Archive for March, 2008

NEW YORK (AP) – March 28, 2008 – Thanks to the weakened dollar, the U.S. has leapfrogged France, Britain and other European countries as a cheaper place to do business.

A new study released Thursday by the auditing and consulting firm KPMG shows that the U.S. moved up on the list of places around the world that are the most cost-efficient. Researchers compared 136 cities in 10 countries in North America, Europe and Asia, but did not include fast-growing China.

Mark MacDonald, the global director of KPMG Competitive Alternatives, said the survey authors found the U.S. to be more cost competitive than they’d ever seen because of the plunging dollar.

In 2006, the U.S. lagged behind four other G7 countries. This year, though, the U.S. surpassed Britain, the Netherlands, Italy and France, leaving only Canada as being more cost-effective among the major industrial nations.

“Now the cost of business is considerably higher in these countries due largely to the depreciation of the U.S. dollar,” MacDonald said in a statement.

Mexico, which is new to the study, was cheapest overall. The study is done every two years.

Among the larger cities, the cheapest cities in which to operate were Puebla, Guadalajara and Monterrey, all in Mexico. In the U.S., the cheapest places were Atlanta, Tampa (Florida), and the Dallas-Fort Worth area.

The San Francisco Bay Area – which includes Silicon Valley and San Jose – was the most expensive in the U.S., edging out New York for that dubious distinction. London, Frankfurt and Manchester, England, were all more expensive than San Francisco.

Paris was slightly less expensive than New York.

The study measured competitiveness using labor costs, taxes, real estate and utilities, as well as non-monetary factors. It included Australia, Canada, France, Germany, Italy, Japan, Mexico, the Netherlands, Britain and all 50 states in the U.S. Those were all compared against a benchmark developed by taking the average cost of doing business in U.S. locations.

©Copyright 2008 The Associated Press, Vinnee Tong (AP Business Writer). All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Housing starts fell 0.6% in February and permits for new construction plunged 7.8% to the lowest level in 16 years. Read the rest of this entry »

TALLAHASSEE, Fla. – March 12, 2008 – Florida is likely to take in about $3 billion less in tax collections this fiscal year and next than previously expected, foreshadowing a brutal session in budget-chopping during the coming weeks.

High energy costs, a failing housing market, a weak credit market and other dark economic forces are combining to drive down general revenue, said state analysts who broke the bad news late Tuesday.

That means lawmakers will face a shortfall in 2008-2009 of somewhere between $3.1 billion and $3.2 billion in general revenue needed just to maintain the current level of state services, said Ray Sansom, chairman of the House Policy and Budget Council.

That assumes, he said, that Gov. Charlie Crist approves the $512 million package of cuts for the current fiscal year that lawmakers negotiated last week and are poised to adopt. If those cuts to education, health care, the courts and other areas take effect, lawmakers will have enough money in reserve to cover expenses without having to slice again into the 2007-2008 budget.

If those reductions do not take effect, “we would violate the Constitution because we would be in a deficit … by the time the fiscal year is over,” said Sansom, R-Destin. “That’s how critical that vote is.”

Tuesday was the fourth time the state’s economic analysts in the executive and legislative branches have revised their forecasts for the current year. Though predictions of plummeting revenue spurred lawmakers last fall to trim more than $1 billion from the budget, analysts have continued to predict worsening shortfalls.

While economic growth is expected to improve in late 2008-2009, said Amy Baker, director of the state Office of Economic and Demographic Research, “revenue collections are not anticipated to exceed the fiscal year 2005-2006 level until fiscal year 2010-2011.”

Tuesday afternoon, House Speaker Marco Rubio characterized Florida’s situation as “an economic crisis” not a “budget crisis.”

“These budgetary numbers that you are seeing today are a reflection of an economy that’s suffering, not a government that’s suffering,” Rubio told reporters. “This is a symptom of a larger disease, which is a national economic downturn which is disproportionately affecting Florida.”

Rubio said he was wrong last week when he warned lawmakers on the opening day of session that “Floridians would wake to the news that we have $4 billion less than we thought we would have, just a year ago.” Turns out, he said, “it’s $4.5 billion less.”

Corporate taxes scrutinized

Florida’s freefalling revenue has lawmakers in both parties pushing strategies for shoring up the budget. But the philosophical divides between them more or less guarantee little bipartisan agreement on a solution.

