AAIA Matching American Red Cross Donations For Superstorm Sandy Relief

AAIA will match as much as $10,000 in donations to the American Red Cross to aid in the relief efforts for Superstorm Sandy, for a potential total combined donation of $20,000. Donations will be accepted until Friday, Nov. 30. AAIA members and non-members are welcome to participate.

Checks can be made out to the American Red Cross and sent to AAIA, Attn: Susan Medick, 7101 Wisconsin Ave., Suite 1300, Bethesda, MD 20814. AAIA also will match online American Red Cross contributions with appropriate proof of donation. For more information, contact Susan Medick of AAIA at (301) 654-6664 or susan.medick@aftermarket.org.


Santa Monica, Calif. (November 8, 2012) – The Advanstar Automotive Group, a leading provider of integrated media solutions to the automotive aftermarket and collision repair industry, has announced the results of the Aftermarket Business World Online Behavior Study which shows automotive technicians still prefer traditional methods to purchase automotive parts. The study showed despite the convenience and ease of price comparisons, technicians are not looking for suppliers online to meet their parts needs.

“Although the Internet is becoming a more and more commonly used source on a day-to-day basis in the shops, techs would rather deal with their parts suppliers in person or over the phone, rather than through an online website,” explained Krista McNamara, managing editor, Aftermarket Business World. “Although the world is pushing forward into a more digital era – one of apps and texting rather than customer service and personal interaction – technicians remain rather old school in their preferences for product purchases.”

Fielded to the readers of Motor Age, the sister publication of Aftermarket Business World that is tailored to automotive repair shop owners and technicians, the survey showed 56 percent of respondents reported they use neither a smartphone or a tablet and “never” make product purchases online.

The remaining 44 percent who do a portion of their purchasing online say convenience and ease of price comparisons are the biggest incentives in Internet buying.

One-fourth of respondents would consider using an app for purchases if their supplier created one, but the inherent biggest challenges of online buying – shipping costs and the potential to order the wrong part, according to respondents – still loom.

When turning to the Internet, techs and shop owners aren’t seeking out new suppliers – they are going to the sites of suppliers they already use in a more traditional sense. And nearly 35 percent reported that product reviews are either “very important” or “important” in their considerations of which products to purchase.

Two thirds of respondents have not made major changes to their online buying product purchasing habits over the past year, buying about the same over the Internet as they did in 2011. And 42 percent say coupons, rebates, QR codes or incentives would impact their online buying frequency going forward.

The Aftermarket Business World Online Behavior Study was fielded to readers of sister publication Motor Age via email. Results are intended to show general market trends, not statistical certainties, and should be treated as such.

If you’d like to schedule an interview with Krista McNamara, contact Boris Chernin, marketing manager, at (310) 857-7632 or e-mail Boris at bchernin@advanstar.com.

Advanstar Automotive Group

The Advanstar Automotive Group (www.SearchAutoparts.com) is a leading provider of integrated media solutions to the automotive aftermarket and collision repair industry, offering a portfolio of three industry leading magazines – Aftermarket Business World, Automotive Body Repair News and Motor Age; four websites including Search-Autoparts.com, the automotive aftermarket’s largest B2B website; nine e-newsletters; numerous news alerts; and 42 training manuals for vehicle industry professionals, trade buyers, and automotive enthusiasts.

Through a multi-media approach, Advanstar reaches nearly 9 million original equipment and aftermarket manufacturers, distributors, service & repair professionals, retailers, and consumers. Advanstar drives insightful news analysis, research and trends, entertainment, new product information and buying opportunities to customers at their office, home, and race track — keeping them passionate, competitive, and connected.


Northwood University’s Monthly Economic Outlook – October


October 2012


As we move into the fourth quarter, the U.S economy is appearing to show signs of slow growth although it still remains unpredictable, especially with the fiscal cliff looming. The economy grew at an annual rate of 2% for the third quarter, due to the housing industry improving, and consumers and government spending more. But with the modest growth in the economy, the major indices experienced declines from their September rallies. For the month of October, the Dow Jones was down 2.94%, S&P down 2.17%, and the NASDAQ down 4.37%.



Positive and Negative Signs
Despite the downtown in the major indices on Wall Street, their year-to-date gains still look appealing. Year-to-date, the Dow Jones is up 7.31%, S%P up 12.37%, and the NASDAQ up 14.27%. But with this trend, these numbers are decreasing from last month. With the slow growth in the economy, some question the effectiveness of QE3. On October 24, the Federal Open Market Committee announced that it will continue to buy $40 billion worth of mortgage backed securities per month, increasing their holdings of these securities by $85 billion per month.

