Monthly Archives: February 2017

By CFO Innovation Asia Staff | Monday, February 27, 2017 - 10:58

The Philippines jumped 12 spots from 70th to 58th in the 2017 Index of Economic Freedom.

The index measures the effects of policy changes on the overall quality of life. The study attributes fiscal gains, monetary stability, consumption, and government spending for the rise in the rankings.

In spite of a weak global demand in 2016-17, Philippines grew at 6.8 percent driven by an increase in investment and consumer spending.

The country was rated their highest on fiscal health (97.2) followed by government spending (89.4) as it maintained its public debt levels at 37.1 percent of gross domestic product.

Financial freedom was ranked at 60, while monetary freedom was higher at 80.6 in line with the Central Banks policies for maintaining price stability, issuing new banking licenses, and maintaining low inflation.

Reduction in cost and time for managing licensing requirements led to a gradual improvement in the business climate rankings while investment freedom witnessed no change due to investment restrictions in several sectors.

Philippines scored low in property rights, judicial effectiveness, and government integrity due to a weak state of law. The government is pursuing tax and legislative reforms to facilitate entrepreneurship, eliminate corruption and improve the ease of doing investments to attract investments and achieve a growth of eight percent by 2022.

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Philippines Improves in Economic Freedom ranking - CFO innovation ASIA

ANALYSIS/OPINION:

Stop me if youve heard this story before. Governors and state legislators are pleading poverty again and they are demanding tax hikes of every imaginable kind.

More than half the states are facing big deficits this year and they are mostly blue states like California, Connecticut, Delaware, Illinois and New York and Oregon. (See chart.) These are the highest tax states with some of the deepest pools of red ink. Theres got to be a message here.

But many red states have money woes too, and we now have Republicans chomping at the bit to raise taxes. The biggest fight is in Kansas where the Republican-dominated legislature recently passed a massive income tax hike that would raise taxes on every small business in the state and every wage earner with income above $15,000. Fortunately, Gov. Sam Brownback vetoed the Republican tax hike but they will be back.

Republican governors Bill Haslam of Tennessee, Mary Fallin of Oklahoma and Eric Holcomb of Indiana want gas tax increases. Republicans in Alaska and Wyoming are considering enacting a state income tax to fill funding holes. These are two of the nine states without an income tax.

So what is the source of the budget crises from coast to coast? First, on the revenue side, tax receipts are down because states are front-line victims of the slow-growth era of the Obama years. When the U.S. economy sputters at only 1.6 percent as it did in 2016, state and local tax revenues barely trickle in. So much for the liberal spin that President Obama left behind a healthy economy.

Revenues are also way down in oil-producing states like Alaska, Kansas, Oklahoma, North Dakota, and Wyoming. Liberals are pushing big tax increases in each of these states that not so long ago gorged on new spending during the years of high prices. North Dakota had one year that the budget rose more than 50 percent.

The best thing Washington can do to help states is pass the Trump tax cuts so we get faster economic growth. Nothing heals state budgets quicker than a dose of prosperity.

The even bigger story is the eight-year state spending binge that almost no one is reporting on. Chris Edwards, a fiscal analyst at the Cato Institute, has run the numbers. He reports that state general fund spending has soared 32 percent since 2010. The National Association of State Budget Officers predicts a 4.3 percent hike in fiscal 2017 budgets.

One reason state budgets have spun out of control is Obamacare. Some 20 million Americans have been added to state Medicaid rolls. For now, the feds pay most of the costs. But in several years the patients will still be on Medicaid but the costs will be shifted to the states. All the more reason to repeal Obamacare as rapidly as possible before the Medicaid caseloads grow by millions more.

Its worth noting that many of the blue states that signed up for the Obamacare Medicaid expansions now face the biggest deficits.

Will tax hikes solve the problem? The answer can be found in Connecticut and Illinois. These two states passed multi-billion dollar income tax hikes on the rich. Both have seen their economies get crushed by the out-migration of tax filers to avoid the tax hikes. Today their deficits are still gigantic. Connecticut faces a near half-billion dollar deficit with Democratic Gov, Daniel Malloy calling for his third mega-tax increase to stop the red ink. Illinois has at least $6 billion in unpaid bills following its biggest tax increase in history.

