SUZE ORMAN’S 2009 ACTION PLAN

By Molly Greavessuze_orman_2009_action_plan1

New York Times best-selling author and one of our nation’s go-to experts and on financial matters, Suze Orman believes that 2009 is a critical year for your money. And I completely agree with her, which is why this weekend I sat down and read her book, 2009 Action Plan: Keeping Your Money Safe & Sound.

 

I know Suze Orman is a trusted household name and I wanted to be sure to recap her message for you in case you don’t have time to read her book.  Below I have outlined with bullets the main ideas from each of her 10 chapters.

 

Don’t forget that the whole goal for you making the rights moves in 2009 is to alleviate the stress, fear and anger you’re feeling and replace it with the secure sense that you have done what it takes to protect yourself, the money you’ve worked for, and the one’s you love. Good for you for taking the first step and reading the action plan. Best of luck to you with your goals as well =)

 

Here is SUZE’S 2009 ACTION PLAN and WHAT YOU MUST DO:

 

  • Make it a priority to pay off your credit card balances.

 

  • Read every single statement and all correspondence from your credit card company to make sure you are aware of any changes to your account, such as skyrocketing rates.

 

  • Work to get your FICO credit score above 720.

 

  • Be very careful where you turn to help with credit card debt. Debt consolidators are often a very bad deal. The National Foundation of Credit Counseling is a smarter choice.

 

  • Resist the temptation to use retirement savings or a home equity line of credit to pay off credit card debt.

 

  • Pay the minimum amount due each month on every card. That’s your only shot at keeping your FICO score from falling further. It will also lower the odds that your credit card company will close your account.

 

  • Line up your cards that charge the highest interest rate at the top of the pile. That’s the card you focus on paying off first. Send in as much money as you can each month to get that balance down to zero.

 

  • Once the first card is paid off, focus on the second card in your pile: the card with the next-highest interest rate.

 

  • Keep up with this system until you have all of the cards paid off.

 

  • The biggest risk to your retirement security is giving in to your emotions. You may make decisions that “feel right” for 2009, but that doesn’t mean they are the right long-term solution for you.

 

  • Make sure you have the right mix of stocks and bonds in your retirement account for your age.

 

  • Do not make early withdrawals or take loans from retirement accounts to pay for non-retirement expenses.

 

  • Convert an old 401(k) to a rollover IRA so you can invest in the best low-cost funds, ETFs, and bonds.

 

  • If eligible in 2009, consider moving at least a portion of a 401(k) rollover to a Roth IRA. Or wait until 2010 and convert it to a Roth then. In 2010, everyone regardless of income will be able to contribute to a Roth. Just don’t forget about the tax due at conversion.

 

  • Make sure your bank or credit union is covered by the federal deposit insurance (this is the FDIC for banks and the NCUA for credit unions ).
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  • Check that what you have on deposit is eligible for full insurance coverage in the unlikely event that your bank or credit union fails. Through December 31, 2009, the general limit has been raised to $250,000 from its previous $100,000, but you still need to educate yourself about the ins and outs.

 

  • If your savings is in a money market mutual fund sold through a brokerage or mutual fund firm, consider moving it to the Treasury money market fund at that company.

 

  • Build up your savings to cover eight months of living expenses.

 

  • Move all money you need within the next 5-10 years into savings. Money you need soon does not belong in the stock market (make sure you choose a high-interest yield savings account).

 

  • Separate your wants from your needs.

 

  • Get over the guilt that you aren’t “providing” for your kids.

 

  • Strike the word “deserve” from the conversation. What you deserve is irrelevant; what you can truly afford is all that counts.

 

  • Try to negotiate better terms on a car loan you can’t keep up with.

 

  • Be very careful when asked to co-sign anything, no matter how much you love the person asking you for your help.

 

  • Pledge these three things:

 

1.     Do not spend money for one day

2.     Do not use your credit card for one week

3.     Do not eat out at a restaurant for one month

 

  • Push for a mortgage “modification” if your current loan is too expensive.

 

  • Do not use credit cards or retirement funds to pay for a too-expensive home.

 

  • Stay informed about new programs, from lenders and the government, in the months ahead that aim to keep more homeowners out of foreclosure (try calling 888-995-HOPE or go to hopenow.com)
  • Build a real savings fund a HELOC should not be used as a safety net in 2009.

 

  • Focus on your home’s long-term value, not it’s price change from month to month.

 

  • If your child is headed to college within four years and your collge savings are in the stock market, you should begin to phase out of the market, so that you have 100% out by the time your child is 17.

 

  • If you have a child who will enter college in 2009-2010, look into getting a Stafford loan.

 

  • If Stafford loans are not enough, parents consider a PLUS loan. Significant changes to this program last year make this a viable option for many more families.

 

  • Stay away from private student loans at all costs.

 

  • If you are graduating college in 2009 with student loan debt, know your repayment options.

 

  • Build a substantial savings account today so you will be okay if you are laid off.

 

  • Do not go without health insurance (try ehealthinsurance.com for the largest online resource for health insurance or nahu.org if you like to work with an agent).

 

  • Shop for private health insurance if you are laid off; it is often less expensive than COBRA.

 

  • Purchase an affordable term life insurance policy if anyone is dependent on your income.

 

  • Make sure you have all of your estate-planning documents in order.

 

  • Focus on the road ahead!

White House Rescue Plan Announced Today–All $75 Billion Of It

By Molly Greaves

 

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President Barack Obama on February 18 rolled out the White House’s Rescue Housing plan of $75 billion to help struggling families avoid foreclosure and to bring some order to the housing market.  The President said taxpayer money could help save  between 7 – 9 million families who are risking foreclosure because they cannot afford their mortgages.  The President continued on adding that “this problem does not just involve them, it involves all of us. All of us are paying a price for the home mortgage crisis and all of us will pay an even steeper price if we allow this crisis to continue—a crisis which is unraveling home ownership, the middle class, and the American Dream itself. But if we act boldly and swiftly to arrest this downward spiral, every American will benefit.”  