Americans were paying a bit more for goods and services as the Consumer Price Index increased by 0.6% for the month of September. On the contrary, the price of gold closed at $1,710 on October 30th, down $62 from its close on September 28th.

The October Conference Board leading economic index for China grew .3 percent in September while the Euro
decreased by .4 percent, with the continued unsolved debt crisis that is plaguing European economies, such as Greece, Spain, and Portugal. The Commerce Department stated that consumer spending increased .8 percent in September due to the Consumer Sentiment index at a five year high. This is mostly credited to falling gas prices and a slightly better job market, with unemployment rate falling to 7.8%, which is the lowest it has been in 4 years. The U.S savings rate stands at 3.3%, which is a decline from 3.7% percent last month, meaning that individuals and governments are saving less, after consumption costs and their expenses. However, unemployment rose to 7.9% in October somewhat dashing optimism.

The U.S. government remained idle in the effort to combat their massive debt load. On October 31, United States’ debt stands at $16.2 trillion, which is about $200 billion away from hitting its debt limit of $16.4 trillion. After a dramatic fall of durable goods of 13.2% in August, September showed an improvement of 9.9% according to the Commerce Department. The Purchasing Managers’ index was at 51.5% in September which is a slight increase of 1.9% from August’s 49.6%, indicating a return to expansion for the United States.

As of October 30, 2012, the national average of a gallon of gasoline declined to $3.55 from $3.82 on September 24. The benchmark in oil closed at $85.57 per barrel on October 26.



In 2010 Americans paid 9.9% of their income in state and local taxes on average according to a recently released study by The Tax Foundation. This is up from 9.3% in 2000 according to the same report. The states with the ten highest combined local and state tax burdens were (1 highest): 10. Pennsylvania, 9. Maine, 8. Massachusetts, 7. Minnesota, 6. Rhode Island, 5. Wisconsin, 4. California, 3. Connecticut, 2. New Jersey and the highest New York. While the states with the lowest combined local and state tax burdens were (1 lowest): 10. South Carolina, 9. Nevada, 8. Alabama, 7. New Hampshire, 6. Texas, 5. Wyoming, 4. Louisiana, 3. Tennessee, 2. South Dakota and 1. Alaska.

It is interesting to note that the highest taxed states had a number of things in common according to The Tax Foundation Study. First, each state had a local and state combined tax burden greater than 10% with Pennsylvania being the lowest at 10.2% of average income and New York being the highest at 12.8% of average income. High tax states also had the distinction of having their residents incur a high percentage of the tax burden ranging from 63.6% in Maine (16 highest) to 84.5% (highest) in California. States which have a lower percentage of the tax burden born by residents usually are blessed by strong tourism, mineral and oil and gas resources and a growing economy which attracts guest workers from other states.

In comparison, the ten lowest tax states have a local and state tax burden ranging from a high of 8.4% in South Carolina to the lowest state and local tax burden being Alaska at 7%. It is also interesting to note that the low tax states have a much higher percent of the state and local tax burden in said states being paid by non-residents. Again, this is usually due to high levels of tourism, mineral, oil and gas deposits and generally a pro-business growing economies which attract guest workers from other states. Fully 32% of all local and state taxes paid in Alabama are paid by non-residents of Alabama (lowest of 10 low tax states) with just under 76% of the local and tax burden being paid in Alaska (highest) by non-residents.

The Tax Foundation report entitled “24/7 Wall Street” is a must-read for all government officials at the local and state levels who wish to enhance or maintain their state’s competitiveness. We also encourage you to go to the Northwood University homepage at www.northwood.edu and view our recent tax symposium program on American Competitiveness.



Comments or questions should be directed to Dr. Timothy G. Nash at: tgnash@northwood.edu or (989) 837-4323.

To view Northwood University’s Monthly Economic Outlook Newsletters from previous months, please visit: http://www.northwood.edu/media/publications/

For more information about Northwood University visit www.northwood.edu.


Northwood University is committed to a policy of nondiscrimination and equal opportunity for all persons regardless of race, gender, color, religion, creed, national origin or ancestry, age, marital status, disability or veteran status. The University also is committed to compliance with all applicable laws regarding nondiscrimination. Northwood University is accredited by the Higher Learning Commission and is a member of the North Central Association (800-621-7440; higherlearningcommission.org).

