- Written by Admin
- Category: Borrow Money
- Hits: 363
The Legislature on Monday voted to cut taxes and borrow money for dozens of special projects across the state even as it cut most state agencies budgets because of revenue shortfalls.
Some lawmakers questioned cutting taxes and borrowing while theyre having to slash most agency budgets. The shortfalls are in part because of $350 million in tax breaks lawmakers approved in recent years. For instance, the phase out of the business inventory tax is expected to remove from $100 million to $126 million from the coming years revenue, which is projected about $102 million short of earlier projections.
The tax cut deal, starting in 2018, would begin phasing out the corporate franchise tax over 10 years and cost $260 million, and the 3 percent individual income tax bracket over five years, eventually costing $415 million. For the fiscal 2017 budget lawmakers continued to set on Monday, the deal would cost $3 million from a reduction in a small-business tax.
The tax cuts, which required a three-fifths vote, passed the House 73-44 and the Senate 36-14.
House Ways and Means Chairman Jeff Smith, R-Columbus, alluded to House members that if they didnt pass the tax cut bill, the Senate likely wouldnt pass a bond bill to borrow $250 million for projects across the state.
If we go home without doing something for colleges and universities and MDA (Mississippi Development Authority), were being negligent. Sometimes we have to swallow hard -- sort of like being married. Its something we need to do, Smith said.
When they are sworn into office, lawmakers take an oath that they will never trade their vote on one measure for another. But it was apparent, and admitted by Smith and others, that some major horse trading went into the tax cuts and borrowing agreements between the House and Senate.
The bond bill includes $68 million for upgrades at state universities and millions for museums, $20 million for local-system bridges, and $45 million for Ingalls shipyard in Jackson County.
Related story: Lawmakers slash budgets
House leaders over the weekend said Lt. Gov. Tate Reeves -- who has pushed a similar tax cut deal for two years -- and the Senate was holding up the bond-borrowing bill in order to force the House to agree with tax cuts. Senate leaders indicated the House was holding up the tax cuts trying to borrow more money for projects.
Reeves has said that long-range tax policy shouldnt be based on short-term revenue problems, and he believes the phase-in of tax cuts over years would prevent more drastic cuts to budgets.
But others -- mostly in the Democratic minority -- argued vociferously against the tax cuts. Seven House Republicans voted against the cuts.
Sen. Chris McDaniel, R-Ellisville, and others of the Senates most conservative lawmakers questioned the borrowing in the bond bill, and the need to fund museums, zoos, parks and borrowing to help private companies, such as Ingalls shipbuilding on the Coast. McDaniel said the state has $4.4 billion in debt for which it had to make a payment of $484 million this year. He said the new borrowing would bring the annual debt service to more than $500 million.
Thats more than enough money to fund education -- make up the (MAEP) difference for more than two years, McDaniel said. ... Were borrowing $45 million to give to a Fortune 500 company (Ingalls).
Sen. Michael Watson, R-Hurley, said people have been running around with their hair on fire about the need for road and bridge work, but the bill included very little borrowing for major infrastructure work.
The borrowing bill passed the Senate 46-6 and the House 108-9.
Lawmakers finished most of the work of setting a $6 billion budget Monday night, with most budgets, other than the states adequate education K-12 formula, seeing major cuts, some in double-digit percentages.
Some major departments are still unsure what their funding next year will look like, including K-12. Education officials are still unsure of specifics despite lawmakers saying a deal was reached Saturday.
"We have never had a situation in which we have not seen the real numbers in the K-12 conference report at this point in the legislative session, and there's no excuse for it," said Nancy Loome, executive director of The Parents' Campaign.
Lawmakers have said the Mississippi Adequate Education Program (MAEP) will be funded at the same level as last year -- some $170 million under full funding -- other parts of the Department of Education budget are being cut.
Loome fears for the Schools for the Blind and Deaf, she said.
"They provide services all over the state that are not reflected in their enrollment numbers," Loome said.