Spending discipline and pro-growth tax reforms are the best formula for reviving state budgets. If Republicans who control 69 of the 99 state legislative chambers think they can tax their way back to prosperity, dont be surprised if they find themselves back in the minority after 2018.

Stephen Moore is an economic consultant with Freedom Works and a CNN senior economic analyst.

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Pleading poverty, demanding new taxes - Washington Times

ALBANY The lobby association for New York's newspapers is urging lawmakers to reject parts of Gov. Andrew Cuomo's proposed $152 billion state budget, contending the package would make some state contracts less transparent and would give the administration "virtually unconstrained authority" over public works projects.

A memo released in late January by the New York News Publishers Associations to its members argues that the bundle of budget bills framed by the Cuomo administration would harm government transparency in New York.

Specifically, the association, in the memo authored by its director, Diane Kennedy, states that it would allow the governor's administration to bypass the review authority of the state comptroller's office the state's fiscal watchdog with proposed contracts for some public construction projects.

The proposed process being advanced by the Cuomo administration could result in newspapers and local contractors being kept unaware of public works projects being planned for their communities, Kennedy warned.

"The Governors proposal would make this new public works method permanent and expand its provisions to all state agencies, authorities, local governments outside New York City, the State University and City University of New York, as well as their affiliates and subsidiaries," Kennedy said in the memo. "It would apply to all projects expected to cost more than $1.2 million."

In response, a spokesman for Cuomo's Division of the Budget, Freeman Klopott, said the measures being advanced by the governor will equip the state "with tools that will keep public works projects on time and reduce taxpayer costs through a transparent, public bidding process.

Klopott noted that two major design and construction projects, the replacements of the Tappan Zee and Kosciuszko bridges, are proceeding smoothly and "remain on budget."

Kennedy said in an interview that the publishers "are not objecting to best-value contracting and we're not opposed to doing public works in innovative ways. We just want to make sure the public is adequately informed."

NYNPA's members in New York include the Niagara Gazette, the Plattsburgh Press-Republican and the Lockport Journal, all newspapers published by Community News Holdings Inc., the company that also owns The Daily Star.

Kennedy's contention that the public's ability to access state information would be weakened echoes concerns that good-government groups have been making regarding what they contend is the need for greater transparency in public works contracts.

The push for independent oversight over state spending has been led by Comptroller Tom DiNapoli, Cuomo and DiNapoli are both Democrats, though their relationship has been rocky.

Lawmakers and Cuomo must be in accord on final budget bills by March 31 for the spending plan to be in place when the new state fiscal year begins April 1. The Senate and Assembly are expected to draft their own budget plans in March, after which negotiations aimed at achieving compromise will commence.

In an interview, DiNapoli said that he shares the concern that "the additional steps being proposed would certainly reduce some of the accountability that comes with oversight."

Of particular concern, he said, is a Cuomo push for "a very significant expansion of executive power without any real check on it. I think that is why the Legislature is taking a close look at it, as well they should."

While it remains unclear whether lawmakers will accept Cuomo's proposals or revise them, DiNapoli said he hopes that the final rush of horse-trading to produce a spending blueprint doesn't occur "at the expense of transparency and accountability."

Cuomo's administration was rocked last year by federal corruption charges against the governor's former top aide, Joseph Percoco, SUNY Polytechnic Institute leader Alain Kaloyeros, lobbyist Todd Howe and six upstate development executives on charges stemming from a probe into bid-rigging and bribery.

In January, Cuomo highlighted the need for ethics reforms, including a 10-point plan in one of his State of the State speeches, calling for limits on the outside income of lawmakers as well as term limits for elected officials and an expansion of Freedom of Information Law requirements for the Legislature.

Kennedy's memo also called attention to the fact that the budget proposals would exempt records of complaints filed with the state against ride-hailing companies from being accessed with Freedom of Information Law requests. Cuomo and many lawmakers are calling for authorization for such companies as Uber and Lyft to offer their services in upstate communities. Such complaints are now public record in New York City, where the companies already operate.

Joe Mahoney covers the New York Statehouse for CNHIs newspapers and websites. Reach him at jmahoney@cnhi.com.

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Publishers: Cuomo proposal removes transparency - Oneonta Daily Star