In a roughly 20-minute announcement, the President  laid out the 4 key elements in his $75 billion Homeowner Affordability and Stability plan which he says is necessary to help the economy. If taken together, he told the folks in Mesa, AZ where he delivered his speech and also to those of us around the world listening, “the provisions of this plan will help us end this crisis and preserve for millions of families their stake in the American Dream.”

In Barack Obama’s exact words, here is how his plan works:

First, we will make it possible for an estimated four to five million currently ineligible homeowners who receive their mortgages through Fannie Mae or Freddie Mac to refinance their mortgages at lower rates.

Second, we will create new incentives so that lenders work with borrowers to modify the terms of sub-prime loans at risk of default and foreclosure.

Third, we will take major steps to keep mortgage rates low for millions of middle class families looking to secure new mortgages.

Fourth, we will pursue a wide range of reforms designed to help families stay in their homes and avoid foreclosure.”

To read more on each key point, or to read his speech in its entirety, please click here.

One last important thing for you…

I went to the White House website to learn more about this for my readers, and came across a Q & A section for Borrowers about the Homeowner Affordability and Stability Plan.  I thought it would be useful and have copied it below for you. If you are risking foreclosure or even if you are current on your mortgage, you will find most likely find this useful. For those of you facing foreclosure, please scroll down to find your questions and answers. Just so you know, all of this information below is based on the official White House blog.

Borrowers Who Are Current on Their Mortgage Are Asking:

  • What help is available for borrowers who stay current on their mortgage payments but have seen their homes decrease in value?

Under the Homeowner Affordability and Stability Plan, eligible borrowers who stay current on their mortgages but have been unable to refinance to lower their interest rates because their homes have decreased in value, may now have the opportunity to refinance into a 30 or 15 year, fixed rate loan.   Through the program, Fannie Mae and Freddie Mac will allow the refinancing of mortgage loans that they hold in their portfolios or that they placed in mortgage backed securities.

  • I owe more than my property is worth, do I still qualify to refinance under theHomeowner Affordability and Stability Plan?

Eligible loans will now include those where the new first mortgage (including any refinancing costs) will not exceed 105% of the current market value of the property.   For example, if your property is worth $200,000 but you owe $210,000 or less you may qualify.  The current value of your property will be determined after you apply to refinance.

  • How do I know if I am eligible?

Complete eligibility details will be announced on March 4th when the program starts.  The criteria for eligibility will include having sufficient income to make the new payment and an acceptable mortgage payment history.  The program is limited to loans held or securitized by Fannie Mae or Freddie Mac.

  • I have both a first and a second mortgage.  Do I still qualify to refinance under theHomeowner Affordability and Stability Plan?

As long as the amount due on the first mortgage is less than 105% of the value of the property, borrowers with more than one mortgage may be eligible to refinance under the Homeowner Affordability and Stability Plan.  Your eligibility will depend, in part, on agreement by the lender that has your second mortgage to remain in a second position, and on your ability to meet the new payment terms on the first mortgage. 

  • Will refinancing lower my payments?

The objective of the Homeowner Affordability and Stability Plan is to provide creditworthy borrowers who have shown a commitment to paying their mortgage with affordable payments that are sustainable for the life of the loan.  Borrowers whose mortgage interest rates are much higher than the current market rate should see an immediate reduction in their payments.  Borrowers who are paying interest only, or who have a low introductory rate that will increase in the future, may not see their current payment go down if they refinance to a fixed rate.  These borrowers, however, could save a great deal over the life of the loan.  When you submit a loan application, your lender will give you a “Good Faith Estimate” that includes your new interest rate, mortgage payment and the amount that you will pay over the life of the loan.  Compare this to your current loan terms.  If it is not an improvement, a refinancing may not be right for you.

  • What are the interest rate and other terms of this refinance offer?

The objective of the Homeowner Affordability and Stability Plan is to provide borrowers with a safe loan program with a fixed, affordable payment.  All loans refinanced under the plan will have a 30 or 15 year term with a fixed interest rate.  The rate will be based on market rates in effect at the time of the refinance and any associated points and fees quoted by the lender.  Interest rates may vary across lenders and over time as market rates adjust.  The refinanced loans will have no prepayment penalties or balloon notes.  

  • Will refinancing reduce the amount that I owe on my loan?

No.  The objective of the Homeowner Affordability and Stability Plan is to help borrowers refinance into safer, more affordable fixed rate loans.  Refinancing will not reduce the amount you owe to the first mortgage holder or any other debt you owe.  However, by reducing the interest rate, refinancing should save you money by reducing the amount of interest that you repay over the life of the loan.

  • How do I know if my loan is owned or has been securitized by Fannie Mae or Freddie Mac?

To determine if your loan is owned or has been securitized by Fannie Mae or Freddie Mac and is eligible to be refinanced, you should contact your mortgage lender after March 4, 2009.

  • When can I apply?

Mortgage lenders will begin accepting applications after the details of the program are announced on March 4, 2009.   

  • What should I do in the meantime?

You should gather the information that you will need to provide to your lender after March 4, when the refinance program becomes available.  This includes:

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    • information about the gross monthly income of all borrowers,  including your most recent pay stubs if you receive them or documentation of income you receive from other sources
    • your most recent income tax return
    • information about any second mortgage on the house
    • payments on each of your credit cards if you are carrying balances from month to month, and
    • payments on other loans such as student loans and car loans.

Borrowers Who Are at Risk of Foreclosure Are Asking:

  • What help is available for borrowers who are at risk of foreclosure either because they are behind on their mortgage or are struggling to make the payments?

The Homeowner Affordability and Stability Plan offers help to borrowers who are already behind on their mortgage payments or who are struggling to keep their loans current.  By providing mortgage lenders with financial incentives to modify existing first mortgages, the Treasury hopes to help as many as 3 to 4 million homeowners avoid foreclosure regardless of who owns or services the mortgage.

  • Do I need to be behind on my mortgage payments to be eligible for a modification? 

No.  Borrowers who are struggling to stay current on their mortgage payments may be eligible if their income is not sufficient to continue to make their mortgage payments and they are at risk of imminent default.  This may be due to several factors, such as a loss of income, a significant increase in expenses, or an interest rate that will reset to an unaffordable level.   

