A federal judge has dismissed a lawsuit in which officials in Louisville and Lexington tried to collect taxes from hundreds of online hotel room brokers.
U.S. District Judge Thomas Russell says city and state hotel laws are outdated and don’t cover the web brokers.
Jefferson County Attorney Mike O’Connell says he’ll appeal the ruling.
He says the companies are not paying their fair share of taxes when they reserve hotel rooms at a discounted rate then charge another rate to consumers.
“(They) only pay the transient room tax on what we would call the wholesale amount and we believe they should pay the tax on the amount they receive for the room itself, and thus it’s deprived Metro Louisville of a substantial amount of tax revenue,” O’Connell said.
Several other cities have filed similar suits againg the online companies, which claim they’re doing nothing wrong.
A University of Louisville finance professor predicts that Cleveland-based National City Bank may be next for review if Congress doesn’t act quickly on a bailout bill. Professor David Dubofsky says the market doesn’t seem to have much confidence in National City.
“If you look at the yields on the bonds that have been issued by National City, they’re very, very high,” says Dubofsky, “well over 20-percent to even 30-percent. That’s saying the market does not think National City will survive.”
Moody’s Investor Service announced this week it might downgrade National City’s rating, but bank spokesperson Kristin Baird Adams says the company is strong.
“Announcing a possible downgrade is not, in and of itself, a downgrade,” says Adams, “and I would reiterate that National City’s debt ratings remain solid in the investment grade today.”
Bank deposits up to 100-thousand dollars are insured by the Federal Deposit Insurance Corporation.
John Deasy – whose PhD from the University of Louisville is under investigation – is moving on. From the Wall Street Journal’s MarketWatch blog:
The Bill & Melinda Gates Foundation announced today that Dr. John E. Deasy has been named deputy director of its education division within its U.S. Program. Deasy is currently superintendent of Prince George’s County Public Schools in Maryland, where he has earned a national reputation for his leadership in significantly narrowing the achievement gap between low-income and minority students and their peers.
A U of L panel is looking into allegations that Deasy received his degree without completing the necessary coursework. This was under the tenure of former Education Dean Robert Felner, who is currently under investigation for allegedly mishandling federal grant money.
Conservative business practices have protected most Kentucky banks from being damaged by the Wall Street financial crisis. That means they’re able and willing to extend credit to eligible customers.
When high risk mortgages became more common nationwide, Kentucky banks generally avoided the trend. Kentucky Bankers Association General Counsel Debra Stamper says the current financial crisis caused by risky loans hasn’t changed the way banks do business in the Commonwealth.
“As I understand it from talking to banks, they have not significantly tightened or changed their underwriting standards for loans, which means if you were a good credit risk for them two years ago, you’d be a good credit risk for them now and they’d be happy to make you a loan,” she says.
But Stamper says further fiscal downturns could hurt consumer confidence and, in the worst case, cause runs on banks.
The president of the Kentucky Restaurant Association says the industry has been reeling from soaring prices for staples and commodities for more than a year, and the continued turbulance in the nation’s financial markets is making a bad situation worse.
Higher gas prices have driven up food costs, and the KRA’s Stacy Roof says restauranteurs are paying about 29 percent more this year for goods such as flour, cheese, poultry and beef.
“So that coupled with the fact that the public is being scared half to death and being alerted that they need to take their money and be very wise with it, then the restaurants are really feeling it on both ends,” Roof said.
She says restaurant owners who are not well established typically have a hard time borrowing money under normal circumstances, but the task is even more difficult now because of a tighter credit market.