Hot Issues

BUSINESS: The PENNSYLVANIA House approves HB 1548, which would
require television production companies to extend the same protections to
child actors who appear in reality shows as those given on the sets of movies
and other television programs. The bill, which moves now to Gov. Tom Corbett (R),
would allow children to work no more than eight hours a day or 48 hours a week and
no later than 10 p.m. on school nights. It would also require that a parent or guardian
accompany a child under 16 at all times. A teacher would also have to be present
on the set, and producers would have to establish trust accounts for their young
actors. Gov. Corbett is expected to sign it into law (PHILADELPHIA INQUIRER).
MICHIGAN Gov. Rick Snyder (R) signs HB 5128, which allows for the creation
of business courts with jurisdiction over business and commercial cases in which
the amount in contention exceeds $25,000 (MICHIGAN GOVERNOR’S OFFICE).
• The NEW JERSEY Assembly approves AB 801, so-called “ambulance chaser”
legislation that would allow only persons involved in an accident, those injured by
that accident, insurance companies and government authorities immediate access to
accident injury reports. All others would be required to wait for three months. The
measure is now in the Senate (STAR-LEDGER NEWARK]).


CRIME & PUNISHMENT: The MICHIGAN Senate unanimously approves
SB 1209, which among other things expands the state’s definition of “predatory
conduct” to include pre-offense actions taken toward an officer posing as a
potential victim, and SB 1313, which would expand the definition of “producing”
or “making” child porn to specifically include the making of new copies of such
videos. Both are now in the House (LANSING STATE JOURNAL, STATE NET).
• Still in MICHIGAN, Gov. Rick Snyder (R) signs three measures to deter the
false reporting of a crime: HB 5431, which makes it illegal to falsely report a crime
or accident, HB 5432, which allows courts to require those convicted of falsely
reporting a crime or medical emergency to reimburse the state or local government,
and HB 5433, which lays out penalties of four to 10 years for falsely reporting
various crimes (MICHIGAN GOVERNOR’S OFFICE). • Also in MICHIGAN,
Gov. Snyder signs HB 5159 and HB 5162, which together allow circuit and district
courts to create supervised treatment programs for veterans suffering from mental
illness or drug or alcohol dependency (MICHIGAN GOVERNOR’S OFFICE). •
The PENNSYLVANIA Senate and House endorse HB 815, which would make it a
misdemeanor for minors to transmit nude or sexually explicit images of themselves
or other youths. The measure would also create harsher penalties for minors that
create a nude image of another youth without their consent, or who transmit such an
image with the intent to coerce, intimidate or harass that person. The bill moves to
Gov. Tom Corbett (R) for review (MORNING CALL [ALLENTOWN]). • Also in
PENNSYLVANIA, lawmakers approve SB 850, legislation that would create tiered
sentencing for minors convicted of murder. Current Keystone State law requires
judges to sentence anyone convicted of first- or second-degree murder to life in
prison without parole, regardless of the perpetrator’s age. The measure moves now
to Gov. Corbett for review (STATELINE.ORG).


EDUCATION: The PENNSYLVANIA House declines to address SB 1115,
Senate-endorsed legislation that would have, among several things, established
a study commission to recommend a new funding system for charter schools,
extended the five-year length of charter schools’ charter renewal to 10 years and
required tuition payments to go directly from the state to charters. Supporters plan
to reintroduce the measure next year (POST-GAZETTE [PITTSBURGH]). • The
U.S. Dept. of Education approves UTAH’s No Child Left Behind waiver request.
The Beehive State becomes the 34th to be granted a waiver from the strictest NCLB
requirements (IDAHO STATESMEN [BOISE]). • The NEW JERSEY Assembly
approves AB 1688, which would bar public colleges and universities from allowing
credit card companies to directly solicit their students. The measure moves to the


HEALTH & SCIENCE: The NEW JERSEY Assembly gives final approval to SB
2135, which would create a health insurance exchange — an online one-stop shipping
site for consumers and small businesses to purchase health insurance — in the Garden
State. The measure moves to Gov. Chris Christie (R), who vetoed similar legislation
(AB 2171) earlier this year (STAR-LEDGER [NEWARK]). • The MICHIGAN Senate
approves SB 1293 and SB 1294, which together would end health insurer Blue Cross’
tax-exempt status, change it from a charitable trust to a customer-owned nonprofit
and require it to contribute about $1.5 billion over 18 years to a foundation aimed at
improving public health. The measures, strongly supported by Gov. Rick Snyder (R),
move now to the House (CRAIN’S DETROIT BUSINESS).


