states

States Will Have Deficits Totaling $500 Billion in ’11, New York Aide Says

October 28, 2009

By Henry Goldman Oct. 28 (Bloomberg) — New York Lieutenant Governor Richard Ravitch predicted states across the U.S. would face deficits totaling as much as $500 billion in 2011 after the federal government stops paying them economic stimulus grants. Ravitch, 76, a real estate developer and former chairman of New York’s Metropolitan Transportation Authority , said the looming nationwide fiscal crisis would first become apparent as states’ credit ratings falter, making it more expensive to borrow money. “I believe that the states across the United States will face deficits a year after stimulus ends of $300 billion to $500 billion a year,” Ravitch told about 200 people gathered at New York University’s Robert F. Wagner Graduate School of Public Service. “You’re going to begin to see cracks in the municipal bond market well before then, because that’s an inexorable casualty of unfundable state deficits.” Ravitch, who became lieutenant governor in July through an unprecedented appointment by Governor David Paterson , estimated the state’s current deficit at about $4 billion, about $1 billion more than the state Budget Office’s calculation. He predicted the gap would be $7 billion to $8 billion next fiscal year and then $15 billion to $18 billion the following year after payments under the federal government’s $787 billion American Recovery and Reinvestment Act of 2009 stop flowing to states. “These are numbers that are unprecedented,” Ravitch said, adding that the current recession is unlike any in the nation’s history, with unemployment continuing to rise, “banks are falling like autumn leaves, and nobody is projecting any significant growth in 2010.” Special Session Paterson intends to meet with leaders of the state Senate and Assembly in New York City tomorrow to discuss how to deal with the deficit that he’s said is at least $3.1 billion for the fiscal year ending March 31. The governor intends to present recommendations during a joint session of the Legislature Nov. 9, and ordered lawmakers into a special session Nov. 10 to consider spending cuts or revenue increases. Congress enacted and President Barack Obama signed the stimulus program into law in February intending to help the U.S. economy with tax cuts, expansion of unemployment benefits, and help for the states to pay costs of public education, Medicaid and infrastructure building and repair. “Health-care costs are rising six to eight times faster than the rate of inflation,” he said. “Those of us who care about the obligations of the public sector to the economy, the growth and the stability of this society, we face a very difficult set of choices.” People Leaving Ravitch, who as lieutenant governor holds the power to cast a tie-breaking vote should the Senate be deadlocked, said the Legislature faces “a terrible dilemma.” Tax increases would be counterproductive, he said, because “anecdotal evidence suggests” people are making “locational decisions,” moving out of state, based upon property, income and business taxes they perceive as too high. “It’s not fun to be there when you have to conjure with the question of do you cut health care? Do you cut education? Do you cut public transportation investment?” he said. “So it’s an interesting task and I hope we’ll begin to deal with it and begin to turn it around. There’s no magic answer.” New York’s $133.5 billion spending plan , including U.S. aid, is 9.8 percent larger than a year ago, the Budget Division said in July. Excluding federal funds, the budget grew 3.4 percent, to $86 billion. Spending Cuts Paterson proposed a $5 billion deficit reduction plan Oct. 15. The program included cuts of $1.8 billion in spending before the end of the fiscal year, and raising $1.17 billion in cash through one-time actions, such as a tax penalty amnesty program and a bond sale by the Battery Park City Authority. About $1.3 billion of the cuts would require legislators’ approval. New York faces a cash squeeze in December, when it expects to have $2 billion on hand and faces more than $5.1 billion of scheduled payments to schools, local governments and other groups, Paterson has said. The governor’s plan would reduce spending by $2 billion next year, change the pension system and impose a cap on spending in subsequent years. Pension fund changes and a spending cap haven’t been approved by lawmakers. To contact the reporter on this story: Henry Goldman in New York City Hall at hgoldman@bloomberg.net

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States Should Be Allowed To Protect Consumers From Big Banks, Obama Says

