Let’s kick off with a significant issue.
Budgeting for Unemployment Insurance Reserve Payments
Karl Knapp agreed to a phone call this morning to discuss the steps local governments need to take in order to properly budget for establishing their unemployment insurance reserve with the State in the upcoming fiscal year. You can check out the following 21-minute video tutorial, which includes some simulations of how the payments of “taxable wages” will be applied on a per employee basis. If the video is not visible below, click here to view it.
This NCLGBA video is a followup to a presentation Karl participated in, along with NCACC’s Rebecca Troutman and DES Unemployment Administration Director Antwon Keith on the same topic during this month’s NCGFOA Spring Conference. You can view the slideshow from that presentation below, or click here.
Expect a separate NCLGBA website post featuring these presentations and some additional analysis early next week (March 25th-27th).
Legislature’s Tax Reform Plan would create challenges for Municipal Revenues
Click here to consult today’s NCLM Legislative Bulletin for information and analysis on how legislation introduced this week in the General Assembly would impact local revenue sources, including local option sales tax, utility franchise fees, and business privilege licenses.
How would eliminating the Tax Deduction on Municipal Bond Interest impact Local Governments?
GFOA Approves New “Best Practices”
Many of these new best practices deal directly with budgeting, including the pricing of internal services and developing “structurally balanced budgets.”
Economy Looks to Be Improving?
Wells Fargo’s Mark Vitner sees some improvement in the first quarter of the national economy, fueled by home construction and durable good sales. Depending on activity in your local area, this may help foster some revenue growth.
With respect to sequestration, Vitner believes that Federal budget cuts implemented due to the sequestration will be limited in amount and impact outside the Washington, DC, MSA, with the actual national impact more than likely recorded back in the final quarter of 2012.
If the video does not appear below, click here.
Walden Sees Jobs for 2013 in North Carolina
NC State University Economist Michael Walden spoke this week in Chapel Hill and stated that he sees job growth of 90,000 statewide in 2013, ahead of 55,000 jobs the state gained in 2012.
Inflation Picks Up Across Board, Moderate Outlook Remains
From Wells Fargo Economics Group:
CPI inflation rose 0.7 percent in February, which was slightly more than markets were expecting. The increase marks a notable acceleration in prices from the past two months when the broad level of consumer prices was unchanged. As expected, the pickup in headline inflation was largely due to a rise in energy prices. All components of the energy index, which includes fuel oil, natural gas and electricity rose in February, but the largest increase was in gasoline. Gasoline prices jumped 9.1 percent, accounting for about 75 percent of the headline’s gain. While alarming for consumers in our view, some reprieve is already in sight. Since the end of February, the average price of a gallon of gas has fallen from $3.77 to $3.70.
Food price inflation was significantly tamer. The CPI for food ticked up 0.1 percent after a flat reading in January. A 1.4 percent rise in fruits and vegetables and a 0.5 percent rise in meats, poultry, fish and eggs were mostly offset by a decline in bakery and dairy products. The 12-month trend in food price inflation remains manageable for consumers at 1.6 percent.
Excluding food and energy products, prices rose 0.2 percent in February. Shelter costs, which comprise the bulk of core goods, rose 0.2 percent and are now up 2.3 percent over the past year. The recovery in home prices has steadily pushed the owners’ equivalent rent index higher, while costs for rented residences have risen amid a tight rental market. Also contributing to the increase in core prices was the 0.8 percent increase in prices for used cars and trucks. The gain was the largest since May for this category, but prices remain down from a year earlier. Core CPI is now up 2.0 percent over the past year.
Other Items of Interest