Category Archives: FINANCE

Money can’t buy teachers’ love

Good principals trump compensation, as factor in teacher retention rates

By Dr. Terry Stoops
John Locke Foundation

NEWS1-Teachers-mug-of-authorRALEIGH — If you watch the evening news broadcasts or read the local paper, you have been told that more educators than ever are leaving North Carolina to teach elsewhere because the N.C. General Assembly “slashed” public school funding. Most of these stories, however, omit key facts and research findings that would otherwise undermine their ideologically motivated tales of woe.

The state legislature recently approved an $8.5 billion K-12 education budget. Compared to the amount of state funds spent by public North Carolina schools last year, the current budget represents an increase of nearly $470 million. Public schools will use those additional dollars to add personnel, invest in instructional materials and programs, and increase salaries, particularly for classroom teachers.

For example, it has been reported widely that the budget provides a $750 compensation bonus to state agency personnel, employees of the University of North Carolina and community college systems, public school staff, and approximately 94,000 state-paid educators.

Fewer have acknowledged that tens of thousands of teachers will receive the bonus and a permanent pay increase this year. The legislature’s Fiscal Research Division estimates that 29,000 educators, nearly a third of the state’s teacher work force, are in this group.

All early-career educators will enjoy a $2,000 annual salary boost. Experienced educators who move from one salary tier to another will receive a permanent salary increase of between $3,000 and $3,500 annually. None of these figures account for higher pay supplements provided by school districts, such as the imprudent one granted to Wake County educators this year.

State funds for employee benefits also are rising. Over the last five years, the state’s average Social Security contribution increased by 4 percent per teacher, while health insurance received an 11 percent boost. Teachers’ retirement contributions surged by over 50 percent.

Overall, teachers received a 24 percent increase in their compensation package during this period. The average teacher will receive over $15,600 in benefits during the current school year.

All told, the average salary and compensation package for a teacher on a 10-month contract will near $60,000 this year, nearly $5,000 higher than the year before.

Despite the facts about educator salary and benefits in North Carolina, news outlets continue to claim that the state’s supposedly meager compensation has triggered a mass “teacher exodus.” Unfortunately, the typical consumer of mainstream news and opinion often hears only those unbalanced, uninformed, and largely anecdotal claims.

While lawmakers should not disregard concerns about compensation, research suggests that retaining high-quality educators and curbing turnover demands school leaders to implement policies and practices that improve teacher working conditions.

In her 2009 UNC-Chapel Hill doctoral dissertation, “A Study of the Impact of Salary Supplements on Teacher Turnover in North Carolina School Districts,” Lillie Cox found a statistically significant relationship between teacher turnover and salary changes for schools in western Carolina but nowhere else in the state.

When she surveyed teachers who left one North Carolina school district, only around 20 percent of them cited salary and benefits as their motivation. The remaining 80 percent identified other reasons, including the need for advancement, poor relationships with their supervisors and colleagues, the school’s distance from home, and various other factors.

A 2015 Pardee RAND Graduate School dissertation, “Hello, Goodbye: Three Perspectives on Public School District Staff Turnover,” agreed. Susan Burkhauser concluded that North Carolina teachers are more likely to remain in school if the principal has “a proven track record of improvements in teacher working conditions.”

Lawmakers would be wise to stick to the facts, ignore the noise, develop budgets that make incremental improvements to compensation, and advance policies that ensure North Carolina classrooms are great places for public school teachers.

Dr. Terry Stoops (@TerryStoops) is director of research and education studies at the John Locke Foundation.

Money missing in Bayboro

Town clerk under investigation

Town of Bayboro Town Hall.

Town of Bayboro Town Hall. (File Photo)

BAYBORO – Charges have not yet been brought, but officials confirmed Wednesday that the former Town of Bayboro clerk, Mary Potter, is being investigated for possible misappropriation of town funds.

In a statement e-mailed to this newspaper, Pamlico County Sheriff Chris Davis wrote:

The Pamlico County Sheriff’s Office is investigating several allegations involving the Finance Officer / Town Clerk for the Town of Bayboro. As this investigation continues, we will be releasing more information; however, we are not releasing any information at this time.