  • How do I know if I qualify for a payment reduction under the Homeowner Affordability and Stability Plan?

In general, you may qualify for a mortgage modification if (a) you occupy your house as your primary residence; (b) your monthly mortgage payment is greater than 31% of your monthly gross income; and (c) your loan is not large enough to exceed current Fannie Mae and Freddie Mac loan limits.  Final eligibility will be determined by your mortgage lender based on your financial situation and detailed guidelines that will be available on March 4, 2009.

  •  I do not live in the house that secures the mortgage I’d like to modify.  Is this mortgage eligible for the Homeowner Affordability and Stability Plan?

No.  For example, if you own a house that you use as a vacation home or that you rent out to tenants, the mortgage on that house is not eligible.  If you used to live in the home but you moved out, the mortgage is not eligible.  Only the mortgage on your primary residence is eligible.  The mortgage lender will check to see if the dwelling is your primary residence.

  • I have a mortgage on a duplex.  I live in one unit and rent the other.  Will I still be eligible?

Yes.  Mortgages on 2, 3 and 4 unit properties are eligible as long as you live in one unit as your primary residence.

  • I have two mortgages.   Will the Homeowner Affordability and Stability Plan reduce the payments on both?

Only the first mortgage is eligible for a modification.

  • I owe more than my house is worth.  Will the Homeowner Affordability and Stability Plan reduce what I owe?

The primary objective of the Homeowner Affordability and Stability Plan is to help borrowers avoid foreclosure by modifying troubled loans to achieve a payment the borrower can afford.  Lenders are likely to lower payments mainly by reducing loan interest rates.  However, the program offers incentives for principal reductions and at your lender’s discretion modifications may include upfront reductions of loan principal.

  • I heard the government was providing a financial incentive to borrowers.  Is that true?

Yes.  To encourage borrowers who work hard to retain homeownership, the Homeowner Affordability and Stability Plan provides incentive payments as a borrower makes timely payments on the modified loan.   The incentive will accrue on a monthly basis and will be applied directly to reduce your mortgage debt.  Borrowers who pay on time for five years can have up to $5,000 applied to reduce their debt by the end of that period.

  • How much will a modification cost me?

There is no cost to borrowers for a modification under the Homeowner Affordability and Stability Plan.  If you wish to get assistance from a HUD-approved housing counseling agency or are referred to a counselor as a condition of the modification, you will not be charged a fee.  Borrowers should beware of any organization that attempts to charge a fee for housing counseling or modification of a delinquent loan, especially if they require a fee in advance. 

  • Is my lender required to modify my loan?

No.  Mortgage lenders participate in the program on a voluntary basis and loans are evaluated for modification on a case-by-case basis.  But the government is offering substantial incentives and it is expected that most major lenders will participate.

  • I’m already working with my lender / housing counselor on a loan workout.  Can I still be considered for the Homeowner Affordability and Stability Plan?

Ask your lender or counselor to be considered under the Homeowner Affordability and Stability Plan.

  • How do I apply for a modification under the Homeowner Affordability and Stability Plan?

You may not need to do anything at this time.  Most mortgage lenders will evaluate loans in their portfolio to identify borrowers who may meet the eligibility criteria.  After March 4 they will send letters to potentially eligible homeowners, a process that may take several weeks.   If you think you qualify for a modification and do not receive a letter within several weeks, contact your mortgage servicer or a HUD-approved housing counselor.  Please be aware that servicers and counseling agencies are expected to receive an extraordinary number of calls about this program.

  • What should I do in the meantime?

You should gather the information that you will need to provide to your lender on or after March 4, when the modification program becomes available.  This includes:

    • information about the monthly gross income of your household including recent pay stubs if you receive them or documentation of income you receive from other sources
    • your most recent income tax return
    • information about any second mortgage on the house
    • payments on each of your credit cards if you are carrying balances from month to month, and
    • payments on other loans such as student loans and car loans.
  • My loan is scheduled for foreclosure soon.  What should I do?

Contact your mortgage servicer or credit counselor.  Many mortgage lenders have expressed their intention to postpone foreclosure sales on all mortgages that may qualify for the modification in order to allow sufficient time to evaluate the borrower’s eligibility.  We support this effort.

 

 

 

 

 

 

 

 


The Dow Closes Down 382 Points, Down The Most In 3 Months…

By Molly Greaves

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At 11:00 am today, the Treasury Secretary Timothy Geithner, was scheduled to announce the Obama Administration’s new bank bailout plan.  Earlier, U.S. stock futures were trading lower as investors prepared for details on the new financial rescue plan. When Mr. Geithner began his speech, the Dow was down about 80 points.  As he unveiled his plan, taxpayers and investors listened closely, and many followed the Dow’s movement to see Wall Street’s reaction in real-time.  Not liking what Geithner had to say, stocks fell sharply after the plan was outlined, and the market was down over 280 points by the time he was finished, even though the market had yet to reach the bottom.

 That’s because also today, Federal Reserve chairman Ben Bernanke took the helm and appeared in front of the House Financial Services Committee. He was scheduled to talk about the moves the Fed has taken to deal with both the credit crunch and with the recession while also addressing whether the Fed should continue to have as much powers over the economy. By the time Mr. Bernanke was done speaking and answering questions from lawmakers, the Dow dropped another 100 points!!

 Meanwhile, Wall Street was also having a hard time swallowing the $838 billion stimulus package that was passed by the Senate today. “The markets weren’t impressed,” said Fox Business News Stocks Editor, Elizabeth McDonald. And understandably so. $838 billion is some serious money, wouldn’t you agree?

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Did you know that if you had spent $1 million PER DAY from the time Jesus was born, up until now, you still would be less than ¾ of the way to a trillion dollars?!  I’m not kidding! Let’s do the math…

 $1million x 365 days per year = $365 million per year

 $365 million x 2,000 = $730 billion

 (The number 2,000 is used assuming Jesus was born 2,000 years ago. I used this number to make math easy, and to help you really grasp your mind around what a trillion really is)

 $730 billion is 73% of $1 trillion, which is less than ¾ of a trillion. Yikes!

