Category / Government

by Hoosier Econ

Indianapolis Still Paying Off RCA Dome Debt

Indianapolis-indiana-rca-dome
In 1984 the RCA Dome opened for business its primary tenant was the Indianapolis Colts. The total cost to complete the RCA Dome was $77.5 Million($176.5 Million in present day inflation adjusted pricing). The cost was financed by the taxpayers of Indianapolis($47.2 million worth of bonds) and The Lilly Endowment/The Krannert Charitable Trust($30 Million). In 2006 the city undertook building a new stadium where the Colts presently play today. In 2006 the total outstanding debt on principal still stood at $75 Million and scheduled to be paid off by 2021. Before 2006, the actual debt was supposed to be paid off by 2013, but through refinancing of bonds, it jumped to 2021.

The city of Indianapolis does its best to make access in researching debt it owes on things tedious to find. The most current numbers I could find were published in 2010 showing RCA Dome debt standing at $61 Million. With eleven years of payments left comes to about $5.5 Million in annual payments on an already demolished structure.

Investors make a lot of money off local governments through time in financing these short term adventures that politicians want. Lucas Oil Stadium where the Colts presently play was built for $700 Million along with their new $275 Million Convention Center. This was financed over thirty years and once interest/financing charges are factored in, the combined project will cost taxpayers about $1.8 billion.

by Hoosier Econ

Updated Federal Government Deficit & Debt

Washington DC political reporter Jamie Dupree released the current financials of the Untied States Government:

Budget deficit in August was $128.7 billion; total deficit so far this fiscal year is $589 billion

Current government debt is
$17,764,720,406,589.08

by Hoosier Econ

Indiana Alcohol Industry Has a New Player: Artisan Distillery

Last year Indiana lawmakers relaxed some rules in allowing investors and alcohol makers open up distillery operations to make whiskey. Now some operations have popped up and the specialized business of the alcohol industry will have to wait and see how it all plays out financially.

Here is how the alcohol rules got relaxed

They pointed to states such as Michigan, where 32 small distillers sell local spirits and generate tourism dollars and tax revenue. Kentucky’s “Bourbon Trail” attracts 400,000 visitors to distilleries, which buy more than 2 million bushels of Indiana corn, each year.

The law that went into effect in July 2013 allows an artisan distiller to produce no more than 10,000 gallons of liquor for retail sale a year. The distiller cannot sell spirits to a retailer or a dealer but must sell by the drink, bottle or case on the premises.

Unlike big craft-spirit operations that buy liquor from wholesalers then flavor, bottle and label it as their own, the products of Indiana’s artisan distilleries must be homegrown. At least 60 percent of the final product must be fermented and distilled from raw materials on-site.

So far five permits have been granted and seven more are awaiting approval. The investors must also already have a federal permit for the process. Investments into the operations can run as high as $500,000.

The most important thing to remember of this new business venture for Indiana alcohol consumers, the bourbon and whiskey are still aging. Only when the first batches are tasted will indicate success of this new expansion.

Hat Tip Indiana Economic Digest

by Hoosier Econ

Saudi Arabia: Nuclear/Solar Power Expansion

Saudi Arabia has recently announced a very aggressive plan to start introducing nuclear power plants and big solar farms into their power supply grid to replace hyrdrocarbons. I find it insane the U.S. does not pursue nuclear energy in all forms. It would stabilize the entire country and be a source of power for decades to come. Here is the entire article but will pass along the highlights.

The Saudi Royal Family hopes that nuclear will provide 15% of the Kingdom’s power (18 GWe) within 20 years, together with a similar 15% (40 GWe) from solar. They are planning to invest $80 billion to build over a dozen nuclear power plants as fast as possible, intending for the first reactor to come online in only eight years. Investment in solar for the same energy production will take about $240 billion in investment, although breakthrough technologies in the next decade should cut that cost in half.

