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Archive for Friday, October 30, 2009

Parkinson raises the possibility of a tax hike as revenue comes up another $15 million short of projections

Kansas officials expect preliminary October revenue figures this afternoon

October 30, 2009, 8:17 a.m. Updated October 30, 2009, 5:46 p.m.

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— As state revenues continued to fall, Gov. Mark Parkinson said Friday that it’s possible he’ll propose a tax increase to lift the budget out of the hole.

“We’re getting very close to that point,” he said during a news conference.

He said four rounds of budget cuts this year have been painful. Further cuts in the 5 percent to 10 percent range would be “crippling,” he said, adding that he doesn’t want to do that.

Parkinson, a Democrat, said sufficient revenue is needed to keep basic state functions operating.

Republican leaders who control the Legislature have said they would oppose tax increases.

But the budget picture got worse Friday. State revenues fell $15 million or 3.6 percent below projections for October, according to the Kansas Department of Revenue.

That brings the tax revenue shortfall for the fiscal year that started July 1 to $80 million.

Parkinson has indicated he will make cuts necessary to balance the budget by the time the Legislature returns in January.

But he said whatever specific action he takes will depend largely on the revised revenue estimate for the fiscal year, which will be set next week when state budget experts meet.

Meanwhile, education, which makes up the bulk of the state spending, is bracing for another round of cuts.

“Everybody in state government has been keeping an eye on revenue figures,” said Jack Martin, a spokesman for Kansas University.

He said higher education officials have assumed there will be more cuts. “We fully recognize the economic situation,” he said.

A previous version of this story contained an incorrect headline.

Comments

tbaker 5 years, 1 month ago

Politicians carping for tax increases always proceed on the assumption government is more important than the people who pay for it.

Parasites indeed.

Richard Heckler 5 years, 1 month ago

This can hardly be considered a tax hike after all of the previous tax cuts and refunds which raided the state cookie jars.... that which created this fiasco.

Now if the state cut off all funding for USD 497 Lawrence would experience serious and I mean serious campaigns for local tax increases. That is what happens each time communities receive less and less from the state. It's called Reaganomics/Wreckanomics.

preebo 5 years, 1 month ago

Barrypenders,

Your analogy is flawed in this regard; ants are a communal creature, doing their part for the betterment of the community as a whole, whereas grasshopper is solitary; (and according to you and Aesop's fable) wants to benefit off the ants work. In this instance, it would appear that those who want the agencies to function and regulate various industries for YOUR benefit, do not want to properly fund them to do so. So, in this instance you and the "don't tax me bro" crowd would be the Grasshoppers while those of us who are willing to pay our fair share so that these essential services function properly are the ants.

tbaker 5 years, 1 month ago

Consider the amount of taxes "sent" to Topeka by the good people / business of Lawrence Merrill. I'm curious - if the good people of USD 497 send the Kansas department of revenue $1 in tax revenue, do they realize $1 dollar back in form of state support for our local schools? Of course not.

So where does the difference go? To the "less fortunate" school districts across the state of course. Say for every dollar taken from the people of USD 497 that is destined for state education spending, we eventually get back 25 cents-worth of state support for our local schools. (I have no idea what the percentage is, but it is certainly less than we pay in)

Why don't we just keep the 25 cents to begin with? Let the local school board put an education levy on the ballot and tax the citizens of the district directly, without the need for the state whatsoever. Better yet, how about the people of USD 497 pay no portion of their state income taxes to the state department of education, but instead the state just sends USD 497 a bill and tells us, "based on our state prosperity redistribution scheme, here is your share we require to support the disadvantaged schools across the state." Let local people / officials decide how to raise the money instead of the Rube Goldberg state confiscation scheme directly from individual citizens, wasting a good portion of it, and then sending a fraction of it back.

The more local a government function is, the better it is. It is more responsive, more effective, more efficient, definitely more accountable to the people, and orders of magnitude less wasteful.

