Beebe set to lead governors panel

Tuesday, January 25th, 2011

Arkansas Democrat Gazette

Gov. Mike Beebe will be a chairman of a committee of governors, the National Governors Association has announced.

Beebe will lead the association’s Natural Resources Committee.

“He will run the [natural resources] meeting at NGA and will be in the position to take initiative on [natural resource]-related letters to Congress or President [Barack] Obama on behalf of governors throughout the country,” said Beebe spokesman Matt DeCample.

“There are no immediate letters or issues he plans to use that position to address.”

Association Chairman Washington Gov. Christine Gregoire and Vice Chairman Nebraska Gov. Dave Heineman will lead the association’s Executive Committee.

Pay for the elected moves to Senate

Tuesday, January 25th, 2011

Arkansas Democrat Gazette

The state House of Representatives voted Monday to hold salaries and funding flat for people elected to the legislative, judicial and executive branches of state government in fiscal 2012.

House Bill 1063 provides money for elected officials – judges, constitutional officers, legislators, prosecutors – but not their staffs nor the rest of state government such as the agencies that provide human services, health programs, prisons, state police or higher education.

The state constitution (Article 5, Section 30) requires that the bill, known as the General Appropriation Bill, be the first appropriation enacted for fiscal 2012. It now goes to the Senate for consideration.

House Bill 1063 initially included a 1.86 percent cost of-living increase for prosecutors and judges that the Legislature’s Budget Committee stripped from the bill last week after some legislators questioned whether it is appropriate to provide raises to elected officials in a tight economy.

The action removed about $475,000 from the bill, which appropriates more than $35 million in total.

Gov. Mike Beebe has proposed a 1.86 percent raise for nonelected state employees. He cited good revenue collections. The committee will consider those raises later in the session.

Budget Co-Chairman Rep. Kathy Webb, D-Little Rock, said she doesn’t know what the rejection of salary increases for judges and prosecutors may mean for raises the governor wants for other state employees.

“I’ve got some members who have told me they’re not going to support any [cost of-living increases], regardless of what the pay level is, and I’ve got some members who’ve said they would support [cost-of-living increases] for the lower paid employees but not the higher paid,” Webb said. “Based on this first bill, I’m sure it will be a robust discussion, and that’s a good thing.”

State Budget Administrator Mike Stormes estimated 31,600 of the state’s more than 56,000 employees would receive the 1.86 percent cost-of living raise if it is approved by lawmakers.

At least a dozen proposed tax cuts have been filed this session, a move Beebe has said the state cannot afford in the current economy.

Beebe proposed his own decrease, a 0.5 percentage point drop in the sales-tax rate on groceries. He has told lawmakers they have to find money in the budget to offset any new programs or further tax cuts.

Webb said some legislators may consider finding that money by not providing cost-of-living increases to state employees, a move she called dangerous.

“I would caution folks about choosing to use this as ‘found money’ because we don’t have [cost-of-living increases] in there every single year,” Webb said.

The Senate co-chairman of the Joint Budget Committee said he doesn’t expect an attempt in the Senate to amend the bill to insert the raises for prosecutors and judges.

“There are some discussions and thoughts about what we should do and not do, but I don’t really see that,” said Sen. Gilbert Baker, R-Conway.

Sen. Mary Anne Salmon, D-North Little Rock, said she didn’t expect an attempt to resurrect the raises for judges and prosecutors, either.

“It’s not good politics,” she said. “The public would have an uprising.”

On another matter, Sen. Jeremy Hutchinson, R-Little Rock, filed Senate Bill 129 to provide for the Senate to install audiovisual equipment to broadcast committee meetings.

The House spent $377,416 in 2010 to equip four of its rooms with broadcast gear.

The House also allows its sessions to be telecast live from within the chamber. The Senate doesn’t.

“I respect the Senate’s traditions, and I value those traditions, but the voters are the ones paying the bills and they elected us, and they should have a chance to see what’s going on,” Hutchinson said.

In other business, Monday’s deadline for introducing state retirement bills has been extended in both chambers until Friday.

Under state law, any legislation affecting a public retirement system in a regular session is required to be introduced during the first 15 calendar days of a regular session but an extension is allowed if the Legislature recesses more than three consecutive days during the first 15.

The Senate chairman of the Joint Committee on Public Retirement and Social Security Programs, Sen. Johnny Key, R-Mountain Home, noted that the Legislature recessed for four days over a recent weekend.

A bill to thwart part of the federal health-care law is scheduled to be heard today at 10 a.m. in the House Public Health, Welfare and Labor Committee in Room 130 in the state Capitol. It is aimed at blocking the federal provision that mandates that people buy private health insurance.