Reminiscent of Democrats in Congress pushing to sunset President George W. Bush’s tax breaks, Democrats in Tallahassee want to end sales tax exemptions and close what they call loopholes in the corporate tax system.

House Minority Leader Dan Gelber, D-Miami Beach, wants to prevent multistate companies from sheltering the profits they make in Florida in tax haven states like Delaware, where there is no corporate income tax. Doing so, Gelber says, would net Florida $400 million a year.

“We’ve got a serious deficit right now that isn’t going to be solved by simply saying we have to live within our means,” he said. “We’re dealing with, actually, health care and core public education issues.”

Gelber’s corporate tax plan will get a hearing in the House, Rubio said, but panned the general notion of increasing the tax burden on businesses.

Florida government will have to prioritize spending, Crist said Tuesday. “We have to tighten our belt just like Florida families do every day.”

Tap Reserves, Crist Says

But he continued Tuesday to urge lawmakers to tap into state reserves in order to avoid painful cuts, a proposal that many Democrats also support. Florida’s reserves include an emergency “budget stabilization fund” of $1.3 billion, which lawmakers would have to pay back within five years if they tapped into it.

Sansom and Rubio said tapping the state’s reserves would be irresponsible given the predicted duration of the economic downturn.

Every time one-time dollars are spent on recurring programs, Sansom said, “It just increases the reductions you have to make the next year, or the next year, or the next year.”

Rubio was more blunt. Spending reserves “is politically expedient; it’s an easy way out of this session,” he said. “It sets up the Legislature and the state of Florida for horrifying consequences as early as next year.”

Senate President Ken Pruitt released a statement calling Florida’s revenue drop-off “a very serious situation” but warned that “we must not take financial shortcuts in order to avoid the political heat that budget reductions will bring.

“We are going to need everyone to pull together to get through these difficult times,” he said. “Florida’s economy has been robust, and I believe once we weather this correction period, we will see those prosperous days again.”

Copyright © 2008 Tampa Tribune, Fla., Catherine Dolinski. Distributed by McClatchy-Tribune Information Services.

File image In this 2005 artist’s rendering, The Promenade at Riverwalk is shown as planned then, bordering the Manatee River THE COMING VOTE (click here to read more) The Bradenton City Council will vote Wednesday on sweeping changes to plans for the Promenade at Riverwalk, a condominium project in the 700 block of Third Avenue West. This public meeting figures to be largely about development, with two other high-profile projects on the slate. The meeting is at 8:30 a.m. in City Hall, 101 Old Main St. Here is a look at the highlights: The ‘Pink Palace’ Hotel investors are trying to revamp the Riverpark Grande, the famed pink hotel that was a celebrity hot spot in the 1920s. Developers want to restore the vacant hotel, with plans that include 140 rooms, a restaurant and parking garage in the 300 block of 10th Street West. Southshore’s fate From the start, Riviera Southshore, a $25 million condo plan in an historic neighborhood, was controversial. When a bank started foreclosure proceedings against the developer, Riviera began to look like a doomed proposition. Investors this week will ask for a five-year extension to get the project built.

By Anthony Cormier

BRADENTON — Six years ago, a group of local investors won the right to build waterfront condominiums in downtown Bradenton.

At the time, city officials envisioned the project as a way to draw people, businesses and tax dollars to the Manatee River and downtown.

Developers planned homes, restaurants, even a movie theater.

But, as often happens with major land developments, plans changed. The movie theater is out, no stores or restaurants have been built and the condos grew taller than originally proposed.

Once again, developers are changing the Promenade at Riverwalk’s blueprint, this time squeezing out about a quarter of the parking spaces and an acre of open space.

While the height of one building will shrink — from 15 stories to 5 — the developers want to make some of the condos “senior-only,” which seems to counter an effort in Bradenton to bring younger residents to a vibrant, walkable downtown.

The City Council will review the proposal on Wednesday.

The project has met with resistance in the past, especially when some critics thought the Promenade would choke public access to the Manatee River. Also, its developers — led by builder Ron Allen, who has been tapped for city contracts and regularly donates to local political campaigns — are seen as being close to city officials who approved the plan.

For example, to give the project a boost, Bradenton agreed to use taxpayer money to build a new street and pave the waterfront park.