She also mentioned her concern about potential cuts to literacy funding, referring to the money set aside for reading coaches and other support to help third-graders pass the new test required for promotion to fourth grade. The Legislature recently passed a bill that would raise the bar for third-graders to pass the literacy test.
"We know that those literacy coaches are critical, but we have no idea if they are funded in this budget," Loome said.
The Department of Mental Health and Institutions of Higher Learning are also still up in the air, though a bill passed on Sunday by the House cuts mental health by a little over 3 percent.
DMH spokesperson Adam Moore said the department is still reviewing the details but expects a reduction in services. The department operates 12 programs throughout the state that provide services to people with mental illness, intellectual and developmental disabilities and substance use disorders.
Attorney General Jim Hood took aim at lawmakers for cutting mental health and other budgets in an op-ed piece.
Hood said his office has returned about $3 billion to the state through legal action against what he calls unscrupulous corporations and each time he sends a check to the Legislature he includes a letter asking that a portion of the money be used toward serving the needs of the mentally ill.
Again, our leadership has closed its eyes and inexplicably decided to actually cut funds for mental health rather than increase them, Hood said. The result of this ignorance is staggering.
Let me be clear: just as bridges will begin to collapse in our state, mental health is a public safety crisis that is primed to explode, Hood said.
Hood also was critical of cuts to the AGs office budget.
Our most significant concern about this year's budget is its disastrous impact on public safety, victims of crime, and our first responders, Hood said.
He added: Just as importantly, it's uncertain whether the office may have enough funding for critical programs that pay for services for victims of violent crimes and for assistance to law enforcement officers and firefighters who are injured in the line of duty. We owe more to our children, elderly, first responders and crime victims than what this budget reflects.
Community colleges will face a decrease of $3.9 million, or 1.5 percent, from the previous year before Gov. Phil Bryant ordered mid-year budget cuts. The cut could lead to increases in tuition rates, which will be set in May by the individual colleges.
The Mississippi Department of Corrections will see an overall decrease of about $17 million from the $374 million in general funds and special funds approved for this current fiscal year. About $5 million of the reduction is for the 1.5 percent cut ordered by Bryant.
We would have liked more, but we will make do, MDOC Commissioner Marshall Fisher said. We will sit down and take a hard look at our priorities.
Fisher said lawmakers approved his priority to give pay raises to guards and parole and probation officers, which he has pushed for since his first day as commissioner.
I know these are hard times; Im not a person who looks at the cup as being half empty, Fisher said of making do with less money.
Fisher had urged lawmakers earlier this year not to cut his budget beyond the 1.5 percent ordered by the governor.
The Mississippi Supreme Court will see a reduction. Chief Justice William Waller and court staff are studying the budget figures. Waller said that he does not know the final result: Its really complicated with this new business model. We have to factor our reduced costs (due to not paying state agencies) with the revised appropriation figures.
A list of some of the borrowing in the deal House and Senate negotiators reached that now goes to the full Legislature:
Alcorn State University: $10,000,000 over 2 years
Delta State University: $9,692,500
Jackson State University: $6,000,000
Mississippi University for Women: $7,140,000
Mississippi State University: $14,000,000 over 2 years
Mississippi State University/Division of Agriculture, Forestry and Veterinary Medicine: $4,000,000
Mississippi Valley State University: $7,500,000
University of Mississippi: $25,000,000 over 2 years
Education/Research Center: $1,615,000
Community colleges: $25,000,000
Civil Rights Museum and Museum of Mississippi History: $16,605,000
MS Maritime Museum: $100,000
Jackson police service: $100,000
Jackson zoo: $200,000
Hattiesburg zoo: $305,000
Jackson parks: $31,000
Hinds Co. wastewater treatment facilities: $250,000
BB King Museum and Delta Interpretive Center: $800,000
MS Science Exploration Center: $340,000
Ross Barnett Reservoir Seawall Ramp;R: $1,600,000
- Written by Admin
- Category: Borrow Money
- Hits: 346
Europe is faced with a crisis of crises.