House Bill 1053 by Rep. David Meeks, R-Conway, states “A law or rule shall not compel, directly or indirectly, an individual, an employer, or a health care provider to participate in any health care system” such as the federal Patient Protection and Affordable Care Act of 2010.

Although federal law overrides state law, lawmakers in 40 states proposed more than 115 bills or resolutions to limit or restrict the federal healthcare law in 2010, according to the National Conference of State Legislatures. Five states amended state laws to oppose the federal health-care law in 2010.

Legislators in 29 states failed to pass or rejected proposed legislation or resolutions against the health-care law.

“We need to show that we are united as individual states against this thing so we’re joining with our fellow states to show that Arkansas is with them in pushing against this thing that the federal government is trying to do to the people,” Meeks said.

Article 6 of the U.S. Constitution contains what is known as the Supremacy Clause, and it states that federal law “shall be the supreme law of the land; and the judges in every state shall be bound thereby, anything in the constitution or laws of any state to the contrary notwithstanding.”

Also, Senate President Pro Tempore Paul Bookout, D-Jonesboro, said Monday that he has appointed Key as co-chairman of the Legislature’s 12-member lottery oversight committee. Key has been a critic of the lottery at times.

Bookout also reappointed Sen. David Johnson, D-Little Rock, and Sens. Robert Thompson, D-Paragould, and Salmon and added Sens. David Wyatt, D-Batesville, and Jonathan Dismang, R-Beebe, to the committee.

House Speaker Robert S. Moore Jr. said he appointed state Rep. Mark Perry, D-Jacksonville, as the committee’s co-chairman and reappointed Rep. Barry Hyde, D-North Little Rock, and Rep. Darrin Williams, D-Little Rock. He also appointed state Reps. Mary Lou Slinkard, R-Gravette; Bobby Pierce, D-Sheridan; and Matthew Shepherd, R-El Dorado.

New requests for jobless aid down 37,000

Friday, January 21st, 2011

Arkansas Democrat Gazette

Fewer people applied for unemployment benefits last week, adding to signs that hiring will pick up this year.

The Labor Department said Thursday that the number of people seeking benefits fell by 37,000 to a seasonally adjusted 404,000 for the week that ended Saturday. That’s not much higher than the 391,000 level reached last month, the lowest in more than two years.

“New jobless claims have broken to the downside in the last 11 weeks, suggesting that labor markets are finally improving,” Steven Wood, president of Insight Economics LLC in Danville, Calif., said in an e-mail to clients. “However, there is typically a lot of volatility in the claims data between mid-November and mid-February both because of the various holidays and because of winter weather.”

Two other reports released Thursday – the sales of previously owned U.S. homes and the Index of Leading Economic Indicators – exceeded forecasts, signs an economic expansion is gaining momentum at the start of 2011.

The positive reports did little to move the stock market. The Dow Jones industrial average fell 2.49 points, or 0.02 percent, to 11,822.80.

The decline in unemployment applications suggested that an unexpected rise in applications a week earlier was the result of seasonal factors. Applications often rise in early January after retailers lay off temporary Christmas workers.

Fewer than 425,000 people applying for benefits is considered a signal of modest job growth. Economists say applications must fall consistently to 375,000 or fewer to substantially reduce the unemployment rate.

Applications are far below their peak of 651,000, reached in March 2009 during the recession. They have fallen by about 16 percent over the past four months, signaling employers are laying off fewer workers.

Last week’s decline reduced the four-week moving average, a less volatile measure, to 411,750. That’s the third decline in four weeks.

Ian Shepherdson, chief U.S. economist at High Frequency Economics, said the downward trend is driven by the easing credit situation for small firms.

“More credit means fewer layoffs, and fewer layoffs mean stronger payroll growth,” Shepherdson said. “It won’t be long before the jobs numbers look better.”

Net job gains in December were modest. Employers added only 103,000 jobs, less than half of the total needed to reduce the unemployment rate.

The unemployment rate fell to 9.4 percent from 9.8 percent last month. About half that drop came from unemployed workers giving up on their job searches. The government only counts as unemployed people who are still looking for work.

In Arkansas, the unemployment rate in November rose to 7.9 percent.

The number of people continuing to receive unemployment benefits nationally fell to 3.9 million in the week ending Jan. 8, its lowest level since October 2008. But that may just mean many people have exhausted their 26 weeks of state benefits.

The figure doesn’t include millions of long-term unemployed who are receiving extended benefits from the federal government under an emergency program set up during the recession.

Purchases of previously owned homes jumped 12 percent in December to a5.28 million annual rate, the National Association of Realtors said Thursday. The New York-based Conference Board’s gauge of the economic outlook for the next three to six months rose 1 percent.

