QUOTE OF THE DAY
Reuters: Appeals court upholds controversial Wisconsin union law
A federal appeals court on Friday upheld a controversial Wisconsin law that restricts the power of public-sector unions, the passage of which sparked an unsuccessful effort to recall the state's Republican governor, Scott Walker.
By a 2-1 vote, the 7th U.S. Circuit Court of Appeals in Chicago found that the law is constitutional, rejecting claims that it violated the equal protection and First Amendment rights of union members.
It reversed part of a March 2012 ruling by U.S. District Judge William Conley in Madison, Wisconsin.
Forbes: Bobby Jindal Seeks Rich State Status With Income Tax Phaseout
Nine states survive perfectly well with no state income tax at all. These include large states such as Texas and Florida, medium size states such as Tennessee and Washington, and smaller states, in terms of population, such as New Hampshire, Nevada, South Dakota, Wyoming, and Alaska. Louisiana Governor Bobby Jindal is now proposing to make his state the 10th in America with no state income tax, phasing out both personal and corporate state income taxes.
Experience proves the wisdom of that idea. Art Laffer, Steve Moore, and Jonathon Williams summarize the data in the 2010 volume of Rich States, Poor States, published annually by the American Legislative Exchange Council (ALEC). Economic growth in the 9 states without income taxes skyrocketed from 1998 to 2008 almost 50% faster than in the 9 states with the highest top personal income tax rates. Job growth rocketed ahead more than twice as fast in the 9 no income tax states as compared to the 9 top income tax rate states.
Yet, because of this more rapid economic growth, total state tax receipts in the 9 no income tax states still grew 30% faster than in the top tax rate states.
Time: Why Illinois is Going Bankrupt
It’s not quite fair to say that Illinois officials are doing nothing to defuse the most threatening pension time bomb in America. Darn close to nothing, that’s fair, which explains why the ratings agencies Fitch and Moody’s have put the state on their negative watch lists. The Land of Lincoln is heading toward yet another downgrade of its battered bond ratings if this near-paralysis keeps up. To say “nothing,” however, ignores Squeezy the Pension Python.
Squeezy is the cartoon co-star in a YouTube video featuring Illinois Gov. Pat Quinn. Hoping to raise awareness among voters and put pressure on the legislature, Quinn took to the ether last year to explain why underfunding the state pension system (the deficit is deepening by more than half a million bucks per hour) is not a good idea. When the state has to pay promised pensions even though the coffers are empty, said the governor, other priorities get squeezed—like schools, roads, and law enforcement.
Cal Watchdog: California pension Death Star approaching
When Moody’s Investors Services issued a “Request for Comment” last July about their plan to begin recalculating the effect of massive state and local unfunded pension liabilities on credit quality, I warned that this would eventually result in the across-the-board slashing of municipal bond credit ratings and numerous municipal bankruptcies in California.
It now appears that I may have understated the risk for California. The California Public Policy Center released a report analyzing of the impact of the new Moody’s policy on six Northern California counties: Alameda, Contra Costa, Marin, Mendocino, San Mateo and Sonoma. Their conclusion is that, when the new rules are applied, the annual cost of pensions will increase from the equivalent of about 50 percent to 100 percent of these counties’ net property tax income.
Detroit News: Treasury can start selling remaining GM shares
The Treasury Department's banks today can start selling off the government's remaining 300.1 million shares in General Motors Co.
The Treasury — which plans to sell its 19 percent stake in the Detroit automaker by the end of March 2014 — said it had filed a written trading plan for its stake.
Last month, it sold 200 million shares of its GM stock to the Detroit automaker for $5.5 billion, or $27.50 a share.
Fox News: Premiums set to rise this year in run-up to ObamaCare tax on insurance industry
While the most sweeping provisions of the health care overhaul have not yet gone into effect, plenty of Americans will still be paying higher insurance premiums this year -- as insurance companies try to preemptively cover the cost of a tax increase included in President Obama's Affordable Care Act.
That tax doesn't take effect until next year, when other major provisions like the so-called "individual mandate" and insurance subsidies also kick in. But that hasn't stopped insurance companies from charging higher premiums this year to cover the hike, as well as the cost of ObamaCare benefits such as free birth control and preventive care.
Miami Herald: Florida Supreme Court upholds retirement law
A law championed by Gov. Rick Scott that requires teachers, state and county workers and some municipal employees to contribute 3 percent of their pay to the state's pension plan was narrowly upheld by the Florida Supreme Court on Thursday.
The 4-3 decision reversed a trial judge's ruling that the law violated the collective bargaining, contract and property rights of about 600,000 public employees including police, firefighters and other first-responders.
The law, which went into effect on July 1, 2011, also repealed 3 percent annual cost of living increases for benefits accrued after that date.
The ruling was vindication for the Republican governor - who had sought an even bigger 5 percent employee contribution - and the GOP-controlled Legislature. The decision was a bitter defeat for public employee unions, led by the Florida Education Association, which had challenged the law.
Mississippi Business Journal: Mississippi Senate easily passes expanded charter school bill
A bill to expand charter schools in Mississippi has easily cleared the Senate, and attention shifts to the House for the second year.
In a 31-17 vote, the bill had two Democratic supporters but no Republican opponents. The vote came after more than three hours of debate and a day after Senate Bill 2189 was introduced and passed by the Senate Education Committee.
Charter schools are public schools that agree to meet certain standards in exchange for freedom from regulations. Mississippi has a charter school law that allows a small number of existing schools to convert to charters, but none have done so.
CARTOON OF THE DAY