If the Europeans only had one major challenge, they could focus on it and solve it.
Unfortunately, however, they face a number of urgent problems, and the solutions for some could actually make others more difficult to solve.
Of course, it is worth pointing out at the beginning that still Europe enjoys enormous strengths. It is remarkably wealthy and has a huge population of educated, skilled workers.
The European quality of life, with long vacations and extended summer weekends, is still something for Americans to envy, if not to emulate. It was remarkable to see large camp grounds full of trailers and motor homes on the Rhine and the Mosel, where the Dutch in particular seem to enjoy staying (leaving behind their heavily populated, indeed crowded, country).
The European welfare states still offer health and education benefits that their citizens prize.
And Europeans cultural focus on museums, parks, historic sites and zoos (my favorite) means they have many of the best cultural institutions in the world.
Cruising up the Rhine, it was obvious from the river traffic and from the constant procession of freight trains that the German industrial economy was still strong and impressive.
There are, however, at least six deep challenges to the heart of the European experiment.
First, the creation of the Eurozone, establishing a common currency, was in retrospect a step too far. A Euro that is strong enough for Germany crushes the Greek economy. A euro weak enough for Greece guarantees inflation in Germany. This 21-year experiment has been a great asset for the German economy, as countries like Greece that had weaker economies could borrow money to buy German products. Now, the weaker economies cant pay back all of the borrowed money. This is an economic, cultural, political and social crisis, and it is a long way from being resolved.
Second, Europe has accepted a large number of migrants from foreign cultures without any methods or systems for assimilating them. This has been an invitation to disaster. From Sweden to Hungary, country after country is now adopting increasingly tough policies for migrants. This will lead to growing tension between elitesthe politicians, intellectuals, and business leadersand the vast majority of the European public.
Third, the relatively slow growth rate of the European economies further heightens tensions created by the Euro and unassimilated immigrants. The high taxes, strong unions, bureaucratic controls, burdensome regulations, and a general bias against entrepreneurial creativity all combine to slow European growth rates. This leads to lower incomes and greater unemployment among young people, and thus, dissatisfaction.
Fourth, while the 71 years since the end of World War II are the longest period without a major war in Europe since the Roman Empire, this peace has been sustained through American leadership structured around NATO and a very strong American military. As Europe has grown wealthier and as Americans have grown weary of carrying the burden, there is renewed pressure on the Europeans to pay more for peace. Yet their welfare states, their slow-growth economies, and the biases of their domestic political systems all conspire to drastically under-fund defense. This inability of Europe to defend itself is being highlighted by the emergence of threats from Putins Russia, Islamic supremacists, the emergence of a missile-capable Iran, the rise of China and the pressures of mass migration. The continents inability to guarantee its own security will be a major challenge in the next decade.
Story Continues rarr;
- Written by Admin
- Category: Borrow Money
- Hits: 355
Municipal Authority of Westmoreland County board members on Wednesday agreed to borrow up to $220 million, which includes a large amount earmarked to purchase up to three sewer systems in the next three months.
The loan will refinance $130 million in capital improvement programs and refinance $63 million in debt.
"We see this as an opportunity to continue to improve our infrastructure," said board Chairman Randy Roadman.
The loan comes on the heels of $140 million in borrowing that the authority finalized in 2013 to pay for five years of improvement projects. Money from that loan is expected to dry up next year.
A 25 percent rate increase for authority water customers went into effect this month earmarked to pay back the latest loan. Additional 7 percent rate hikes for the 2017 and 2018 fiscal years also were authorized to cover the debt.
The authority has more than 120,000 water customers in five counties and more than 10,000 sewer customers.
Authority Manager Chris Kerr said talks are ongoing with three municipalities, which he declined to identify, to purchase their sewer systems. As much as $27 million could be borrowed to pay for those deals.
