Tuesday, May 17th, 2011

Talk Business

It’s not science fiction. Quite the contrary, it’s becoming science fact.

Springdale-based NanoMech, the nanotechnology firm converting University of Arkansas research to the marketplace, has a new product it’s been testing and it could be huge.

“We don’t split atoms, we sort of move atoms around. And when you do, it gives you the ability to make anything better, cheaper, more durable, last longer and maybe do some things that have never been done before,” says NanoMech CEO Jim Phillips.

Nanotechnology is a research field that manipulates matter in a microscopic way allowing for applications. The scale of nanotechnology is so small – a billionth of a meter – or the equivalent of one ten-thousandth the size of a human hair.

Appearing on this week’s edition of Talk Business, Phillips outlined several of the products his fledgling firm has been marketing.

NanoMech makes a product called TuffTek that is a coating applied to cutting equipment to keep it in use longer and to make it more durable. With TuffTek coating, those materials can last 3 times to 10 times longer.

Another product is called NanoGlide, which suspends nanoparticles in oil or lubricants to keep windblades or gears or machinery working better. According to studies, it extends the life of those lubricants by another 30-40%.

A third product is nGuard – a spray used in one application for body armor for the U.S. military. nGuard kills more than 99% of bacteria in that armor. It can also be injected in wood products to eliminate mold and mildew.

And a fourth product, currently known as Element X, could be the most transformative of all of NanoMech’s inventions.

Element X involves a proprietary gas condensation process that takes metals, semi-metals or solids and powderizes them to nano-size.

“When you do that, everything changes in terms of its behavior,” says Phillips, who adds that, in essence, the process redefines the element table.

“So if you take aluminum, a chain link fence, whatever, and you put it through our reactor. When it comes out the other side, it’s so powderized that we can now turn it into solid rocket fuel for companies like NASA,” he explains.

Phillips provides another example of taking a rock-like element known as selenium and powderizing it. He says that a pound of the powder mixed with water can be sprayed over 60 acres of sterile land and make it fertile without fertilizers or insecticides.

NanoMech has been on our radar for some time. It was the 2011 winner of the Talk Business “One to Watch” award given to a company that has the ability to transform the Arkansas and international business landscape in a positive way.

Debt hits cap; U.S. taps two pensions

Tuesday, May 17th, 2011

Arkansas Democrat Gazette

Treasury Secretary Timothy Geithner said Monday that he will immediately halt investments in two big government pension plans so the government can continue to borrow money.

Geithner informed Congress of his decision in a letter stating that the government had officially reached its $14.3 trillion borrowing limit. He repeated a warning that if lawmakers do not increase the borrowing limit by Aug. 2, the government is at risk of an unprecedented default on its debt.

Geithner wrote lawmakers Monday to say he has declared a “debt issuance suspension period,” a technical measure that allows him to free up borrowing room from the Civil Service Retirement and Disability Fund and the Government Securities Investment Fund.The steps won’t affect retirees or government operations.

Even though the government has reached its official borrowing limit, Geithner said unexpected revenue and bookkeeping maneuvers will allow the Treasury to continue auctioning debt for another 11 weeks.

Geithner has suspended pension payments in the past when Congress has held off raising the debt limit. The money that the two pension funds will lose will be replaced when Congress votes to raise the borrowing limit.

Geithner’s letter Monday indicated he has not changed his assessment of when his department will exhaust its set of emergency measures for preserving borrowing room.

“I have determined that a‘debt issuance suspension period’ will begin today, May 16, 2011, and last until August 2, 2011, when the Department of the Treasury predicts thatthe borrowing authority of the United States will be exhausted,” Geithner said in the letter to Senate Majority Leader Harry Reid, D-Nev., and other lawmakers.

It would be “seriously problematic” if Congress does not act by Aug. 2 and the Treasury has to pick and choose which of its payments it is able to meet, said Lou Crandall, chief economist at Wrightson ICAP LLC in Jersey City, N.J. He said the Treasury would have a net cash-flow deficit of about $230 billion to $300 billionbetween Aug. 2 and Sept. 30.

“Short of embracing something like a bankruptcy-style reorganization plan – or beginning to shut down government operations preemptively weeks in advance – we’re not sure how the Treasury could scale its outlays back to the current level of revenue,” Crandall said in a note to clients Monday.

Interest payments would be legally protected and benefit payments backed by trust funds would “probably” go out on schedule, he said. Other payments might need to be put on hold, including civilian salaries and studentloan disbursements.

“Food-stamp issuance would have to be shut down weeks in advance to allow time for the existing body of vouchers to work their way through the system,” he said.

If it doesn’t raise the limit, Congress would have to comeup with $738 billion to make up for what it planned to borrow through the end of the fiscal year on Sept. 30. The options are drastic: Cut 40 percent of the budget through September, which might mean defaulting on payments to investors in government bonds; raise taxes immediately; or some combination of the two.

