Plot Thickens on Spending Limit
No sooner had word leaked out that the governor and Republican legislators were working on a five year spending cap as a compliment to the five year tax extension plan than Jon Coupal of the Howard Jarvis Taxpayers Association filed a proposed initiative with the Attorney General’s office for a hard spending limit. Spending is limited under the HJTA plan, but the term of the law is not.
The effectiveness of a five year spending limit is suspect. Projections are that the state will not have a lot of excess revenue over the next five years. The goal of a spending limit, beyond the obvious effort to control spending, is to reassure Wall Street and the bonding agencies that California is taking concrete steps to deal with it’s budget problems in the long term.
The HJTA approach does that.
Budget Deficit IV Now Showing in L.A.
When Hollywood produces a sequel, it is because the first film was a hit. This spring’s Budget Deficit IV, starring the City of Los Angeles, does not fall into that category. What started out as a PG rated show three years ago and gained little attention has turned into a horror movie that should scare every resident and taxpayer of Los Angeles.
Some of the actors in Budget Deficit IV would like to make us believe that while the plot is heavy with drama, calling it a horror movie is simply crying wolf. They assert that the villain in Budget Deficit I, II, III and IV is a character called the Great Recession and that if we are just patient, that villain will be swept away as the economy improves. Miguel Santana, L.A.’s City Administrative Officer, says that portrayal of the current budget deficit would be fiction.
Speaking to a group of L.A. Area Chamber members last Friday, Santana said the actual numbers for the past four years and the financial projections for the next four years tell a sobering story about a budget crisis that would have unfolded even without the Great Recession. Santana points to a long-term trend line of increased expenses for personnel, programs and retiree benefits that surely and steadily increased the City’s budget obligations every year and laid the foundation for a budget deficit even when the economy was growing robustly. The budget deficit tsunami is rushing in on Mayor Villaraigosa, members of the L.A. City Council and citizens of Los Angeles, and we can no longer avoid tough cost-cutting decisions.
The Truth about Swipe Fees
Richard Kennedy, in his one-sided
article, "Protecting the Durbin Amendment is Critical to America’s
Small Businesses," completely missed the boat about the
real impact of so-called "swipe" or interchange fees, the small fee that
consumers pay when they use a credit or debit card.
To quickly summarize the issue, at the behest
of large national retailers, Senator Durbin (D-IL) included an amendment in the
Dodd-Frank Act last year that allowed the Fed to fix prices on what banks and
other financial institutions charge merchants each time they swipe a
transaction. By reducing fees, consumers
would "supposedly" benefit. Majorities
in both the House and Senate jumped on board and passed this legislation.
Ultimately, the idealism of the Durbin Amendment
is giving way to the practicality of implementing it…and the law of
unintended has come into play. In
Congress’ zeal to reign-in large banks, they will likely end up hurting
consumers and punishing credit unions and smaller community-owned banks. Large retailers, with Senator Durbin as their
mouthpiece, argued that the consumer would see an immediate benefit in price
reductions should the Durbin Amendment be enacted. Unfortunately, nothing in the Dodd-Frank bill
prohibits retailers from simply pocketing the difference – a windfall for
large, national retailers but no consumer benefit. Or, framed the other way, retailers aren’t
required to return any profit to consumers.
Our Media Cup Truly Doth Runneth Over
BREAKING NEWS:
I am an unabashed ‘Media Junkie,’
but the last months have been incredible, over-the-top excitement, even for
me! Big Screen TV’s must now, and
hereafter, be sold with an accompanying, never-emptying, box of Kleenex
attached.
After watching 24/7 on our big
screens and on our computers, the governments of almost the entire Arab world
begin to topple, one by one like dominoes, beginning in mid-January (yes, my
son is finally home safe from his two-month work stint in Dubai), the
unbelievably tragic Biblical Trifecta of Horror befell Japan, and we all sat in
awe of Mother Nature and her non-stop, real-time fury. The heartbreaking Japan story pushed the
Mess in Libya off the Media’s front stoop for only a few days, however. Last week, incredibly, the UN, US, and our
newly cobbled-together Coalition of Allies (including 2 jets from Quatar!)
combined for a show that we watched something unprecedented (since the year I
was born) happen, with jaws dropped .