It’s a slow day in a small town and
streets are deserted.
Times are tough, everybody is in debt, and everybody
is living on credit.
A rich tourist drives through town, stops at the
motel, and lays a $100
bill on the desk saying he wants to inspect the rooms
upstairs to pick one for the night.
As soon as he walks upstairs, the owner
grabs the bill and runs
next door to pay his debt to the butcher.
The butcher takes the $100 and runs down the
street to retire
his debt to the pig farmer.
The pig farmer takes the $100 and heads off
to pay his bill to
his supplier, the Farmer’s Co-op.
The guy at the Farmer’s Co-op takes the
$100 and runs to pay his
debt to the local prostitute, who has also been
facing hard times and has
had to offer her “services” on credit.
The hooker rushes to the hotel and pays off
her room bill with the hotel owner.
The hotel proprietor then places the $100
back on the counter so
the rich traveler will not suspect anything.
At that moment the traveler comes down the
stairs, states that
the rooms are not satisfactory, picks up the $100
bill and leaves town.
No one produced anything. No one earned
anything. However, the
whole town is now out of debt and now looks to the
future with a lot more optimism.
And this, ladies
and gentlemen, is how the United States
Government is
conducting business today.
What has Tennessee elected officials done to get the data center business?
The state of Virginia has adopted targeted tax incentives to attract major data center projects to the state, which is already one of the most active data center markets. The incentives are designed to keep Virginia competitive with other states that have passed similar tax incentives to attract data center projects, and positions the commonwealth to benefit from IT investment in the Obama administration’s economic stimulus plan.
Last month both houses of the Virginia General Assembly unanimously passed the incentive package, which offers tax breaks on servers and other equipment purchases for either new or existing data centers. The bill was promptly signed into law by Gov. Tim Kaine.
The new measure offers an exemption from the Virginia Retail Sales and Use tax for computer equipment bought or leased between July 1, 2010 and June 30, 2020 for use in a data center. The facility must be located in Virginia, generate capital investment of at least $150 million and create at least 50 new jobs that pay one and one half times the prevailing average wage in the locality.
Read more via Virginia Passes Data Center Tax Incentives « Data Center Knowledge.
Grandparents, retirees and struggling seniors have waited months for this.
Tens of millions of Social Security recipients will see their bank accounts jump by $250 starting Thursday, when the government began sending out checks and transferring funds for a one-time boost coming from the stimulus bill passed in February.
The payments are flowing to nearly 55 million seniors and retirees between now and June 4, with a huge batch of checks hitting the mail this week.
Read more via $250 checks going to millions of seniors Thursday – CNN.com.
When Warren Buffett speaks, it’s usually worth paying attention. This time, the Oracle of Omaha is voicing concerns about the ability of some battered local and state governments to pay off their debts. The idea of cities and states facing insolvency is alarming for sure, and Buffett isn’t alone. Moody’s recently assigned a “negative outlook” to the creditworthiness of all the nation’s local governments. The agency has rarely made such a sweeping generalization but said the magnitude of this recession warranted the move. The comments are the latest to have shaken the once-staid world of municipal bond investing.
Traditionally, muni bonds offered lower yields — usually about 20% less — than Treasury bonds, since their income isn’t taxed. But the group was crushed last year, sending prices down and yields up. Now bargain hunters have started to emerge, attracted by yields that are as much as 70 basis points, or 0.7%, more than similar 10-year Treasurys, for example. As a result, the S&P Muni index has climbed 7% this year, compared with the nearly 6% decline in the broader stock market. Read more…
Cash-strapped state treasuries could lose tens of millions of dollars in income and corporate tax revenue if states copy the tax breaks in the federal economic stimulus package, officials say.
Most states tie their tax code to the federal government’s to make it easier for individuals and businesses to fill out their tax forms. The $787 billion stimulus package that Congress approved and President Obama signed contains about 10 new tax cuts that state officials will have to decide whether to follow.
Read more via Stimulus tax breaks threaten state revenues.
State and local governments are turning to user fees to raise quick cash — from increases on hunting licenses to fees for enrolling in the Little League. One town is considering charging accident victims who need to be extricated from their cars.
As cities and states struggle with sinking property values and declining sales tax revenue, many see raising fees as more acceptable to voters than increasing income taxes and sales taxes, said Bert Waisanen, a fiscal analyst for the National Conference of State Legislatures.
Money from the federal stimulus package will bolster some parts of states’ budgets, but it won’t be enough to close the gaps, said Scott Pattison, executive director of the National Association of State Budget Officers. “The stimulus favors education and health care,” Pattison said. “Other parts of the budget are going to be disproportionately hit, like parks and recreation.”
Read more via Cities, states tack on more user fees – USATODAY.com.
Nearly 700 homeless families in Massachusetts are living in hotels at state expense because emergency shelters are full. New York City saw a 40 percent rise in families seeking shelter since the recession began. School districts nationwide reported more homeless kids in the fall of 2008 than the entire year before. And tent cities have sprung up throughout Hawaii and in Sacramento, Calif., Reno, Nev., Phoenix, Portland, Ore., and other cities.
It’s one of the most alarming aspects of the economic crisis: State officials are seeing levels of homelessness they have never seen before. President Barack Obama’s $787 billion economic stimulus package includes $1.5 billion to address the problem, but officials say it’s not enough to cover the cost of housing for millions of families in crisis.
As many as 3.4 million Americans are likely to experience homelessness this year – a 35 percent increase since the recession started in December 2007 – and a majority will be families with children, according to the National Alliance to End Homelessness. The predictions are based on rising levels of unemployment and poverty, plus a severe shortage of affordable housing created, in part, by the mortgage industry collapse.
By the time a family shows up in a shelter, they’ve done everything possible to avoid homelessness – stayed with friends and family members, gone without food and sold their possessions. They’ve expended every financial and social resource they have. Some were middle-class families felled by layoffs and ballooning mortgages.
Read more via States cope with rising homelessness.
State Finance Commissioner Dave Goetz says unemployed Tennesseans will soon be eligible for $25 more in weekly benefits after two legislative panels approved the expansion.
The extra benefits paid with federal stimulus money will bump up the maximum weekly payments from $275 to $300.
Read more via Lawmakers OK $25 boost in unemployment benefit.
More than three weeks after President Barack Obama signed into effect the stimulus package, many area governments, including Johnson City, are still waiting on word of how much money they will receive. Johnson City City Manager Pete Peterson says the city requested several hundred million dollars in stimulus funding that could be used for a half dozen “Shovel-Ready” projects.
Read more via Johnson City Hoping For Millions In Stimulus Funding | TriCities.