October 9, 2009

President Barack Obama reaffirmed his commitment Friday to allowing states to adopt stronger consumer protection measures than the federal government when it comes to financial products like credit cards and mortgages. In a meeting at the White House, Obama told a group of state attorneys general and consumers that he was still committed to the idea. He didn’t mention it, though, during his public remarks . Over the last several years many states have adopted tough pro-consumer laws governing predatory lending, bank fees, interest rates and late charges, only to be told by federal regulators that their laws can’t be applied to national banks such as Bank of America, Citibank, J.P. Morgan Chase and Wells Fargo. With the major banks immune from state laws, the measures are largely worthless. Some states have abandoned efforts to provide consumers with added protection from predatory lenders; others have scaled back existing rules after being pressured by federal agencies. To that end, the administration has proposed a new Consumer Financial Protection Agency . It would consolidate existing consumer protection power spread across a range of agencies. In short, it would be able to write rules governing products like credit cards and then enforce them to make sure consumers are being treated fairly. One aspect of Obama’s plan would allow states to enact tougher rules than the CFPA, so CFPA rules would be a ” floor, not a ceiling ” when it came to consumer protection. Consumer advocates and state attorneys general enthusiastically support the proposal. Throwing a monkey wrench in their hopes is Rep. Melissa Bean (D-Ill.). She’s reportedly preparing an amendment to accompany proposed legislation creating the agency that would prevent states from doing just that. The Wall Street Journal reports that some Democrats would vote against the entire bill if Bean’s amendment is attached. With scant Republican support, a splintering among Democrats doesn’t bode well for the type of reform the administration first proposed in June to great fanfare. But Obama isn’t backing down, according to Massachusetts Attorney General Martha Coakley, a participant in Friday’s White House meeting. Obama was “very sympathetic” to the anti-preemption message from state attorneys general. “This meeting was for the president…to hear from state attorneys general about our efforts to protect consumers,” Coakley said. “It’s one of the reasons why he wanted us there, to tell us that he believes the states will be partners in this going forward. This president has been very proactive about states not being preempted. There’s no disagreement with us.” State attorneys general historically have been at the front lines protecting consumers. They’ve also been successful in combating predatory lending, like last year’s multi-billion dollar settlement with Countrywide Financial. Illinois Attorney General Lisa Madigan praised Obama for supporting the attorneys general in their efforts to rein in the abuses perpetrated against consumers. “Throughout the meeting today, President Obama reiterated his commitment to getting regulatory reform passed this year and encouraged all of us to keep up the strong fight against the special interests working overtime to kill the Consumer Financial Protection Agency,” Madigan said in an email. Bean’s proposed amendment, though, has them “very concerned,” Coakley said. So does the fact that the financial services lobby is fighting hard to kill or defang proposed reforms, like rolling back preemption, which Coakley calls “fairly outrageous.” “Part of the reason why the system hasn’t worked is because [the states] have been preempted in so many areas,” she said. “Those members of Congress who agree with the old system, with the U.S. Chamber of Commerce — they have to own that.”

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FluMist: Swine Flu Nasal Spray Vaccine Becoming Available

