Tuesday PM April 7th, 2009
by: Ed Mayberry, April 7, 2009 10:04:40 pm
A Texas House committee has approved a $178 billion state budget to pay for functions for the next two years. The vote moves the budget to the full House, where it is expected to be taken up late next week. The House version, which is almost $4 billion less than the Senate version, includes $11 billion in aid from the federal stimulus package. Public education and health care take up the biggest percentage of the spending plan for 2010-2011. About $80 billion of the spending — 45 per cent — is from state dollars, mostly revenue from the sales tax.
If you haven't already, you should be getting a fatter paycheck soon. That is, if you're among the 110 million families that should benefit from the government's economic stimulus plan. The government says the average family will get about $800 more in take-home pay this year. A single person gets $400, on average. To be sure you don't end up paying some of the money back next year at tax time, you may want to take a few minutes to check your withholding. The Internal Revenue Service has issued new tax tables to employers, effective April 1st. The tax tables reduce the amount of taxes withdrawn from your check, giving you a little more money to spend. For example, a single worker making $50,000 and who gets a biweekly check should see about $20 more each paycheck.
The Federal Reserve says consumer borrowing dropped in February, reversing an unexpected gain in the previous month. The Fed says credit card use and other forms of borrowing decreased at an annual rate of $7.48 billion in February, or 3.5 per cent, compared with January. Wall Street economists expected borrowing to drop by only $1 billion, according to a survey by Thomson Reuters. The report shows consumers reluctant to ramp up spending as employers shed millions of jobs and the economy is mired in a recession.
Houston-based Hydro Green Energy has completed installation of a water-powered electric turbine on the Mississippi River in Minnesota. The company's Wayne Krouse says the turbine was placed just downstream from a hydroelectric plant operated by the city of Hastings, Minnesota, and it produces about 100 kilowatts—enough to power about 60 homes.
"Folks have seen rivers flowing by. Basically, all we're doing with this technology is putting a very slow, rotating turbine in the water, which is very much like a revolving door, in terms of its speed, at a hotel or at the airport, and we're using that revolving door, if you will, to capture the available energy instead of wasting it. And that energy is actually very valuable, and we can produce that at a very cost-competitive number, and hopefully with these projects we'll be able to help Texas meet more of its renewable energy goals."
Krouse says recent FERC approval lets the turbine tie into the local electric grid.
"Unfortunately, hydropower is the most heavily-regulated of all energy sources win the United States--even more so than nuclear power or liquified natural gas. We've filed ten preliminary permit applications with the Federal Energy Regulatory Commission that will give us the right to determine what the currents are like in those areas, determine if the project economics will be suitable to developing the project."
Hydrokinetic power taps into existing currents, rather than water running through dams.
El Paso Corporation is reorganizing its exploration and production business, which will eliminate up to 40 jobs, according to the Houston Chronicle. Employees were told that the company will reorganize into three geographic regions: Western, Central and Gulf Coast. El Paso has 1,950 Houston employees.
Blockbuster says the risk that it may not complete financing deals raises "substantial doubt" about its ability to continue as a going concern. Dallas-based Blockbuster, which has struggled amid the rising popularity of DVD-by-mail services like Netflix, disclosed the warning in a filing with the Securities and Exchange Commission. The company already cautioned last month that its auditor is likely to raise doubts about its ability to stay in business. A going-concern qualification refers to an auditor's assessment of a company's ability to continue to operate for the foreseeable future.
KFC is suing one of its suppliers, saying cups used to hold popcorn chicken have caught fire while being reheated in microwave ovens. Louisville-based KFC charges that Paris Packaging of Paris, Texas, changed the content of the black ink on the containers so it now includes carbon, which may catch fire if heated. The restaurant chain says at least two people reported fires. The suit does not say whether anyone was injured because of the fires. Messages left at Paris Packaging and at KFC's corporate offices were not immediately returned.
Anadarko Petroleum has reduced drilling operations in Wyoming but hasn't cut its work force or shut in any wells. Anadarko spokesman John Christiansen says company officials are keeping a pretty close eye on commodity prices and are funding the capital program fairly prudently. The Woodlands-based company lowered its entire capital budget to between $4 billion and $4.5 billion for 2009. It was $5 billion in 2008. The company has about 750 employees in Wyoming working at both natural gas and oil operations.
The Business Roundtable index of CEO's six-month forecast has fallen to its lowest level since the survey began in 2002. McGraw-Hill CEO Harold McGraw, chairman of the Business Roundtable, says "this is our darkest hour." He predicts improvement from this point. But in the survey, CEOs are pessimistic about capital spending, layoffs and sales.
Safety officials are blaming poor oversight by American Airlines of aircraft maintenance for an engine fire in 2007 that forced an emergency landing. The findings, by the National Transportation Safety Board, come as the airline faces heightened scrutiny by the Federal Aviation Administration. The agency recently assigned a special team of 17 inspectors to examine American's aircraft maintenance and other operations. The special audit is expected to take about three months. The NTSB conducted a hearing to investigate the September 28th, 2007 incident in which American Flight 1400's left engine caught fire during a departure climb from Lambert-St. Louis International Airport.,/p>
The Transportation Department plans to give Continental Airlines antitrust immunity to join an alliance of other carriers, including United Airlines. The department said that it also proposed to approve a new joint venture among Continental and three other members of the Star Alliance to set prices and schedules on international service. The other three airlines are United, Lufthansa and Air Canada. Continental announced last year it planned to leave the Skyteam Alliance, which includes Delta and Northwest. That group already has antitrust immunity for some routes.
