KeNo's Housing and Economic Portal: Wednesday May 26 Housing and Economic stories

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TOP STORIES:

Anger brews over tax appeal fee - (lansner.freedomblogging.com) A vote over a proposed $30 fee for appealing property taxes is being postponed after the Orange County Association of Realtors requested a meeting to learn more about the measure. Meanwhile, several property taxpayers who have been through the process oppose the fee, saying it’s unfair to make property owners pay to correct the county’s mistakes. The Orange County Board of Supervisors had been set to vote Tuesday on a proposal that property owners who dispute their tax amounts pay $30 to help offset the costs of doing so. But Darlene Bloom, clerk of the board of supervisors, has requested that the vote be postponed until May 25 so she can meet with members of the Realtor association and give them more information about the proposal. Association President Gary Macrides issued a statement: “We only just learned about the proposed new fees for filing property tax appeals today. From the association’s perspective, we would like the opportunity to learn more about the fee, including the reason behind the implementation, and whether it is possible to accomplish what the Clerk is looking to do without the fee. Anytime you have services that are free, or part of the general operations of a county government agency, and they suddenly cost money, you want to know why.”

Big firms consider dropping health benefits - (money.cnn.com) The great mystery surrounding the historic health care bill is how the corporations that provide coverage for most Americans -- coverage they know and prize -- will react to the new law's radically different regime of subsidies, penalties, and taxes. Now, we're getting a remarkable inside look at the options AT&T, Deere, and other big companies are weighing to deal with the new legislation. Internal documents recently reviewed by Fortune, originally requested by Congress, show what the bill's critics predicted, and what its champions dreaded: many large companies are examining a course that was heretofore unthinkable, dumping the health care coverage they provide to their workers in exchange for paying penalty fees to the government. That would dismantle the employer-based system that has reigned since World War II. It would also seem to contradict President Obama's statements that Americans who like their current plans could keep them. And as we'll see, it would hugely magnify the projected costs for the bill, which controls deficits only by assuming that America's employers would remain the backbone of the nation's health care system.

Why aren't Fannie and Freddie in Reform Bill? - (voices.washingtonpost.com) One of the right's talking points on financial reform is that it needs to include major reforms of Fannie Mae and Freddie Mac. That seemed fair enough to me, at least until I started working on a Fannie Mae and Freddie Mac explainer and realized it belies the reality of the issue. And Republicans, I think, know that. If you read the Republican FinReg proposal, it does three things on Fannie and Freddie: It appoints a new special inspector general inside the mortgage giants to make regular reports to Congress. It undoes the emergency measures put into place during the financial crisis. And it directs the president "to submit a plan to reform [Fannie and Freddie] to Congress no later than six months after the enactment of the Act." In other words: Ready, set, PUNT! What we do with Fannie and Freddie has more to do with our priorities for the housing market than our priorities for the financial system. The entities exist to make mortgages cheaper (I'll get into the how of that tomorrow). Eliminate them, or substantially change them, andmortgages will get more expensive. You're talking about taking a massive -- albeit somewhat opaque -- subsidy to the middle class and eliminating it. That is to say, the politics of reforming Fannie and Freddie are more like the politics of reforming the mortgage interest deduction than reforming financial regulation.

Plunge in state revenue dashes hopes of an easy budget fix - (www.latimes.com) Legislators were hoping revenue would continue to exceed projections, forestalling deeper cuts and further tax hikes. But April's total was 30% below what was expected, leaving them with few options. State tax collections plummeted unexpectedly in April, wiping out months of steady gains that legislators hoped would ease their budget troubles and restore California's economy faster than experts predicted. Such hope is now fading fast. Revenue for April, the biggest revenue month because it is when most Californians pay their taxes, lagged projections by nearly 30% — roughly $3 billion, according to state officials. The drop was steep enough to erase improvements recorded in each of the four previous months. Economists and finance officials are scurrying to analyze the data to determine what caused the April swoon. Some suspect it sprang from new laws that changed the rhythm of tax payments. It could also reflect the growth in unemployed residents eligible for refunds.

Geithner: Housing Reform To Come AFTER Wealthy Get Their Money Out - (www.imarketnews.com) U.S. Treasury Secretary Timothy Geithner Tuesday said the Obama administration has decided to approach the reform of Fannie Mae and Freddie Mac in two stages. Following questions on why an overhaul of the housing system is not part of the financial reform package, Geithner told the Senate Finance Committee the government has held off "because we thought frankly we'd get a better outcome, more thoughtful effort, more commitment to reform if we were further ahead in the process of repairing the damage to the housing markets." The administration has begun to consider its options, soliciting public comment on the various proposals, he added, reiterating the government's readiness to work with Congress to put in place a strong set of reforms to address the whole housing finance market. "There are a range of things we are going to have to change in that process," the Treasury Secretary said. The purpose of the hearing was to discuss the Crisis Responsibility Fee that the administration is proposing to recoup the direct costs of the Troubled Asset Relief Program from large banks. Geithner argued that TARP recipients Fannie and Freddie are not included in the levy because "they did not cause the crisis."

Another jobless summer for young people - (money.cnn.com) The job situation is starting to look better for grownups. But college and high school kids could be in for a long, disappointing summer. While Friday's employment report is expected to show employers added the greatest number of jobs in three years in April, unemployment among 16- to 24-year-olds stands at nearly 19% heading into this summer. That's nearly doubled from 2007, the last summer before the recession, when it averaged just over 10%. "As far as summer jobs go, this is going to be the worst year to try to land a job since the Depression," said Heidi Shierholz, labor economist with the Economic Policy Institute, a liberal think tank. And the numbers tell only part of the story since so many younger job seekers have simply given up and no longer counted as unemployed. The percentage of those in the 16- to 24-year-old age group with jobs last summer tumbled to an average of 47% from 55% over the course of the previous 60 years. The situation has only gotten worse since last summer, with only 45% holding a job in the most recent reading in April.