October 2, 2009

Just a trickle of vaccine, 600,000 doses of the nasal spray FluMist, will be divided among 21 states and four large cities by Tuesday, with more small shipments to more states later in the week. “We’re moving this out as quickly as we can,” said Oregon’s public health director, Dr. Mel Kohn, who hopes shipments arrive in time to begin some vaccinations on Monday. “This doesn’t do any good sitting in a warehouse.” Most states are aiming their first small batches at health care workers, hoping to keep them well enough to be on the job as cases of swine flu — what doctors prefer to call the 2009 H1N1 strain — are rapidly increasing nationwide. In Chicago, firefighters will share first doses with hospitals, to get some emergency responders protected, too. Alaska wants its meager first 4,000 FluMist doses to head directly to preschoolers, ages 2 to 4. And Pennsylvania will target its initial 58,000 FluMist doses mostly to 5- to 9-year-olds in parts of the state where H1N1 is most active. It’s the school-age kids who are getting infected most, said Pennsylvania’s acting physician general, Dr. Stephen Ostroff, and the under-10 crowd is going to need two doses of swine flu vaccine. “Our figuring is, let’s get started in the group that’s going to take longest to get protected,” he said. Stay tuned: How much vaccine is available and for whom is going to change week by week. “This is really just the beginning,” said Dr. Anne Schuchat of the U.S. Centers for Disease Control and Prevention. “We need a little bit of patience the first couple of weeks.” Indeed, some states were surprised that the first shipments were FluMist, which is only for healthy people ages 2 to 49, which leaves out some of the groups at high risk for H1N1 flu. The more common flu shot will be close behind, part of the 6 million to 7 million doses of vaccine the CDC expects to ship around the country by the end of next week. Far larger batches — about 40 million doses — start shipping the second week of October. That’s when states expect enough of both shots and FluMist to start heavily targeting the high-risk groups: pregnant women, children and young adults from 6 months to 24 years, the young and middle-aged who have flu-risky conditions like asthma or diabetes, and caregivers of infants. Hospitals in Pinellas County, Fla., plan to give new parents a special reminder. On the newborn checklist — infant car seat, going-home outfit — comes a plea to get themselves vaccinated before discharge. Because newborns can’t be vaccinated, “the only way to protect your baby is for Mom, Dad and the family to receive the vaccine,” the flyer says. By the end of October, Arizona expects 1 million doses on hand, enough for schools to start onsite vaccination programs, said Health Services Director Will Humble. What about everybody else? Massachusetts officials are warning that people who aren’t at high risk from swine flu may have to wait until November for an H1N1 shot. In other states, officials are more optimistic. Milwaukee has earmarked its first shipment for health workers and its second for schoolchildren, kindergarten through high school. Then by late October, “we should be able to open it up to anyone who wants it,” said Milwaukee’s disease-control chief, Paul Biedrzycki. “We’re expecting two to three times the demand for seasonal flu vaccines.” This year brings an unusually complex vaccination schedule: Most people will need two different inoculations, one against regular winter flu and the H1N1 vaccine. Plus, children under 10 will need two H1N1 doses. The federal government bought the nation’s entire supply of H1N1 vaccine and is dividing doses as they arrive among states according to population. State health departments submit orders, and doses are shipped to the vaccination sites the states deemed able to quickly get shots into arms and squirts up noses — a mix of doctors’ offices, hospitals, drugstores and public clinics. CDC in turn will track those shipments to see how fast vaccine is used, and for whom, to ensure the populations at highest risk are vaccinated. Associated Press writers Carla Johnson in Chicago, Marc Levy in Harrisburg, Pa., Christine Armario in Tampa, Fla., Bob Christie in Phoenix, Dinesh Ramde in Milwaukee, Tim Fought in Portland, Ore., Dan Joling in Anchorage, Alaska, and Steve LeBlanc in Boston contributed to this report. Get HuffPost Business On Facebook and Twitter !

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David Adkins: Shaping the Legacy of the Recovery Act: A View from the States