 Guess what else? With the stimulus amount that was passed through the Senate today — all $838 billion of it — being equal to almost 84% of $1 trillion, that is the same thing as spending a $1 million per day for 2295 years. That’s 295 days in addition to our example above!!

It’s no wonder with all this spending and low confidence that the market plummeted. With all of that said, the market closed today at 7888.88, down 4.62 percent or 381.88 points.  This is its lowest point since Nov. 20, the date considered by many experts to have been the low of the bear market. Hopefully tomorrow the market we’ll be back over 8000 again.

 

 

 

 

ADULT SPELLING BEE IN AUSTIN!

By Molly Greaves

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Always thought you were the best “speller” in your class, or even in all of Texas?!   Now you can put yourself to the test! Yippee!!

See below for information for the 6th Annual Great Grown-up Spelling Bee. This is put on by the Literacy Coalition of Central Texas. 

  

AUSTIN’S 6TH ANNUAL GREAT GROWN-UP

SPELLING BEE
FOR LITERACY 

Thursday, April 9th, 2009

11:30 AM – 1:00 PM 

Location: Austin Music Hall
208 Nueces Street
Austin, TX 78701

A uniquely funky Austin event, the Spelling Bee not only supports an important cause, but has also gained a reputation for being an uproariously fun event. The 2009 edition is our 6th Annual Spelling Bee, and is sure to entertain both spellers and observers alike!

 Join us for Lunch and Laughs!

 

Tickets for the 2009 Great Grown-Up Spelling Bee are $50 per person ($25 non-profit rate) for lunch and spelling lunacy! 

$500 for a Bee Hive Table (table for 10)!  Click here to go to their site!  OR call 512-320-4505

Gov. Rick Perry Delivers the State of State Address for Texas

By Molly Greaves

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Today I went to the Capital and watched Gov. Perry deliver his State of State Address.  With my bright and early arrival, I was able to score a seat in the front row.  

Above you can see the standing ovation Perry received as he entered the room. He got warm a big Texas welcome from most, but not all as you know how politics go… you either love ‘em or hate ‘em. 

Read below to get the speech or click here to watch it for yourself. It’s about 49 minutes.  ENJOY!

“It is truly an honor for me to be here with you today.

Lt. Governor Dewhurst, it is a pleasure to share this stage with you as we begin another session together.

Speaker Straus, congratulations on your new role and the affirmation of your peers it implies.  Like we have in the past, I look forward to working with you in the months to come.

Julie, you may have thought your life was busy before, but it’s about to go to a whole new level…just ask Nadine.

Speaking of which, I want to take a minute to recognize my good friend, Tom Craddick. He and Nadine are stuck at home in an ice storm, but they deserve our heartfelt thanks for their faithful service to the state.

I also want to thank my parents for joining us today. Thank you for giving me life and for teaching me the value of hard work, public service and compassion for others.

Finally, I want to acknowledge my inspiration, my counsel, my best friend, and the love of my life. She’s also your First Lady, Anita Perry. Anita, I wouldn’t be where I am today without you. Thank you for your support and love.

As I look out across this historic chamber, I see the faces and recall the memories of so many leaders, past and present, who devoted their lives to serving our beloved state. Together, we have made Texas a better place.

Here in this room, we sit side by side, Democrat with Republican, from urban districts and rural, different in so many ways, but united by a common goal: doing good for Texas.

We are blessed that the state of our state is strong. However, during this session, we can do the most good by working to minimize the impact of the global economic crisis on the people of Texas.

Over the course of this session’s remaining 126 days, we might define the word “good” a little differently or diverge on how to get it done, but I have no doubt that each of us is committed to doing what’s best for a state we love.

We must never forget that we were put INSIDE this building to serve those OUTSIDE this building. May we never lose touch with these flesh and blood Texans, people who are focused on working hard, stretching a paycheck, and raising their children.

As we work on their behalf, we may disagree, and sometimes disagree vigorously, but when the day is done, we’ll hammer out the details and we’ll make things happen, Texas-style, by putting the people first.

We saw that mindset portrayed in our state’s remarkable response to three hurricanes this past year.

Those catastrophic storms affected millions of Texans, including people sitting here today, like Senator Mike Jackson and Representative Craig Eiland, whose homes were damaged by Ike, and their peers from the Valley who have worked so hard to help their districts recover.

Once the storms passed, we saw neighbors helping neighbors, volunteers with chainsaws clearing debris, and charitable organizations working ‘round the clock to help their fellow Texans.

One of those groups was Somebody Cares America, a Houston-based group whose volunteers worked tirelessly to bring thousands of meals and even hot showers to Texans whose lives were turned upside down by Hurricane Ike.

Joining us today is the leader of this organization, Dr. Doug Stringer. Please join me in recognizing his leadership. Doug’s group and countless others like them showed the world how Texans respond to a crisis: we roll up our sleeves; we make tough choices, and put people first.

As leaders and Texans, it’s our turn to demonstrate those same qualities as we confront the greatest challenge facing our state, the national economic crisis, a situation unlike anything most of us have ever seen in our lifetimes.

Every day, we hear more stories from across the country of jobs lost, plants closed, and homes on the auction block. As shockwaves of this crisis begin to resonate in Texas, we’re reminded that we’re not immune to these forces, yet we’re still in better shape than most other states.

I credit our relatively strong economic condition to tough, principled, decisions made in this building over the past three legislative sessions.

It was only six years ago when the 78th Legislature kicked off with a $10 billion budget shortfall.

To our shared credit, we didn’t raise taxes like so many other states did then…and are again contemplating today. Instead, we tightened our belt, made spending cuts where we could and focused on key priorities, never forgetting that it’s not OUR money we spend here; it’s the taxpayers’.

Many of you remember those fiery spending debates of years past, so you’ll be ready for some equally challenging conversations in the days to come.

All across the country, states are hiking sales taxes, they’re slashing education spending, preparing to pay state employees with IOUs, and begging Washington DC for a bailout.

Because we took a different approach back then, we know it’s better to control spending to make government less burdensome, as a way to free up the economic power of our citizens.

We know the benefit of legal reforms that stem the tide of frivolous lawsuits, while attracting an army of skilled doctors to Texas, and improving access to healthcare across our state.