Bob_Keeshan 5 years, 1 month ago

tbaker (Anonymous) says…

Politicians carping for tax increases always proceed on the assumption government is more important than the people who pay for it.

Based on this, one can assume it is your belief that people pay for government and get nothing out of it.

And yet you know how to type. And read. A do math. And I assume you drove to work this morning, took a shower, and flushed a toilet.

I would encourage you to put a price on all the services government provides just to those who don't receive special care, such as the elderly, the disabled, or the indigent. You will find you are not paying your fair share.

tbaker 5 years, 1 month ago

Big assumption there Bob. People do get something from government. Where did I say / infer otherwise? We have state and federal constitutions which clearly spell-out what those things are. I have a problem, as we all should, when government exceeds their constitutional authority and ventures into things that should be left to the states or the people themselves to decide.

Those who believe these extra-constitutional things are the rightful province of government to perform should work to see them included in the constitution by amendment. In the mean time, government should be confined to it's constitutional role.

I object to the common practice of government entities operating from the predicate assumption that these things they "provide" the people are of much greater importance than the private property rights of the individual citizens they must take the money from to perform them. If the government service in question lies within the constitutionally defined role of government, then it is correct to make this assumption. If it is not, then this is merely looting in the name of someone's vision of fairness, equality and do-goodism for it has no basis in the supreme law of our country and / or our state. As Lincoln said, our American model holds government should be of, by, and FOR the people. The needs of government should not usurp the import of individual liberty for it's first and principal role is to protect it.

You see Bob I believe in the sovereignty of the individual person - not the government. It is people who make our towns, states, and country great - not their governments. Before raising a penny of taxes, our state government should review it's function and end any service they provide which has no constitutional basis. They will more than make up the short-falls they face if they do. If enough people believe the discontinued state function is needed, there are more than enough organs of local government to restore the service under local control, or there is a sufficient constituency to see the function added to our constitution by amendment.

justthefacts 5 years, 1 month ago

It's not hard to figure out. Just because the numbers are big, and the uses for the money are myriad, doesn't mean it's all that complicated.

We have X number of dollars coming in from taxes etc. And we have Y number of things it's being spent on. When Y exceeds X, then something has to change or we go into debt. Either we have to raise more money or cut spending. The hard parts comes in FIRST deciding which course to follow, tax or cut spending and SECOND deciding (a) who or what to tax more or (b) who or what to cut spending on.

But it's not all that complicated.

avoice 5 years, 1 month ago

"He says the state can’t cripple its agencies and programs so that they can’t recover after the economy improves and revenues revive."

Why not? Many a small business has been crippled to the point of not being able to survive. And the crippling taxes have a lot to do with it! We can do without the private businesses, but we can't do without the government agencies? People don't need jobs; they just need government hand-out programs.

tbaker 5 years, 1 month ago

Thanks for playing Bob. Keep that chin strap fastened tight now.

remember_username 5 years, 1 month ago

tbaker - in response to your earlier comment. The resources of the more fortunate people of USD 497 is distributed, along with funds from other districts, to less fortunate districts because we all live in the same state. I'm confident none is given to our neighboring states. I'm guessing the districts were determined at the state level, and were established with an understanding that resources of each district would be shared. If the promise of sharing was not implied then Kansas would probably have a single district.

I can understand the concept of small local government having the appearance of greater efficiency, but most small local governments do not have the resources to do big things. How does a small community afford roads, and protect itself from floods or pestilence? How does Hoover Dam, TVA, Erie Canal, or the Intercoastal Waterway get build without a whole bunch of communities coming together to do it. Since we're a republic, every community gets represented in the group, and it turns out there is always more "Have-Nots" than "Haves". So if the "Haves" really want the benefit of the resources of a greater community they must provide a larger percentage. Once the larger community is created, it is like a living entity, you can't go back without violent revolution - consider the Civil War an unsuccessful revolution.

