KeNo's Housing and Economic Portal: Monday January 4 Housing and Economic stories

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City Threatens $2500 Fines for Challenging Traffic Tickets - (www.infowars.com) City Threatens $2500 Fines for Challenging Traffic Tickets - (www.infowars.com) Motorists who receive minor parking or traffic tickets in Indianapolis, Indiana are being threatened with fines of up to $2500 if they attempt to take the ticket to court. A local attorney with the firm Roberts and Bishop was so outraged by what he saw in Marion County traffic court that he filed a class action suit yesterday seeking to have the practice banned as unconstitutional. “The deck is stacked against the motorist,” lawyer Paul K. Ogden wrote. “To penalize that person for seeking justice seems wrong. I know it is done for the purpose of discouraging baseless challenges to tickets and clogging the docket, but in the process you are also penalizing people who have a legitimate defense and want a chance to present it to the court.” The city made explicit the threat of additional fines for challenging parking tickets in a November 30 press release announcing a deal between Indianapolis and a private firm, T2 Systems, to hand over operations of a parking ticket court to increase municipal income. “Using Six Sigma process improvement strategies, it is estimated that under this program the city may collect an additional $352,000 to $520,000 in parking citation revenue over the next 12 months,” the city press release stated. “If citations are not paid prior to their scheduled hearing, the city may request a fine of up to $2500 per citation. Upon receiving a judgment for an unpaid citation, individuals responsible could be subject to collections actions or having their vehicle registration suspended.” In traffic court, Judge William Young has been making good on the threats by routinely siding with police officers in disputes and imposing fines of up to $500 on anyone who challenges a moving violation ticket, no matter how minor, and loses. Those who pay without going to court do not face this extra fine. “Unfortunately what you have happen a lot of times is that judges aren’t particularly worried about whether what they’re doing may be violating the law as the odds of someone ever appealing a $400 traffic ticket is remote,” Ogden wrote. “I see it all the time. Trial judges flouting the law knowing they are unlikely to ever be challenged on an appeal because the litigants can’t afford it.” Ogden is specifically representing three motorists affected by court policies. Toshinao Ishii received a ticket for driving 63 MPH in a 55 zone in February. Had he paid the ticket without challenge, the fine would have been $150. After Judge Young sided with the police officer in court, Ishii was fined $550. Motorist Matthew Stone was told by his doctors not to wear a seatbelt over his chest as it could damage his cardiac pacemaker. He received a $25 ticket for not wearing a seatbelt. After court officials threatened Stone with a $500 fine, he gave up his intention of challenging the citation. Adam Lenkowsky, who did not receive a ticket, attempted to attend a traffic court proceeding on September 23, 2009. He was barred from the court, despite the state constitutional requirement that court proceedings be open.

Gulf States to Compete More for Money as Banks Balk After Dubai - (www.bloomberg.com) The emirs, presidents and sheikhs of the six members of the Gulf Cooperation Council meet in Kuwait this week with the days of easy credit over following a year of debt defaults and deferred payments. Dubai World said Dec. 1 it was seeking to restructure $26 billion of borrowing, and the race to build financial centers and skyscrapers is now turning into a competition to convince banks simply to keep lending to the region, investors and economists said. The GCC annual summit starts today. “Financing will be harder to attract for all companies in and related to the Gulf in the next few quarters as international banks will be loath to have any association with regional corporates and governments, regardless of their stability,” said Emad Mostaque, who helps manage $100 billion at Pictet Asset Management Ltd. in London. While the global financial crisis forced bank bailouts across the western world, in the Gulf it has jeopardized plans to develop markets and forge closer economic ties. At the GCC’s meeting in Muscat on Dec. 30 last year, leaders approved a monetary union agreement, a step toward forming a Gulf single currency. Kuwait said last week that the project may take 10 more years to come to fruition. ‘Moral Hazard’: When the two Saudi family holding companies, Ahmad Hamad Algosaibi & Brothers Co. and Saad Group, defaulted on their Bahrain-based banking units earlier this year, the U.A.E. complained that there was no communication within the GCC. The perception that “the money was there and it would just be splashed around regardless of moral hazard or business viability has not been the case,” said Jane Kinninmont, an economist at the Economist Intelligence Unit in London. “If there’s less money to go around, there will be more competition between the Gulf states.”