We continually fine-tune our regulatory climate, increasing predictability and fairness for employers, while protecting our citizens and our natural resources.

We also invest in proven economic development efforts like our Enterprise Fund, our Emerging Technology Fund, and Film Incentives which target an industry that has brought more than $1.2 billion to our economy over the past ten years.

In short, our refusal to continue business-as-usual has made life better for Texans, like those working in the 1.2 million net new jobs created since 2003, the vast majority of them in the private sector.

Considering the fact that Texas had only added about 300,000 jobs in the five years prior to 2003, our efforts clearly strengthened our economy.
As it stands, our state now leads the nation in exports, Fortune 500 companies, and job creation.

From November 2007 to November 2008, roughly 70% of the jobs created in the U.S. were in Texas.

Think about that for a moment.  Our state is home to one out of ten Americans, but seven out of ten new American jobs were created here in the Lone Star State.

Even in these tough times, more jobs are heading our way.

Cooper Tire is bringing 250 new positions to Texarkana, into Senator Eltife and Representative Frost’s district.

Martifer Energy has pledged 225 jobs in San Angelo, which will help things in Senator Duncan and Representative Darby’s neck of the woods.

Caterpillar is moving 1,400 new jobs to Seguin, to energize the economy represented by Senator Wentworth and Representative Kuempel.

I would like to recognize Mike Coolidge, a generator technician for Caterpillar here in Texas, who is up here with me today. Mike, would you stand and be recognized?

Mike represents the 1,400 other Texans who will have the chance to work hard and feed their families in the coming months as a result of our state’s economic development success.

I’m confident CAT won’t be the last employer to identify Texas as the best place to grow a business, invest capital and create new jobs.

As we celebrate our relative strength and welcome these new jobs to Texas, we cannot lose sight of the global financial situation and what it may mean for us in the months to come.

As we wrestle with lowered revenue estimates, we must stay committed to the proven policies that have brought us so far, and resist any calls to panic.

There are those who say we should crack open the Rainy Day Fund and pour it out on every need that presents itself. Others say we should just hunker down, save every penny we have, and stay curled up in the fetal position ‘til this one blows over.

Now, I’m a big believer in conservative fiscal approaches… but that doesn’t mean it’s time to play defense. Texas is strong because we aggressively play offense.

In tough times, others see threats; Texans see opportunity.

For example, the nationwide struggles are creating a buyer’s market for economic development, so let’s be bold and win even more jobs for Texans.

When other states are raising taxes, their businesses will be looking elsewhere for tax relief. Let’s make sure they find it in Texas.

When other states are driving companies away with suffocating layers of regulation, let’s welcome them with fewer obstacles.

When other states are bonding additional debt for daily operations, let’s invest wisely to create even more jobs and opportunity.

We should start by replenishing the Emerging Technology Fund, our Film Incentives and the Enterprise Fund, to keep drawing ideas, investment and jobs to Texas.

Together, we’ve invested $377 million with the Enterprise Fund since 2003, creating nearly 54,000 jobs for Texans while drawing $14 billion in direct capital investment to our state.

These jobs have gone to both urban and rural areas, from the Metroplex to the border, from the Piney Woods of East Texas to El Paso, providing for families and strengthening communities.

As we work to enhance our economy, we also need to take a close look at the reformed business tax we implemented a few years ago.

With one collection cycle under our belts and plenty of feedback from both the Comptroller and business owners, we know enough now to improve it. The question is how.

I would support raising the small business exemption to $1 million, and I’m looking forward to hearing from folks like the House’s Jim Keffer and John Otto as well as Chairman Ogden about the best way to protect small businesses.

Our guiding priority must be shrinking, not expanding, the burden on the small businesses that are the backbone of our economy. Let’s free up our entrepreneurs to keep doing what they do best, creating wealth, drawing investment and generating the jobs needed by our growing population, one the Census Bureau tells us is averaging 1,000 new Texans per day.

As more people move here, will our economy continue to grow? Or will we let taxes and regulatory encroachments creep upward to choke off innovation? I say we hold the line.

Will they find their property taxes spiraling continually upwards because of a broken appraisal system? I say we give that system a dose of accountability, transparency and restraint.

Will they find themselves stuck in traffic and paying too much for dwindling supplies of power and water? Not if we act to upgrade our state’s overburdened infrastructure.

Will they be left behind by the demands of an increasingly high-tech economy? Let’s improve education in our state at every level to help them compete in any arena.

To reach our goal of ensuring every student graduates from Texas high schools with a strong foundation in math, science and English, we owe them three things.

First, they deserve the best teachers.  Nothing matters more to student success than having an excellent teacher in every classroom.

That is why we worked so hard to create the largest teacher incentive pay program in the country, one that will pay out more than $147 million to teachers and staff by the end of this school year. This is a program we must continue.

Second, we must hold our schools accountable for student performance.  As you consider changes to the accountability system, make sure it keeps moving students along the path to graduating “college and career ready” while keeping parents and taxpayers informed on their district’s performance.

Third, let’s keep improving our math and science education, and continue preparing our young people, especially low-income and minority students, for a productive life after high school.

Since we first created the Texas High School Project to improve graduation rates of disadvantaged students, this program has created 32 academies that focus on science, math and technology, along with several early college high schools on community college campuses, whose best practices are being shared across the state.

Our ongoing commitment to supporting teachers, holding schools accountable and improving outcomes for minority and underprivileged students has made a huge difference.Let’s continue that momentum and give our children the gift of even stronger educational outcomes.

One approach is to update our laws and regulations to help schools benefit from evolving educational technologies. For example, we should allow school districts to purchase electronic versions of the text books that have been approved by the State Board of Education.

This will allow flexibility as educators move our children along the path to graduation and the next step in their lives.

For many young Texans, that next step is college. Let’s work together to make college accessible and affordable for more qualified, motivated students than ever before.

I propose increased funding for the Texas Grant Program, an initiative I pressed for as Lt. Governor, that has opened the door for traditionally underserved Texans.I like this approach because it not only knocks down a barrier between hard working students and the success they desire, it also keeps our college classrooms supplied with students who are motivated and prepared to succeed.