Reached by phone Wednesday morning, long-time Bayboro mayor, Keith Cowell, confirmed that Potter is no longer employed by the town, but referred all other questions to town attorney Ben Hollowell.

“There is no question that money is definitely missing,” explained Hollowell, in a brief telephone conversation. “We don’t yet know the extent of the damage.”

Bayboro, the county seat of Pamlico, is one of nine incorporated towns in the county. All are considered small, when compared to nearby cities and towns in more urban areas. One dilemma shared by these small communities is that, quite often, funds are received and disbursed by a single staffer. In fact, required municipal audits – conducted annually – almost always cite a lack of internal controls as a small town’s biggest vulnerability.

Hollowell alluded to such a shortcoming.

“Certainly, the town commissioners trusted her (Potter) emphatically,” he said. “She is no longer employed, but a big part of the problem is that she has left the town office in disarray. It is a complete wreck.”

Attempts by this newspaper to reach Potter for comment were unsuccessful.

Wall Street Journal praises North Carolina

Editor’s note: This commentary, written by Stephen Moore of the Heritage Foundation, a conservative ‘think tank’ based in Washington, D.C., recently appeared on the website of the Wall Street Journal:

“Four years ago North Carolina’s unemployment rate was above 10 percent and the state still bore the effects of its battering in the recession. Many rural towns faced jobless rates of more than 20 percent. But in 2013 a combination of the biggest tax-rate reductions in the state’s history and a gutsy but controversial unemployment-insurance reform supercharged the state’s economy and has even helped finance budget surpluses.

As the Economics Group of Wells Fargo Bank recently put it: “North Carolina’s economy has shifted into high gear. Hiring has picked up across nearly every industry.”

The tax cut slashed the state’s top personal income-tax rate to 5.75 percent, near the regional average, from 7.75 percent, which had been the highest in the South. The corporate tax rate was cut to 5 percent from 6.9 percent. The estate tax was eliminated.

Next came the novel tough-love unemployment-insurance reforms. The state became the first in the nation to reject “free” federal payments for extended unemployment benefits and reduce the weeks of benefits to 20 from 26. The maximum weekly dollar amount of payments, $535, which had been among the highest in the nation, was trimmed to a maximum of $350 a week. As a result, tens of thousands of North Carolinians left the unemployment rolls.

Gov. Pat McCrory

Gov. Pat McCrory

In an interview at the Governor’s Mansion, Gov. Pat McCrory tells me that when he took office in January 2013 he looked at the data and knew “we couldn’t stay on the course we were on. We had the highest unemployment benefits and yet at the same time businesses were routinely complaining they couldn’t find workers until benefits ran out. We heard a lot of stories of workers waiting until benefits ran out before going back to work.”

In sum, the state was paying people not to work.

While these measures were passing the legislature, the state capital boiled over with rancorous political rallies, called Moral Mondays, designed to block the “cruel” GOP agenda. Rev. William Barber II, one of the protest organizers, lambasted Republicans for making the Tar Heel State a “crucible of extremism and injustice.” The national media piled on with claims that the Republican agenda cut taxes for the rich while slashing benefits for the poor.

Then a funny thing happened. After a few months, the unemployment rate started to decline rapidly and job growth climbed. Not just a little. Nearly 200,000 jobs have been added since 2013 and the unemployment rate has fallen to 5.5 percent from 7.9 percent. There is a debate about how many of North Carolina’s unemployed got jobs and how many dropped out of the workforce or moved to another state. But the job market is vastly improved and people didn’t go hungry in the streets. On the Tax Foundation index of business conditions, North Carolina has been catapulted to 16th from a dismal 44th since 2013.

The most recent news will make many other governors jealous. The state didn’t take the extra federal benefits—which require repayments later to the feds—and it cut the weekly benefits. So the state government has been able to pay back $2.8 billion in unemployment-insurance money owed to the feds, and it now has a trust-fund surplus. This means it will be able to provide employers with at least $500 million in cuts from the state and federal unemployment tax on payroll over 18 months.

This comes at a time when other states are raising payroll taxes to pay off the loans for the rich benefits they doled out in the recession and its aftermath. The lesson: Handouts from the feds are never free.