HOMELAND SECURITY: The NEW JERSEY Assembly approves AB 2948,
which would require out-of-state law enforcement agencies to notify Garden State
authorities at least one day in advance of crossing the border to conduct counterterrorism
operations. The measure migrates now to the Senate (STAR-LEDGER


SOCIAL POLICY: The 2nd U.S. Circuit Court of Appeals in NEW YORK
rules that the federal Defense of Marriage Act, which limits marriage to one man and
one woman, is unconstitutional. It is the second federal court to rule against the law.
Several other appeals are pending before the U.S. Supreme Court, which is expected
to take up the case this fall (REUTERS). • The NEW JERSEY Assembly gives final
approval to SB 599, which would require Garden State foster home providers to
undergo evaluations to see if they are fit to continue caring for a disabled person, and
require case managers’ supervisors to visit the foster home residents every two years.
The bill moves to Gov. Chris Christie (R) for review (STAR-LEDGER [NEWARK]).


POTPOURRI: The ALASKA Supreme Court rules that state officials may use
private email accounts to conduct state business, but that those messages may be
public records subject to public disclosure. The high court’s ruling upholds a lower
court opinion that found that use of private email accounts wasn’t in itself a violation
of state public records law (ASSOCIATED PRESS). • MICHIGAN Gov. Rick
Snyder (R) signs HB 5391, which allows transportation service providers to conduct
background checks before hiring individuals responsible for the transit of children,
disabled citizens or the elderly (MICHIGAN GOVERNOR’S OFFICE). • Still in
MICHIGAN, Gov. Snyder signs HB 5292, which allows disabled veterans to obtain
hunting and fishing licenses at no cost (MICHIGAN GOVERNOR’S OFFICE).

— Compiled by RICH EHISEN

Politics & Leadership

rejected a marijuana legalization measure two years ago — Proposition 19
— the prospect of legalizing the drug anywhere in the foreseeable future
seemed to go up in smoke. But the inclusion of three new legalization measures on
the ballots in Colorado, Oregon and Washington — and recent polling in the latter
state, in particular — suggests that is not the case, and the pro-legalization camp has
learned a few things from the Prop. 19 experience.

While Prop. 19 would have left it to municipalities to regulate marijuana growers
and retailers, all three of the new measures — Colorado’s Amendment 64, Oregon’s
Measure 80 and Washington’s Initiative 502 — entrust that responsibility to the
state. The measures also balance the promise of a sizeable boost in tax revenue with
societal safeguards.

Washington’s I-502, for example, would not only levy a 25-percent excise tax
projected to generate nearly $2 billion over the next five years, but also impose a
ban on pot smoking in public, set an intoxication limit of 5 nanograms of THC per
milliliter of blood and allow employers to fire workers for smoking on the job.

As Dan Riffle of the Marijuana Policy Project put it to the Huffington Post, the
“libertarian…dream of legal pot with no regulations” doesn’t sit well with voters.

The Washington measure has also benefited from the support of former U.S. law
enforcement officials, including U.S. Attorneys John McKay and Kate Pflaumer, and
the FBI’s former Seattle chief, Charles Mandingo.

“We know firsthand that decades of marijuana arrests have failed to reduce use,”
Mandingo says in a current ad. “And the drug cartels are pocketing all the profits.”

There is evidence that the various tactics are working, with a SurveyUSA poll
conducted last month showing 57 percent of likely voters in Washington backing
I-502. Recent polling has also shown majority support for Colorado’s Amendment 64
too but only minimal support for Oregon’s Measure 80.

If either the Washington or Colorado measure passes, it may be largely due to the
failure of Prop. 19.

“I think these campaigns did learn a lot from the Prop. 19 experience,” said Beau
Kilmer, co-director of the RAND Corporation’s Drug Policy Research Center. “There
were a lot of meetings after the fact and there’s some serious money [involved],
all of which makes it easier to tease out potential liabilities and run a campaign
where you’re doing focus groups and you have lots of televised advertisements.”


immigrant advocacy groups, including CASA of Maryland, formed an alliance
with gay rights groups to co-promote two controversial initiatives on Maryland’s
November ballot: Question 4, seeking to make some undocumented immigrants
eligible for in-state college tuition rates, and Question 6, seeking to legalize samesex
marriage. The coalition was motivated at least in part, CASA said in announcing
it, by recent research from the Pew Hispanic Center and the National Council of La
Raza showing a majority of Hispanics support same-sex marriage.