I also propose freezing a student’s college tuition rates for four years at the level they pay as an entering freshman. This will help Texas families plan while giving students another incentive to finish on time.

We must continue removing roadblocks for young Texans wanting to pursue higher education, whether they enroll straight out of high school, or choose to serve their country in the military first.

I’m talking about service members like the ones joining us here today in the front of the chamber, visiting from Brooke Army Medical Center. Please help me recognize our wounded warriors here today.

They represent the countless young Americans who have gone in harm’s way in defense of freedom throughout our nation’s history.

These veterans, who now spend their days recovering from injuries sustained while serving our country, deserve the best our state has to offer, as do all veterans who have served our country.

In appreciation for their service, I share Senator Van de Putte’s belief that we should extend in-state tuition rates to all veterans, regardless of their home of record.

This approach would not only express our heartfelt gratitude for their selfless service, it would also enrich our colleges and our workforce with the leadership, motivation and experience gained during military service.

Any discussion of higher education must include our community colleges and proprietary schools.

Every year, these institutions turn out students who are prepared to succeed in the completion of their four-year college degree, as well as folks ready to work in the trades that contribute so much to our quality of life.

I agree with Comptroller Combs that we should significantly increase our investment in community colleges.

Besides being anchors to their local communities, these schools are ideally positioned to educate a growing population of workers that have either been displaced by the current economic turmoil, or have job skills that have been outpaced by rapidly-evolving technology.

I suggest we tackle this challenge with an expansion of the Workforce Commission’s Skills Development Fund and its training partnerships.

Since its creation in 1996, the Skills Development Fund has helped 3,000-plus employers train more than 200,000 workers in essential workplace skills.
Given the rapidly growing need for this type of retraining, I strongly urge you to increase the Skills Development Fund, and invest in the Texas worker of tomorrow.

At the same time we strengthen our community colleges, we can also champion changes that will improve our four-year universities. Let’s apply the power of incentives by rewarding universities that increase the number of students they graduate.

This is just one way to continue improving higher education in Texas as we work to achieve and maintain a competitive edge in the global marketplace well into the future.

As we turn our eyes toward that shared future, we must continue focusing on the things that government is supposed to do, provide for the additional transportation, electricity and water infrastructure and resources our state needs to grow and prosper.

Ask yourself, will the decisions we make in this session ensure your children and grandchildren have the resources they need to thrive in Texas?

When they turn on the faucet, will clean, affordable water flow?  Let’s answer that question before this session ends and make it a resounding yes.

Make this 81st Session memorable as the moment when Texas finally invested in your water plan that is well-researched and locally-developed…but not-yet-funded.

Let’s ensure that our citizens, our children and grandchildren, have access to this most vital of resources for the next fifty years.

Let’s also make sure that, when they flip a light switch, the lights will come on and stay on. Let’s not leave a legacy of rolling blackouts because we didn’t keep pace with our power infrastructure.

The best long-term method for controlling utility costs is not to centralize control of rates, but to diversify the supply of energy…and keep taxes lower.

Fortunately, we’ve been successful in lowering the taxes our citizens pay on some utilities. By modifying the universal service fund in ’05, we are saving telephone ratepayers millions,  and Texans have saved $600 million on telephone charges because we listened to Speaker Straus and eliminated the TIF tax.

When we combine lower utility taxes with increased, diversified production, we will preserve our role as the nation’s energy leader.

Unfortunately, our strength in petrochemical production and refining makes us a big target on the radar of an increasingly activist EPA, whose one-size-fits-all approaches could severely harm our energy sector; an agency whose potential to harm our state with punitive actions will only increase in the months and years to come.

Rather than wait for more mandates and punishments for environmental non-attainment, let’s continue encouraging innovation.

I support giving Texans in the non-attainment areas of our state a $5,000 incentive towards a purchase of Plug-In Hybrid Electric Vehicles, using the funds Texans have already paid to reduce emissions, while providing a unique way to store wind energy.

This will keep Texas competitive in an emerging technology and take advantage of an energy portfolio that grows deeper and more diverse every day.
Texas has been taking an all-of-the-above approach to energy, increasing our affordable supplies of traditional energy sources, as well as wind, solar, bio-fuels, and nuclear, as a way to bolster our economy and move us closer to energy independence.

Texas is leading a national renaissance in nuclear power.  With six potential new reactors on the drawing board, we need to encourage the production of this clean and reliable form of energy.

Texas has a huge opportunity in bio-fuels if we’ll continue leveraging our state’s energy expertise while avoiding use of food crops for energy, a practice that harms our farmers and ranchers, and drives up the family grocery bill.

Of all the renewable energy sectors, our biggest success story is in wind. Texas not only leads the nation in installed capacity, we have more wind-generated megawatts than all but three countries.

As with all electricity, however, one of our biggest challenges is getting the power from the source to homes and businesses where it is needed.

So whether it’s West Texas wind or nuclear power from South Texas, we need to build out the transmission and distribution lines, streamline the regulations, and cut the red tape, so we can move this power to where it’s needed.

As is the case with most infrastructure needs, eminent domain will play a role in this effort.

Let’s resolve the eminent domain issue once and for all in this session, so that Texans will not only have clarity, but also a strong defense of the private property rights we all hold so dear.

While we’re at it, let’s provide an added measure of security for our landowners by putting it into the Constitution. Senator Duncan and Representative Orr, I appreciate your willingness to run point on this important issue.

In these times of global unrest and porous borders, security remains a top priority, especially in light of Washington’s ongoing failure to provide the resources necessary to secure our border, or implement a sensible immigration policy.

I’m hopeful that my fellow border governor from Arizona will bring a better approach in her new role as Secretary of Homeland Security. However, until we see results, Texas will continue filling the leadership void created by Washington DC and investing in the safety of our citizens with our own border security effort.
From 2005 until September 2007, my office cobbled together roughly $38 million which we used to ramp up security along our border.

Based on the success of these efforts, you invested $110 million in Operation Border Star in 2007. In doing so, you not only funded more personnel, but also provided assets like aircraft and patrol boats, as well as better technology for communications, data management and coordinated efforts.

