THE WORLD READS WHITE PLAINS CITIZENETREPORTER — 8,324,077 VISITS IN ONE YEAR

WPCNR QUILL & EYESHADE. By John F. Bailey. October 2, 2008 UPDATED 4 PM EDT with Labor Statistics: The New York State Department of Labor  is not seeing the layoffs predicted for Wall Street appearing yet in significant numbers in the Department filings for unemployment, according to the Department’s Communications Office.

 “There is a little upswing, but we are not seeing numbers being predicted. Not yet.  Do not forget when some Wall Street personnel were laid off  they were greeted on the street with billboards saying we’ll hire you. They immediately got other jobs. If they do not apply for unemployment benefits, we do not count them,” stated Chris Perhan of the state Labor Department Communications.

On Tuesday, the Comptroller’s Office  forecast as many as 25,000 persons would lose their jobs in the securities industry, and could be as high as 40,000 by March 2010,  and could result in “as many as three jobs (per securities industry layoff) lost elsewhere.”

If terminations increase as expected, they will add to the financial burdens of companies making the layoffs, Ms. Perhan said. The way unemployment benefits are funded is through assessments on state employers and employees. When a person is let go,  she said, the employer’s Federal Unemployment Tax Assessment increases the next year, for each person terminated. The new assessment is usually given to the employer in the spring of the year.

 One could see a scenario where layoffs would be held off until January, to avoid FUETA increases until 2010, by  which time things might turn around. This advantage might be  a reason why the beginning of predicted unemployments have not escalated. Any layoffs will add to company’s burdens, but of course, but not to the extent of carrying the employees on payroll now if an employer cannot afford to.

Perhan said the percentage of payroll the employer usual pays is determined by a “floor” or minimum FUETA assessment, and is raised according to the number of employees the firm let go the previous year. She reports the FUETA rate for 2008 is 6.2%. Employers must pay 6.2% of the first  $7,000 in salary per employee, and that holds through December, 2008. She had no estimate at this time as to what any increased assessment would amount to per employee by next spring. She could not give a figure for how much the rate goes up per number of firings. 

The Comptroller’s Office this week not only predicted the job losses, but also stated business taxes wre down $366 Million year to year from last year, while personal income tax collection for the first six months of 08-09 were $2.7 Billion higher, but was slowing. The Comptroller’s office noted Wall Street Bonuses on which the state collects taxes expected to be 50% lower amounting to only $16 Billion.

On September 18, a State Labor Department news release stated New York State’s private sector employment increased over the month by 3,000, or less than 0.1 percent, to 7,261,200 (seasonally adjusted) in August 2008.

In addition, New York State’s unemployment rate, after seasonal adjustment, increased from 5.2 percent in July 2008 to 5.8 percent in August 2008 — its highest level since June 2004. New York City’s seasonally adjusted unemployment rate was 5.8 percent in August 2008, up from 5.0 percent in July 2008. The rate in the balance of the state outside of New York City also rose over this span, from 5.3 percent in July to 5.7 percent in August 2008.

“New York State’s labor market indicators reported mixed signals in August. Although the state did add 3,000 private sector jobs, the unemployment rate increased from 5.2 percent in July to 5.8 percent in August. This 0.6 percentage point jump represented the largest monthly increase in the state’s rate since January 1991,” said Peter A. Neenan, director of the Division of Research and Statistics.

The Job Trends by Type of Employment July 2007 to July 2008:

Industries with Job Gains:
	Educational & Health Services		+37,400
	Leisure & Hospitality		+11,500
	Government		+7,200
	Other Services		+4,800
	Information		+2,900
	Professional & Business Services		+2,800
	Trade, Transportation & Utilities		+2,400
	Natural Resources & Mining		+200
Industries with Job Losses:
	Manufacturing		-17,900
	Financial Activities		-9,400
	Construction		-2,200

 

 

WPCNR QUILL & EYESHADE. By John F. Bailey. Interview with City Executive Oficer, Paul Wood. October 1, 2008: Paul Wood held an exclusive interview with WPCNR this afternoon to give details on the city financial position after the first quarter. He assured the city that city financial borrowing planned for the year had been completed before the present runup in interest rates and slowdown in lending. Though the city has spoken with its underwriters on the matter of financing, he said it was too early to tell the effect on 2009-2010 issues until “the turbulence” substides.

Paul Wood, City Executive Officer confirmed WPCNR’s sales tax projection this morning that  the city was expecting $13 Million in Sales Tax in the till in the First Quarter, based on the ¼% sales tax increase. He attributed the sustained sales tax performance in the first quarter to White Plains “diverse” selection of retail outlets, saying other communities had told him White Plains was “sucking away” shoppers from their shopping centers.