An even bigger surprise — even to supporters — is the tax cut’s impact on revenue. Even with lower rates, tax revenues are up about 6 percent this year, according to the state budget office. On May 6, Gov. McCrory announced that the state has a budget surplus of $400 million while many other states are scrambling to fill gaps.

This is the opposite of what has happened in Kansas, where jobs have been created but revenues have fallen since the top personal income-tax rate was cut from 6.45 percent in 2012 to 4.6 percent today and the income tax for small business owners who file as individuals has been eliminated. North Carolina’s former budget director, Art Pope, says one difference between the two states is that “we cut spending too. Kansas didn’t.”

The story gets better. Because North Carolina built in a trigger mechanism that applies excess revenues to corporate-rate cuts, the business tax has fallen to 5 percent from 6.9 percent, and next year it drops to 4 percent.

You won’t hear much about this in national news media, where the preferred story line is that tax cuts don’t work because they were followed by budget deficits in Kansas. In North Carolina, policies to reduce taxes and stop paying people for not working have created jobs and surpluses.

Mr. Pope says: “I wish people criticizing Kansas would look at what’s happened here.”

Nursing home care, costly and confusing

By David Silver | Department of Finance, East Carolina University | Special to the County Compass
David Silver

David Silver

Editor’s note: As the face of health care changes in this country, the County Compass intends to feature articles, written by experts, on a number of relevant topics.

Mom had a stroke and now she needs nursing home care for the rest of her life. How can we afford that? How can I make sure that my kids don’t have to pay to take care of me if I need to go to a nursing home? Will the nursing home take my house?

If you don’t have a high fixed-monthly income, a lot of money in the bank, or a good long-term-care insurance policy, the answers to these very common questions will require some understanding of Medicaid.

In North Carolina, we have two levels of nursing care: Assisted Living and Skilled Nursing.

Assisted Living is the ‘rest home’ that takes care of (usually elderly) people who don’t need a nurse, but do require help with some of their activities of daily living (nutrition, hygiene, medications, etc.). Some people choose to live in Assisted Living facilities in order to live in a safe and social environment rather than living alone and isolated in their home while experiencing diminishing physical and/or mental capacity. Assistance to help pay for this type of care is a topic for a future article.

Skilled Nursing is the ‘nursing home’ where the person requires care from a nurse. No one wants to go to a Skilled Nursing Facility — they end up there. The typical path is a stroke or a fall, followed by a stay in a hospital for a few days or more, then a subsequent release to a rehabilitation facility. When the rehab is over and a physician determines that continued skilled nursing care is required, then that person will need to be placed in a Skilled Nursing Facility. (Many rehabilitation facilities are also Skilled Nursing Facilities).

Medicare pays for 20 days of rehab and most Medicare plans pay a large percentage of the cost of an additional 80 days of rehab as long as it serves to improve or maintain the patient’s condition.

However, Medicare does not cover the cost of the Skilled Nursing Facility, and the average cost of a Skilled Nursing Facility in North Carolina is $6,300 per month. If you can’t afford this cost, there is a government program that helps pay for this type of care, which in North Carolina is called Medicaid.

If you qualify, Medicaid will pay the difference between your income and the cost of care at the Skilled Nursing Facility.

In order to qualify for Medicaid, you must meet a medical test, an income test, and an asset test. The medical test simply requires your doctor to fill out a form (called an FL-2 form) stating that you require care at a Skilled Nursing Facility. The income test requires that your income (not including your spouse’s income) be less than the Skilled Nursing Facility’s Medicaid reimbursement rate.

Basically, if your social security and pension income is less than $5,000 per month, you will likely pass this income test.

The final Medicaid qualification test is the asset test. If you are single (or a widow/widower), you are not allowed to own more than $2,000 of ‘countable’ assets. If you are married, Medicaid counts the assets owned by both you and your spouse, even if you have a prenuptial agreement, and the rules are a little more complicated. Your spouse may keep half of the countable assets up to about $230,000, but is allowed to keep all of the countable assets up to $23,184. The rest of the countable assets would have to be ‘spent down.’

