April 17, 2014

QUOTE OF THE DAY

money

Reuters: New analytical tools for muniland

Some great new tools have arrived in muniland that begin to stretch the boundaries of how we organize and process our endless information. Staying on top of 80,000 municipal issuers, 50 states and unlimited private activity issuers is no easy task. Check out some of the new arrivals:

Standard & Poor’s

Standard & Poor’s Ratings Services announced the launch of a free interactive web application that gives muniland participants the ability to create and compare credit scenarios. Users can model different capital structures and see possible ratings based on Standard & Poor’s general obligation ratings framework and their own data inputs. This web app follows last year’s launch of the iPad-based S&P U.S. Local Governments Credit Scenario Builder. Log on and have fun. The Bond Buyer lays out some specs:

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Detroit Free Press: Obama, Michigan in talks to free up $100M to aid Detroit pension deal

The Obama administration and state officials are in discussions on a deal that would free up an additional $100 million to soften the blow to Detroit pensioners, two people familiar with the talks told the Free Press late Tuesday.

The two sources, who spoke on condition of anonymity because they weren’t authorized to disclose the information, confirmed that there have been talks about the federal government supporting a move by the state to give Detroit $100 million in federal money for blight remediation. That, in turn, would free up $100 million of the more than $500 million that emergency manager Kevyn Orr planned to spend for blight removal over the next 10 years. Orr could then use that money to reduce pension cuts.

The federal funds would come from the Hardest Hit Fund, a $7.6-billion Obama administration effort established in 2010 to help the 18 states most hurt by the housing downturn.

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USA Today: Detroit pension board endorses deal to cut benefits

A Detroit pension board endorsed a deal Wednesday that would cut pension checks for non-uniformed city workers and retirees by 4.5% and eliminate cost-of-living increases to retirement benefits.

The city’s General Retirement System accepted the deal; however, the pension fund’s nearly 18,000 individual retirees and workers still will have to approve the cuts.

“The motion we passed today represents progress that allows us to move forward to continue to negotiate other details for a final settlement agreement,” the board said in a statement after it passed a motion in support of the cuts 7-0.

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Chicago Sun Times: Aldermen search everywhere for alternatives to property tax hike

A London-style congestion fee on motorists who drive into downtown Chicago during weekday business hours.

A new and lower sales tax on high-end professional services performed in Chicago.

Going along with Gov. Pat Quinn’s plan to make permanent a temporary increase in the state income tax, only if municipal revenue sharing is restored to bring Chicago $150 million-a-year.

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Bloomberg: Is Obama Cooking the Census Books for Obamacare?

For several months now, whenever the topic of enrollment in the Affordable Care Act came up, I’ve been saying that it was too soon to tell its ultimate effects. We don’t know how many people have paid for their new insurance policies, or how many of those who bought policies were previously uninsured. For that, I said, we will have to wait for Census Bureau data, which offer the best assessment of the insurance status of the whole population. Other surveys are available, but the samples are smaller, so they’re not as good; the census is the gold standard. Unfortunately, as I invariably noted, these data won’t be available until 2015.

I stand corrected: These data won’t be available at all. Ever.

No, I’m not kidding. I wish I was. The New York Times reports that the Barack Obama administration has changed the survey so that we cannot directly compare the numbers on the uninsured over time.

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Illinois Issues: Proposed ban on plastic microbeads could be model for other states

A bill approved last week by the Illinois Senate that would eliminate plastic microbeads found in hygiene products could become a national model for states looking to phase out the material.

Microbeads are small plastic particles, made of polyethylene or polypropylene, found in items such as body and facial scrubs and some toothpastes. After use, they are washed down the drain and released into waterways. The beads are so small that they make it through the filtration process at water treatment plants. They cause harm when fish and other aquatic life confuse them with food because of the resemblance in color and size to the microbes that they eat. Because they are made of plastic, which is not biodegradable, the particles do not dissolve once they are released into the environment. They float through the water or sink to the bottom once they have absorbed surrounding pollutants.