This is human nature and occurs all over the world in places without benefit of a constitution. I think ours has lasted as long because of it's flexibility and because we've had things pretty good in balance. You and all the other strict constitutionalists truly have my sympathy because what you advocate, right or wrong, is possible only at a terrible cost.

commuter 5 years, 1 month ago

If there is a tax increase, i would like to see all people's taxes go up. I am tired of paying my share and other's people share too.

tbaker 5 years, 1 month ago

remember_username: I agree with 90% of what you said, although I think we differ on where the line between local, state, and federal government is - but thats OK because you offered a thoughtful critique. People can disagree without being disagreeable.

City, County, and State government in Kansas (as they do in many states) have about the right mix of functions. This equilibrium is largely the product of the fact the state of Kansas (like other states) cannot print money like the feds can, and the State's constitution requires it to have a balanced budget. This doesn't prevent the various arms of Kansas state government from growing (as this is the nature of all government) and getting themselves involved in "providing" ever-more services to the public. This of course is done (usually) out of a genuine concern for welfare of those who are the object of the assistance.

I believe there has been a slow but steady shift in the behavior of government such that when faced with a problem, there is a bias which favors a government-centered solution to the problem instead of a people-centered approach. As our country was founded on the later principal, I am always on the look-out for opportunities to point this out.

Tax increase proposals are always a good opportunity simply because of the aforementioned nature of government to grow beyond it's constitutional limits. As such, there should be the exact same political enthusiasm devoted to saving money by eliminating the extra-constitutional functions of government as is applied to the question of raising our taxes. Too often that isn't the case simply because dishonest politicians find it far easier to soak us tax-payers than shut down unconstitutional functions of government. Unfortunately, politicians ignoring the constitution which they have sworn and oath to defend is common place.

somebodynew 5 years, 1 month ago

Marion (Marion Lynn) says…

Of course, the thought of cutting the budget never entered into whatever Parkinson has that passes for a brain.


What you are forgetting is that the budget has already been cut a couple of times this year. People have lost jobs and "most" State agencies are trying to do more with less staff (Legislature doesn't count as absolutely nothing affects them), You cut anymore and then people are going to be b**ching about not being able to get anything done. And then somehow it will be the State employees fault (who will probably be on an unpaid furlough day).

And as far as Parkinson being kicked out of the Republican party - - you are a little late. He was smart enough to switch sides on his own a couple of years ago.

Alexander Neighbors 5 years, 1 month ago

No NEW TAXES, how about you trim some of that spending ?

This is why you set a budget and if your over it Cut back. This is the main reason people are in too much debt

Boston_Corbett 5 years, 1 month ago

Marion is still digging his foxhole bunker from last spring when he couldn't close the Mexican border and we all got H1N1 from the trade routes to Herrington.

A new peoples revolution/pandemic/disaster/(but not holocaust) is always around his corner......what will his new bugaboo be tomorrow?

(yawn)

Boston_Corbett 5 years, 1 month ago

I think I have my Halloween costume figured out.

I'm going to wear a pair of Blu-Blocker sunglasses, sport a Nazi armband, spout opinions like an expert on every topic, while really being a total and complete idiot who doesn't realize it.

I'll let you all connect the dots.

Godot 5 years, 1 month ago

It is time to look for new tax sources, not further punish those who are already paying.

Tax the churches and non-profit organizations on their interest income, dividends and capital gains. Establish a minimum amount that they must use for charitable purposes; if they don't spend that amount, then tax it. Stop exempting them from paying property tax.

matchbox81 5 years, 1 month ago

There needs to be a balance to taxes and revenues. From what I can see, the Kansas legislator cuts taxes to the bone during the "good" times when low sales tax rates are sufficient to bring in money to cover the State's expenses because people are buying.. When people slow down their buying, that same tax rate doesn't bring in enough money, even though State's expenses typically go up (or at the very least stay the same) during an economic downtime because there's more demand on social services, plus roads still need to be repaired, schools funded, etc. School districts across the country are having furlough days because of budget problems, Hawaii has only 163 school days a year now, compared to 180 day/year national average. This compares to 193 day international average, and ~220 day average in the Asian countries.

