State News Roundup

News Roundup | May 24, 2012

In Louisiana, some businesses are holding off on investing due to uncertain economic conditions. A recent survey found that while larger businesses are proceeding with investments as normal, small businesses have held capital in order to be protected against changing financial conditions. “A lot of (the concern) comes from the national media that percolates through everyone’s daily lives about conditions that still have a great deal of uncertainty,” said Adam Knapp of the Baton Rouge Chamber of Commerce. While the state’s unemployment rate is at 7.1 percent, a full percentage point below the national average, this was not good news for those looking for work.

Vallejo, Calif., which in 2008 declared bankruptcy and was forced to make large spending cuts to its city government, is now seeing a dramatic boost in its economy compared to neighboring cities. The Washington Post reported today that the city of 116,000 has seen a turn around in its fiscal situation and is now seeing marked improvement from its dire situation in 2008. With a general fund of $65 million, much smaller than its record high of $85 million in the 1980’s, Vallejo has used a combination of technology and citizen participation to maintain services to the community while decreasing costs. New cameras allow police to monitor larger areas of the city, while the number of volunteer neighborhood watch groups has swelled from 15 to 350.

Overall Vallejo is fairing much better after its bankruptcy than the state, which recently reported a budget gap of $16 billion this year. To encourage participation in the fiscal situation of the city, the city council has allowed citizens to vote on ballot measures to direct spending of new increases in tax revenue. Saying the bankruptcy may have been the best thing for the city, Assistant Manager Craig Whittom commented, “It was effective at helping us re-create ourselves and change the culture so that we could restart from a stronger financial footing.”

Meanwhile in Chicago, teachers have begun protesting for higher pay despite Mayor Emmanuel stating that the group deserved a raise, reports The Sun Times. Though the Mayor and the union are meeting with an independentarbiter to reach an agreement, there may not be much room in the budget as Illinois is facing a possible default, leaving the city without state funds. Find more on the state’s fiscal situation here.

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