But some members of the Latino religious community in the state have strongly
opposed the move.

“I think it’s really a big mistake on [CASA’s] part to join the two issues, which are
quite distinct,” said Monsignor Mark Brennan, pastor of St. Martin of Tours, a Catholic
church in Gaithersburg with 2,500 Hispanic congregants that has worked with CASA in
the past. “From what I’m hearing from my people, CASA’s stance offends them.”

Indeed, a new survey from the Pew Research Center indicates that only a small
majority of Latino Catholics support same-sex marriage and a strong majority of
Latino evangelical Protestants oppose it.

There was even the suggestion the issue might affect parishioners’ future
relations with CASA. Brennan said “it could cause some re-evaluation in our
community of ‘Hey, what’s CASA all about?’” And when asked whether he would
work with CASA again, Bishop Angel Nunez of the Bilingual Christian Church of
Baltimore, a longtime CASA ally, said, “We will probably see after the election.”


2011 legislative session, about half of the members of the House were new, as
a result of the 2010 elections. And next year there
will be even more freshman lawmakers in the state
because regardless of how many incumbents this year’s
elections unseat, a third of the Legislature will be
termed out of office.

Missouri is just an extreme example of what’s about
to happen in statehouses across the country. This year’s
elections are coming after the once-a-decade legislative redistricting that always
results in more turnover because many incumbents are forced to run in unfamiliar
districts or, alternatively, opt to retire. Term limits in Missouri and 14 other states will
only add to the churn.

Those two factors, combined with the high turnover in 2010, owing to the
Republican wave that swept many Democratic incumbents from office, mean that
nearly half of all state legislators sworn in next year could have less than two years’
experience, according to Karl Kurtz and Tim Storey of the National Conference
of State Legislatures. And the election experts say this year could also mark the
highest rate of legislative turnover in two consecutive election cycles in 50 years.


POLITICS IN BRIEF: The U.S. Supreme Court has denied OHIO’s request
to reverse a lower court ruling blocking a state law that would have reduced the
state’s early voting period by three days for all voters except members of the military
(STATELINE.ORG). • In another case that didn’t go OHIO’s way, the 6th U.S. Court
of Appeals in Cincinnati upheld a lower court’s ruling mandating that provisional
ballots cast in the correct polling place but wrong precinct not be thrown out, as
Buckeye State law had required (STATELINE.ORG). • The U.S. Supreme Court has
agreed to hear a challenge to ARIZONA’s new law requiring proof of citizenship to
vote. The law was blocked by a federal appeals court, which ruled that it conflicted
with federal law (STATELINE.ORG). • The LOUISIANA Supreme Court named
its first black chief justice last week. Justice Bernette Johnson, who will replace
retiring Justice Catherine “Kitty” Kimball, will also be the second elected African-
American to serve on the state’s 199-year-old court (WALL STREET JOURNAL). •
MONTANA’s campaign contribution limits will remain in place for the November
election, after the 9th U.S. Circuit Court of Appeals put a hold on a lower court
ruling that would have allowed for unlimited spending on state races (BILLINGS
GAZETTE). • Backers of an effort to develop a privately run casino near Portland,
OREGON announced last week they were abandoning their campaign to pass a
pair of ballot measures that would authorize the state’s first nontribal casino and
site it at a former greyhound racetrack because they don’t have enough votes to do
so. The propositions — Measure 82 and 83 — will remain on the ballot, however


— Compiled by KOREY CLARK

State Net Capitol Journal®

Once Around the Statehouse Lightly

GOTTA BLAME SOMEONE: It was a season seemingly destined for glory.
But the Washington Nationals suffered an ignominious ending, coughing up
a six-run lead in the deciding game of the National League Division Series
to snatch defeat from the jaws of victory, suddenly ending what had been a storybook
season. While rational folks understand the Nats lost to a vastly more experienced
St. Louis Cardinals team — the defending World Series champs — some folks see a
darker reason. As recently noted in this space, on October 3 Teddy Roosevelt (mascot
likeness, not the real person) ended a 538-game losing streak, finally beating fellow
former presidents Washington, Jefferson and Lincoln in the team’s nightly “race of
the commanders in chief.” Drunk with success, Teddy won several more in a row
during the playoffs…and thus, some fans claim, cursed the team! That excuse of
course ignores the fact that the bulk of Teddy’s losing streak was matched by the
Nats, who until this year were the epitome of awful. Alas, in baseball and politics,
memories can be short.

