Archive for June, 2009

Delayed tax refunds: Money shortage beats ideology

In the end, money trumps ideology.

Gov. Sonny Perdue often has talked about improving government efficiency, so it functioned more like a business than a bureaucracy. And Republicans, in general, often talk about returning as much tax money to the people as possible.

But when revenue heads south and budget cuts take hold, both ideas appear to take a back seat.

Nearly 500,000 Georgia income tax returns have yet to be processed by the state Department of Revenue, and it could be months before all of the 2009 returns are handled.

AJC reporter Aaron Gould Sheinin writes that state Revenue Commissioner Bart Graham said the agency has absorbed a $12 million budget cut this year. A total of 280 jobs have been eliminated since October, including 155 in the processing division.

The cuts have hurt the ability of the revenue department to efficiently process tax returns, Graham said.

“We are, and I am personally, very unhappy and dissatisfied that this is the best we can perform under …

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Power Breakfast: Record unemployment in Georgia, Obama, delayed tax refunds, Sembler, Botanical Garden, UGA

There’s been a lot of talk about “green shoots” lately. The Federal Reserve chairman and others believe there are some positive signs the economy is somewhere near the bottom and will start making a slow turnaround soon.

But the labor market is another story — a sadder one. There’s more evidence of that today.

Georgia’s unemployment rate jumped to 9.7 percent in May — a record, the state labor department said.

Employers are still shedding lots of workers as they try to cope with declining revenues. In Georgia, the unemployment rate has been higher than the national average for 19 consecutive months.

The green shoots may not appear in the labor market for quite some time, with many economists predicting double-digit unemployment rates.

Also in the AJC:

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What do you think about Obama’s financial proposals?

Here is the latest on President Obama’s financial-regulation proposals from Associated Press writer Jim Kuhnhenn.

The debate is just beginning in Congress.

Do you think the government is getting too involved in the economy? Or given what has happened over the past year, do you think it’s the right move?

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Which way mortgage rates?

Will the tame inflation number out today help to turn around the recent rise in mortgage rates? The last thing this economy needs is a slowdown in mortgage refinancings and home buying.

The U.S. Labor Department said today the consumer price index increased just 0.1 percent in May after it was unchanged in April. Inflation and inflationary expectations appear to be under control.

Meanwhile, Reuters is reporting that U.S. mortgage applications fell for a fourth consecutive week, with overall demand plunging to its lowest level in nearly seven months.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, for the week ended June 12 decreased 15.8 percent, the lowest since the week ended November 21, 2008, Reuters said.

A rise in mortgage rates in recent weeks had sapped demand, particularly for home loan refinancing. But the direction of rates reversed course last week.

Borrowing costs on …

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Power Breakfast: Obama’s financial regs, Atlanta symphony architect, MARTA, digital TV problems

Today is the day President Obama unveils his plan to straighten out the worst financial mess since the Depression.

The Wall Street Journal outlines some of the details, from a newly empowered Federal Reserve to beefed up consumer protections and controls over some exotic investment products, such as derivatives.

Too much government interference? Not enough? That’s the debate that we’ll be hearing over the weeks to come.

Given lessons learned from the Depression and the very tough times we’ve been going through now, I lean toward strong medicine.

How about you?

In the AJC:

In other media:

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Kiplinger’s: Ten Quirky Economic Indicators

From more first dates and goopier eyelashes to less dry cleaning and packed theaters, Kiplinger’s has come up with 10 Quirky Economic Indicators and the reasons for choosing them.

Here’s a sampling:

  • Dry Cleaning Pickups Are Down: The International Drycleaning and Laundry Institute is hearing gripes from many of its 5,000 members. Because of the poor economy, customers are visiting less frequently and leaving clothes longer.
  • More First Dates: Misery loves company. In the fourth quarter of 2008, online dating service Match.com was its busiest in seven years. Match.com believes people are looking for someone with whom they can forget about money troubles—or share the pain.
  • Goopier Eyelashes: You’ve got that recession look in your eye. Total eye-makeup sales at supermarkets and drugstores were up 8.5% in the one-year period that ended on March 22. In that period, more than $260 million was spent on eye makeup—in particular, eyeliner was up 9% and mascara almost 13%, …

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Your exec pay comments

It’s not easy to summarize three dozen of your comments on exec pay from yesterday.

But, it seems that the majority are not happy with the current situation in which millions of dollars go to top execs with little regard to their performance.

Some of you were angry about the basic unfairness in the system.

A few of you thought $5 million was the top of what execs should be making.

Having said that, there’s a strong, vocal minority that believes government should keep out of this arena.

They believe it’s up to shareholders and the board of directors to decide. That’s how the system should work.

What’s more, they said, we’ll lose talented people if we restrict the financial incentives.

The two camps represented their views well.

Continue reading Your exec pay comments »

Big change in exec pay is unlikely

A million here, a million there, and soon you’re talking real money.

Despite the financial crisis, rising unemployment and falling profits, senior executives at Georgia’s largest companies saw their median pay rise 3 percent last year to nearly $2 million, according to an analysis by AJC reporter Joe Guy Collier. For CEOs alone, median compensation was $5.5 million.

Capitalism is supposed to be the system that prides itself on accountability.

Capitalism is supposed to be the system that rewards execs who do right by shareholders.

In tough times like these, many readers — and shareholders — have become angrier about how out of whack our system has become.

One small example. About two weeks ago, dozens of people commented on a Biz Beat blog reporting that the Chrysler CEO at the time, Bob Nardelli, said former Chrysler chief Lee Iacocca stood to lose much of his pension and his company car due to the automaker’s bankruptcy.

Nardelli, you’ll remember, left Home …

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Power Breakfast: MARTA, WiMax, med school, financial reform, health care, GM and credit cards

Recently, in a quick, unscientific survey, readers of this blog overwhelmingly chose transportation as the No. 1 business issue that the gubernatorial candidates needed to address.

Starting today, MARTA is holding its last round of public hearings on some tough medicine it’s proposing because of a budget shortfall. The story by AJC reporter Ariel Hart outlines the proposals, which include a fare hike and service cuts. MARTA’s board is scheduled to vote on the proposal later this month.

Congestion has been one of metro Atlanta’s main problems for a long time. The lack of funding to get out of this traffic mess also has been a constant.

I think the business community got it right when it highlighted the importance of this issue. I wonder if the situation will begin to change or whether we’ll just be getting more fare hikes and service cuts down the road while the highways remain congested.

Also in the AJC:

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Power Breakfast: Georgia colleges, Atlanta sewers, entrepreneurship, soda tax and health-care reform

In addition to the story selection here, check out the blog item below this one. There are links to the interesting executive pay story and chart that ran Sunday, as well as some reader comments.

The story by AJC reporter Joe Guy Collier found that compensation for senior execs at Georgia’s largest companies rose to nearly $2 million last year, despite a worse financial performance by most of the firms.

Also in the AJC:

In other media:

Continue reading Power Breakfast: Georgia colleges, Atlanta sewers, entrepreneurship, soda tax and health-care reform »