What’s a ‘countable’ asset and how can you ‘spend down’ these assets? A residence and one vehicle are usually not countable assets, meaning that you do not have to sell them to qualify for Medicaid. Cash, retirement accounts and investments usually are countable assets, meaning that these funds would have to be spent down. It is usually okay to spend down countable assets by pre-paying for a funeral, paying legitimate debts and paying for health care. There are many rules about what constitutes a ‘countable’ asset and what is permissible when ‘spending down’ assets, so it is often worthwhile to consult with an attorney specializing in this area of law to discuss what can be done without disqualifying you for Medicaid.

You can not simply give away your assets in order to qualify for Medicaid. If you have given away assets or transferred assets for less than full value within five years of applying for Medicaid, you will be ineligible for Medicaid for one month for every $6,300 that you have transferred.

This penalty period does not begin to run from the date of the transfer, it begins to run after you are in the Skilled Nursing Facility and have spent down all of your assets to under $2,000. There are times when gifting assets might be appropriate, and there are ways to fix the damage done by past gifts, but the details of these circumstances would require individual legal analysis beyond the scope of this article.

If you do qualify for Medicaid, the State of North Carolina will have a claim against your estate at your death for the amount that Medicaid paid for your long term care at the Skilled Nursing Facility. If you don’t have anything in your estate when you die, then this claim is of no consequence.

However, if you had some non-countable assets when you applied for Medicaid (such as your residence) and these assets are part of your estate when you die, then these assets may have to be sold in order to pay Medicaid’s claim (this is a process called “estate recovery”). There are sometimes opportunities to protect some assets from estate recovery. If it is important to you to try and ensure that your residence is protected for your kids at your death, then it is usually beneficial to discuss estate recovery with an attorney practicing in elder law.

If you do have that stroke and are heading to the Nursing Home, you will likely be unable to participate in the conversation, nor be able to take any action, regarding countable assets, spend down, or estate recovery. For this reason, it is very important that your loved ones have your Power of Attorney in order to take action on your behalf.

$22 million jail likely topic at County Comission retreat

By Betty Murphy | Special to the County Compass

WASHINGTON, N.C. – If you are a regular Compass reader, you are no stranger to the ongoing battle of the proposed new jail for Beaufort County – where to locate it, how to finance it, public involvement in the process, and whether a new jail is even needed.

The Beaufort County Board of Commissioners will hold its annual retreat Feb. 20 and 21 at the North Carolina Estuarium located on the town’s waterfront. Thursday’s session runs from 1 p.m. until 5 p.m. while Friday’s second day begins at 9 a.m. and adjourns at 3 p.m.

The meeting is open to the public.

The main purpose of the retreat is to focus on current economic challenges and then provide a forum where elected officials can utilize the information gleaned from the presentations and discussions in developing the 2014-2015 county budget.

However, insiders believe the proposed jail will undoubtedly surface as a controversial issue during the two-day retreat.

It is important to note that prior to last year there was a consensus among the commissioners that binding votes are not taken at the annual retreat. That changed during the 2013 retreat with a laying down of the gauntlet by Commissioner Jerry Langley, the board’s Democrat chairman.

During a presentation by an unbiased expert (who specializes in planning and development of jails), it became evident that there was more than one viable site for a new jail. At a previous meeting, this expert had offered plans that included building the jail behind the courthouse.

It had been rumored that Democratic Commissioners favored locating the jail in the underutilized space at the Beaufort County Industrial Park on Hwy 264. Attempting to secure that location, Langley put forth a motion that received a majority vote by the three Democratic Commissioners and a Republican Commissioner (often derisively described at the Gang of Four).

Although the commission has four Republicans, the GOP often sees a defection by Commissioner Al Klemm, who usually votes in lockstep with the Democrat commissioners.

In 2013, the annual retreat came to an abrupt end when conservative Republican Commissioner Hood Richardson walked out of the meeting. Richardson had prepared a plan to locate new jail facilities behind the Courthouse where it is currently located – closer and cheaper than at a remote site.

Apparently due to either arrogance or ignorance, the plan to build a new jail at the favored Beaufort County Industrial Park) was short-lived. The Gang of Four were surprised to discover that the County does not own 100 percent of the industrial park.

