SCORECARD
State Finances are Weakening
A new report by the National Conference of
State Legislatures shows increased concern over
state revenue performance - Slow revenue growth
rates mean states' budgets continue to weaken,
according to a new report by the National Conference
of State Legislatures.
- NCSL's State Budget Update: November
2007 is a result of a survey of legislative fiscal
directors in all 50 states and Puerto Rico. The report
covers the revenue and expenditure situation for the
first four months of fiscal year (FY) 2008 for most
states. It includes information on revenue
performance, spending overruns, projections of
budget gaps or surpluses, and the top fiscal issues
anticipated for the 2008 legislative sessions. It also
includes a special focus on the effects of the housing
sector slump on state revenues.
- Twenty-four states and Puerto Rico reported state
revenues have been hurt by the housing sector slump.
At least a dozen states and Puerto Rico are seeing
declines in their real estate transfer or recording
taxes. Many states anticipated a slowdown in this
revenue source, but the drop is even higher than
expected.
- Legislative fiscal directors identified health care
and Medicaid, along with transportation, as key budget
issues their legislatures will address in 2008. At least
16 states are expected to address a variety of K-12
issues, including funding levels, and at least 13
states and Puerto Rico are expected to consider
overall budget issues. Particularly of pressing issues
include funding for education and health care, which
together account for half of general fund budgets.
- Twenty-two states have revised their FY 2008
revenue forecast. In one half of those states, including
California, Florida and New York, it was lowered. The
other 11 states, which include Iowa, Texas and
Utah,
raised their forecasts. Alaska expects an upward
revision to reflect the current oil market and a recent
tax change.
- The report finds that at least nine states and
Puerto Rico reported collections were below forecast.
The amounts were sizeable in Arizona: collections
were 7.3 percent below the estimate. In California
collections were $1.1 billion (3.8 percent) below
forecast.
- Fortunately for states spending plans appear to be
stable in the early months of FY 2008. A quarter of the
states and Puerto Rico report modest overruns.
Special education costs are over budget in
Connecticut and Kansas. Medicaid is exceeding
budgeted levels in Arizona and Maryland. Maryland
and Vermont are also seeing a cost increase for low-
income energy assistance programs.
- NCSL is the bipartisan organization that serves
the legislators and staff of the states, commonwealths
and territories. It provides research, technical
assistance and opportunities for policymakers to
exchange ideas on the most pressing state issues
and is an effective and respected advocate for the
interests of the states in the American federal
system.
How is Utah doing?
Utah Labor Market Indicators - Oct 2007
(Sep 07)
- Employment Growth: 4.3% (4.4%)
- Employment Increase: 52,500 (53,500)
- Unemployment Rate: 2.7% (2.7%)
Source:
Utah Dept of Workforce Services, 11/13/07
U.S. Labor Market Indicators - Oct 2007
(Sep 07)
- Employment Growth: 1.2% (1.2%)
- Unemployment Rate: 4.7% (4.7%)
Source: Utah Dept of Workforce Services, 11/13/07
________________________________________
Where Are the New Jobs? - Sep
2007
- State Total (Market Share) - 52,500 +4.3%
- Salt Lake County (48%) - 24,581 +4.2%
- Utah County (15.1%) - 11,406 +6.3%
- Davis County (8.2%) - 2,933 +2.9%
- Weber County (7.6%) - 2,633 +2.8%
- Washington County (4.3%) - 1,955 +3.7%
- Cache County (4.0%) - 1,694 +3.5%
- Summit County (1.6%) - 1,541 +8.0%
- Box Elder County (1.6%) - 1,362 +6.9%
- Uintah County (1.2%) - 1,230 +9.0%
- Tooele County (1.3%) - 1,201 +8.0%
- Iron County (1.4%) - 739 +4.2%
Source: Utah Dept of Workforce Services,
11/13/07
What are our new Jobs? - Oct
2007
- State Total - 56,822 +4.7%
- Specialty Trade Contractors - 7,700 +11.2%
