Economy & Business

Economy & Business news from 90.5 WESA.

After two months of debating, approving, disapproving, and more debating, it seems like the mayor's office, City Council, and the Intergovernmental Cooperation Authority have all agreed on a plan for Pittsburgh to borrow a hefty $80 million.

It's the largest bond floated in city history, and the first new debt issued since Mayor Luke Ravenstahl took office. Pittsburgh City Councilman Bruce Kraus said it's necessary to pay for much-needed capital improvement projects.

Home Sales Leveling Out in Region

Jan 23, 2012

After years of declining home sales, it appears as though the housing market in Southwestern Pennsylvania is stabilizing.

In a report released Monday, the analysis group RealSTATs said the regional residential market declined from 2010 to 2011, but only by eight homes.

"In reality, the market would be more flat than declining," said RealSTATs Vice President Daniel Murrer. "What we envision in 2012 is that the number of home sales should pick up, based on what we saw in the last few months of 2011."

Pittsburgh Credit Rating Upgraded

Jan 20, 2012

Following a trip to New York City aimed at encouraging international bond rating agencies to upgrade Pittsburgh's credit rating, that very thing happened. Moody's upgraded the city from an A1 negative to A1 stable rating and Standard and Poor's upgraded the city from BBB negative to BBB stable.

"For the city and the taxpayers, this means that either their borrowing costs will remain the same or be improved. Either way it's a net plus for taxpayers," said Pete Schlict, financial advisor with Janney Montgomery Scott.

Independent Fiscal Office Offers First Report

Jan 20, 2012

Pennsylvania's Independent Fiscal Office is linking the state's poor economic showing at the end of 2011 to state and local government job layoffs. The opinion is part of the group's first report.

Pennsylvania Housing Alliance Rejects State Funding Cuts

Jan 18, 2012

Following the state's budget cut of $160 million dollars this month, the Housing Alliance of Pennsylvania said the Corbett Administration is being foolish. Liz Hersh of the Housing Alliance said the statewide freeze hit housing programs hard.

$19.5 million was from the state's homelessness assistance program. $2.5 million dollars is now gone from legal aid to help people stay in their homes.

Hersh said the latest cuts confuse expenses and investments.

PNC Q4 Earnings Dip

Jan 18, 2012

Fourth-quarter earnings for Pittsburgh-based PNC Financial Services Group fell more than 40 percent, according to the bank's quarterly report. Net profits dropped to $451 million, or 85 cents a share, from $798 million ($1.50/share) one year ago.

"PNC had a solid year of accomplishments in a challenging regulatory and economic environment," said PNC Chairman and CEO James E. Rohr.

Overall profits for 2011 came in under $3 billion, a decline from last year's $3.01 billion.

Regulatory matters

A survey by the National Federation of Independent Business (NFIB) reports small business optimism rose nationwide in December for the fourth consecutive month. While the NFIB's Optimism Index gained 5.7 points since September, it is still 6 points below the pre-recession average.

Given ongoing struggles with Pittsburgh's pension funding, the Allegheny Institute for Public Policy decided to examine how the other 129 municipalities in the county are faring with their plans. Using the most recent pension plan data available, which was from 2009, the institute found that overall, smaller municipalities were doing quite well, with only three of the plans funded below 50 percent.

At the House Democratic Policy Committee's public hearing on job creation on Monday, many speakers called on legislators to pass a bill to fund transportation infrastructure investments.

Frank Snyder, the Secretary-Treasurer of the AFL-CIO, said that not only do roads and bridges need repair, but many other kinds of infrastructure could be improved as well. He pointed to the hundreds of dams in Pennsylvania that are structurally weak, and said that thousands of jobs could be created by strengthening such water infrastructure.

Calls for help through the Low Income Home Energy Assistance Program (LIHEAP) have been down so far this heating season compared to recent years. That's likely due to the slow start to winter. The milder temperatures have helped ease concerns that the program would run out of money before the end of the heating season, due to federal funding cuts.