BASIC BROWN: He has come a long way since his days as “Gov. Moonbeam,”
and California Gov. Jerry Brown has plenty of words of wisdom to share about the
journey. Appearing recently in Esquire magazine, Brown reveals that, among other
things, he is the only governor to ever “have actually taken vows of poverty, chastity,
and obedience.” Given the Golden State’s ongoing issues with a structural budget
deficit that annually leaves it billions of dollars in the red, the vow of poverty still
seems pretty appropriate.

JERSEY BOY: Some folks will surely recall Gov. Brown’s recent dustup with
New Jersey Gov. Chris Christie in which Brown challenged the, uh, full-figured
Christie to a contest of sit-ups, pull-ups and a 5K race. Christie smartly declined, but
he didn’t seem to mind appearing in the same issue of Esquire with Brown. He also
wisely didn’t touch upon the whole brouhaha with his California counterpart. He did,
however, take a jab at his predecessor, former Garden State Gov. Jon Corzine, whom
he noted he had once seen leaving a Bruce Springsteen concert early. “You cannot be
from New Jersey and have left a Bruce Springsteen concert early,” Christie said. The
gov’s man crush on Springsteen is legendary, so it should be no surprise that Corzine
bugging out of one of the Boss’s concerts didn’t sit well with him.



New York Gov. Andrew Cuomo (D) said last week he will block any attempt
by Empire State lawmakers to raise their own salaries for the first time since
1999 when they return to session after the election unless they first tackle what he
called “the people’s agenda.”

Tops on that list include hiking the minimum wage, reforming the state’s “stopand-
frisk” laws and decriminalizing the possession of small amounts of marijuana.
All were part of Cuomo’s agenda last year.

“If there is an opportunity for the Legislature to act, I’m going to be looking for
them to act on the people’s agenda,” he told reporters. “I understand they may have
an interest in a pay raise. I’m interested in a people’s agenda and that’s what the
session would be about.”

“I understand what they want,” Cuomo added, “but I’m more interested in what
the people want.”

Cuomo did not offer specifics on a minimum wage hike. Earlier this year, the
Assembly endorsed legislation to raise the wage from its current $7.25 to $8.50 and
tie future increases to inflation (AB 9148), but that measure stalled in the Senate.

Cuomo did not openly support the bill. He has, however, been up front with his own proposal
to change a state law that makes the possession of 25 grams or less of marijuana a violation but
the public display of pot only a misdemeanor. The situation, he says is made worse by
the New York Police Department’s stop-and-frisk tactics, which critics contend
disproportionately impact young African-American men. Under that policy, police can
detain someone with little reason and force them to empty their pockets, often revealing
small amounts of pot that subsequently allow the holder to be arrested.

Assembly Speaker Sheldon Silver (D) and Senate Majority Leader Dean Skelos
(R) both said they had not discussed a special session agenda with the governor,
though Silver spokesperson Michael Wyland said the minimum wage issues “should
be a part of any special session later this year.” (NEWSDAY, DAILY NEWS, WGRZ.


Gov. Tom Corbett (R) dismissed rumors last week that his administration plans to lift
a moratorium on gas drilling on state park lands, telling reporters “We are not drilling
in the state parks.”

Corbett was responding to growing speculation that
the abrupt resignation earlier this month of state parks
director John Norbeck was connected to the governor’s
desire to end the drilling ban. Norbeck indicated he was
forced to resign over his opposition to gas drilling and
commercial logging in the parks. The Keystone State
has 120 state parks comprising around 300,000 acres of
public land.

That fueled speculation among environmental
groups that Corbett was set to endorse mining and
timbering on state lands. But the governor vigorously
denied that possibility during a news conference about
drilling impact fees collected this fall.

“Can we put that to rest? I don’t know where that
came from,” he said. “There was a moratorium put on
the state forests. We haven’t lifted that. We haven’t
even talked about lifting that. We haven’t talked about
drilling in the state parks.” (PITTSBURGH POSTGAZETTE,


HERBERT ISSUES ED PLAN: Utah Gov. Gary Herbert (R) outlined a proposal
last week he said would raise the number of Beehive State residents with college
degrees to 66 percent by 2020.