September 5, 2009

If the 2009 sessions of most state legislatures are any indication, the Recovery Act played a pivotal role in helping states weather the economic storm. Although some states are still floundering in red ink, most have found a way to creatively combine new spending strategies, limited budget cuts, some tax hikes and stimulus dollars to craft balanced budgets. Moreover, states have emerged as the tip of the spear in our nation’s response to the continued economic crisis. Across the country state leaders are putting Recovery Act dollars to work in new and creative ways. In Indiana, for example, Governor Mitch Daniels has used $24 million in stimulus funding to employ 2,000 young Hoosiers to break trails and improve public parks. And in Georgia, $187 million in federal stimulus dollars will be used for 51 road, sidewalk and other transportation projects. While the New Deal was about federal agencies, the Recovery Act is about federal partnership, with states leading the charge in providing essential services to the vulnerable while jump-starting economic growth. This means by necessity that much of the political risk for achieving results falls on the states, specifically governors. With the passage of the Recovery Act, the job of governor quickly became the second hardest job in America. Within days of enactment, Vice President Biden read the riot act to state and local governments that “business as usual” would not be tolerated. Governors knew they would be held to unprecedented levels of scrutiny. They also knew that they would need to act quickly to ensure they maximized their state’s share of the funds available. These pressures often left little or no time to accommodate appropriate legislative oversight or solicit broader public input into spending priorities. This left many state officials “flying naked” as they sought to embrace the opportunity represented by Recovery Act funds. Despite these risks, states rose to the challenge, saving or creating thousands of jobs and rolling out infrastructure projects and other programs at unprecedented speed. If the figures quoted recently by the vice president are true that the Recovery Act added over 2 percent to U.S. economic growth in the second quarter, this result will be due in large measure to the leadership and vision of state leaders from both parties and in all corners of the country who have worked diligently to implement the Recovery Act even if they do not universally agree on the merits of all its component parts. While the White House has worked closely with state leaders to navigate the challenges of the Recovery Act, the next phase of implementation will require a new tone from Washington. If the stimulus investment is to achieve more than just plugging budget gaps, states will need to channel multiple streams of Recovery Act funding, such as work force training funds and competitive grants for research and development or green energy, to focus on achieving a transformational change in key sectors of state economies. In noting that critics fault the Recovery Act for containing too many small investments in scattered programs rather than large strategic interventions, the vice president said that the Recovery Act was not a “silver bullet,” but rather “silver buckshot.” If this is the case, there is a role for the states and the federal government to work together to ensure that enough individual pellets of funding are concentrated on a single target – such as fostering a new energy economy — to deliver an economic punch. Although the Recovery Act will not leave behind the infrastructure legacy of the New Deal, with such transformational public assets as the San Antonio River Walk, that doesn’t mean it can’t have a transformational impact. Just as an unexpected windfall of federal research funding for the space race provided the seed capital to transform a rural patch of North Carolina into the Research Triangle Park — the Silicon Valley of the Southeast — Recovery Act funding opportunities in green energy, biomedical research and other fields could propel new communities into an economic future radically different from the one they face today. The public is entitled to accountability and the federal government is right to emphasize it. But when the main message to the states is a wag of the finger, the tendency is to play it safe rather than pursue creative strategies. If the feds wish to maximize the legacy of the stimulus investment and empower state policymakers to take the risks necessary to achieve transformational change, as North Carolina Gov. Luther Hodges did in the 1950s, they will need to convene and inspire state leaders to explore the possibilities that exist for spending stimulus dollars not just emphasize the consequences of failure. Let’s hope the administration and Americans are willing to look beyond the short-term and begin instead to look to the horizon. The hard work of addressing today’s needs will continue in every state capitol, but the more imaginative, transformative opportunities made possible by this unprecedented federal investment must also be pursued if the full promise of the Recovery Act is to be achieved. That will require a new partnership between levels and branches of government. Thankfully, for both the states and the federal government, the risk of pursuing the possibilities is far less than the risk of failing to act.

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Harley-Davidson Scouting Locations for New Plant

August 25, 2009

Harley-Davidson is scouting sites in four states as it mulls a decision to move its York, PA, manufacturing facility — the largest Harley plant in the country — to the Midwest. According to recent reports, officials from the Milwaukee-based motorcycle…

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CalPERS Sues State Over Furlough Plan

August 23, 2009

The California Public Employees Retirement System has filed a lawsuit over the effect of the states furlough program on its pension fund

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Tony Sachs: The Return Of The Green Fairy: Ted Breaux Brings (Real) Absinthe Back To America