“In the economic area, this is the equivalent of nuclear war,” says Edward Knight, who was the Treasury Department’s general counsel during a standoff over the debt ceiling in the mid-1990s.

“At some point it’s clear to me that we have to increase the debt ceiling,” House Speaker John Boehner, an Ohio Republican, said Sunday on CBS’ Face the Nation. Senate Minority Leader Mitch McConnell, a Kentucky Republican, appearing Sunday on CNN’s State of the Union,said he wants the extension of the debt limit coupled with broad fiscal changes.

Republicans have also ruled out any tax increases, including any plans to end tax cuts for high earners enacted in 2001 and 2003.

“We need to have a vote to lift the debt ceiling because the consequences of not doing so would be quite serious,” White House spokesman Jay Carney told reporters. “And those who suggest otherwise are whistling past the graveyard.”

Vice President Joe Biden is holding negotiations with lawmakers over the types of deficit-cutting measures that need to be approved to win congressional approval of a higher debt limit.

6 draft legislative maps revealed after 1 leaked

Monday, May 9th, 2011

Arkansas Democrat Gazette

Sarah D. Wire

Early drafts of new legislative district maps became public Friday. Board of Apportionment Director Joe Woodson said he had planned to post maps on the board’s website for public comment as early as Monday but released six maps to the media after a Senate map was leaked to political bloggers.

Woodson stressed that the maps are very early drafts and haven’t received any support.

“I just want to suppress everybody’s urge to read too much into this,” he said. “We’re 12 weeks away from our goal date.”

The board, made up of Gov. Mike Beebe, Secretary of State Mark Martin and Attorney General Dustin McDaniel, is responsible for drawing Arkansas’ 100 state House of Representatives districts and 35 state Senate districts this year in light of 2010 Census data.

The board has set a goal of completing the process by Aug. 1. The board has tentatively scheduled seven meetings around the state for public comment on proposed maps.

Woodson said the first public meeting is 6 p.m. May 24 on the Arkansas State University campus in Jonesboro. Public comment can also be left at

On Friday, Woodson gave the Arkansas Democrat-Gazette five Senate maps and one House map that had been drawn. He said he drew the initial map Wednesday.

“You’ve got to start somewhere,” he said.

Under the official 2010 Census population figures, each of the state Senate seats would represent about 83,312 people and each of the state House seats would represent about 29,159.

The map initially released Friday would expand westward the 24th Senate District in the southeast corner of Arkansas to include part of Calhoun, Union and Cleveland counties.

The 20th Senate District in west Arkansas expands toinclude all of Polk, Montgomery and Sevier counties as well as a portion of Scott and Yell counties.

Woodson said earlier in the week that population decline in that area would make it necessary to expand southern districts geographically.

The 10th Senate District in north Arkansas would extend south to include part of Cleburne and Van Buren counties, along with moving west to take in part of Baxter County.

In the fast-growing Springdale-Rogers-Fayetteville area in Northwest Arkansas, the 35th Senate District would shrink geographically with the 3rd Senate district reaching up higher into Washington County.

The 1st District in northArkansas would expand to include Newton and Searcy counties as well as more of Boone, part of Madison and the northeast corner of Van Buren County.

Several Senate districts in central Arkansas will shrink geographically because of population growth, including the 22nd, 33rd and 34th Districts. The 31st and 32nd Districts would expand.

Pulaski is still the most populous county in the state, with 382,748 people.

The board has met twice and representatives from all three of the constitutional offices got computers and software to begin drawing maps last week.

McDaniel said Friday that his office has just begun drawing maps.

Former state Rep. Timothy Hutchinson of Springdale, who is responsible for drawing maps for the secretary of state’s office, said Thursday that he began drawing maps in February and has several proposed maps complete.

Beebe: Flooding will have long-term economic impact

Monday, May 9th, 2011

Arkansas News Bureau

John Lyon

The flooding occurring in parts of Arkansas will have a serious, long-term economic impact on the state, Gov. Mike Beebe said today.

Beebe said that by all accounts the Mississippi River is expected to stop rising next week, but in places it could remain at flood stage until early July.

“There’s going to be an agricultural impact,” Beebe told reporters after addressing the Delta Caucus’ annual conference in Little Rock. “The problem with aid or assistance on agricultural losses is that traditionally the … Department of Agriculture is a couple of years behind, time-wise, on those kinds of assessments, so you’ve got a tough period to go through for those farmers.

“Economically on agriculture it’s going to be very difficult, and devastating for some,” he said.

Beebe also said the floods will affect the state budget by eating up a large portion of the money set aside each year for disaster assistance. Federal disaster aid is provided as a 3-1 match of state aid, he noted.

“And then obviously to the extent that it’s impacting people’s ability to make money and pay taxes and have a profit, it will impact ongoing revenue, so it’s kind of a triple whammy,” the governor said.

