Virginia Borrows $1.26 billion To Pay Unemployment Benefits; Detroit Loses $400 Million on $800 Million of Bonds; Detroit’s Easy Solution
by ilene - December 1st, 2009 12:31 am
Virginia Borrows $1.26 billion To Pay Unemployment Benefits; Detroit Loses $400 Million on $800 Million of Bonds; Detroit’s Easy Solution
Courtesy of Mish
Virginia is robbing Peter to pay Paul because it is plain flat out broke. Bankrupt is probably a better word. To pay unemployment benefits, Virginia will borrow $1.26 billion and pay it back plus interest by jacking up unemployment taxes.
Please consider Va. to borrow $1.26 billion for depleted unemployment funds.
As Virginia wrestles with ways to replenish its depleted fund for unemployment benefits, Hampton Roads employers expressed concern about the impact that higher unemployment taxes could have on the health of their businesses.
The sorts of tax increases described by the Virginia Employment Commission earlier this fall may be difficult for some small businesses to absorb without job cuts, said Jim Shirley, owner of Bennett’s Creek Farm Market in Suffolk.
The state’s average unemployment tax per employee will jump from $95 this year to $171 in 2010 and to $263 by 2012, the VEC said in a Sept. 29 presentation to the Commission on Unemployment Compensation.
For small retailers, the financial pressure from weak sales and higher unemployment taxes could be intense, Miller said. "You’ve got to have someone in the store, and if you’re down to one person in the store, you can’t cut any more."
In addition to boosting unemployment taxes on employers, Virginia will have to borrow more than $1.26 billion from the federal government in coming years to continue paying jobless benefits, the VEC said in its forecast.
That’s because the deficit in its unemployment-benefits fund will hit $194 million by the end of this year and balloon to $561 million by the end of 2010, the VEC said.
Two dozen states, including North Carolina, South Carolina, New York and Texas, have already borrowed about $21 billion from the federal government to pay jobless benefits, according to the Labor Department.
One problem with borrowing to pay jobless benefits, the VEC noted, is that interest payments on this debt cannot come from the unemployment trust fund or from federal money. The interest payments on its $1.26 billion of projected borrowing are likely to total $36.7 million and come from general state funds, the VEC said in its September report.
Yet Another Reason To Not Hire
Borrowing money while jacking up…
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City of Houston is Bankrupt (So are California, Oregon, and Pension Plans in General)
by ilene - October 27th, 2009 8:51 pm
City of Houston is Bankrupt (So are California, Oregon, and Pension Plans in General)
Courtesy of Mish
Houston, we have a problem. We are bankrupt.
That is the finding of Bob Lemer, CPA, Retired Partner at Ernst & Young; Aubrey M. Farb, CPA, Retired Partner at Grant Thornton; and Tom Roberts, CPA, Retired Partner at Fitts Roberts.
Cover Letter
October 22, 2009
Name, Title and Address [see list below]
Subject: Finances of the City of Houston
Dear : [see list below]Enclosed is our partial analysis of the very serious financial situation at the City of Houston. We would be derelict if we failed to share this financial analysis with you. This financial heads up will assist you in meeting your fiduciary responsibilities to Houston voters, taxpayers, readers, viewers or investors—as the case may be.
We feel a public discussion of the City’s financial situation is necessary and firmly believe that addressing the City’s financial condition is in the best interest of the Houston economy and Houston taxpayers. We believe the sooner the City of Houston addresses the financial shortfall the better.
Please bear in mind that the Houston City elections are on November 3, 2009, with early voting having commenced on October 19, 2009. Recent history has shown a large portion of voting occurs during early voting.
We trust that the attached article is of significant assistance to you.
We may be reached at boblemer@sbcglobal.net.
The above was sent to:
City of Houston—Incumbent Mayor, City Controller, and City Council Members
City of Houston—Non-Incumbent City Candidates
Greater Houston Partnership—Board Members
Houston Chronicle—Editorial Board Members
Houston TV Stations—CEOs
Houston Business Journal—Editor
Houston Community Newspapers-Editor
Houston Press-Editor
Municipal Bond Rating Agencies—CEOs
Wall Street Journal—Editor
Barron’s-Editor
Investor’s Business Daily-Editor
USA Today-Editor
Texas Monthly—Executive Editor
Deloitte & Touche LLP—Houston and New York
Executive Summary
City of Houston
Disturbing Financial Facts—October 2009
By: Bob Lemer, Aubrey M. Farb and Tom Roberts
The City of Houston is financially broke and it appears that the mayor who takes office in January 2010 may have to captain the City through bankruptcy procedures. The City’s unrestricted assets were $1.2 billion short of the already recorded corresponding liabilities these assets were needed to pay as of fiscal year end June
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
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