Gas Industry: State Should Be Sole Regulator

Jan 9, 2012

In a speech made in Washington, D.C. last week, the leader of the American Petroleum Institute said that the industry wants state governments to be the sole regulators of shale gas exploration, production, and supply.

API President & CEO Jack Gerard said that putting several strata of regulation on energy companies is redundant.

Governor Tom Corbett has signed a law that expands the Pennsylvania Insurance Department's authority to review and disapprove rate increases in the small group market. Previously, that was out of their hands. Large commercial insurance companies that deal with big businesses are still outside the scope of their authority.

Unemployed Workers Rally for Extension of Benefits

Jan 6, 2012

In an effort to raise awareness for the end of unemployment benefits for 40,000 Pennsylvanians, the Mon Valley Unemployed Committee rallied in downtown Pittsburgh on Friday afternoon.

"Most people think that extended benefits will be continued until the end of February, and if there is another renewal on the federal level, they will continue to receive extended benefits," said Antonio Lodico, co-Director of the group. "In reality, everybody with unextended benefits, which we estimate to be over 40,000 Pennsylvanians, will be cut at the end of this month."

Selling Pennsylvania to Europe

Jan 3, 2012

Governor Tom Corbett will lead a trade delegation to Europe in the spring of 2012, the governor's office announced this month. A group of business and government leaders will travel to Germany and France in March in an effort to boost Pennsylvania's export markets and lure European investors to the state.

The tax forms in Pennsylvania for 2012 will feature a new line item intended to collect a "use tax" that has been on the books for more than a half century, but has recently become a problem.

The use tax has been part of the tax code since 1953, but has grown into a larger issue as online shopping has become a bigger percentage of the retail market.

Elizabeth Brassell, a spokeswoman for the Pennsylvania Department of Revenue, said that with the growth of online shopping, the state misses out on a large amount of collectable dollars annually.

Millions of Federal Stimulus Dollars Going to Community Lending Oganizations in PA

Jan 3, 2012

The state's economic development arm says that it took a unique approach to sending out the most recent round of federal stimulus money to small businesses: it's about to give $29.2 million federal dollars to community lending organizations.

Pennsylvania Department of Community and Economic Development Secretary, Alan Walker, said this is an uncommon approach.

The Cost of Pennsylvania's Debt

Dec 28, 2011

At this time of year many of us add to our personal debt, pulling out that plastic to purchase holiday gifts. State officials are also thinking about adding to Pennsylvania's debt as lawmakers work through the 2011-2012 capital budget. They won't boost the debt by using a credit card, but rather through borrowing for capital projects by floating bonds.

Pennsylvania has a Double A bond rating, the second highest possible. But the question lingers: is it a good time to borrow?

PNC: 2011 Struggled but Grew

Dec 28, 2011

The 2011 economy might look different depending on your personal situation, but from where PNC Chief Economist Stuart Hoffman is standing, it was a relatively good year.

Hoffman said that the US economy overcame, but just barely, several hurdles: "Struggles and challenges coming out of Europe, much higher gasoline and energy prices through the first half of the year, a lack of any action in Washington to deal with the fiscal deficit."

State Efforts Underway to Help Returning Iraq Veterans Find Jobs

Dec 26, 2011

With the official conclusion of the Iraq War, local officials have made much of Pennsylvania's efforts to help returning service members come back into the civilian workforce. The state's Civil Service Commission held a recruiting event specifically for military veterans earlier this month. About 150 people showed up for information and advice.

Veterans face many challenges when returning from combat. One of the first steps to finding civilian employment is to get veterans to cut the shorthand out of their speech.

Apparently "what's on the inside" doesn't really count, at least when it comes to product choice. A recent study from a team of market researchers found that when it comes to consumer choice, packaging makes a big difference in the perceived effectiveness of a product.