Researchers have found them in waterways, oceans and, overwhelmingly, the Great Lakes. The 5 Gyres Institute, a group that studies the global effect of plastic pollutants, found beads within the lakes. Early testing, which looked at Lake Superior, Lake Huron and Lake Erie, shows Lake Erie had more than two times the amount sampled within some areas of the ocean. The results of the study have spurred manufacturers to act. “Most of the major manufacturers that were presented with the research of the high abundance of these particles in the Great Lakes surface water responded by voluntarily phasing out plastic particles in their products and looking for alternative formulations,” said Olga Lyandres, research manager of the Alliance for the Great Lakes, a Chicago-based environmental organization. The alliance worked with The 5 Gyres Institute on the lakes study.

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WSJ: Cooking the ObamaCare Stats

You can’t manage what you don’t measure, as the great Peter Drucker used to say, and for the White House that seems to be the goal. Out of the blue, the Census Bureau has changed how it counts health insurance—at the precise moment when ObamaCare is roiling the insurance markets.

Since 1987, the Current Population Survey, or CPS, has collected information on the health-insurance coverage status of Americans. The annual reports are widely cited because their large sample sizes improve accuracy, the data are gathered constantly, and they tease out state-by-state details. But this year the Census revamped the CPS household insurance questions, muddying comparisons between the pre- and post-ObamaCare numbers. The results of the new method will be disclosed this fall.

The FDA would never approve a new drug whose maker completely changed the clinical trial protocol in the middle of the experiment, yet that is what the White House has done. How many people gained or lost insurance under ObamaCare? Did government crowd out individual insurance? What about employer-sponsored insurance? It will be much harder and in some cases impossible to know.

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Real Clear Policy: A Better Way to Pay Federal Pensions

The federal government has a long tail. But to find it, you need to look underground.

There are about 2.5 million people getting federal retirement benefits. Some 2 million of them have pensions, the rest (those hired since 1984) have annuities. Each year, another 100,000 or so people retire from the federal workforce. That’s when the old-fashioned paper chase begins.

Each retiree’s paperwork is sent to a former mine in Pennsylvania, where it is put into storage. The mine contains 28,000 file cabinets and is staffed by 600 people. It takes roughly two months for the mine’s employees to track down all the necessary paperwork, stick it in a folder, and file it away.

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NWI: Strip club “pole tax” falls short of goal

A new tax on Illinois strip clubs generated significantly less money than what supporters hoped it would raise in its first year.

According to the Illinois Department of Revenue, the so-called “pole tax” raised about $380,000 in 2013 to help fund rape crisis centers in the state.

That amount falls far short of the $1 million backers said the new tax would bring in when they pushed it through the General Assembly in 2012.

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Chicagoist: Emanuel Begins Selling Property Tax Hike To City Council

With his pension reform plan only needing Gov. Pat Quinn’s signature to become law, Mayor Rahm Emanuel has turned his attention to rustling support with aldermen for one of the linchpins of the plan with citywide elections a year away.

Emanuel’s plan was passed by the Illinois Legislature without any mention of the five-year, $250 million property tax increase that would help square the laborers’ and municipal workers’ pension funds. Instead, Emanuel placed the property tax hike squarely on the shoulders of City Council. Ald. Ameya Pawar (47th) and Will Burns (4th) realized one of the unintended consequences of the property tax hike would be funneling more money to the city’s tax increment financing districts.” Burns and Pawar approached Emanuel with the idea of declaring an immediate TIF surplus on that revenue and returning it to other city departments strapped for cash like Chicago Public Schools and pension funds. According to the Sun-Times, that would earmark nearly $10 million to CPS and $4.6 million to pension payments. Pawar noted it isn’t much, but it is a good faith gesture to taxpayers fed up with the TIF districts and Emanuel is on board with the plan.

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CARTOON OF THE DAY

obamacare