Governor’s school finance plan faces uncertain future
By Brent D. Wistrom, The Wichita Eagle, Kan.
Feb. 22--TOPEKA -- Gov. Sam Brownback's school finance plan faces an uncertain future as lawmakers test out a variety of changes in hope of making it more palatable to fellow politicians and education officials.
Sen. Jean Schodorf, a Wichita Republican who chairs the Senate Education Committee, said Tuesday that her committee won't vote on the plan before a critical legislative deadline this Friday when most bills must be approved by the House or Senate.
Instead, she sought an extension and said she's not sure what the plan's prospects are.
"Anytime you have something as difficult as this it takes a lot of discussion," she said.
The current school funding formula was enacted in 1992 and revised in 2005 and 2006 after the state Supreme Court ruled school funding was inadequate.
The governor's plan allows school district voters to approve unlimited property tax increases to bolster local education and gives districts at least as much money as they currently receive, which critics say keeps funding artificially low because of recession-linked cuts in recent years.
It also replaces weightings that give districts with large populations of at-risk students more money with an equalization payment that some critics say doesn't take into account how student populations change year to year.
"I think it's a major change in the school funding formula and it takes people a while to get comfortable with changes of this magnitude," said Sen. John Vratil, R-Leawood. "I think it has an uphill battle this year and it will probably need to be reintroduced next year."
The governor's office offered this response via spokeswoman Sherriene Jones-Sontag: "The governor appreciates the legislature's interest in and work on improving education in Kansas and we look forward to continuing to work them on these topics as the session continues."
The bill's future in the House could be tenuous as well.
"If the Senate is having trouble getting together in smaller numbers and finding something that could be supported by a majority over there, I think it would be difficult for the House to be able to move something," said House Education Committee Chairman Rep. Clay Aurand, R-Belleville.
But senators are hauling stacks of amendments forward in hopes of finding consensus.
Read More»Once again, speculators behind sharply rising oil prices
WASHINGTON -- U.S. demand for oil and refined products -- including gasoline -- is down sharply from last year, so much that United States has actually become a net exporter of gasoline, unable to consume all that it makes.
Yet oil and gasoline prices are surging.
On Tuesday, oil rose past $105 a barrel and gasoline averaged $3.57 a gallon -- thanks again in no small part to rampant financial speculation on top of fears of supply disruptions.
The ostensible reason for the climb of crude prices on the New York Mercantile Exchange, where contracts for future delivery of oil are traded, is growing fear of a military confrontation with Iran in the Persian Gulf's Strait of Hormuz, through which 20 percent of the world's oil passes.
Other factors driving up prices include last month's bankruptcy of Petroplus, a big European refiner, and a recent BP refinery fire in Washington state that's temporarily crimped gasoline supply along the West Coast; gas now costs an average of $4.04 a gallon in California.
While tension over Iran has ratcheted up in the past few months, the price of oil and gasoline has leaped far beyond conventional supply and demand variables. Financial speculators are piling into the market, torquing the Iranian fear factor into ever-higher prices.
"Speculation is now part of the DNA of oil prices. You cannot separate the two anymore. There is no demarcation," said Fadel Gheit, a 30-year veteran of energy markets and an analyst at Oppenheimer & Co. "I still remain convinced oil prices are inflated."
Consider that light, sweet crude trading on the NYMEX changed hands at $79.20 a barrel just four months ago, but soared past $105 a barrel Tuesday afternoon, partly on news that Iran would halt shipment of oil to Britain and France. But those countries already had stopped buying Iranian oil. And Didier Houssin, the International Energy Agency's director for energy markets and security, said that "there are alternative supplies that can make up for any loss of Iranian exports," The Wall Street Journal reported.
Still, oil's price shot up because it trades in financial markets, where Wall Street firms and other big financial players dominate the trading of oil, even though they have no intention of ever taking possession of the oil whose contracts they are trading.
Read More»Supply of homes for sale declines a touch
Existing U.S. home sales rose in January and unsold inventories declined, the National Association of Realtors said Wednesday.
The second consecutive month of declining inventories means a reduced supply of homes in the market, which is an indication that home prices could rise. Prices have remained low since the December 2007 through June 2009 recession.
NAR said there was a 6.1-month supply of homes on the market at the current pace of sales. That is down from a 6.2-month supply in December.
At the end of the month, there were 2.31 million existing homes on the market, compared with 2.38 million in December.
The trade group said sales of single-family homes, townhomes, condominiums and co-ops rose 4.3 percent to a seasonally adjusted annual rate of 4.57 million in the month. December's adjusted annual rate was revised lower to a 4.38 million units per year pace.
Sales for the month were also 0.7 percent higher than the 4.54 million pace from January 2011.
"The uptrend in home sales is in line with all of the underlying fundamentals -- pent-up household formation, record-low mortgage interest rates, bargain home prices, sustained job creation and rising rents," NAR Chief Economist Lawrence Yun said.