Southwest Airlines says it will be setting up shop at New York's LaGuardia Airport in June, the carrier's first foray into the major market. The move not only helps Southwest push into one of the country's busiest airports, but it also taps into budget-conscious travelers' desire for low-cost fares during the recession. The Dallas-based company says it will have eight daily nonstop flights to locations such as Chicago and Baltimore/Washington. A one-way ticket to Baltimore/Washington will run $49, while a Chicago one-way fare will cost $89. Previously Southwest's closest hub for New York-based travelers was Long Island's Islip Airport. The carrier has said it is starting service at Boston's Logan International Airport in the fall.
A newspaper says a consultant warned Imperial Sugar about combustible dust hazards at its Georgia refinery just two days before a deadly explosion devastated the plant near Savannah. The Savannah Morning News reports that consultant MacAljon Engineering warned of impaired dust collection systems at the refinery in a report dated February 5th, 2008. A huge explosion rocked the plant two days later. Federal investigators later blamed the explosion on sugar dust that ignited like gunpowder. Fourteen workers died and dozens more were injured. Imperial Sugar, based in Sugar Land, said it did not receive the consultant's report until after the explosion. The Occupational Safety and Health Administration said last year that records showed Imperial Sugar had been warned several times about combustible dust hazards since 2002.
The International Fuel Quality Center has ranked the top 100 countries on clean, low-sulfur gasoline limits. All EU countries placed within the top 50, bumping the United States down to number 44. If California was a nation, it would rank 36th. Sulfur is found naturally in rude oil, and passes into refined products such as transportation fuels when it's processed at the refinery.
Rice University has been awarded $16 million over the next 54 months from the Defense Advanced Research Projects Agency to develop performance improvements of applications running on microprocessors. Microprocessors in computers, cell phones, game systems and cars translate human-written computer applications into the binary system. Rice computer scientists hope to develop a single new super-compiler to boost computer speeds.
An industry report is suggesting one way states can tone down the red ink in their budgets is by tweaking their lottery programs. The California-based consulting firm Frost and Sullivan says states can scratch out an additional $14 billion in lottery revenue if they engage a younger generation of players and increase their payouts. Looking at 20 state programs, the study says the most frequent players are 35 or older. The report suggests targeting a younger generation by marketing on the Internet. It also suggests following Georgia's model. The Georgia lottery says it has been successful because it "tried to be where the people are," setting up kiosks in places like Atlanta's airport. The study also points out that Massachusetts has the highest prize payout--and, in turn, the highest per capita sale and profits in 2007.
A new government subsidy that helps the unemployed keep health insurance also makes recession-weary employers nervous about the financial hit they may take if more people stay covered under their plans. More than 40 per cent of employers in a survey by Chicago-based Aon Consulting say they expect the plan to drive up their health care costs. Some businesses also say it will leave them exposed to big bills in the future from former employees who would have otherwise dropped coverage. People who lose their jobs but qualify to keep coverage under the federal law commonly known as Cobra may be eligible for a subsidy that pays 65 per cent of their premium for a few months. This helps laid-off workers who normally would be stuck paying their entire premium.
The Pentagon says it spent at least $100 million in the last six months responding to and repairing damage from cyber attacks and other network problems. Senior military leaders say they are only beginning to track the costs, but the money was spent on manpower, computer technology and contractors hired to clean up after both external probes and internal mistakes. U.S. Strategic Command, which is responsible for protecting and monitoring the military's information grid, would not say how much of the cost was due to outside attacks against the system. The revelations come as the Obama administration is finalizing a broad government-wide review of the nation's cyber security.
Some companies are using an unconventional approach to try to get through the recession: keeping all their workers. It's not necessarily out of compassion but because firing people comes with a lot of baggage, too. Costco Wholesale says its profits have plunged by 27 per cent from a year ago, yet it hasn't laid off a single permanent worker. Instead, it imposed a hiring freeze. The discount chain says it regards employees as its most valuable resource. Economists say loyalty to workers spares firms the expense of finding, hiring and training new employees when things pick up. It also makes sense where workers who have special skills or customer contacts. John Challenger of placement firm Challenger, Gray & Christmas says more companies are trying to find alternative ways to save Money, like freezing pay and curtailing benefits. Still, the recession is taking a heavy toll: more than five million jobs have been cut since it began.
The president of Shell Oil is the keynote speaker at tomorrow's "View From the Top" networking luncheon on the importance of Minority Business Enterprise development. Marvin Odum will speak at the Hilton Americas on Lamar.
Thirteen conventions and trade shows have been booked by the Greater Houston Convention & Visitors Bureau in May. More than 99,150 attendees are expected to spend about $96.5 million in Houston during the month. Events include the massive Offshore Technology Conference at Reliant Park, celebrating its 40th anniversary May 4th through the 7th. The 2009 Nanotech Conference & Expo is set for May 3rd through the 7th at the George R. Brown Convention Center.
The dominant seller of music on the Internet has a new look: pricing changes to Apple's iTunes store have gone into effect, with some popular songs now $1.29 apiece. Apple said in January that it would end its practice of selling all songs for 99 cents a piece and begin offering three tiers: 69 cents, 99 cents and $1.29. Record companies can pick the prices. In exchange for the ability to set prices, record labels agreed to sell all songs on iTunes without "digital rights management" technology that hampers users' abilities to copy tracks or play them on multiple computers.