Tag Archives: Economy

An update on the state of Washington’s economy

This past Tuesday, House Democrats presented their plan to fix the state’s budget shortfall. They have proposed relying on $400 million in delayed payments and reduced support for local governments, while mainly protecting basic education from further cuts.

The House Democrat’s plan saves over $890 million without asking voters for a sales tax increase, which was initially suggested by Gov. Chris Gregoire. On top of this, the Democrats propose to leave $504 million in reserves. The proposal does, however, open the door to higher local taxes.

The largest savings come from delaying the $405 million in payments to schools until the next budget cycle. That budget cycle begins in July of next year. Their proposal also calls for $65 million in cuts to higher education, and $224 million in cuts to health care and human service programs.

Democrats suggest decreasing distributions to local governments by $82 million. This will include support for criminal justice programs, along with the elimination of a sales tax credit for rural counties. To make up for that, the state would essentially give local governments authority to make tax increases without a public vote.

Another $18.1 million will come from the elimination of another tax break. This tax break allows out-of-state banks the ability to claim the break on interest earned on first mortgages. The plan also accounts for nearly $54 million in fund transfers, including more than $37 million in unspent agency money being returned to the state’s general fund.

The Democrats are looking to save an additional $130 million in other areas, including reductions to the Department of Corrections’ chemical dependency treatment and community supervision programs.

In a statement on Tuesday, Gov. Gregoire called the budget proposal “a good start”, stating “I’m pleased this budget leaves a sizable ending fund balance as we must continue to plan for unforeseen circumstances.”

Senate Democrats are expected to unveil their budget proposal next week. The 60-day legislative session ends March 8.

Many experts believe that we may be headed for another recession. Don’t enter a second recession with mountains of debt. I can help you to understand the options available to you for dealing with your debts. I am sure that I can be of assistance to you, to a family member, or to a friend as we all know people experiencing trouble these days even if we are not experiencing our own financial troubles. Please do not hesitate to make contact with me. I emphasize courteous and discrete consultations that fill your time with useful information. The impact to your life after an in-person consultation with me may be substantial, and life-long. You will enjoy a new peace of mind and a fresh hope for the future with a new roadmap for financial success that we develop together. You can contact my scheduler through our website for your free 30 minute consultation. If you wish, you may schedule your free 30 minute consultation by phone by calling us at 253-383-1001 Monday through Thursday from 9:00 AM until 5:45 PM, and on Friday from 9:00 AM until 12 noon.

What is the state of Washington’s economy?

A recent story presented by KOMO News stated that as of February 9, 2012, Washington State’s budget shortfall is down to $500 million. The state’s economy is stabilizing and showing signs of growth as people rely less on state services.

Numbers released last Thursday by the state’s Economic and Revenue Forecast Council showed $96 million in extra revenue and an additional $340 million in expected savings from less reliance on state services. Prior to this report, state legislatures had been looking at about a $1 billion shortfall.

According to Steve Lerch, the U.S. economy has had higher job growth than anticipated. He also stated that Boeing manufacturing output, growth in the software sector, and strong exports have placed the state in a “decent” position.

Lerch still has his reservations about celebrating, though. He feels that due to our country’s financial situation compounded by the economic crisis overtaking Europe and the slowdown in Asia creates a variety of risks that Washington state needs to continue to monitor.

With these risks in mind, state budget officials are looking at ways to cover more than just the current shortfall. They hope to retain a buffer of approximately $600 million in case the state economy struggles again.

House Republicans plan to release their proposal for the budget by tomorrow, and the Democrats have promised to release their ideas next week.

Two “levels” of birth certificates?

The New York Times reported on January 5, 2011, of a growing movement that seeks that states will issue two different types of birth certificates.

If this movement gains sufficient steam to obtain amendments to state laws, then the states will grant a “Class A” birth certificate to children who have parents with legal residency papers or who are citizens.

A “Class B” certificate will be issued to children whose parents are both undocumented.

This would seem to be at odds to the 14th Amendment to the Constitution which grants citizenship to anyone born on American soil.

Gabriel J. Chin, a law professor at the University of Arizona is quoted in the NY Times as saying “This is political theater, not a serious effort to create a legal test….it strikes me as unwise, un-American and unconstitutional.

The 14th Amendment, adopted in 1868, was a repudiation of the Supreme Court’s 1857 ruling in the Dred Scott v. Sanford decision. The Dred Scott ruling held that people of african decent could never be citizens.

The US Supreme Court affirmed the 14th Amendment in 1898 in the case of US v. Wong Kim Ark, interpreting the citizenship provision to apply to a child born to Chinese immigrants.

Tea Party member (Arizona representative Duncan Hunter) said in the NY Times quote: “And we’re not being mean…we’re just saying it takes more than walking across the border to become an American citizen. It’s what’s in our souls.”

See NY Times, Wednesday, January 5, 2011, page A1, by Marc Lacey. “On Immigration, Birthright Fight in U.S. is Looming.”

US Trade Deficit Narrows in October but still huge! Little improvement in manufacturing exports – recission will linger.

The New York Times reported on December 11, 2010 "U.S. Deficit in Trade Narrowed In October" by Christine Hauser that there is one small bright spot.

The Commerce Department reports that the trade gap was $38.7 billion in October 2010. the smallest since January 2010, when it had been down at 34.8 billion.

A trade deficit forecast of $43.8 billion had been forecast for October 2010, so the numbers were better than expected.

The narrowing was due to an increase in American exports. Most of the increase in exports was agricultural goods like food (soybeans to China) and some gas and oil sent to Mexico.

Unfortunately, there was no big increase in manufacturing exports, so while this narrowing deficit is good news overall, it is not as good as one would have hoped. Manufacturing increases are desirable, as this decreases unemployment.

Holding back the economy – Financing remains tight, Arizona firms say.

[categories: Washington Bankruptcy Attorney]

When I was at the American Bankruptcy Institute, Western Leadership Conference, In Scottsdale, Arizona, in early December 2010 (for three days of intense classes and education about cutting edge bankruptcy issues) I came accross the following article about trouble financing small businesses. I recap the article here.

Small business is a major economic driver; so long as loans and financing remains tight for small business, it is very likely that the economic recovery will be very slow. So, thus, if you are facing financial dificulties, expect the economy to remain stagnant. I don’t think growth and increases in income are in the short term forecast.

December 11, 2010, The Arizona Republic, Saturday. Section D by Russ Wiles.

Russ Wiles reports on a conference, the Invest Southwest Capital Conference, recently held in Scottsdale, AZ, in early December 2010.

The financing climate has improved a little bit, but it is still very difficult to secure commitments for loans for capital acquistions and improvements.

"It’s better than it was last year," said Vaidy Iyer, chief executive officer and co-founder of SEAL Innotech, a Chandler, AZ company that develops mobile-phone applicatinos for large global companies. "But it’s still challenging, and it’s nothing close to where it was a few years ago."

Also cited as financing problems are a recent tightening of the federal rules governing "accredited" investors, making it harder for upscale individuals to qualify as investors in angel capital or venture capital funds.

"The climate for funding small businesses is in a crisis" said Terry West, CEO of Serious INtegrated, a Phoenix company that makes iPhone like touc panels for applications.