The City of Washington owns 45 percent, and the City Council members were duly upset that no one had consulted with them. As embarrassing as this revelation was to everyone, the three-ring circus continued.

At that point the Gang of Four changed direction (literally from west to south) and decided that the new jail should be built in the Chocowinity Industrial Park on Hwy. 17. This second park has been empty for years. It was built on the advice of the former Beaufort County Economic Director – a firm believer of a “BUILD IT AND THEY WILL COME” strategy.

The site selection now places a future jail directly across from the future Hwy. 17 “Welcome – Rest Stop.”

Taking into account that taxpayers would be facing a total tab of more than $22 million if the jail is located somewhere other than behind the Courthouse (at a cost below $5 million), representatives from the general public have appeared regularly at the Board of Commissioners monthly meetings, asking for hearings and a referendum. Their pleas have fallen on deaf ears.

The Gang of Four has chosen not to listen to the voters. 

MidSouth Golf declares bankruptcy

Owner of amenities owes community big bucks

By Penny Zibula | Staff Writer

FAIRFIELD HARBOUR – Last month, MidSouth Golf filed for voluntary Chapter 11 in North Carolina Eastern Bankruptcy Court, essentially throwing a wrench into this community’s efforts to collect a court-ordered award of $1.45 million.

The Myrtle Beach-based company owns Fairfield Harbour’s amenities, including Harbour Pointe Golf Course and the now-closed Shoreline Course.

In a 2009 civil trial, a jury ruled MidSouth owed the community damages for its failure to properly maintain the two courses, swimming pools, marinas, clubhouses, and other amenities.

Although MidSouth appealed the ruling, it was upheld by the Appellate Court, and refused consideration by the NC Supreme Court. To date, however, no payment has been made to Fairfield Harbour by MidSouth.

In May 2011, MidSouth hired Billy Casper Golf to reopen, renovate and manage Harbour Pointe, which closed after the lawsuit was filed. And, a year later, the change was dramatic. The greens were well manicured, the clubhouse and pro shop were open for business, and grateful Fairfield Harbour golfers were staying home to play their local course.

Billy Casper Golf also began to mow the Shoreline property, and it has been kept in reasonable condition ever since.

In August 2013, Fairfield Harbour’s board of directors decided to turn up the heat, hiring Wilmington attorney, Gary Shipman, to go after the outstanding debt.

“The POA Board has been quite vigilant in not only attempting to collect the judgment against MidSouth,” said Shipman in a statement posted on the POA website, “but in trying to work with MidSouth to find a way to do that and comply with MidSouth’s continued obligations under the various covenants and agreements in Fairfield Harbour.”

Reached by telephone this week, Donnie Shaw, Managing Member of MidSouth Golf, declined comment.

“It’s too early in the process,” he said. “I’m waiting for advice from our attorney before I can make a statement.”

Whether Fairfield Harbour will eventually receive all or part of the money owed will depend on how MidSouth’s debts are reorganized. At present, there are over 50 creditors, including Wells Fargo Bank, the Employment Security Commission, Craven County Tax Collector, NC Department of Revenue and the IRS, along with a host of government entities and service providers.

Dissident property owners must pay dues

By Jeff Aydelette | Staff Writer

FAIRFIELD HARBOUR – A lawsuit filed by a dozen property owners – meant to justify their collective refusal to pay homeowners’ dues since March of 2012 – backfired last month when Superior Court Judge Jay D. Hockenbury ruled in favor of the Fairfield Harbour Property Owners Association, the defendants in the case.

Both sides agreed to waive a jury trial, in favor of Hockenbury hearing the case solo.

The judge’s decision, released Dec. 16, gives the Association a green light to pursue foreclosure on almost 50 parcels, including 29 owned by Landcon, Inc. a homebuilder active in the community for many years. In his order, Hockenbury also decreed “Defendant is entitled to have and recover against the Plaintiffs reasonable attorneys’ fees and costs in the amount of $110.975.41.”