A report showing Philadelphia-area manufacturing expanded for a fourth month indicates companies such as International Business Machines Corp. are also enjoying greater demand from countries like China. At the same time, Federal Reserve officials have said growth isn’t strong enough to push unemployment down as much as they would like, making it likely they will stick to plans to pump more money into the economy.

“Manufacturing is on solid footing, the housing market is nearing a bottom and the labor market is slowly healing,” said Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pa. “The economy is still heading in the right direction. It seems to be gathering some steam but we have a long ways to go.”

As signs of stronger economic growth push up borrowing costs, homebuyers may be rushing into the market to lock in current mortgage rates before they climb further, analysts said.

Buyers, returning to the housing market after a government tax credit expired in the middle of 2010, may also be taking advantage of cheaper homes. The median sales price of a previously fell to $168,800 from $170,500 in December 2009.

For all of last year, purchases decreased to 4.91 million, the fewest since 1997, the National Association of Realtors’ figures showed. Home sales were forecast to rise to a 4.87 million rate in December, according to the median of 73 forecasts in a Bloomberg survey. Economists’ estimates ranged from 4.5 million to 5.07 million after November’s 4.68 million pace.

Improved consumer expectations, fewer firings and higher stock prices also helped drive the leading economic indicator index up in December after a 1.1 percent rise a month earlier.

“We do see a lot of momentum in the index, which is consistent with GDP growth well north of 3 percent,” said Carl Riccadonna, a senior U.S. economist at Deutsche Bank Securities Inc. in New York. “Economic momentum is being maintained and the index suggests some acceleration.” Information for this article was contributed by Daniel Wagner of The Associated Press and Shobhana Chandra, Bob Willis and Alex Kowalskiof Bloomberg News.

House starting on health redo

Friday, January 21st, 2011

Bloomberg

House Republicans on Thursday outlined their first steps toward crafting new health-care proposals, a day after voting to repeal the overhaul President Barack Obama and congressional Democrats enacted last year.

“Today is Day One of our efforts to replace Obamacare with something better,” Rep. Fred Upton of Michigan , chairman of the House Energy and Commerce Committee, said at a news conference in Washington.

The House passed a resolution 253-175 authorizing four committees to begin work on new legislation.

Arkansas’ Rep. Mike Ross joined 13 other Democrats in voting for the resolution. Republican Reps. Tim Griffin, Steve Womack and Rick Crawford also voted for it.

“Obviously, if we can get costs down, the opportunity to afford health care goes up and you can get more coverage,” said Rep. Dave Camp of Michigan, chairman of the House Ways and Means Committee. “Our focus will be how can we make health care more affordable.”

GOP lawmakers also introduced two separate bills to toughen restrictions on taxpayer funding of abortions, arguing that the language now in the law is weak.

“Clearly there’s an awful lot of doubt as to where the administration really is on this issue,” said House Speaker John Boehner, R-Ohio, calling the abortion legislation one of his top priorities. “I think the will of the people is that we enact this clear-cut prohibition on the use of taxpayer funds for elective abortions.”

The GOP move on abortion puts ideology ahead of pocketbook issues, said Rep. Rosa DeLauro, D-Conn.

“These are folks who came to town saying they’d create jobs and get the economy back on track,” DeLauro said of the new Republican majority. “This legislation goes far beyond current law. Given the opportunity to govern, they are once again trying to deny women’s access to abortion.”

The health-care law that cleared Congress in March 2010 with no Republican support was the top domestic priority for Obama and congressional Democrats, who then controlled the House and the Senate. It extends coverage to tens of millions of uninsured Americans, imposes new taxes on the highest-wage earners, calls for taxes on health-care companies and provides hundreds of billions of dollars in Medicare savings.

Republicans contend the law will raise taxes, destroy jobs and burden businesses with new requirements, such as the one that makes them report to the Internal Revenue Service any expenditure over $600.

Democrats, who control the Senate, say the repeal effort will be blocked in that chamber and, in any case, Obama would veto any such measure that reached his desk.

Rep. John Kline, R-Minn., chairman of the House Committee on Education and the Workforce, said the committees will release a number of “smaller pieces of legislation” aimed at reducing health-care costs. They have no timeline to complete their work. Two committees have announced investigations into the law, one on its effect on jobs and a second on how the administration has granted waivers for some companies to avoid new rules.

The administration office has approved 222 waivers for companies, local governments and other organizations for part of the law requiring minimum coverage levels by employer insurance offerings, according to its Web site.

Rep. Lamar Smith, R-Texas, chairman of the House Judiciary committee, told reporters he plans to hold hearings on the costs of medical-malpractice insurance and the constitutionality of the 2010 law.

