In May, the Brookings Institute released its study of The State of Metropolitan America<http://www.brookings.edu/reports/2010/0509_metro_america.aspx>. This report projects what we can expect to see in the 2010 Census. The US Census Bureau has now released their last population estimate for places, covering 2009 before they begin to release the actual 2010 census results in December. Every decade, as the census results are released, significant changes are made in where business choose to build, expand and relocate based on the data and indicated consumer and population trends. Beverly Kerr with the Chamber of Commerce, reports on this last census estimate and how Austin and Texas rank.
Self-employed real estate practitioners should expect a host of new paperwork beginning in 2012.
That will be the first year that whenever a firm buys more than $600 a year in goods or services from a vendor – whether it is a giant company or a one-person show – the vendor will be due a 1099 from the purchaser at the end of the year.
Lawmakers passed the provision to help fund healthcare changes by closing the “tax gap” created by cheaters. An estimated $300 billion of revenue is lost to tax evasion every year.
Critics say the new rules expand current reporting requirements significantly, with the burden falling on sole proprietors and other very small businesses. The new rules require tracking payments throughout the year to see if they fall into the over-$600 category.
If the vendor fails to supply his or her tax ID number, then the payer is required to withhold 28 percent of the payment and send that amount to the IRS.
There is a way around this. Businesses that pay with credit or debit cards are excused from sending 1099s.
Source: The Wall Street Journal, Laura Saunders (07/17/2010)
* Interest Rates down to 4.57% from 4.58% last week.
* Refinance Loans were 78.7% of Loan Applications.
* Average Interest Rate for 2009 was 5.04%.
* Average Interest Rate for 2008 was 6.03%.
* Average Interest Rate for 2007 was 6.34%.
This chart shows the change in weekly interest rates from January of 2008 forward based on the Freddie Mac Primary Mortgage Market Survey of approximately 125 lenders. Freddie Mac’s survey is viewed as the best indicator of interest rate trends.
About the “Primary Mortgage Market Survey(r) (PMMS(r)) Freddie Mac’s Primary Mortgage Market Survey(r) (PMMS(r)) surveys lenders each week on the rates and points for their most popular 30-year fixed-rate, 15-year fixed-rate, 5/1 hybrid amortizing adjustable-rate, and 1-year amortizing adjustable-rate mortgage products. The survey is based on first-lien prime conventional conforming mortgages with a loan-to-value of 80 percent. In addition, the adjustable-rate mortgage (ARM) products are indexed to U.S. Treasury yields and lenders are asked for the both the initial coupon rate and points as well as the margin on the ARM products.
Currently, about 125 lenders are surveyed each week and the mix of lender types – thrifts, credit unions, commercial banks and mortgage lending companies – is roughly proportional to the level of mortgage business that each type commands nationwide.
The survey is collected from Monday through Wednesday and the results are posted on Thursdays.
Hope remains for 1155 Barton Springs
The development arm behind a luxury condo complex planned for Barton Springs Road, across the street and about 200 feet west of the Palmer Events Center, filed for bankruptcy protection this month after its lender decided not to renew its loan.
Despite the setback, PPT Development LP principal Steffen Waltz said the $40 million development called 1155 Barton Springs is merely in hibernation, not dead.
PPT Development is seeking Chapter 11 protection, filed at the end of May, claiming its assets and debts each range from $1 million to $10 million, according to records that did not include a complete list of creditors.
The company’s largest creditor is San Antonio-based Overland Partners, the lead architect on the project, which is owed about $1 million, according to court records
Issue Date: May/June 2010, Posted On: 4/29/2010
Best and Worst States for Business 2010
More than 600 CEOs rated states on a wide range of criteria from taxation and regulation to workforce quality and living environment, in our sixth annual special report.
In Chief Executive’s annual survey of best and worst states for business, conducted in late January of this year, 651 CEOs across the U.S. again gave Texas top honors, closely followed by North Carolina, Tennessee and Virginia. They gave the booby prize for worst state to California, with New York, Michigan, New Jersey and Massachusetts filling out the bottom five-a line-up virtually unchanged from last year. Florida and Georgia each dropped three places in the ranking, but remain in the top 10. Utah jumped six positions this year to sneak into the top 10 at No. 9.