- Health Services and Social Assistance - 4,300
+4.1%
- Accommodation and Food Services - 3,800 +4.3%
- Professional, Scientific, and Technical Services -
3,100 +65.0%
- Finance and Insurance - 2,900 +5.3%
- Unemployed - 2,800 +2.9%
- Administration & support & Waste Mgm't &
Remediation - 2,100 +2.9%
- Heavy and Civil Engineering - 1,700 +17.2%
- Ambulatory Health Care Services - 1,700 +3.9%
- computer and Electronic Products - 1,400 +12.1%
Source: Utah Dept of Workforce Services, 11/13/07
What kinds of New Jobs? - Oct
2007
- State Total - 53,500 +4.4%
- Specialty Trade Contractors - 9,000 +13.1%
- Professional, Scientific, and Technical Services -
4,300 +6.9%
- Health Services and Social Assistance - 4,100
+3.9%
- Accommodation and Food Services - 6,800 +4.2%
- Food Services and Drinking Places - 3,800
+4.2%
- Finance and Insurance - 3,100 +5.6%
Source: Utah Dept of Workforce Services, 11/13/07
Economic Snapshot - First Four Months
FY2008
Utah State Government
- Sales and Use Taxes (Gen Gov't)
+1.2%
- Individual Income Taxes (Education)
+8.1%
- Individual Income Tax Withholding (Education)
+10.9%
- Corporate Franchise Taxes (Gen Gov't)
-11.7%
- Motor Fuel Taxes (Transportation)
+1.3%
- Severance Taxes (Gen Gov't)
-10.7%
- Wine and Liquor Taxes (Education)
-49.4%
Source: Utah State Tax Commission, TC-23
11/14/07
Economic Snapshot - First Four Months
FY2008
Local Government
- Local Sales and Use Taxes
+6.3%
- Tourism, Recreation, Cultural, Convention
+23.2%
- Public Transit
+44.0%
Source: Utah State Tax Commission, TC-23
11/14/07
Development Notes:
- Trammell Crow High Street Residential
partnered with the Dallas suburb of DeSoto to break
ground on a mixed-use project which will include
35,000 square feet of retail and 135 residential units.
- The public-private venture will replace a vacant
strip mall.
Urban Revitalization - Creating a catalyst for
downtown redevelopment
- In the early 1990s, Spokane, Wash.'s
downtown core was on its way to becoming a vacant,
blighted area. Prostitutes and drug dealers had taken
up residence on the downtown streets that used to
bustle with businesspeople, shoppers and tourists.
Only a coordinated effort by city leaders and downtown
owners and businesses saved the city, which is built
on the banks of the Spokane River about 300 miles
east of Seattle.
- As the hub for the Inland Northwest - a region with
a population of nearly 2 million people and
encompasses several states including Washington,
Idaho, Montana, Oregon and parts of Canada -
Spokane always boasted a strong downtown core,
says Betsy Cowles, president of the Cowles
Company, a Spokane-based company with a variety of
holdings including downtown real estate.
- "We've always been the economic center for
hundreds of miles," points out Cowles, a fourth
generation Spokanite. For example, Spokane hosted
the 1974 World's Fair, which was - by all accounts - a
roaring success. The Fair sparked a development
boom in downtown Spokane, creating a 100-acre park
along the river and a downtown mall called River Park
Square, owned by the Cowles Company.
- Over the next 20 years, Spokane proved that its
urban core was vulnerable to the troubles other
American cities experienced. "We saw what had
happened to other cities' downtowns, and we could
definitely see the writing on the wall," Cowles notes,
adding that River Center lost two of its four department
store anchors within months of each other.
- The Cowles Company was faced with a dilemma -
should it pack up its tent and look for other investment
opportunities or stick it out in downtown and try to turn
things around? With its long history in the city, the
company decided to do everything it could to spark
redevelopment in Spokane's core - it invested more
than $115 million to redevelop River Park Square, a
project that spans almost two city blocks. The new
373,000-square-foot retail center, which features a
new 130,000-square-foot Nordstrom's department
store and a 20-screen movie theater, launched the
city's urban revitalization.