Currently, about 43 percent of Utahans hold a post-secondary degree or
certification. Under Herbert’s plan, 13 percent would hold a board-approved
certification, 14 would achieve an associate’s degree, 28 percent would obtain
a bachelor’s degree and 11 percent would earn a graduate degree. The proposal
contains a number of benchmarks to ensure the state will get there, including calling
for a 90 percent proficiency among students in third, sixth and eighth grade reading
and math, and achieving a 90 percent high school graduation rate and an 80 percent
post-secondary enrollment rate.

But while the plan drew cheers from lawmakers, business leaders and education
officials, all acknowledged that getting there is not going to come cheap. State school
board leaders said they will ask lawmakers to hike the state’s per-pupil spending next
year and to fully fund anticipated enrollment growth. Utah Commissioner of Higher
Education Dave Buhler said colleges and universities will also seek an additional $20
million in state funds, which he said his system will match.

Herbert was optimistic that lawmakers will fund the effort.

“It’s not going to be easy, but it is absolutely a necessity,” Herbert told the Salt
Lake Tribune. “We have work to do.” (SALT LAKE TRIBUNE, DAILY HERALD


GOVERNORS IN BRIEF: ALASKA Gov. Sean Parnell (R) said last week he
has no plans to change his administration’s policy requiring employees to use state
email accounts for conducting state business. He was responding to the state Supreme
Court’s ruling that state officials may use private email and text messaging accounts
to conduct state business, but that those messages may be subject to disclosure and
state open records laws (ANCHORAGE DAILY NEWS). • ILLINOIS Gov. Pat
Quinn (D) launched a $1 billion effort to upgrade sewer lines, water mains and water
treatment plants across the Prairie State. Officials said the initiative expands an
existing program that offers low-interest loans to local governments seeking to avoid
environmental hazards brought on by an aging infrastructure (CHICAGO TRIBUNE).
ALABAMA Gov. Robert Bentley (R) announced he will seek legislation in 2013
that would incentivize eligible state employees to retire. The plan would offer multiple
fiscal options to the Heart of Dixie’s 10,579 state workers and 6,062 teachers who are
currently eligible for retirement. Bentley said his efforts are part of an overall plan to
cut $1 billion from the state’s operating expenses (WBRC.COM [MONTGOMERY]). •
RHODE ISLAND Gov. Lincoln Chafee (I) announced the Ocean State’s first statewide
cyber security plan, which outlines policies and procedures for guiding the state in the
event of a loss of cyber connectivity. The plan is designed to meet four goals: sustaining
government operations, educating the public and business community, cyber defense
and economic workforce development (PROVIDENCE JOURNAL).


— Compiled by RICH EHISEN

State Net Capitol Journal®

Budget & Taxes


TAX DODGERS DOGGING CA: California’s budget is so in the red that Gov. Jerry Brown (D) has placed a multi-billion tax measure on the state’s November ballot to try to avoid having to make deep cuts to education and public safety funding. But one reason the state is in such fiscal trouble is because it has been unable to collect all of the taxes it is owed by individuals and businesses. The outstanding debt currently stands at $8 billion, and some of the debtors have owed the state millions of dollars for years.

The state’s Franchise Tax Board began publishing a list of the top tax delinquents — those owing more than $100,000 and having been notified by the agency at least seven times — in 2007. Tax board spokesman Daniel Tahara said the plan was to give the delinquent taxpayers “motivation to get back into compliance.” But the agency has collected only $177 million from individuals and businesses on the Top 500 Delinquent Taxpayers list so far.

That may largely be due to the fact that many of the tax debtors have gone bankrupt, leading some to question the value of publicly humiliating them.

“If somebody goes bankrupt, they are already embarrassed,” said Mark Gergen, a professor at the UC Berkeley School of Law who studies tax issues. “If you want to have this public disclosure as a way of embarrassing people, you aren’t doing a big service by adding them to this list.”

Some of those on the delinquent taxpayers list, however, have quietly dissolved their tax-burdened companies and formed new ones under different names or simply continue to conduct business as usual. And the tax board has gotten more aggressive with such offenders by filing liens against their assets or seeking to suspend their professional licenses.

But even that hasn’t necessarily produced results. Baldomero De Leon Jr., M.D., a board-certified doctor of internal medicine in Walnut Creek, owes the state more than $4.1 million in corporate income taxes, according to the tax board, and his name has appeared at — where it currently resides — or near the top of the board’s delinquent taxpayers list since 2010. But the state can only collect on the lien it has placed on his practice if his assets are sold, and it can’t revoke his medical license because it’s a personal license and his taxes are owed by his company.