The business leaders were asked to draw upon their direct experience to rate each state in three general categories: taxation and regulation, quality of workforce and living environment. Within each category respondents graded states in five subcategories, as well as ranking each in terms of its importance to the respondent and how individual states measure up (Click here to see How CEOs Grade the States chart).
For example, Texas fares competitively with Nevada and Delaware in terms of taxation and regulatory environment, but scored best overall, in no small measure because of the perception that its government’s attitude to business is ideal. Runner-up North Carolina edged Texas slightly in its living environment, but scored somewhat below the Lone Star state in terms of government attitude to business and work ethic, which is a sine qua non for the business leaders. (Click here to see the chart) After employee work ethic, CEOs most highly prize lower tax rates and perceived attitudes toward business, followed by living environment considerations, such as real estate costs and education.
“Texas is pro-business with reasonable regulations,” one CEO respondent remarked, “while California is anti-business with anti-business regulations.” Another commented, “California is terrible. Even when we’ve paid their high taxes in full, they still treat every conversation as adversarial. It’s the most difficult state in the nation. We have actually walked away from business rather than deal with the government in Sacramento.”
Click here to view the full chart
Best and Worst States for Business 2010
“The leadership of California has done everything in its power to kill manufacturing jobs in this state,” observed another CEO. “As I stated at our annual meeting, if we could grow our crops in Reno, we’d move our plants tomorrow.”
How is it that the nation’s most populous state at 37 million, one that is the world’s eighth-largest economy and the country’s richest and most diverse agricultural producer, a state that had the fastest growth rate in the 1950s and 1960s during the tenures of Democratic Governor Pat Brown and Republican Governors Earl Warren and Ronald Reagan, should become the Venezuela of North America?
Californians pay among the highest income and sales taxes in the nation, the former exceeding 10 percent in the top brackets. Unemployment statewide is over 12.2 percent, higher than the national average. State politics seems consumed with how to divide a shrinking pie rather than how to expand it. Against national trend, union density is climbing from 16.1 percent of workers in 1998 to 17.8 percent in 2002. Organized labor has more political influence in California than in most other states. In addition, unfunded pension and health care liabilities for state workers top $500 billion and the annual pension contribution has climbed from $320 million to $7.3 billion in less than a decade. When state employees reach critical mass, they tend to become a permanent lobby for continual growth in government.
Bill Dormandy, CEO of San Francisco medical device maker ITC, summed it up: “California has a good living environment but is unfavorable to business and the state taxes are not survivable. Nevada and Virginia are encouraging business to move to their states with lower tax rates and less regulatory demands.”
Lone Star Leader
By contrast, Texas, the second-most populous state and the world’s 12th largest economy, is where 70 percent of all new U.S. jobs have been created since 2008. Unsurprisingly, it scores high in all the areas CEOs value most. “You feel like state government understands the value of business and industry to create jobs and growth,” observed one CEO. Its tax credits and incentives to business choosing to locate or expand are among the most aggressive. The Texas Enterprise Fund is by far the largest deal-closing fund of any state, with grants totaling $377 million disbursed in 2008.
Little wonder then that while Texas gained over 848,000 net new residents in the last 10 years, according to the Census Bureau, California lost 1.5 million. New York State’s net loss exceeded 1.6 million – the highest of any state. High-tax, big- government New Jersey ranked fourth, with a net loss of almost 460,000, enough to drop it from 10th to 11th place in population.
“The New York state legislature is the most dysfunctional in the land and one of the reasons why New York is the worst,” one exasperated New York City business leader volunteered. The political elites in the states that dismiss out-migration trends overlook the radical demographic adjustment underway. As higher-income earners leave, they are more often replaced by those with lower incomes and lower skills, many needing public assistance. Gone too are the entrepreneurs and risk-takers, off seeking regions where their job creating abilities are rewarded.
Another more daunting reality is in store. The so-called de-leveraging of America hasn’t reached government. U.S. cities and states have issued over $2 trillion in new debt since 2008, with another $1 trillion scheduled this year. The problem is that state revenues in real terms may not reach 2008 levels until late in 2012, according to John Thomasian of the National Governors Association Center for Best Practices. As he emphasizes in his paper, “The Big Reset: State Government after the Great Recession,” states will have to rethink and redesign government in terms of what is essential and what can be made more efficient if their citizens are to have much of a future.
The results of this survey may point the way.
Click here for more information on the Chief Executive’s Best and Worst States for Business survey and other economic indicators.
Click here to see Lago Vista Stats