August 10, 2009

A few years ago, I scored my first bottle of genuine absinthe from a French company called Jade Liqueurs. You may not know much about absinthe, because it was banned in the USA in 1912. Sometimes called “the green fairy,” absinthe was said to cause hallucinations and drive drinkers of the stuff to insanity and murder. Needless to say, I was intrigued. It took weeks, and a ridiculous shipping price, for the bottle to arrive. After all, the stuff had to be virtually smuggled into the States. But even though its sinister reputation had since been scientifically disproven, everyone I know still wanted to try some. So I decided to throw an absinthe party. Now, absinthe is a strange little spirit. It’s distilled entirely from herbs, including anise, fennel, and artemis absinthia , a type of wormwood that gives absinthe its name. Its powerful flavor makes it difficult to mix into cocktails. You can’t do absinthe shots, or simply pour it into a glass with ice. The ideal way of preparing it for human consumption is a meticulous, time-consuming task involving cold water, sugar cubes, and slotted spoons. The process is called louching , and it has to be done just right. Add too much water and the drink tastes flat. Too little, and the high alcohol content will singe your taste buds. In a nutshell, absinthe is not a ready-made party beverage, even if my apartment was filled with would-be Toulouse-Lautrecs ready and eager to sample the contraband hooch from across the pond. After a couple of bouts of louching with no hallucinations (and thankfully, no murders), most of my guests were ready to move on to more simple and traditional methods of intoxication. As one imbiber said, “It tastes… weird.” That’s true — if you’ve been weaned on whiskey, tequila, vodka and the like, a spirit distilled from medicinal herbs won’t taste like anything you’re familiar with. Not long after my party, the ban on genuine absinthe was lifted in the U.S. thanks largely to the efforts of Ted Breaux, the founder of Jade Liqueurs. Breaux almost single-handedly proved through modern chemical analysis that absinthe, consumed responsibly, will only affect your sobriety, not your sanity. And in 2007, Breaux, along with Viridian Spirits, introduced Lucid, the first genuine, unadulterated absinthe to be legally sold Stateside since the Taft presidency. The challenge in bringing a formerly-verboten potion to the masses is twofold. First, thrill-seekers and purists need to be convinced that Lucid is the real deal, and not some watered-down absinthe substitute like Pernod or Absente. And second, the imbibing public has to be persuaded to try a liquor with flavors and aromas unfamiliar to the American palate — and which won’t even make you hallucinate or generally drive you ’round the bend. That’s why today, Breaux considers his job “15% distillation and 85% education.” He’s spreading the word about Lucid, and absinthe in general, to almost anyone who’ll hear him out. “Basically,” he says, “the whole future of the category depends on education. And that’s the biggest challenge right now. Seasoned enthusiasts, cocktailians, mixologists, spirits tasters, judges — all became novices in the world of absinthe. Because, who has tasted vintage absinthe? And until you do, it’s hard to get a basis of perception. Modern Pernod isn’t even close. I mean, what’s a bottle of Thunderbird compared to a cabernet sauvignon?” It’s pretty cool to talk with someone who almost unquestionably knows more about a given subject than anyone in the world. And it’s even more cool when that subject is something as interesting and fun as absinthe. It’s somewhat surprising, then, to find out that fifteen years ago, Breaux didn’t even know what absinthe was. “Back in ’93, I was a chemist, working in a research lab, and a colleague of mine mentioned absinthe in a passing comment. I said, ‘Yeah, what exactly was that?’ And he said, ‘It’s that green liquor that makes you crazy.’” Breaux was intrigued — hell, who wouldn’t be? So he did what any good chemist would do, and consulted the Merck Index to find out more about absinthe’s notorious side effects. “It just had a few generalities about it,” he says, “and then it had this note. Verbatim, it says, ‘Caution: ingestion of the liquor absinthe can cause hallucinations, convulsions, death.’ And it just goes to show you just how widespread the misconceptions about absinthe are. I mean, even the most intelligent and educated and credible among us were not spared.” Breaux read everything he could on the subject, but still had lots of questions that no living soul could answer. So he began an odyssey that led him to France — which was Absinthe Central back in the 19th century — where he tracked down bottles of vintage, pre-ban absinthe and chemically analyzed them for evidence of thujone, the substance allegedly responsible for absinthe’s mind-altering effects. “The technology to do that didn’t exist until maybe the 1960s, 1970s,” says Breaux. “By that time, [absinthe] was long gone.” The analyses turned up only trace amounts of thujone, and nothing else deleterious. So absinthe didn’t make generations of European and American drinkers crazy, it just made them drunk — absinthe has a very high alcohol content. At the same