The state hasn’t had any better luck with Caresystems Inc., a home health care company in Vacaville. No. 3 on the board’s list, with a tax debt of over $1.9 million, the secretary of state’s office lists the company as having dissolved. But the company’s CEO, Anthony Thekkek, is reportedly running a nursing home company, Thekkek Health Services Inc., at the same address. (BAY CITIZEN [SAN FRANCISCO])

FORECLOSURE SETTLEMENT FUNDS NOT ALL GOING TOWARD HOMEOWNER RELIEF: When states reached a $25 billion settlement in March with five of the nation’s largest mortgage lenders over charges they improperly processed foreclosures, it was hailed as the biggest government-industry accord since the multi-state tobacco settlement in 1998. But the states’ share of that money hasn’t all been going toward helping distressed homeowners, as expected.

Under the terms of the agreement, Ally Financial Inc., Bank of America Corp., Citibank Inc., J.P. Morgan Chase & Co. and Wells Fargo & Co. were required to provide $20 billion in mortgage relief directly to homeowners. The $2.5 billion states received was supposed to be used “to the extent practicable…for purposes intended to avoid foreclosures,” among other things.

But according to a report by Enterprise Community Partners, a housing nonprofit, only about $1 billion of the state funds have been allocated for some type of homeowner relief so far, while $1 billion has been funneled into state general funds. Only 14 states are planning to spend their entire allotments on housing aid, while nine plan to spend most of their funds that way, according to the report. And many of the largest states have opted for the general-fund route.

“It’s an incredible frustration,” said Andrew Jakabovics, who co-authored the report.

The allocation of the foreclosure funds has touched off battles across the country. Consumer advocacy groups sued Arizona over its decision to designate roughly half of its $98 million payout for general fund use.

“Virtually everything in the settlement is about providing relief for distressed homeowners,” said Tim Hogan, executive director of the Arizona Center for Law in the Public Interest and an attorney for the plaintiffs in the suit. “I don’t see how you can take these funds for something else.”

A state judge dismissed the suit this month. But Hogan said he’ll appeal that ruling. In South Carolina, Gov. Nikki Haley (R) vetoed the Legislature’s diversion of $10 million from the state’s $31 million foreclosure settlement allocation to a campaign to lure out-of-state businesses, which she called both “inappropriate” and a “raid.” The Legislature overturned her veto and allocated the remaining $21 million to the state’s general fund.

NY CITIES ‘CLOSE TO BANKRUPTCY’: Several of New York’s largest cities, including Rochester, Syracuse and Yonkers, are “close to bankruptcy,” a source close to the mayors of those cities said last week. The mayors have been in secret talks on their financial options in recent weeks, and aides to Gov. Andrew Cuomo (D) are working on a plan to link aid to the cities to “workout plans” that reduce the cities’ labor, pension and education costs, the source said.

“The mayors have got to come to the state with a plan that explains what’s causing their problems and how they plan to solve it,” said a Cuomo administration official. “To come to us year after year for a handout as they have been doing, only to come back next year asking for the same handout, is a nonstarter. It doesn’t work.”

Creating local control boards for the cities is reportedly another measure being considered. Whatever the changes, however, Albany Mayor Jerry Jennings, who has also been in on the talks, said they’d better be big and come quick.

“There has to be dramatic changes very soon; things are getting worse,” he said.

BUDGETS IN BRIEF: Despite ILLINOIS’ fiscal woes, the state has hired 1,203 employees since the start of the fiscal year on July 1, according to records compiled by the state Comptroller’s office. Many of the new employees are replacing retiring older workers (QUAD-CITY TIMES [DAVENPORT]). • State revenues in MAINE fell below projections by nearly $27 million in the first quarter, according to the state’s finance commissioner. And not a single revenue category met expectations in September (BANGOR DAILY NEWS). • Student-loan borrowers in the college class of 2011 averaged $26,500 in debt, according to the Institute for College Access and Success’ Project on Student Debt. That figure is up 5 percent from the $25,350 average for the previous year (NEW YORK TIMES). • VIRGINIA Transportation Secretary Sean T. Connaughton told the state House Appropriations Committee last week that operation of the state’s port facilities is “financially unsustainable” under its current arrangement. Connaughton said the state is currently subsidizing the Virginia Port Authority’s port operations by $60 million to $70 million per year (RICHMOND TIMES-DISPATCH)

                                                                                                                                                                                                        — Compiled by KOREY CLARK

Redistricting gives GOP key edge in many state elections


SNCJ Spotlight

Redistricting gives GOP key edge in many state elections