"We are currently talking with a number of municipalities," Kerr said. "All or some may decide to have us acquire them."
The deadline to finalize those deals is July to ensure the authority can borrow money to pay for the purchases, Kerr said.
In February, the authority purchased the Youngwood sewer system for $3.1 million.
Bruce Robinson, Ligonier Township Municipal Authority board member and supervisor, previously confirmed negotiations have taken place for the county authority to buy his townships sewer system. No deal has been finalized.
Roadman suggested more purchases could be forthcoming.
"Were always looking at opportunities to expand," he said.
The loan will pay for the next five years of improvement projects, which includes a proposed $35.8 million plan to install transmission lines to allow officials to overlap service areas and deliver water to customers from its treatment plant along the Youghiogheny River near Connellsville and the Beaver Run Reservoir in Bell.
Officials said about $40 million will be used to upgrade the authoritys three water and four sewer treatment plants.
The authority plans to allocate about $22 million to repair water lines throughout the system where leaks have been a recurring problem.
Kerr said refinancing of the previous debt at a lower interest rate is expected to save the authority about $9 million.
- Written by Admin
- Category: Borrow Money
- Hits: 358
Last night, Benchmark VC Bill Gurley posted a 5,700-word piece sounding the alarm about the state of over-funded Silicon Valley companies and the investors who over-funded them. Its going to be the talk of the tech world today, so if you havent read it yet, youd better get started ASAP.
Whats that? You have a day job? You dont have time to read a 5,700-word piece? Even if its only 5,681 words?
No worries. Part of my day job involves summarizing 5,681-word pieces. Here you go.Whats the big picture?
Gurley says too many Silicon Valley companies have raised too much money, and now theyre in trouble. The same goes for the investors who gave them all that money. Times are changing, he tweets.That sounds familiar.
Thats because Gurley has been saying too many Silicon Valley companies have raised too much money, and will be in trouble, for a couple of years now. And every time he says it, it generates a lot of attention.Okay. So whats new here?
If you are cynical, you might argue that its Gurleys victory lap. A less cynical take: Many investors have come around to Gurleys point of view and are less likely to pour money into tech companies at any valuation.So what does that mean for the tech company I work at or invested in?
This is the most important part of Gurleys essay: He sketches out a scenario in which companies that have gotten used to easy money but have yet to build a business that makes money, find that they need to raise more money and that the easy money is gone.
Now, they may have to raise money at valuations below their previous marks the down rounds youve heard whispers about for some time. A worse option would be raising money via dirty term sheets, which come with all kinds of ugly-sounding mechanisms like ratchets and superior preferences.Whats wrong with those mechanisms?
Youve seen movies where people borrow money from loan sharks, right?If things are so bad, how come Ive read about VCs raising a ton of money in the last few months?
This is a big part of Gurleys essay. He describes a landscape where panicked VCs are loading up on cash before the value of their investments plummets. And since many traditional investors in VC funds are done investing, VCs and their portfolio companies are hitting up anyone with a checkbook. Maybe even you.Is that why I just got an email offering me the opportunity to invest in a VCs friends and family special vehicle?
Sure could be. Gurley takes special care to denigrate special purpose vehicles, which are basically mini-funds VCs raise to supplement their main funds. He calls them eerily Madoffian.Wait a minute. Gurley is a VC. So hes invested in lots of companies that have raised lots of money, at very high valuations. Like Uber. Right?
Right.Id like to hear a more optimistic view of all this. Who should I ask?
A good bet would be rival VC Marc Andreessen, the anti-Gurley. I can't stand him. If you've seen 'Seinfeld,' Bill Gurley is my Newman, he told the New Yorker last year. Keep an eye on his Twitter account. (Bloombergs Eric Newcomer suggests that Gurley may be trolling Andreessen by calling out several of his portfolio companies. Stay tuned!)Hey! Dont you work at one those companies that have raised a lot of money recently? Doesnt this worry you?
Oh look at the time! Gotta go.