I bet one reason college tuition is going up across the county is because State funding for education is going down at the same pace. This policy of slashing education funding (since it's the majority of State expenses) seems penny wise and pound foolish, and doesn't help us compete in a global market place. The reason there's a huge percentage of foreign-born engineers designing our military systems is because the US education system isn't producing enough competitive students for these highly paid, highly sought out positions.

Liberty275 5 years, 1 month ago

I already pay way too much in state taxes for the privilege of living in the middle of a cornfield. As soon as the housing market hits a good upswing, our house is going up for sale and its back to Florida for us, where the state government doesn't charge you money for earning a living.

Living in Kansas already isn't worth the taxes, it certainly isn't worth any more.

commuter 5 years, 1 month ago

Godot- Good posts abbout finding additional income. I would suggest that we also start taxing KU Atrhletic Cirp & KU Endowment type Corps as well.

Taxpayer 5 years, 1 month ago

Raise taxes? This is what Democrats know how to do best...

Godot 5 years, 1 month ago

commuter, that is what I meant - KUAC and KU Endowment are so-called "non profits," sheltering hundreds of millions of dollars from taxation.

Flap Doodle 5 years, 1 month ago

Get used to seeing "tax hike" in headlines more and more often as the O'dude's Brave New World takes effect.

wysiwyg69 5 years, 1 month ago

liberty 275 if ya don't like it, move , no one is forcing you to stay " in a cornfield" .

Stuart Evans 5 years, 1 month ago

tax and regulate marijuana Mr. Parkinson. while I don't want to turn Kansas into a progressive super-state, I do think that you would be remembered kindly by history if you make this intelligent decision. California is poised to pass this law and many other states will make the same choice in the near future. The economic data is sound, and the liberties given back to the people is enormous.

tomatogrower 5 years, 1 month ago

I'm curious just how many of the people here who don't want to pay taxes were educated in private schools and universities? I also have a feeling they are the first to complain about the roads and why there isn't more police presence late at nights. They want their cake and eat it too.

And it's not a tax hike. It's just restoring all the tax monies that were stolen in the last 30 years, and, yes, I'm including Clinton in this debacle. If the tax rates had remained the same, we wouldn't have this problem now. If business had not been given tax incentives to take jobs out of the country, there would be jobs now. It's going to take a lot to come back from 30 years of a "It's all about me, who cares about the country" mindset. They will wrap themselves with the flag and buy a ribbon sticker (probably made in China) for their car, but they don't want to educate children, because then they couldn't afford their big screen TV's to watch the celebrity news on FOX and who wins American Idol. The invalid down the street? Not my problem. They can just go away and die. I just want my money for my toys. It's actually a modern version of the decadence that was a sign and a cause of the downfall of all other empires, like Rome, Greece, Chinese dynasties, etc. Are we a nation who cares about one another and work for the better good? Or are we just a bunch of spoiled, greedy little brats?

Stuart Evans 5 years, 1 month ago

if the government weren't trying to bureaucratize everything, our taxes wouldn't need to be so high. There is so much waste in our government from the top on down. at a local level it's not quite as bad because the people are more directly involved. But waste and fraud are rampant throughout. I would bet that we could all enjoy the same comforts we have now for at least 75% of the cost, if we could clean out the bullsh!t. I don't want to accept that 1/4 of everything I'm taxed by our government ends up as grease for the machine.

Boston_Corbett 5 years, 1 month ago

So Godot really just wants to eliminate charity giving. I guess churches get taxed at the same time.

tomatogrower 5 years, 1 month ago

"You see Bob I believe in the sovereignty of the individual person - not the government. It is people who make our towns, states, and country great - not their governments."