In the lawsuit, the plaintiffs alleged that a document known as the Declaration of Restrictions, commonly known by community property owners as the ‘DORs’ and dating from the early 1970s, did not allow dues revenue to be spent for clean-up on private property.

Both sides agreed, in fact, that dues money had been spent in the wake of Hurricane Irene to benefit both common areas and private properties – an expenditure funded by a special, one-time assessment of $145 per lot.

Hockenbury’s order also alluded to other disputes:

“Some of the Plaintiffs complained as early as 2005 about how the Association was being run and managed, and how the monies were spent. Between 2008 and 2012, there was a 74% increase in dues from $400 a year to $696 a year per lot. Dues for 2013 were assessed at $659 a lot.”

“More complaints from the Plaintiffs were that that the Board of Directors hired a professional management company and a private security firm for the community.”

Hockenbury also made it clear that “prior to March 1, 2012, each of the Plaintiffs was current on all assessments owed the Association.”

The lawsuit made its biggest headlines when Lee Bettis, attorney for the plaintiffs, argued that Fairfield Harbour – which has been developed in stages — is not a single, legal entity but rather two separate communities, roughly separated by state-maintained Broad Creek Road.

Hockenbury dismissed that notion, agreeing with defendant’s attorney Hope Derby Carmichael, that Fairfield Harbour is indeed a single ‘unified’ community and that its governing Association “properly assessed” annual charges for 2012 and 2013 against the plaintiffs.

Insiders familiar with the case expect an appeal, notice of which must be filed by mid-January.

Editor’s note: County Compass reporter, Penny Zibula, is a plaintiff in the lawsuit described above. She did not contribute to this report.

Quantitative Easing begins to harden

By Jeff Aydelette | Staff Writer

WASHINGTON, DC – Five years of unprecedented money printing, a process known as Quantitative Easing, and perhaps the biggest driver of rising stock prices, will slowly ‘taper’ over coming months.

In a statement released Wednesday afternoon, the Federal Reserve announced its decision to gently cut back on its huge monthly purchases of U.S. Treasury debt and mortgage-backed securities, which have had the effect of pumping $85 billion of newly minted dollars into the economy each month.

Experts say the drastic measures by the nation’s central bank were a last-ditch effort to beat back the Great Recession.

Investors pushed the Dow Jones industrial average to a record close after the Fed decision, apparently placated by assurances that a “highly accommodative stance of monetary policy will remain appropriate for a considerable time after the asset purchase program ends.”

The following is a verbatim text of the Federal Reserve’s statement, issued Dec. 18:

Information received since the Federal Open Market Committee met in October indicates that economic activity is expanding at a moderate pace. Labor market conditions have shown further improvement; the unemployment rate has declined but remains elevated. Household spending and business fixed investment advanced, while the recovery in the housing sector slowed somewhat in recent months. Fiscal policy is restraining economic growth, although the extent of restraint may be diminishing. Inflation has been running below the Committee’s longer-run objective, but longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with appropriate policy accommodation, economic growth will pick up from its recent pace and the unemployment rate will gradually decline toward levels the Committee judges consistent with its dual mandate.

The Committee sees the risks to the outlook for the economy and the labor market as having become more nearly balanced. The Committee recognizes that inflation persistently below its 2 percent objective could pose risks to economic performance, and it is monitoring inflation developments carefully for evidence that inflation will move back toward its objective over the medium term.

Taking into account the extent of federal fiscal retrenchment since the inception of its current asset purchase program, the Committee sees the improvement in economic activity and labor market conditions over that period as consistent with growing underlying strength in the broader economy.

In light of the cumulative progress toward maximum employment and the improvement in the outlook for labor market conditions, the Committee decided to modestly reduce the pace of its asset purchases. Beginning in January, the Committee will add to its holdings of agency mortgage-backed securities at a pace of $35 billion per month rather than $40 billion per month, and will add to its holdings of longer-term Treasury securities at a pace of $40 billion per month rather than $45 billion per month. The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. The Committee’s sizable and still-increasing holdings of longer-term securities should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative, which in turn should promote a stronger economic recovery and help to ensure that inflation, over time, is at the rate most consistent with the Committee’s dual mandate.