- "We were motivated by the fear that Spokane
would die on the vine," Cowles admits.
Plan for the best
Continued Next Week
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Greetings!
State Revenues Declining?
What about Utah?
- Who is up?
- Who is down?
- Nationally?
- Utah?
The Ten Things Everyone Should Know About
Science, Pt III
Bob Springmeyer
Bonneville Research
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The Ten Things Everyone Should Know About Science Part II |
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The Ten Things Everyone Should Know
About Science Part III
- You may be able to quote Shakespeare, but what
are you like on Big Bang theory?
- The Financial
Times gives non-scientifically minded readers a leg
up the tree of knowledge.
Relativity
- If Charles Darwin and his theory of evolution have
become the great symbols of 19th-century science,
Albert Einstein and relativity play a similar role for the
20th century. Einstein's theory of relativity was
published in two parts, both of which have had an
immense influence on the subsequent development
of physics and cosmology.
- ''Special relativity'' (1905) showed that time and
distance are not absolute but depend on the
observer's motion. Key to special relativity is the
famous formula e=mc2, where e is energy, m mass
and c the speed of light. The formula implies that
mass and energy can be converted into one another,
that the speed of light in a vacuum is the same for all
observers under all circumstances, and that nothing
can travel faster than light (300,000km per second).
- ''General relativity'' (1915) brought gravity into the
theory, showing that heavy objects distort the fabric of
space and time through their gravitational fields.
General relativity passed its first public test during a
solar eclipse in 1919, when telescopes showed light
from distant stars ''bent'' by the sun's gravity, exactly as
the theory predicted.
Another prediction, confirmed much more recently, is
the existence within galaxies of ''black holes'' from
which no matter or light can escape because the force
of gravity is so strong.
Why does it matter?
- Like cosmology and the Big Bang, relativity
underpins the intellectual framework of science.
- But it has practical applications in space
technology; for example, satellite navigation works
because the Global Positioning System (GPS) takes
account of relativity. And science-fiction writers need to
invoke relativistic effects to make time travel possible.
What next?
- No one knows. The great unmet challenge of
theoretical physics is to combine relativity with
quantum mechanics. The two theories still co-exist
uneasily without a common base. One day another
Einstein will come up with a grand theory to unite
them.
Fear factor: palpitations
What's next? - Quantum mechanics
Source: Financial Times, London, 2007
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Economic Notes: |
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- The Federal Open Market Committee
- The FOMC lowered the federal funds rate by 25
basis points to 4.25% and also lowered the discount
rate by 25 basis points to 4.75%. The committee cited
weakening economic growth, concern in financial
markets and slowing core inflation. The FOMC did not
indicate a bias for future monetary policy; there was no
discussion of future policy actions, with the FOMC
noting that uncertainty has increased in recent
months. One member voted to cut the fed funds rate
target by 50 basis points.
- Treasury Budget - (-$98.2 B)
- The unified deficit for November was $98 billion,
slightly below the CBO's preliminary estimate of a
$101 billion deficit. The federal government has run a
deficit of $154 billion through the first two months of
FY2008; this is 26% larger than the deficit at the same
point in FY2007. After a few years of improvement, the
federal budget deficit is set to widen in the current
fiscal year.
- International Business Confidence
- Businesses are very nervous. Confidence edged
a bit higher during the first week of December, but is
consistent with an economy that is contracting.
Expectations regarding the outlook over the next six
months are eroding and have never been weaker in
the five years of the survey. Responses regarding
sales strength, inventory investment, and office space
are all soft. Businesses are more positive when
responding to questions regarding payrolls and
equipment investment. Confidence is stronger
outside the U.S., but it has notably weakened most
everywhere across the globe during the past
month.
- International Trade (FT900)
- The nominal U.S. trade deficit in goods and
services widened by 1.2% in October. The U.S. trade
deficit came in at $57.8 billion, $0.7 billion more than
September's revised $57.1 billion, according to the
Bureau of Economic Analysis. In October, both exports
and imports increased, though imports increased
more than exports. The goods deficit with China,
however, widened to $25.9 billion, increasing 6.3%
compared to a year ago. Crude oil prices increased in
October, which in turn increased the nation's total
import bill for energy-related petroleum products to
$30.1 billion.