Joining us today are representatives of the team protecting our border. Will you please stand and be recognized? They represent the hardworking men and women who work together to fight crime, including the Texas Border Sheriff’s Coalition, the Brownsville Police Department, the Department of Public Safety, Texas Parks and Wildlife, Texas Military Forces, and the U.S. Border Patrol.

Thank you for working so hard to keep Texas safer.

As a result of your efforts and their deterrent effect, illegal alien apprehensions in Texas have dropped 47% since 2005. Crime has also fallen as much as 65% in areas that smuggling cartels previously treated as their personal playground.

Those are signs of great improvement, but we need to keep the heat on by renewing funds for our border efforts, especially in light of the growing drug and gang-related violence in Mexico. It is already spilling into communities across the state in the form of increasingly brazen transnational gangs.

Because we have seriously hindered the Mexican drug cartels’ ability to move contraband across the border, they are relying with increasing frequency on these unprincipled gangs to do their dirty work.

Originating in foreign countries and taking shape in our prisons, these gangs have been radiating outward into our towns, schools and neighborhoods, applying terror tactics to build their influence.

Joining us here today are State Troopers John Cox and Chad Foster, who were recently on the receiving end of gunfire while protecting our state from those threats, including gang members. Would you please stand and be recognized?

Gentlemen, thank you for standing between the law-abiding citizens of our state and those who would do them harm. I also want to thank Senator Carona for his efforts to bring attention to the serious threat these gangs pose to our state.

I agree it is time to act and believe we should devote the necessary resources, just under $32 million, to properly address this gang threat head-on, in communities across the state. These funds would be used to pay more officers, provide better coordination of multi-force efforts and fund prosecutions for gang-related offenses.

As we continue to strengthen our border, we must also consider the essential role that federal immigration policy, or the lack thereof, plays in the safety of our citizens and integrity of our state.

After revelations that a Dallas man had set up a cottage industry procuring Texas driver licenses for illegal aliens hailing from countries around the world, I am an even stronger supporter of the DPS initiative to issue specialized, vertical driver licenses, to identify those who have overstayed their visa.

I also support an end to the notion of sanctuary cities. Local government sends the wrong message when they pick and choose what laws they want their peace officers to enforce.

I believe we should also require the same identification procedure for voting that we require for voter registration. I commend Lt. Governor Dewhurst for his longstanding leadership on this issue. A democracy without proper protections against voter fraud cannot preserve the public trust.

We should also track the citizenship status of those receiving state-funded services so we can get our hands around the financial impact of Washington’s failure to handle the immigration challenge.

Some may oppose these efforts, but they are commonsense approaches to protecting our citizens’ lives and resources, as well as our state’s integrity.

Although we are maintaining a more secure border and preparing to combat the growing gang threat in our cities, there is nothing we can do to divert the storms that hammer our coast. The financial impact of the 2008 storm season was unprecedented in Texas history.

Our experience in the aftermath is a reminder that we cannot rely solely on the federal government and the good intentions of FEMA, but we know we can move a whole lot faster than they can.

We simply cannot, in good conscience, allow our citizens to shiver in a tent or sweat in the sun as Washington drags its heels on housing and reimbursements. To that end, let’s create and fund a disaster contingency and relief account, that gets locals the resources they need when they need them, so they can respond immediately to storms, wildfires and other disasters.

This fund could also pay for other approaches we have pioneered, like the buses we hire to move thousands of Texans out of the path of approaching storms.

As we consider ways to protect our citizens, I would ask you to consider if we’re doing enough to improve their lives. For example, Texas obesity rates are well above the national average and the negative effects are spreading.

Comptroller Combs and Commissioner Staples are right. If we don’t tackle this problem, not only will this generation of children be the first to have a shorter average lifespan than their parents, we will never get a handle on the costs of preventable diseases like diabetes, heart disease and even some forms of cancer.

Let’s address obesity where it will make the most difference, most quickly: with our schoolchildren. Texas should take the lead on testing an incentive-based fitness program like those gaining popularity in the workplace.

As we consider detriments to our quality of life, let’s not forget the looming specter of cancer, a disease that still takes the lives of more than 34,000 Texans every year.

We did a good thing in the last session when we authorized the referendum championed by Representative Rose and Senator Nelson. Texans agreed with you when they approved the Cancer Prevention and Research Institute of Texas in a statewide vote.

Now it’s time to take the next step by covering the Institute’s startup costs so researchers can get to work , move us closer to a cure, and accelerate our state’s ascendance as a leader in biotechnology.

This rapidly-growing field is of particular interest to Texans, both economically and in terms of discoveries that improve and save lives. Biotech innovations in our state include discoveries in the area of adult stem cell research that are showing great promise. For example, the folks at the Texas A&M Health Science Center will begin trials on diabetes treatments later this year in Waco.

Let’s get Texas in on the ground floor and invest in adult stem cell research, the one area of that field that is actually proven to expedite cures. Expertise in this emerging and increasingly promising field will not only bring healing to the suffering and create jobs for Texans, it will also establish an appropriate firewall protecting the unborn from exploitation.

I am grateful to Senator Nelson for stepping to the front on this issue.

As we consider the growing threats to our nation’s unborn, I believe it’s time to add another layer of protection for the most vulnerable Texans. I hope you will join me in supporting Senator Patrick and Representative Corte’s effort to require those wanting to terminate a pregnancy to review their ultrasound before proceeding.

Issues of this complexity and moral weight are the sort of thing that we are sent here to address. As we wrestle with such issues in the 126 days left ‘til Sine Die, I know that our values, patience and resolve will be tested, but I’m confident in our prospects for success, because I am confident in the people who elected us.
As we serve them, let’s not forget the principles that have brought our state this far.

I am convinced that the fiscal discipline we exercised together over the past few sessions has left us in much better shape than other states. Let’s build on our shared record of success and press on to do even more to protect our citizens’ families, jobs and rights.

For example, the time has come for a frank conversation about spending limits that should culminate in a constitutional amendment. I’m a firm believer that limiting the growth of our budget to the combined growth of inflation and our population is appropriate.

I also hope we can build on the success of our transparency efforts by calling for more of it, including from our institutions of higher education and municipalities all across the state. Judge Self and the folks in Collin County showed it’s possible when they took it upon themselves to put their books online.