Total electricity consumption in Saudi Arabia exceeds 200 billion kWhs per year and is expected to double by 2030

Two largest uses of power in the Middle East are for desalinating seawater and residential cooling. Saudi Arabia desalinates over 250 billion gallons of seawater each year, and that number will double in the next ten years as the population and industrialization increase.

Saudi Arabia burns almost a billion barrels of oil a year to produce electricity

Saudi’s neighbor, Abu Dhabi in the United Arab Emirates started towards the solar/nuclear combination as well. Here is an interesting note to show how much solar it takes to equal nuclear power

Recently the UAE opened what was, at the time, the largest solar plant in the world, the 100 MW Shams 1 at a cost of about $600 million. But two hundred Shams 1 arrays will be needed to equal the output of the four Barakah nuclear reactors.

by Hoosier Econ

United States YTD Interest on Debt Payments

Month of August Interest on Debt payment was $27,093,517,258.24. Fiscal YTD payments now stand at $411,217,855,816.94. There is one fiscal month left for 2014.

Soure: Twitter page @USGovtInterest

by Hoosier Econ

H&R Block: Yeah Taxes Will Get More Complicated Because of Obamacare

H&R Block confirmed what many predicted would happen with the new health care law enacted 4 years ago: make taxes even more complicated.

Speaking on H&R Block’s quarterly earnings conference call, CEO William Cobb said that the company was already taking steps to train its tax preparers based on the draft forms that the Internal Revenue Service has released to comply with Obamacare.

“As expected, the forms are very detailed and can present significant complexity, depending on a filer’s coverage status during the year, income level, and household composition,” Cobb said. “Depending on their situation, there are instances where filers may need to file multiple new tax forms and complete additional worksheets.”

And he wasn’t he wasn’t finished…

“Depending on the type of exemption, the process to claim it could be quite cumbersome and time consuming,” Cobb said.

by Hoosier Econ

Colorado Pot Tax Revenue Prediction Goes Up In Smoke

Colorado government tax revenue prediction was off for the first six months of legalized pot sales. They were only off by about 70%.

Via CBS4 Denver –

When voters approved recreational marijuana sales the state predicted it would pull in more than $33 million in new taxes in the first six months. The actual revenue came up more than $21 million short.

by Hoosier Econ

Numbers from Illinois Teachers Pension Fund

Illinois is a broke state and their teacher pension fund does not make things any easier on how it is contractually written. Yes, it is a contract and the state is honoring the pension as of right now. In the spirit of “States Rights” the voters of Illinois find their financial situation very pallable no matter the current conditions or what they will be facing as the physics of economics plays out. This blog is not making fun of Illinois but it also will not give pity to the residents when debt hell hits.

The Washington Times had a long article showing the ramifacations of this current penson plan that they operate on. I will post the key financial highlights of it while you can read the rest in the embedded link.

About 6,000 retired educators collecting more than $100,000

More than 100,000 retired Illinois educators had been paid back what they invested into the system just 20 months after leaving work

The pension is about $54 billion underfunded

The teacher pension’s 3 percent annual increases aren’t tied to inflation — meaning they cannot fluctuate up or down depending on the economy or budget pressures.

Illinois public sector workers will receive, on average, a $1,906 annual cost of living adjustment this year — nine times more than the average Social Security beneficiary

by Hoosier Econ

Swiss Banks to IRS: Pound Sand

This story is from Reuters:

At least 10 Swiss banks have withdrawn from a U.S. program aimed at settling a tax dispute between them and the United States, Swiss newspaper NZZ am Sonntag said on Sunday, quoting unnamed sources. Around 100 Swiss banks came forward at the end of last year to work with U.S. authorities in a program brokered by the Swiss government to help the banks make amends for aiding tax evasion.

The newspaper said the banks were convinced they had not systematically broken U.S. law and lawyers of the U.S. Department of Justice had actually been surprised to see them take part in the program and did not object to the banks leaving the program.