- Import and Export Prices
- The U.S. Import Price Index increased 2.7% in
November. The increase was the largest monthly
advance since October 1990 and was led by a 9.8%
rise in petroleum prices. Export prices rose 0.9% in
November, after rising by 0.8% in the previous month.
- PPI
- Producer prices for finished goods soared 3.2% in
November, the second highest reading since the
inception of the series in April 1947. The increase was
driven almost entirely by energy prices, which rose
14.1%. The core producer price index posted an
above-trend 0.4% gain.
- Quarterly Services Survey
- In the third quarter of 2007, the information
industry reported 5.8% year-to-year revenue growth.
Professional services revenues are up 6.2%.
Administrative and support and waste management
and remediation services revenue posted 2.5%
growth. Revenue in hospitals, nursing and residential
care facilities is up 7.0%. The aggregate of services
revenue increased 5.8% from the third quarter of
2006.
- Manpower Employment Outlook Survey -
Canada, United States & Western Europe
- According to the Manpower Employment Outlook
Survey, employers in all of the 27 countries and
territories surveyed expect to add staff during the first
quarter in 2008. Nevertheless, hiring intentions
continue to soften in the U.S., with the net employment
outlook indicating that 10% (not seasonally adjusted)
of employers expect to add staff compared to 18% in
the previous quarter. The employment outlook is
looking up in the euro area, however, in the U.K. and
Ireland employment demand will soften. In Asia
Pacific, demand for new workers will weaken slightly
but remain strong.
- Wholesale Trade (MWTR)
- Wholesale inventories were unchanged in
October, falling well below consensus expectations of
a 0.5% gain. September's large increase in
inventories was revised lower from 0.8% to 0.6%.
Sales rose by 0.7% over the prior month in October as
compared to September's upwardly revised 1.4%
increase. The inventory-to-sales ratio edged down to
1.09 in October.
- Pending Home Sales
- The pending home sales index declined by 18.4%
in October on a year-ago basis. At 87.2, the index was
up by 0.58% from September. September's index was
revised upward to 86.7 from 85.7. The index's large
fall from a year ago suggests that home sales will
slow further over the next several months in light of
continued weakness in the nation's housing market.
- MBA Mortgage Applications Survey
- Mortgage demand increased 2.5% in the week
ending December 7. Purchase applications increased
1.7% and refinance applications increased 4.3%. A
second consecutive increase in mortgage
applications is a positive sign that could signal
improving conditions in the mortgage market.
- Chain Store Sales
- Chain store sales rose 0.2% in the week ending
December 8, but year-over-year growth fell to 2.3%, as
comparisons were difficult. The ICSC reported that
consumers continue to delay their purchases relative
to recent holiday seasons.
- Retail Sales (MARTS)
- Total retail sales soared 1.2% in November,
accelerating from 0.2% in October. Non-auto sales
grew an even stronger 1.8% as auto sales fell. Sales
at gasoline stations led growth but core sales grew a
surprisingly strong 1.1%. Growth was strong across
virtually all non-auto retail segments. Year-over-year
growth rose to 6.3% in total and 7.4% excluding autos.
October growth was not revised in aggregate.
- Oil and Gas Inventories
- Crude oil inventories fell by 0.7 million barrels for
the week ending December 7, according to the Energy
Information Administration, below expectations of a
0.1 million barrel build. Distillate supplies fell by 0.8
million barrels, below expectations of a 0.5 million
barrel build. Gasoline supplies rose by 1.6 million
barrels, above expectations of a 1.3 million barrel
build. Refinery capacity utilization fell by 0.6
percentage points to 88.8%. Today's report supports
higher oil prices.
Source: Economy.com 2007
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Bonneville Research is a Utah-based consulting
firm providing economic, financial, market and policy
research to public and private sector clients
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Each of our studies is tailored to address the
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If we can help, please call or email us at
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