What is really wrong is the people and the government used to be the same. People refuse to get involved any more. So the people who run things just do what they want. People don't even vote, a simple thing to do, anymore. Or they vote for the person who buys the biggest and most entertaining ads. Not the guys with the ideas who don't have the corporate backing. They vote for the fear mongers (well, maybe not this time), but they listen to the fear mongers and believe anything they get in some stupid mass email without checking for validity. People want their TVs, ,computers, gas-guzzling cars, etc so they don't have to think about the real problems. How many would give up 3 hours of electricity every night if it meant we wouldn't have to buy oil from the middle east? They wouldn't even give up 10 minutes. People even threw a fit when the government wanted to stop printing 1 dollar bills and replace them with coins, saving millions of dollars. No the people don't want to be bothered. We could be invaded by another country, and as long as they kept the oil flowing and the toys coming, noone would care. Just plug them into the matrix, and let the weakest just get flushed.

Godot 5 years, 1 month ago

The concept of the 501(c)(3) tax exempt charitable organization, like all tax exceptions, is being massively abused.

In a time of crisis, it is appropriate to put all options on the table, including taxing the earnings and assets of charitable organizations.

That does not mean charitable giving will end. Charitable giving did not just begin when the tax deduction for contributions was created, nor will it end if the deduction disappears. When the 501(c)(3) tax exempt status for corporations was created, the number of non-profit organizations exploded. Many, many of them exist simply to raise funds, with huge budgets, huge salaries, lobbies, and gigantic marketing budgets, while a miniscule percentage of the dollars raised are miniscule dollars spent on the actual charitable projects.

Kansas should treat charities like any other business.

Sunny Parker 5 years, 1 month ago

Obamy promised no tax hikes but saving 'millions of poor americans'!

Just wait until you are paying trillions of dollars for healthcare! You ain't seen nothing yet.

Chocoholic 5 years, 1 month ago

Liberty275 (Anonymous) says…

"I already pay way too much in state taxes for the privilege of living in the middle of a cornfield."

If you build it, He will come. :)

remember_username 5 years, 1 month ago

Liberty275 - "Location, Location, Location." It's very true about Florida where the state government has the luxury of all those tourist dollars coupled with a higher sales tax to help fill their coffers. Funny thing, I been visited Florida for a long enough period to hear people complain about their property taxes and homeowners insurance being to high, at least you'll have prospective.

AreUNormal - I agree that antidotally there appears to be considerable waste and corruption associated with large government. In my opinion this is not as obvious on the local level as it's harder to hide and on a smaller scale. Not because the people are more involved at the local level but that there is less opportunity for corruption and because (this will sound odd) there is less justification for the waste. Give me a few examples of big government waste, and playing devils advocate. I'll bet I could find a justification for some of them and possibly a small local example of the same. It'll be fun.

Godot 5 years, 1 month ago

government Stimulus waste: $14.1 million for an airport in an Alaskan town of 160 people, that averages one and one-half flights per day.

government Stimulus waste: $8000 tax credit for first time home buyers that results in spending of over $40,000 per credit.

government Stimulus waste: $3500 to $4000 credit to fund the purchase of new cars; total cost to taxpayers, per car, $24,000.

Government TARP waste: transferring $180,000,000,000 to Goldman Sachs, JP Morgan, Deutche Bank, and UBS, to pay them in full for assets that were worthless, via the bailout of AIG.

Government fraud and waste: the Federal Reserve purchasing billions of mortgage backed securities, in bold violation of its charter, and paying 100 cents on the dollar for assets that are nearly worthless.

government fraud and abuse and waste: just happened yesterday: OCC and FDIC approves allowing TARP banks to refinance commercial real estate loans at full value, even if the property is worth less than the amount of the loan.

government Stimulus waste: $250,000 per fictional job created or saved.