NAR said sales of existing homes rose 3.4 percent in the Northeast, 1 percent in the Midwest, 3.5 percent in the South and 8.8 percent in the West.
The average median price for an existing home was $154,400 in the month, down 2.6 percent from a year earlier.
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Read More»Dollar rises to 7-month high against Japanese yen
NEW YORK - The dollar rose to a seven-month high against the Japanese yen, a week after the Bank of Japan announced a surprise increase of its economic stimulus program.
The dollar rose to 80.40 Japanese yen in afternoon trading Wednesday, its highest point since July 11. The dollar was worth 79.71 yen late Tuesday.
The Bank of Japan said on Feb. 14 that it would buy more government bonds while keeping short-term interest rates close to zero to boost the country's economy.
The yen has been falling against the dollar ever since the announcement.
In Europe, a downgrade of Greece's sovereign debt by ratings agency Fitch didn't hurt the euro. It was practically unchanged at $1.3247 from $1.3244.
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Read More»Stock market investors choose to take profits
By Krista Angela M. Montealegre, The Manila Times, Philippines
Feb. 22--PHILIPPINE share prices on Tuesday retreated from record levels as investors booked profits despite the euro zone's approval of a second rescue package for Greece.
At the Philippine Stock Exchange (PSE), the composite index fell 42.90 points or 0.87 percent to 4,900.94, while the broader all-shares index lost 19.80 points or 0.60 percent to 3,296.60.
Only the holding firm counter managed to eke out a modest gain of 0.18 percent.
Decliners beat advancers, 97 to 79, while 36 stocks were unchanged. A total of 18.43 billion stocks worth P8.54 billion changed hands.
"While most sought for guidance in Europe and the affirmation for a second bailout package in support of Greece, profit-takers still dominated after the market reached an all-time high at the start of the week," said Freya Natividad, investment analyst at 2TradeAsia.com.
The PSE index on Monday surged to a record 4,943.84, marking the ninth time it rewrote historic highs this year, on optimism that debt-stricken Greece will receive a much needed rescue package to avoid a potentially disastrous default.
As expected, the euro zone finance ministers did approve on Tuesday a 237-billion euro ($310-billion) bailout package to help Greece, but concerns linger.
"Europe takes another step towards preventing a Greek default, moves closer to a second bail-out package for the troubled economy but remains far from addressing concerns over the overall health of the region with contagion risks, and fears, still high in the minds of investors," said Jun Calaycay of Accord Capital Equities Corp.
Also contributing to the correction was the absence of economic data to digest with Wall Street closed for trading in observance of the President's Day holiday, Natividad said.
While investors were generally in profit-taking mode, foreigners were in net buying position of P1.5 billion.
"Hopes were high that the measure will make a momentous break of the 5,000-line, and even as it failed to do so Tuesday, the prospects of doing so over the balance of the week remains," Calaycay said.
Immediate support for the index is at the 4,790 to 4,820 range, while major support is at the 4,850 line. Resistance is within the 4,930 to 4,950 band.
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Read More»S.J. has $2.3 billion in pension liabilities
By Zachary K. Johnson, The Record, Stockton, Calif.
Feb. 22--STOCKTON -- Two dozen city and county governments in California face a combined $135.7 billion in unfunded pension liabilities, according to a study released Tuesday that also found the problem is growing.
San Joaquin County's portion of that figure amounts to nearly $2.3 billion.
The Stanford Institute for Economic Policy Research and a nonprofit group, California Common Sense, evaluated 24 local government pension systems that are not part of the California Public Employees' Retirement System, the state's main pension fund. The funds ranged from those for smaller entities, such as Santa Barbara and Stanislaus County, to the largest local governments in California, including Los Angeles, San Diego and San Francisco.
With assets having a market value exceeding $2.3 billion, San Joaquin County Employees' Retirement Association is the 18th largest independent pension system in the state and has about 11,500 members, including about 4,500 retirees receiving benefits.
The report found that none of the systems is at least 80 percent funded, which often is used as a benchmark for the minimum funding level of pension funds. The study assumed a 5 percent annual rate of return for the funds' investments, much more conservative than the 7.75 percent or greater annual return rate assumed by many of the funds.
"Each system substantially understates liabilities and overstates funded ratios," the report stated.
When the Stanford group released a similar report looking at the statewide pension fund last December, CalPERS responded that using the lower return rate artificially magnifies unfunded liabilities.
San Joaquin County's Retirement Association uses the 7.75 percent rate of return, which shows the county is 64 percent funded at current market rate, said Annette St. Urbain, chief executive officer for the retirement association.
"It's not like we are in jeopardy of running out of cash," she said. "And we have time to amass the assets to pay for future liabilities."
The benefits for all current retirees as well as former employees who have yet to begin collecting benefits are 100 percent funded, she said.
The Stanford report showed benefits paid to retired workers also vary.
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