Now, developers are asking to trim the parking spaces to a lower number.

According to Planning Commission minutes, the parking issue was of great concern — especially because the revised plans call for about 930 parking spaces, down from the 1,300 spaces originally proposed.

In the past, developers promised to build a 550-space garage for the first phase. When that garage was built, it had 448 spaces — and a second garage would be smaller than originally proposed.

While Ed Vogler, a land attorney and one of the investors, acknowledged that the parking spaces are being dramatically scaled back, he says that the price of building multiple parking garages — which were initially planned — has skyrocketed.

“The reality is that it’s too expensive,” Vogler said.

The councilman who represents that area says that he is concerned about the proposed “senior-only” residences, which would cater to the over-55 crowd and feature condos that include meal and transportation services.

The condos would rent for anywhere between $2,800 to $4,600 a month. Although the investors are targeting affluent retirees, Councilman Bemis Smith says that Bradenton has largely been trying to welcome more young professionals and families to the city.

Some in Bradenton foresee downtown as a “walkable” community where residents work, shop, eat and live within a few blocks. Smith wondered whether the seniors, who will have a meal plan, would often venture out for a meal in downtown.

“My concern is that we want to create this vibrant place where people are out eating at restaurants, shopping at stores,” Smith said. “And I wonder if this is the right type of project for that.”

Source: HeraldTribune.com

TALLAHASSEE, Fla. (AP) – March 7, 2008 – A second major property tax-cutting proposal advanced Thursday in a commission that proposes state constitutional amendments, but only one is likely to go on the November ballot.

The new plan being considered by the Taxation and Budget Reform Commission would cut taxes about 12 percent a year when fully implemented. It would provide a 25 percent “super exemption” for all residential properties including second homes and rentals. They’d get only get half – 12.5 percent – in the first year.

For the first three years, the amendment would impose a 0.5 percentage point increase in sales tax to temporarily replace some of the money – about $4 billion to $5 billion a year – that school districts and local governments would lose.

A commission committee sent the proposal to the full panel for a vote. Another approach that would cut taxes 25 percent was previously cleared for commission action after getting committee approval.

“I think it would be wise to have the full commission have both of these tools available so they can make the ultimate choice when they’re fully vetted,” said Commissioner Carlos Lacasa, a former state representative from Miami, who is sponsoring the super exemption plan.

The competing plan would repeal that portion of property taxes the Legislature requires school districts to levy in return for getting state aid. The Legislature would have several options for replacing the $8 billion annual revenue loss, including a 1 percentage point increase in the sales tax and repeal of certain sales tax exemptions.

Both versions also would cap annual assessment increases on all property, except primary homes, at 5 percent. That would replace a 10 percent cap in Amendment 1, which voters approved Jan. 29. Primary homes, or homesteads, already have a 3 percent Save Our Homes limit.

The commission has not yet set a date for voting on the property tax proposals but has a May 8 deadline.

Lacasa’s plan received unanimous approval from the Governmental Procedures and Structure Committee, two days after Gov. Charlie Crist said in his State of the State address that he is looking to the commission for more property tax relief.

Some committee members prefer the school tax cut but voted for Lacasa’s proposal so all commissioners can take part in the final decision.

The super exemption applies only to homesteads valued at more than $50,000. Homesteaders also would continue to get an existing $25,000 exemption but would lose their Save Our Homes benefits unless they are a better deal than the super exemption.

The measure would repeal a second $25,000 homestead exemption that’s part of Amendment 1 and applies only to non-school taxes.

Another commission committee narrowly voted 6-4 to send the full panel a proposed amendment that would cap state and local revenues – taxes, fees and other income sources – after making some changes. The caps would let revenues increase to match inflation and population or school enrollment growth plus 1 percent.

The Planning and Budgetary Process Committee, though, removed a provision that also would have limited spending and added one that would require voter approval of new taxes or fees. Another change would let local government bodies exceed the caps for up to 10 years with a three-fourths vote. The Legislature could do the same with a three-fourths vote in the House and Senate.

The same committee also sent the full commission two measures that would affect schools. One would water down class-size reduction requirements and the other would lift a ban on state aid to parochial schools and other religious organizations in return for providing public services.

© 2008 The Associated Press, Bill Kaczor (Associated Press Writer). All rights reserved. This material may not be published, broadcast, rewritten or redistributed.