Texas teachers fund losses will reverberate for years - (www.statesman.com) The worst of the past year's financial upheaval might be over, but the fund that provides retirement benefits to Texas teachers will feel the effects for many years, actuaries said Friday. "There is virtually no way that this state can give ... a permanent increase to your retirees in the foreseeable future," said Michael Carter, an outside actuary for the Teacher Retirement System of Texas. "The depth of what the markets have done in this decade will be felt for probably at least 20 years, and it will impact what this system will be able to do," Carter said, referring to the most recent market decline and the losses that followed the technology industry bust in 2001-02. Over the past 10 years, the fund's average earnings were 3.3 percent, compared with an expected return of 8 percent. It was sobering news for the board of the $94 billion pension fund and its 1.3 million retired and active members. It was also a clear signal that the state — and perhaps active members — will probably need to ante up more in 2011, and the Legislature might have to reduce benefits for future retirees. The fund can cover benefits through 2058, so there is no worry that retirees won't get their regular checks. But there is a concern among retirees that they can't keep up with rising costs unless they get a benefit boost. The Legislature tried to provide the retirees a one-time payment of $500 in the 2010-11 budget. Because of lingering legal questions, the budget writers made the payment contingent on approval by the Texas attorney general. In late November, the attorney general determined that the payment could not be made because it might violate the state constitution. That means the only way to increase retiree benefits is to make the fund "actuarially sound" — meaning that it can cover its current and projected obligations over 31 years. It now has 83 cents for every dollar needed to cover promised benefits over the long term, which is the lowest funded level since 1987. That figure is expected to decrease next year, because $18 billion in investment losses will be accounted for over several years. During the market tumult of the past year, the fund's assets plummeted from almost $105 billion in August 2008 to $67 billion in early March and then soared back up to $89 billion as of August. For the fiscal year, which ended in August, the market return on the pension fund's assets was down 13.5 percent. The fund has been on an unprecedented upswing since the spring, and the most recent quarterly performance was the best in its history, with more than $10 billion in investment returns, said Britt Harris, the fund's chief investment officer. But it is not likely that investment returns alone will dig the fund out of the hole. Getting the fund back to its 2008 level would require a one-year return of 38 percent or an annual 11 percent return for 10 years, the actuaries said. The only other ways to bolster the long-term condition of the fund are to increase the rate of contributions, which come from both the state and the teachers, or to reduce future benefits. It will be up to the Legislature when it convenes again in 2011 to determine what approach to take. Ted Melina-Raab of the Texas chapter of the American Federation of Teachers said the teachers he represents will want to see the state pony up first before they are asked to contribute more.

Taxpayers' pension tab starts spike - (www.pennlive.com) School districts and the state will pay 70% more next year for teachers' retirement. And the increases are expected to worsen. Pennsylvania's school districts will see their retirement costs increase by more than 70 percent next year as the first symptoms of the state's public pension crisis begin to be felt. The Public School Employees' Retirement System trustees on Friday approved an employer contribution rate of 8.22 percent for the 2010-11 budget year, a 12-year high for the system and a 72 percent jump from the 4.78 percent contribution rate in place now. That means taxpayers will have to spend $1.1 billion next school year for teachers' pensions, or almost $500 million more than this year. State and local education officials said the worst part is that next year's increase is just a fraction of an anticipated leap to record public contributions by 2012, when the state and local tab is projected to exceed $4 billion. "This is not catastrophic," said Jay Himes, the executive director of the Pennsylvania Association of School Business Officials. "What will be catastrophic is that if in the next two short years we can't find a series of legislative changes to prevent that launch in 2012. "That would be simply unaffordable across the board." The PSERS fund is financed by tax revenue, investment returns and mandatory payroll contributions averaging 7.34 percent of salary from 279,000 school employees. The taxpayers' tab -- known as the employer contribution rate -- floats according to the investment earnings. The rate is that share of a district's payroll taxpayers must put up to meet future pension obligations. That cost is split between the state and school districts, but it's all paid by taxpayers. School officials have been bracing for the 2012 rate spike, driven in large part by benefit changes passed by the General Assembly and approved by then-Gov. Tom Ridge in 2001, after several years of historic bull markets, that would leave most career teachers and state workers retiring at full salary. But thanks in part to historically bad returns in investment markets last year, the cost climb has started earlier and might be getting steeper. PSERS lost 26.5 percent on its investment portfolio for the year ending June 30, believed to be its worst one-year result ever.

Texas State sales tax revenue plunge persists - (www.statesman.com) Texas collected $1.7 billion in sales taxes last month, down 14.4 percent from November 2008. It was the tenth month in a row of year-over-year declines and the sixth consecutive month of double-digit percentage drops. State Comptroller Susan Combs said Friday that collections were down in all categories, including retailing, oil and gas production and construction. Although there are some signs nationally that consumers are starting to spend a little more, Combs has said the sales tax picture will remain bleak for several more months. Combs' office also sent Texas cities, counties and other local taxing districts their sales tax allocations for transactions that occurred in October. The total came to $417.1 million, down 14.9 percent compared with December 2008. Austin received $10.6 million, down 8.7 percent from a year earlier, and Round Rock received $4.6 million, down 21.8 percent. Among major Central Texas cities and towns, only Lakeway and Georgetown had increases.

Indiana cities pull plug on streetlamps to save money - (www.wthr.com) Budget cuts and property tax caps are leaving many residents across Indiana in the dark. Merrillville has turned off every other streetlight on its main roads. Valparaiso is turning off every other light in some areas and has set others to turn off at midnight. Muncie officials say the city will shut off 85 percent of overhead lights to help balance the 2010 budget. The moves are a response to rising costs and shrinking revenue that's the result of the ailing economy and property tax caps. Muncie Mayor Sharon McShurley says the move could result in more than just darker streets. "I'm setting you on notice," she told the council. "The decisions you have made, unless you reconsider the budget, are going to be detrimental to the city." But officials in several cities say the changes are necessary. Merrillville Public Works Director Bruce Spires said the city is more than a year behind on its NIPSCO bills. The city will turn off 300 streetlights, for a savings of about $2,000 a month. "The town has been very aggressive in putting up streetlights for the past 15 years, especially when we can get federal funding for them," Spires said. "They were either done as part of a road project or as a safety issue where we got 100 percent funding. These roads are well lit. A couple of them you could land an airplane on." Merrillville's decision won't affect subdivisions, curves or intersections. Valparaiso officials say they aren't sure how much electricity the city is using because it pays a flat rate per light each month, regardless of whether the light is working. The city has shut off some lights and will meter others to determine their usage. Project and Facility Management Director Don McGinley said the city also is considering putting some lights that already are on photo cells on timers so the lights don't turn on simply if it's extremely cloudy or during a storm.