Government waste and malfeasance: FDIC allowing insolvent banks to remain open in violation of statute that requires FDIC to shut down banks that do not have enough on reserve to protect deposits. Then, when the charade can no longer be maintained, and the banks have bad debt 40 to 50 times deposits, the FDIC puts taxpayers on the hook for makings the depositors whole, and then sells the deposits to another insolvent bank to bolster its balance sheet. Happened just last night.

government waste and sheer hubris? FDIC chairwoman, Sheila Bair, stating, "We are the government. We cannot run out of money."

That is just the tiniest tip of the massive, ugly, stinking mountain of government fraud, waste, corruption and sheer incompetence that is the US government.

No humans are capable of managing anything as big as the US government. That is why the government must shrink, and powers must be returned to the states.

remember_username 5 years, 1 month ago

Godot - Boy, you sure took the fun out of that. Where did the per car and per credit numbers come from? I can probably respond to the Alaskan airport one if you've more of that type and can provide more information. The TARP and bailouts would require more time and expertise than I have to address, but before I respond to any of that I have to ask: Do you care about a response? The rest of your post suggests I would be wasting my efforts at further reply and any justifications I present are unlikely to form the basis of a discussion.

Boston_Corbett 5 years, 1 month ago

Just tax some of that stuff Godot is smoking. Problem solved.

Stuart Evans 5 years, 1 month ago

believe it or not, Boston is right on the money. We could continue to cost the taxpayers millions fighting American citizens who partake in the use of a plant, or we could add money to our sales tax revenue on a massive scale, while putting a huge dent in organized crime.
Legalizing marijuana would end the flow of billions of American dollars to cartels in Mexico and Central America.
Now what could all of those billions of dollars possibly do for local and state coffers?

Godot 5 years, 1 month ago

remember_username, I will make it easy for you. Address the most recent developments involving the FDIC: the closing of 9 banks last night, with the transfer of assets to US Bancorp, a TARP recipient, with a back stop of the potential losses to US Bancorp by the FDIC.

http://www.fdic.gov/news/news/press/2009/pr09195.html

FDIC closes nine branches of a bank, transferring the assets to US Bancorp, with a backstop from the FDIC, but lets the parent bank remain open?

and

"The closing of $4.7 billion-asset Park National occurred the same day that its community development arm, Park National Bank Initiatives, received $50 million from Treasury Secretary Timothy Geithner in a ceremony in Chicago. The money is intended to stimulate investment in low-income communities on such projects as charter schools, health clinics and stores."

http://www.chicagotribune.com/business/chi-fbop-seize-oct30,0,502486.story

Geithner pumps $50 mil into bank the day before Blair closes it, along with 8 other branches of the same parent, and transfers the deposits and assets not to the parent, but to US Bancorp?

Last week when the number of failed banks reached 100 for the year, the FDIC revealed that one of the banks had losses exceeding 40%. Why would Blair have allowed the bank to reach that condition? Why was that bank was allowed to remain open while insolvent? Why did the FDIC allow the losses to mount to an incredible 40% while not warning patrons that they were depositing money in an insolvent institution? Can you justify that, remember_username?

http://www.fdic.gov/news/news/press/2009/pr09186.html

Godot 5 years, 1 month ago

remember_username, the $24,000 for Cash for Clunkers came from that right wing nut job news outlet, cnn, and Edmunds, a source that obviously knows nothing about the automobile market.

"NEW YORK (CNNMoney.com) -- A total of 690,000 new vehicles were sold under the Cash for Clunkers program last summer, but only 125,000 of those were vehicles that would not have been sold anyway, according to an analysis released Wednesday by the automotive Web site Edmunds.com.

Still, auto sales contributed heavily to the economy's expansion in the third quarter, adding 1.7 percentage points to the nation's gross domestic product growth.

Is the economy really getting better? The Cash for Clunkers program gave car buyers rebates of up to $4,500 if they traded in less fuel-efficient vehicles for new vehicles that met certain fuel economy requirements. A total of $3 billion was allotted for those rebates.