time Breaux was making his chemical revelations, a new wave of absinthes was emerging out of Eastern Europe. “I saw the whole resurgence of interest in absinthe unfold, and I saw it unfold badly, with all these products from the Czech Republic that don’t bear any resemblance to real absinthe. These products are alcohol with a little bit of flavoring and green dye added to it, and sold at ridiculous prices, because they realized that tourists would buy it. Because who knows any better? “I realized that there’s nothing out there that’s basically representative of what absinthe was. There’s nothing out there crafted like it was, and nothing out there that really tasted like it did. And that’s when I decided that somehow, some way, I was going to find a way to reproduce vintage absinthe. I couldn’t do it in the United States, because it was still illegal here. So I spent some time in France.” And thus was born Jade Liqueurs, one of the geekiest-yet-coolest endeavors in beverage history. By recreating specific vintage absinthes to the letter, Breaux created a time machine for the taste buds. He grew the herbs on the same terroir . He found a 175-year-old distillery, with the original equipment, in which to make the stuff. He had a special base spirit prepared the same way it had been 100 years ago. He distilled every batch himself, by hand, in very limited quantities. He even created vintage-style labels for the bottles. Breaux and Jade Liqueurs were the catalysts for an absinthe renaissance. Breaux was featured in countless magazine articles and TV shows, and his absinthes started making their way into the States — no easy task considering the stuff was still illegal here. That’s where the lawyers who were to form Viridian Spirits came in. “They approached me,” says Breaux, “and said ‘Look, with the science that you have and the credibility you have in this field, we have a very good legal mechanism, and we feel very confident that together, we could make an effort to overturn this silly ban that’s been here in the US since 1912.’ I told them, ‘I’ll tell you what. I’ve got the product for you, and if you can do it, then we’ll do it together.’” The rest is alcoholic history. On March 5, 2007, Lucid hit American watering holes and liquor store shelves. While it’s not a by-the-book recreation of a specific vintage absinthe, it’s definitely in the ballpark. “If you went to a French bistro or café in the 19th century and ordered absinthe — I mean a decent place — you would’ve gotten something like Lucid,” he says. And even though 21st century palates are no longer accustomed to the stuff, if you’ve got an open mind and a taste for adventure you’ll find plenty to love. Anise is the dominant flavor, but you get a nice balance from the fennel, a slight edginess and from the wormwood, and an earthiness from the other herbs. Lucid is slightly sweet on its own but acquires an almost minty coolness when sugar is added. Its clean mouth feel and refreshing finish belie its high alcohol content; the louching process helps eliminate the burn that you’ll get if you try the 124-proof libation straight. Absinthe-based cocktails have been around since the 19th century (the most famous being the Sazerac ), but modern bartenders are only beginning to explore its possibilities. As Breaux puts it, “What I like to say about vodka is that it goes with everything. It’s like wearing black. Absinthe is like wearing purple. But the thing about wearing purple is that if you know your shit, you can do great things with it.” One of my favorites is the St. Germainiac — an ounce of St. Germain elderflower liqueur, about a quarter ounce of Lucid, ginger ale and a healthy dash of Angostura bitters, with an orange twist. Contrary to public perception, Lucid won’t make you hallucinate or turn homicidal. In fact, it imparts what Breaux describes as “a sensation of clarity. I drink red wine, I feel like my mind just drops down. Not with absinthe — I feel somewhat stimulated mentally. One word that keeps coming up when people describe this is lucid, or lucidity. And hence the name of this product.” He adds, “It’s kind of like an herbal speedball. Some herbs are reputed to be excitatory, and some that are sedative, so you have this kind of push-pull thing going on.” If that’s not a selling point, I don’t know what is. Absinthe may still be a long way from mainstream acceptance and general understanding, which means that Breaux has a lot of work to do. And he’s not shrinking from the task. “I’m on the road a lot. And I’m just one person, but fortunately I get enough press and media. I’m trying to educate the press and the media, mixologists, bartenders, the public, as to what they’re buying.” His mission, apart from getting more Americans to try real absinthe, is to keep them away from the bogus stuff. “There are profiteers that realize that they can put anything green in a bottle and call it absinthe and jack up the price, and take advantage of a largely ignorant consumer base, and sell it. Hence, the need for education. “If it were easy, it wouldn’t interest me. But the good thing is that I know I’m doing the right thing. I’m on the good side – I’m on the side of truth.” I’ll drink to that.

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