The Committee will closely monitor incoming information on economic and financial developments in coming months and will continue its purchases of Treasury and agency mortgage-backed securities, and employ its other policy tools as appropriate, until the outlook for the labor market has improved substantially in a context of price stability. If incoming information broadly supports the Committee’s expectation of ongoing improvement in labor market conditions and inflation moving back toward its longer-run objective, the Committee will likely reduce the pace of asset purchases in further measured steps at future meetings. However, asset purchases are not on a preset course, and the Committee’s decisions about their pace will remain contingent on the Committee’s outlook for the labor market and inflation as well as its assessment of the likely efficacy and costs of such purchases

To support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the asset purchase program ends and the economic recovery strengthens. The Committee also reaffirmed its expectation that the current exceptionally low target range for the federal funds rate of 0 to 1/4 percent will be appropriate at least as long as the unemployment rate remains above 6-1/2 percent, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee’s 2 percent longer-run goal, and longer-term inflation expectations continue to be well anchored.

In determining how long to maintain a highly accommodative stance of monetary policy, the Committee will also consider other information, including additional measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments. The Committee now anticipates, based on its assessment of these factors, that it likely will be appropriate to maintain the current target range for the federal funds rate well past the time that the unemployment rate declines below 6-1/2 percent, especially if projected inflation continues to run below the Committee’s 2 percent longer-run goal. When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 percent.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; James Bullard; Charles L. Evans; Esther L. George; Jerome H. Powell; Jeremy C. Stein; Daniel K. Tarullo; and Janet L. Yellen.

Voting against the action was Eric S. Rosengren, who believes that, with the unemployment rate still elevated and the inflation rate well below the federal funds rate target, changes in the purchase program are premature until incoming data more clearly indicate that economic growth is likely to be sustained above its potential rate.


Fed shutdown affects county

By Jeff Aydelette | Staff Writer

6110_showcase_fed_shutdown_620x375BAYBORO – Pamlico County is being forced to make do with $10,300 less in weekly revenue, according to Finance Officer Mary Jane Westphal, who told elected officials Monday night that county government may be forced to tap savings in order to make up the shortfall.

The culprit? Well, the Congressional budget impasse, of course, proving beyond a shadow of a doubt that Uncle Sam’s financial tentacles are long and deep, if even remote Pamlico County feels the effects of the federal squabble.

In a handout to the county commissioners, Westphal noted that ‘Federal Administrative Reimbursements’ amount to exactly $10,318 per week, money that is split primarily among three county government departments: Social Services, Health, and Senior Services.

One bright spot, according to Westphal, is that rental income from housing federal inmates in the county’s 106-bed jail should arrive on schedule with little or no impairment.

“I guess they consider that to be an essential service,” joked the veteran finance officer.

Big bag program costly for town to implement

Commissioner Warren Johnson and Town Manager Wyatt Cutler demonstrate a ‘vegetative debris’ bag, one of 565 that the town recently purchased.

Commissioner Warren Johnson and Town Manager Wyatt Cutler demonstrate a ‘vegetative debris’ bag, one of 565 that the town recently purchased.

By Jeff Aydelette | Staff Writer

ORIENTAL – Town Commissioner Warren Johnson, known for having a sharp pencil when it comes to municipal finances, got a bit hot under the collar Tuesday night.

Johnson was upset with the town’s $4,000 purchase of ‘vegetative debris’ bags. And to drive home his point, Johnson enlisted the assistance of Town Manager Wyatt Cutler as the pair unveiled one of the large, polyester fabric containers.

“We could be looking at some major problems here,” said Johnson, hinting the bags would be so heavy to retrieve that the town’s Public Works staffers “might be submitting claims for disability or who knows what?”

Commissioner Sherill Styron agreed.

“There’s no way in the world to make this program cost effective,” complained Styron.

Cutler left the meeting room briefly to check on the town’s official bag inventory. He returned with an exact figure: 565.

Johnson’s show-and-tell performance, and his concluding plea: “I’d like to propose that we put this program on a permanent hold until we figure out what we need to do on this,” quickly won over his fellow board members.

A unanimous vote gave Cutler authority to completely nix program, should he choose to do so.