The companion to transparency is truth-in-budgeting, so let’s work together to further reduce the number of diversions in our budget. We should only spend tax dollars on the express purpose for which they were collected.  That’s what Texans expect and that’s what they should get.

Let’s show it can be done in this session by shifting funding for the Department of Public Safety back into general revenue. This will free up existing gasoline tax dollars to fulfill their original purpose: the construction and maintenance of our state’s roads.

As you go about your business in the next few months, you may be tempted to dip into our rainy day fund. If you do, let’s limit our use of those funds to significant one-time expenditures, not recurring items.

That approach will preserve the gains that underlie our economic health, and enable us to keep doing the good I discussed as I began my time with you today.

To me, good is giving Texans access to a quality education, good-paying jobs and the chance to keep more of what they’ve earned for their own families.

Good is a community safe from crime, blessed with clean air and water, where families spend time together at the dinner table or the sports field, not stuck in bumper-to-bumper traffic.

Good is a state where people are free to worship their god in the manner of their choosing, passing to their children an inheritance of sound values and living out their life in peace.

As we work in this historic place and serve the people who sent us here, I hope we will continually strive for the good, take part in passionate yet civilized debate, and never let the flame of our passion dwindle.

For we still live in what I consider the greatest state, a land settled by visionary risk-takers, replenished in every generation by individuals who carry our state’s heritage of selfless service as their charge.

I speak of individuals like Regan Hunt, an Eagle Scout from Austin who risked his own life to save five others from drowning in an Idaho canal. Regan, please stand for a moment and let these folks join me in thanking you for being with us here today. You are a shining example of the courageous, selfless spirit that makes Texas great.

As we are told in Scripture, “Let us not become weary in doing good, for at the proper time we will reap a harvest if we do not give up.”

And reap that harvest we shall…and we shall reap it together.

Because, ladies and gentlemen, the State of our State is good.  Her character is strong and her people are great, and I believe now, more than ever before, that our best days are yet to come.

May God bless you and, through you, may He continue to bless the great state of Texas.


UNEMPLOYMENT HITS RECORD HIGH IN U.S.

By Molly Greaves

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The number of people collecting unemployment in America hit a record high of nearly 4.78 million last week.

The week ending Jan. 24 saw a seasonally adjusted 588,000 new unemployment claims, 3,000 more than a week earlier, according to the U.S. Department of Labor.

In Texas, the unemployment rate was at 4.2 percent in December of 2007, 5.7 percent in November of 2008 and 6 percent last month.

The national unemployment rate rose to 7.2 percent in December, up from 6.8 percent the previous month and from 4.9 percent a year earlier.

AUSTIN RANKS #11 FOR FOREIGN REAL ESTATE INVESTORS

By Molly Greaves

austonian

Sunday through Sunday construction is taking place all around the streets of Austin. Locals love it here as do non-locals, including real estate investors.  Investors from all over the globe are buying our real estate. Some of these folks are calling Austin their home, while others are buying up our real estate purely for investment, and may never even come to Austin if you can imagine that.

So many people are now buying in Austin for investment, that  Austin ranked 11th for  top cities for U.S. and global investment in 2009 according to the report from the Association of Foreign Investors in Real Estate.

Washington D.C. clinched the No. 1 spot on the ranking. New York is next, followed by San Francisco, Los Angeles and Houston for the top five. Austin’s 11th place standing tied it with Las Vegas, Phoenix, Orlando, Atlanta, San Diego and San Jose, Calif.

Survey respondents said the multifamily sector was the preferred property type for investment dollars, followed by office, industrial, retail and hotel properties. In the two previous years, office investment ranked first, but employment instability likely contributed to the flip-flop.

Click here to read the full article from the Austin Business Journal

HOME SALES UP NATIONWIDE

 

By Molly Greaves

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According to the Austin Business Journal, the number of foreclosures may be up, but there are people out there buying too.

Sales of previously owned homes rose 6.5 percent to 4.74 million last month, up from 4.45 million in November, according to the National Association of Realtors.

And while sales are up, prices continue to go down.

Nationwide, the median sales price fell to $175,400, down 15.3 percent from $207,000 a year ago.

GOING GREEN? THEN TAKE THE RED…LINE THAT IS.

By Molly Greaves

 

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Going Green? Then take the Red…Line that is.

I’m happy to note that the Capital Metropolitan Transportation Authority has released a tentative schedule for its new commuter rail service, the Capital MetroRail, aka the Red Line.

The Red Line will run on 32-miles of existing freight tracks between Leander and Downtown Austin.

Practice runs of the service will begin Feb. 12 along the entire 32-mile rail line and regular service is expected to begin in March! Frequency will be every 30 minutes.

Get this, “Sleek, new trains will take you to work in comfort and style, providing you with high-back seats, bicycle and overhead racks, and Wi-Fi connections. Capital MetroRail will offer service during morning and afternoon peak hours. Local routes and rail connector routes will whisk you to your final destination.”

 

Features

  • Holds 200 Passengers, 108 seated
  • ADA accessible
  • Bicycle racks
  • Tables or pull-down trays
  • Luggage racks
  • WiFi service
  • Automated station announcements
  • Message boards with real-time passenger information
  • Travels up to 75 mph

 

Finish this article and get the complete schedules by visiting the MetroRail’s website  here .

See you there!

Capital MetroRail Red Line.ai

Report outlines decline in Texas construction

By Molly Greaves
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According to the Austin Business Journal today, they report that Texas is expected to experience a considerable slowdown in construction activity in 2009, according to a report issued by McGraw-Hill Construction.

The outlook for the coming year calls for construction spending of roughly $54.4 billion in Texas, down 13 percent from 2008, the report indicates. However the building of the giant Motiva and Valero refineries in Port Arthur that created 5,000 jobs buoyed the numbers in 2008.

McGraw-Hill researchers forecast that construction of housing units will drop 4 percent statewide in 2009, surpassing the 3 percent national decline. But population growth, cost advantages and the relative buoyancy of the Texas economy should help the state recover more quickly than the rest of the nation in the residential sector when demand improves.

Finish the story here!