Dire Cuts Predicted for 2012-2013 State Budget

Dec 20, 2011

State-funded programs and departments should brace for impact when the Pennsylvania budget is passed next summer.

The state budget for 2012-2013 will make cuts much deeper than those used to balance the current spending plan, according to predictions from the Corbett administration.

Budget Secretary Charles Zogby said on Tuesday that the state is facing a revenue shortfall of at least $500 million in the current budget year, which will carry over into next year's fiscal plan, creating a massive financial gap.

The net amount of the first paycheck you receive in the new year might be a bit smaller. That's because a final phase of Pennsylvania Act 32 is being implemented on January 1st and many employers will be withholding their workers' local Earned Income Tax (EIT) or wage tax for the first time. So, instead of receiving quarterly reminders from your city, township, or borough to pay the tax of 1 percent or so, that amount must now be withheld from your paycheck.

PNC: “Persistent Growth” in 2012

Dec 19, 2011

Don't look for a gangbuster economic year in 2012, but PNC Chief Economist Stuart Hoffman is predicting "persistent growth."

"We're not in the relapse or 'double dip' camp," said Hoffman. "Our view is that the economy will grow actually a bit stronger in 2012 than it did this year."

When the Keystone Opportunity Zone program was created in 1998, it was hailed as a way to attract business to poor areas in Pennsylvania by eliminating some state and local taxes within certain boundaries.

Thirteen years later, the program is being ranked among the worst tax credit projects in the country, in terms of the expectations of companies that benefit from the program to hire a certain number of workers and pay fair wages.

Many people think of Black Friday, the day after Thanksgiving, as the biggest shopping day of the year, but in reality, that honor traditionally goes to the Saturday before Christmas. Since Christmas is on a Sunday this year, this coming Saturday, December 17, is expected to be the busy day.

"Saturday and Sunday of this weekend are going to be huge. Stores are going to be packed. People are going to be buying a lot of things," said Dr. Audrey Guskey, a marketing professor at Duquesne University.

Mayor: $80 Million in Bonds is the Right Amount

Dec 13, 2011

At City Council's Tuesday budget hearing, Pittsburgh Mayor Luke Ravenstahl defended his plan to borrow $80 million for use in the city's capital budget over the next two years.

The mayor said that the time to borrow is now because of low bond interest rates and a great need for upkeep of the city's roads, fleets, and buildings.

City Council Members had expressed concern that the mayor's budget aimed to borrow too much, but Ravenstahl said that the city has fallen $17 million behind on maintenance and must now make larger investments to catch up.

Occupy Pittsburgh ‘Evicts’ BNY Mellon

Dec 12, 2011

Occupy Pittsburgh activists have done more than defy the eviction notice given to them on Friday by property owner BNY Mellon, they've given the bank an "eviction notice" of its own.

On Monday, a group of about twenty occupiers gathered at the plaza below BNY Mellon Center to demand that the bank leave its Grant Street tower, a retort to BNY Mellon's legal request that the protesters stop camping on its Downtown property.

Open Innovation is an emerging concept that promotes collaboration between companies to research and develop ideas. This notion goes against years of companies fighting to keep ideas and intellectual property within their own walls — and the belief that they, alone, hold the best and brightest minds.

Friday's news that unemployment in the U.S. has fallen to 8.6 percent is a mixed bag for some local unemployed Pittsburghers. On the one hand, the falling rate is going in the right direction, and last month some 120,000 new jobs were created. On the other hand, the unemployment rate may be lower because more than 300,000 people left the workforce, according to Co-Director of The Mon Valley Unemployed Committee, Antonio Lodico.

A Festive Take on Economic Hardship

Nov 29, 2011

The latest indicator of tough times for American consumers comes gift wrapped from Pittsburgh-based PNC Financial Services Group, Inc.

Every holiday season since 1986, PNC analysts price each of the exotic gift items mentioned in "The Twelve Days of Christmas," a data set they use to tabulate the annual Christmas Price Index (CPI).

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