Bull is Allowed! )

" State of the States: A day of reckoning " - "The Coming Municipal Meltdown"



You need to take some time and listen to this audio clip folks if you are a longer-term investor.

Traders - well, we are all just playing the trend. " Cash is not Trash! "
Many States are in Big Trouble - it could get very ugly this year as many states are close to bankruptcy and can't pay their bills. Soon many will have a hard time even selling bonds. Recovery - show me the tax receipts and then I will believe you - not the Bullshit numbers coming from CNBS talking heads.

If you think things are ok again, you better listening to this audio clip - "State of the State’s"...... NOT GOOD.

The day of reckoning is a coming folks…. Again, you should take some time and listen to this. What’s going to happen in late 2010 and 2011? – I think PAIN for most states – GOT STATE BONDS?

Think your State pension is guaranteed? Are you sure? If you are getting on the train - make it a short ride. A train wreck could be a coming!


Take Care!

Robo


Saturday, January 30, 2010
HOUR 1
RealPlayer WinAmp Windows Media MP3

Martin Goldberg (Technical) Chartered Market Technician Topic: Market Approaching Critical Pivot Point | State of the States: A day of reckoning | Frederick Sheehan Author; Writer Topic: The Coming Municipal Meltdown


http://www.financialsense.com/fsn/main.php
 
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