The House Energy and Commerce Committee wrote to the administration Thursday in opening an investigation into the Center for Consumer Information and Insurance Oversight, the office in the Health and Human Services Department that writes many of the regulations to implement the health law.

“Most troubling is that your office is currently responsible for deciding who does not have to comply with the massive new regulations imposed,” wrote Upton.

The House Ways and Means Committee announced a hearing next week looking into how the law will affect employers and the economy.

“Employers of all sizes are expressing concern that the new mandates and regulations will deter them from hiring new employees, threaten their ability to retain existing workers, and harm their ability to increase wages for existing employees,” committee Republicans said in a statement on their website announcing the hearing.

Republicans also plan to use the House Appropriations Committee, headed by Rep. Hal Rogers of Kentucky, to financially starve Obama’s overhaul measure by denying money for implementing some of its provisions.

Chesapeake Revs Up CNG Fleet

Monday, January 17th, 2011

Fort Smith Times Record

Wanda Freeman

Natural gas and oil producer Chesapeake Energy Corp. has put its fleet where its mouth is.

After years of pushing for a nationwide reduction in dependency on foreign oil, the Oklahoma City-based company spent the past year converting 700 fleet vehicles to run on compressed natural gas, and this week will conduct an official “first fill” at a new CNG fueling station in Arkoma.

The Arkoma location will be one of six new stations to open in Oklahoma this winter and one of 11 existing or planned in Oklahoma towns where Chesapeake has field offices, said market development coordinator James Roller.

Chesapeake teamed up with OnCue Express convenience stores to open the facilities, but the new field office stations will be stand-alone facilities.

“These locations will be unmanned stations with a card reader and a pump,” Roller said.

Steve James, chief financial officer of OnCue Express, said the stations are open to the public but will offer only CNG.

“This is domestic product, not an import,” James said. “It’s mostly from the United States and some from Canada. And it’s virtually half the price of gasoline.”

Roller said the going price of CNG is about $1.39 per gallon compared to nearly $3 a gallon for unleaded gas. Mileage on an equivalent tank is “one to one” with gasoline.

He said there is no way to know whether Chesapeake is the supplier of the natural gas at the end market.

Conversion of the fleet vans consisted of retrofitting the vehicles with CNG tanks that hold the equivalent of 21 gallons, while still retaining the unleaded tanks. The end result was “bi-fuel” capability.

Roller said he could not provide a cost figure for the conversion, but Chesapeake enjoyed economies of scale that would not be available to individuals.

“The rate of return is very, very good,” he said. “For our vehicles, we expect to save $7.8 million a year, just in fuel expenses.” James said conversion of one vehicle could be in the ballpark of $10,000, but alternatives are available. The state of Oklahoma offers all state taxpayers a 50 percent tax credit for CNG conversions. Also, he said, Honda offers a Civic natural gas model.

In a statement on Chesapeake’s website, company founder and CEO Aubrey McClendon argues for a nationwide transition to CNG fleet vehicles as a way to reduce America’s need of oil. He says the United States imports 60 percent of the oil it consumes at a cost of $1 billion a day.

Roller said the 700 vehicles converted so far account only for Chesapeake’s Oklahoma fleet.

“Over the next three, four years, we plan to convert all 4,000 fleet vehicles. We’re in 17 states,” Roller said. Besides OnCue, he said, Chesapeake is working with Love’s convenience stores and Hutchinson Oil.

Chesapeake is not the only energy producer that has committed to natural gas for fleet vehicles.

Mike Callan, president of Arkansas Oklahoma Gas, said AOG has been using CNG since 1980.

“This was not long past the Arab oil embargo, and we wanted to wean ourselves off of gasoline,” Callan said.

Today, AOG runs about 30 vehicles, or about 25 percent of its fleet, on CNG.

“Some vehicles are exclusively CNG, but the majority are bi-fuel,” Callan said. Conversion cost about $8,000 per vehicle.

The vehicles travel within about a 50-mile radius of Fort Smith, and they fuel up at AOG’s own station off Rogers Avenue across from Central Mall.

Callan said the drivers can use the “fast fill” method, pumping in the natural gas just as they do at a regular gas station, or the “slow fill” method, plugging the vehicle in and letting it fuel up overnight.

Fuel prices run about $1.35 to $1.40 per gallon equivalent, with the natural gas compressed to 3,600 pounds, he said. Vehicles with a 10- to 12-gallon equivalent tank can go about 200 to 250 miles on a tank, which he said was comparable to gasoline mileage.

Natural gas appears to be easier on vehicles than gasoline, too: AOG keeps its fleet vehicles going for 250,000 miles before retiring them.

Callan said he was hopeful that Arkansas will one day address CNG conversion with a tax credit like the one in Oklahoma. At the federal level, he said, the issue depends on how much gridlock remains in Congress.