- The Washington Times - Tuesday, November 11, 2008


Loan industry in jeopardy

PHOENIX | The payday-loan industry - which flourished this past decade on Arizonans’ almost insatiable need for quick short-term loans regardless of their high interest rates - may have to close down in Arizona unless state lawmakers can be persuaded to ignore voters’ wishes, the Arizona Republic reports.

Voters last week overwhelmingly rejected Proposition 200, a ballot initiative financed and written by the loan companies to allow them to continue charging high interest rates on small loans. That decision placed Arizona among a growing number of states that have effectively shut down the payday lenders.

However, an industry spokesman said payday-loan stores could be wiped out because they cannot afford to operate on the lower rates they eventually will be forced to charge. Critics who opposed Proposition 200 say payday-loan stores prey upon the poor.

The measure would have allowed payday lenders to charge interest rates up to 391 percent and indefinitely extend their state licensing, which expires July 1, 2010. In return for the extension, lenders would have slightly reduced fees, stopped loan extensions and created repayment plans.

Without a payday-lending license, businesses can charge no more than 36 percent annual interest, the maximum allowed for consumer lenders, according to the Arizona Department of Financial Institutions.

“We are still absorbing the loss and trying to figure out the best tactic to take to preserve the business,” said Stan Barnes, spokesman for Yes on 200.

Mr. Barnes said about 2,500 Arizonans will be out of work if payday lenders are shut down.

“There is a lot at stake,” he said. “It’s not every day we eliminate an entire industry.”


Slot machine take may be cut

TOPEKA | State Senate President Steve Morris says legislators might consider lowering the state’s take from slot machines at racetracks.

The Legislature last year approved a law allowing slot machines at tracks but assigns a maximum 40 percent of slot revenues to the track, with the rest going to the state, local governments and programs for animals and problem gamblers.

Owners of three racetracks that have closed because of financial problems say they need a bigger percentage to make reopening worthwhile.

Mr. Morris says allowing the tracks to reopen could generate added revenue. The state faces a $137 million budget deficit in the fiscal year that ends June 30.

The racetracks’ owners urged the Kansas Racing and Gaming Commission to let them keep their licenses until they could lobby lawmakers to change the law.


Auditor win seat without campaigning

MONTPELIER | Vermont State Auditor Thomas Salmon - who’s serving with the U.S. Naval Reserve in Iraq - won re-election Tuesday despite not being allowed to campaign.

Mr. Salmon, a 45-year-old certified public accountant, was deployed in June. Under Pentagon rules, he wasn’t allowed to participate in his re-election campaign. His wife, campaign manager and father - former Gov. Thomas Salmon - ran the campaign without him.


Governor’s warning viewed skeptically

FRANKFORT | State Senate President David Williams continues to voice skepticism about Gov. Steve Beshear’s recent warning of the “dire” financial outlook presented by the projected $294 million revenue shortfall this year, the Courier Journal reports.

“The fact that the revenue forecasters make this revenue forecast is not going to make me fall into his spin zone,” Mr. Williams, Burkesville Republican, said in a recent interview. “The man has declared some kind of catastrophe every few weeks since he’s been in office.”

Mr. Beshear, a Democrat, announced the projected shortfall late last month and said he would reach out to work with legislators on both sides of the political aisle in crafting a solution, which he said will require spending cuts and may require a tax increase.

If higher taxes are to be part of the solution, the governor will need an agreement with Mr. Williams, who successfully opposed Mr. Beshear’s proposals early this year to raise revenue by legalizing casinos and increasing the cigarette tax.


Report urges calm in budget cutting

Lawmakers facing huge budget shortfalls should “take a deep breath” before advancing $400 million worth of cuts in state business taxes that state officials say are vital to helping New Jersey’s economy confront the mounting global recession, a liberal policy analyst said in a new report today.

“When you’re at the bottom of a deep hole, the last thing you need is a shovel,” Jon Shure, president of the liberal think tank New Jersey Policy Perspective, said at a recent press conference, the Star-Ledger reports.

At the conference, Mr. Shure released a report that disputes the notion that tax cuts will help New Jersey in the current recession and suggests the proposed cuts will cost the state millions of dollars at a time when tax returns are already plunging.

“There’s no broad evidence that tax cuts for big business are a silver bullet,” he said. “I don’t think we should be taking this on faith.”

Mr. Shure said his group’s study of the corporate tax changes under consideration in the state shows that they will amount to lucrative tax breaks for big corporations while doing little to stimulate job growth.

Legislation that would pare back provisions of New Jersey’s corporate business taxes, which business leaders have criticized for years, are speeding through the Legislature during the economic crisis.


Tax foe quits court battle

CARSON CITY | Former Assemblywoman Sharron Angle, an anti-tax conservative, has ended a court battle for a public vote on her proposal for a Nevada version of California’s tax-capping Proposition 13.

An agreement to drop an appeal seeking a vote on the plan was filed Thursday in the state Supreme Court. The agreement was signed by lawyers for Mrs. Angle’s We the People Nevada group, the Nevada State Education Association, which opposed the plan, and the secretary of state.

Mrs. Angle had circulated an initiative petition and gathered about 83,000 signatures to amend the Nevada Constitution. However, the education association filed suit, and a district judge ruled there were defects in the petition.

The state Supreme Court agreed in September to keep the proposal off Tuesday’s ballot. The case remained in the high court for further arguments.

The proposed constitutional amendment would have limited property tax increases to 2 percent per year until a property is sold. The current cap, set by the Legislature in 2005, is 3 percent per year for owner-occupied homes and 8 percent for other property, including commercial.

Mrs. Angle has tried for years to get a property tax limit into the Nevada Constitution. She has argued that the cap needs constitutional protection because the Legislature could revoke its cap anytime it wished.


Jobs packages first on agenda

SALEM | From the race for president down to contests for Oregon legislative seats, Democrats were elected last week on promises they would patch up a broken economy.

Now, Oregon Gov. Theodore R. Kulongoski and legislative leaders say they are ready to deliver with a big job-creating transportation package as a first step.

Today, Mr. Kulongoski appeared at a legislative hearing to make his case for a plan that could raise the state gas tax and vehicle fees to pay for road and bridge improvements and create thousands of new construction-related jobs.

It’s what voters had in mind when they embraced President-elect Barack Obama and other Democrats in last Tuesday’s election, Mr. Kulongoski said.

“We need to put people back to work,” the governor said. “And you can accomplish more good on that score by investing in public infrastructure than you can throwing public money at banks and financial institutions.”

From staff dispatches and wire reports

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