Beebe has declared 63 of the state’s 75 counties disaster areas because of recent storms and flooding.

State highway officials were diverting eastbound big rigs through Mississippi on Friday to ease major traffic jams caused by the closure of Interstate 40 in both directions in eastern Arkansas due to flooding along the White River.

“Essentially every truck that comes from Texas will have to route to Mississippi,” Glenn Bolick, spokesman for the state Highway and Transportation Department, said in announcing a separate route to take heavy trucks off I-40 through Lake Village and into Mississippi.

Highway officials closed westbound traffic Wednesday near Biscoe in Prairie County. Eastbound lanes were closed Thursday night.

Officials said it was impossible to tell how long one of the busiest interstates for truck traffic in the nation would remain closed because of the slow pace of flood waters flowing from the roadway.

“Unfortunately, it’s gotten (downstream) way faster than it’s gotten off of I-40,” Bolick said.

Upstream, state police set up an outpost today at Patterson in Woodruff County, where a mandatory evacuation was ordered Thursday night at Cotton Plant, Gregory and McClelland because of flood waters.

Tommy Jackson, spokesman for the state Department of Emergency Management, said most of those among the roughly 1,000 residents of the three towns who chose to leave were directed to a shelter at the First Assembly of God Church in Brinkley. Arkansas National Guard troops were aiding in the evacuation, Jackson said.

“Other than that, we’re working with our county coordinators at their request. Sandbags still remain a big request,” he said, adding that the agency had delivered about 56,000 sandbags to St. Francis County.

An evacuation order was issued Thursday in Prairie County for residents east of the White River. Donna Speight, administrator of the state Health Department’s local health unit in Des Arc, has been helping to find shelter for evacuees and assisting volunteer efforts in the county.

“We’ve got some great volunteers in this county,” she said. “We’ve got volunteers who have water standing in their homes chest high, but they’re out here feeding the volunteers who are trying to help save other people’s homes.”

Speight said the health unit’s building had not been flooded by Friday afternoon, but as she stood just outside the building she had “water at my feet.” Some of the unit’s medical supplies were moved to the health unit in Stuttgart when flood waters came within feet of the building, she said.

Jackson said authorities were still searching Friday for at least one person missing in the latest round of flooding in the state that began April 30. Two people have drowned.

In all, 16 people have been killed in a spate of severe weather in the state over the past two weeks — eight from tornadoes and eight from flooding — and 23 have died since mid-April.

New legislation should fix unemployment trust fund, report says

Friday, May 6th, 2011

Arkansas News Bureau

Rob Moritz

A new study released today by the Arkansas State Chamber of Commerce shows laws recently approved by the Legislature to trim jobless benefits should help eliminate the nearly $360 million debt the state owes the federal government for unemployment insurance within four years.

Randy Zook, president of the state chamber, said the study, done by the Arkansas Department of Workforce Services, suggests there is no need for a bond issue to repay the debt.

Act 125 of 2011 authorizes the governor to call an election for a bond issue to pay back the unemployment trust fund debt. The measure also would add an assessment on workers paid by employers to underwrite the bonds.

The bond issue “is a good tool to have available to us, but at this point it’s not necessary,” Zook said after a noon meeting with about 70 business leaders.

The chamber is conducting meetings with business leaders around the state over the next few weeks to gauge support for the state bond issue to pay off the $360 million debt. Results of the meetings will be presented to the governor.

“We’re just testing the view of the business community and based on (today’s) meeting the business community is overwhelmingly in favor of … letting the current system play out, let the balances be handled through the normal course of what’s already in place and not issue bonds,” Zook said.

The next meeting is today in Rogers. Meetings also are scheduled May 12 in Jonesboro and May 19 in Fort Smith.

The state owes the federal government for money it borrowed to keep unemployment benefits flowing to thousands of out-of-work Arkansans during the recession.

In an effort to address the debt, lawmakers during the recent session approved and the governor signed into law Act 861, which Zook said should save the state $60 million to $70 million.

The law caps the maximum unemployment benefits and cuts the benefit period by a week. It also eliminates wage indexing and changes some of the eligibility requirements for workers seeking unemployment.

The unemployment benefit changes included in Act 851, plus additional revenue generated by a 20 percent increase in the unemployment insurance rate employers pay, which was approved by the Legislature in 2009, and the continued improvement in the economy should allow the state to reduce the debt to zero by 2015, Zook said.

“So you raise the revenue by an added tax on business, and you trim modestly the benefits on recipients through some better defined rules regarding who is eligible, and the combination of the two changes by the Legislature basically has set the thing back on a more favorable and operable course,” he said.

He said the state economy also must continue to improve, unemployment must drop and fewer people must receive unemployment benefits.

“We’ll see within 3 1/2 years (if) the trust fund gets back to zero and then continue to build and get that fund back to where it needs to be, which is about … $400 million,” Zook said. “It might take several years to get there but we’re on course to do it.”