The average rebate was $4,000. But the overwhelming majority of sales would have taken place anyway at some time in the last half of 2009, according to Edmunds.com. That means the government ended up spending about $24,000 each for those 125,000 additional vehicle sales."

http://money.cnn.com/2009/10/28/autos/clunkers_analysis/index.htm

Godot 5 years, 1 month ago

support for the Bair quote, "we (the FDIC) are the government.........we cannot run out of money."

http://www.youtube.com/watch?v=mH8NCZRsB74

government at its best

Godot 5 years, 1 month ago

Now, back on topic of the thread.

Many businesses in Kansas have cut staff, cut services, and many others have simply gone out of business.

I expect our government to reflect the economic status of its citizens. Cut salaries, cut positions, cut departments, cut agencies.

When money returns to the coffers as a result of creating an environment where private businesses thrive, the state administration might just find out that they got along very well without the flotsam and jetsom let go, out of necessity, during this crisis. There may be new needs and methods by the time the money flows again.

Tax the earnings and assets of the big non-profits, including religious institutions, do not raise taxes on current taxpayers, and cut, cut, cut.

Godot 5 years, 1 month ago

@remember_username: support for my statement that Goldman Sachs, JP Morgan Stanley, and others, were enriched to the tune of billions of dollars via the bailout and nationalization of AIG, by the Treasury Dept., acting illegally in concert with the Federal Reserve. Timmy Geithner and Ben Bernanke put taxpayers on the hook for billions and billions of dollars to save these elite banksters from paying the price for their fraud, deception, thievery and brilliantly stupid actions.

"From The Business Insider, Oct. 27, 2009:

It is by now well known that the banks on the other side of credit default swaps sold by AIG got paid out at par when the government bailed out the insurance giant.

But what isn't as well known is that by deciding to pay AIG's counter-party in full, the Federal Reserve was reversing months of work AIG executives had done to convince the banks to take a haircut on their positions."

http://finance.yahoo.com/tech-ticker/article/361258/How-the-Fed-Bungled-AIGs-Rescue,-Enriched-Bankers-and-Screwed-Taxpayers

What's the matter, remember_username, why aren't you playing anymore? Do facts scare you?

Godot 5 years, 1 month ago

confronted by facts, remember_username gathers his marbles, stuffs them in his pocket, and shuffles home, where his mommy gives him milk and cookies and assures him that he is the smartest kid on the block.

And a Progressive is born.

remember_username 5 years, 1 month ago

Sorry folks, such a beautiful day yesterday I decided to do yard work and enjoy family and sunshine. Thanks for the follow up details which will make digging into the materials easier. Give me a bit to do some reading before I respond and please keep in mind I work full time on other stuff - thanks for your patience.

Godot 4 years, 11 months ago

Oh noes! Sheila Bair got a sweetheart deal on a $1,000,000 loan from the very bank she was investigating, and then she lied about the intended use of the property.

Nothing to see here. Move along.

http://huffpostfund.org/stories/2010/01/fdic-chief-got-bank-america-loans-while-working-its-rescue

"Sheila Bair, one of the chief regulators overseeing Bank of America’s federal rescue, took out two mortgages worth more than $1 million from the banking giant last summer during ongoing negotiations about the bank’s bailout and its repayment."

and

" Mortgage documents for that 14-room home include a provision, known as a second-home rider, stating that Bair and her husband must keep the house for their “exclusive use and enjoyment” and may not use it as a rental or timeshare.

Yet the couple has been renting out part of the house since they left for Washington, with Bair listing income from the “rental property” in Amherst as between $15,000 and $50,000 a year on her most recent financial disclosure form as head of the FDIC.

Banks generally consider loans on rental properties to be riskier and charge more for them than for loans on second homes. For a $204,000 loan, according to Bank of America rate sheets examined by the Investigative Fund with the help of a mortgage broker, closing costs on a rental property could be $4,000 higher and the interest rate could rise by a half-point."

Bair must resign.

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