The Eyeshade Process

He said that the Mayor was meeting with Department heads as he does every year with no objective to cut across the board but to achieve savings if possible. He said on going expenditures were running “slightly under” budget. It’s not unusual to pull in department heads at midyear, we’re just doing it a little bit early because of what’s going on. We do it every year to see if there are certain items they can do with out. It’s more of a priority because of the ($400,000)  cut  (the council made) in the Reserve for Financing.They cut the reserve by a point. We’re looking at rolling stock, any area where we can do things differently. We have a hiring freeze on.”

Asked if the city departments were under budget, Wood said “A majority of them are, at this point. You have to remember we’re entering a point when you have to do more with less. We have 7,000 more residents here, more people coming into the city.”

Calling in the Council Early This Year

He said that Common Council members had contacted the Mayor’s office “showing their support and concern,” but said none had offered policy suggestions on budget cutting. Wood said given the turmoil of the economy outside White Plains, that the Mayor would bring the Common Council together earlier this year, possibly in November after elections to give them the opportunity to see where the city stood and for them to give early input into  2009-2010 budget.

Holding Inflation Line the Goal.

 Wood said it was the Mayor’s goal to hold the city budget to the present inflation rate, 5% (the Consumer Price Index).

Wood said the city was not facing threats to the budget from within, but from the loss of income from the state. He said he anticipated a cut in the city’s AIM  (Aid & Incentives for Municipalities) funding from the state of $5 Million, which the city would not know until April when the budget will be presented to the Common Council. Wood said there might be other effects or mandates that the state might decide to level on cities.

The city has already presented its revised 2009-2010 projected budget to AIM and Wood said he would be sending that to WPCNR. Wood alluded to energy costs as being up, though expenditures as a whole were running slightly under budget. He said he would get an analysis for WPCNR of how much city energy costs had grown.

Union talks situation.

On the negotiation of the union contracts for police, fire, teamsters and CSEA, Wood said he could not comment. He said he felt the six year settlement Westchester County had recently announced with its Civil Service Employees Union was not a good model for any settlement in these times. Asked how the Mayor felt about the City School District and its teachers union agreement to negotiate a 2 year contract (though not settled yet), Wood said it (a shorter term contract until “things settled down” made sense in these uncertain times. He said the unions were very aware of the troubled times in talks so far.

Commenting on the school district 2-year teacher contract being negotiated, Wood observed, “I think a two year contract kind of makes sense, they’re saying here’s where they are, obviously this is a difficult year for everybody, let’s take  two years and see where we are after that. I don’t think the 6 year county contract with the CSEA was a very smart thing. I’m really pleased with the tone (of the unions) they obviously are in touch with the situation the city is in and we appreciate there efforts in providing extra services despite the interest in demand. We’re respectful of one another and very hopeful that will come to a somewhat reasonable solution to settle in the midst of this turbulence.”

Wood said length of contract was being explored with the unions

Captial Projects Funded in Summer. No Bond Issues going out Now.

On the city ability to float municipal bonds in the current market, Wood said the city had already gone out for its municipal bond needs prior to the current credit crunch.  The city, Wood said, had not withdrawn any issues they were planning to put out on the market and did not anticipate any for the next six months. The school district, conversely is looking at a $16 Million in bonding to complete their $66 Million Construction Project, $50 Million of which has already been marketed successfully, plus another $8 Million in certiorari payments.

New Certiorari Filings Threaten finances. May Require City to Bond for Settlements.

Asked if previously successful commericial property owners who have been granted certioraris about five years ago had refilled for more certioraris due to this year’s dramtic drop in the “Equalization Rate.” Wood said the city has seen the number of certiorari cases jump up over 300. Wood said the judges in order to unclutter the certiorari crunch in the court system have shown a tendency to rule quickly in favor of certiorari filers, Wood explained, “forcing us to settle more cases than we’d like.”

Wood disclosed that the city is looking at continuing a process started this year of payinc certioraris on installments with the winning plaintiffs and bonding for the certiorari payments, a process the school district used last year and intends to use again in 2009.

LCOR Financing Found

Wood confirmed Ms. Malmud’s understanding that the LCOR  55 Bank Street 80-20 Affordable Housing project has received a commitment for financing. “That’s what we’ve been told,” Wood said, saying that LCOR financing has in the past been supported by the California Teachers Retirement Fund. But, he did not know whether that fund was the source of the financing.

Asked if LCOR was proceeding with the project, drawing up site plans for submission to the council in January, Wood said ” Yes, they default if they don’t submit those drawings.”

Asked if LCOR had indicated they were no longer interested in the project, Wood said “No.”

Kensington Assisted Living nears HUD Approval.

On another ongoing city development, the Kensington assisted living project for which the city built a $19 Million Municipal Parking Garage (with space to be leased to White Plains Hospital  for parking, Wood reported  “That’s still moving forward. We spoke to them this weekend they said HUD may actually approve their request much more quickly than anticipated. These projects are assets that someone will want. There isn’t a lot of  risk out there but there are investors looking to put money into projects where performance has occurred. Look at Robert Weisz, he had no trouble financing the first new White Plains office building in 20 years.)