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U.S. District Judge Thomas Russell says city and state hotel laws are outdated and don’t cover the web brokers.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.
Tuesday, September 30, 2008
The Importance of Regionalism
Regionalism is truly in the eye of the beholder. When Louisville was getting ready to merge with Jefferson County, the regionalism talk was all about Louisville and the surrounding suburbs. As the talk shifted to the bridges project, regionalism came to mean Metro Louisville and Southern Indiana. And now we are hearing about “mega regions” such as Cincinnati to Columbus in Ohio. But what does this all mean for us? And why should we care about what happens beyond the borders of our cities, counties and states? Join us on Friday when we discuss the ins and outs of regionalism.
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Looking for an older episode? Browse the State of Affairs Audio Archive.
The $700 billion bailout plan for the nation’s financial system that was defeated in the U.S. House Monday drew ‘no’ votes from four of Kentucky’s six representatives in the chamber.
One of those ‘no’ votes came from Louisville Democrat John Yarmuth, who says the measure gave too much away to Wall Street firms and didn’t do enough to free up the country’s wary credit markets.
Yarmuth says he’s “relatively confident,” though, that some type of rescue package will clear the Congress.
“That the leadership will take the temperature of those who voted against it, see what provisions might get them to change their vote, and then I would think they would go to the Senate, this is my guess, ask them to put it in their version and then if the Senate passes it, bring it back to us,” Yarmuth said.
Also voting against the package were Democrat Ben Chandler and Republicans Geoff Davis and Ed Whitfield.
Kentucky Republicans Hal Rogers and Ron Lewis voted for the measure.
Southern Indiana Democrat Baron Hill voted ‘no.’
