Cities Using Special Tax Accessments To Cover Budget Shortfalls

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More and more cities are having trouble meeting revenue requirements for the city employees pension plan. City and state employees along with firefighters and police have yearly pension obligations. They are usually funded by property tax or income tax revenues. What happens when these pension plans are not funded because of a revenue shortfall?

Pension plans are usually created by the employee unions and the city leaders. These plans have to be funded or the unions become very angry. This leaves cities no other choice but to go to where the money is: the residents of the city.

In one of our neighboring cities this problems is happening. In Lake Worth, city commissioners are working toward making a plan to levy a per-building assessment on homes and commercial buildings to cover a shortfall in firefighters pensions. Commissioners voted to take the first step in levying a fire assessment for the budget year that begins Oct. 1. The city's annual fire assessment would be $60 per residential unit, 13 cents per square foot for commercial buildings, 2 cents per square foot for industrial or warehouse buildings and 9 cents per square foot for institutional buildings.

Notices showing the amount owed will be mailed to each affected property owner on Sept. 1. A public hearing on the assessment is scheduled for 6 p.m. Sept. 22 at city hall. The commission is expected to vote on the fire assessment following the public hearing.

When the assessment is O.K.'d as proposed, the city will use most of the $1.4 million to cover part of the cost of firefighter pensions, which cost the city $1.8 million this year.

The Lake Worth city commissioners have come up with a clever plan to cover the shortfall. The only problem is the publics reaction to it is not good. Many people have voiced concerns that raising taxes in this financial environment is counter productive. Other concerns are that fulfilling the never ending pension needs of the fire fighters is representative of the Social Security shortfalls we currently experiencing in Washington. Many believe that all city and state employees should fund their own pensions with their own money. 

The current pension system is broken. The unions should see this and ween the firefighters off the taxpayers to a self supporting system. We are seeing more pension and budget shortfalls every day. Don't bleed the tax payers anymore and don't let the employees of the city and state goverment trust in a pension system that will eventually collapse under it's own weight. 

Marshmallows Can Predict If You Will Be A Saver Or A Spender

In the 1960s, Stanford psychologists conducted an experiment on a group of 4 year olds, and it yielded absolutely fascinating results. They put a group of children, one-by-one, in a room with a marshmallow. They told the children they could eat the marshmallow whenever they wanted, but if they waited till the adult came back they’d get two marshmallows. Recently, the experiment was conducted again, and filmed. So here’s what happened…

It’s pretty strange to watch their behavior. Because they are like little drug addicts. They’re sitting there, trying not to think about that marshmallow, but you can tell it’s the only thing in their whole world. One kid starts smelling it, before putting it down and putting his head in his hands, like he’s 40 instead of 4. Another looks away, trying to pass the time, but his fingers creep over and hold onto the marshmallow, as if to reassure him that his sugary prize hasn't up and vanished.

Only a small number could wait. The researchers studied both groups of children throughout their life, and discovered some fascinating patterns. The low delayers (failers)—those who could not wait until the adult came back to eat their marshmallow—were affected by a number of risk factors that did not affect high delayers (passers). Here is what they discovered:

The Ones That Couldn't wait:

• struggled more in stressful situations
• had trouble paying attention
• had greater difficulty maintaining friendships
• scored lower on the S.A.T. (by over 200 points)
• prone to a much higher body mass index
• were more likely to have drug addictions

So it turns out that this experiment is not just about a bunch of four year olds hungry for sugar. This is about all of us. This is about the power of patience. Financially, we are tested in the area of patience every day. We’re on our way home and we really want something that would be a lot cheaper at the grocery store. But the convenience store is a lot closer. And you’ll always pay for convenience. It’s closer, but it ain't cheaper.

When we delay gratification, not only does it pay off in the end, but it often pays off more substantially than if we had just gone for instant gratification. But you don’t inherit the ability to delay gratification. You develop it. You develop it by facing off against this decision over and over: do we spend more to get the thing we want now, or do we wait? What if we skipped the purchase entirely? The we’d still have the money with us later on when we needed it. And if we skipped the purchase and left it in an account, over time that money could increase through interest. Eventually we’d have two marshmallows instead of just one.

AAA Has 3 Apps To Help On Your Next Trip

Image via CrunchBaseI recently wrote about taking my stepson back to college for his 3rd year there. We live in South Florida and his school is in Tallahassee. Its a drive of 450 miles. Even though we have made it many times before I always have the GPS on showing me where I am and it helps when we stray a little to do some outlet mall shopping.

I also am a AAA member. I like them because they are great for money saving deals and of course when your locked out of your car they save the day. They have a great website which gives you a lot help when you need to make your travel plans. But when your on the road it's not always convenient to take the laptop. Luckily AAA has made some great smart phone apps.

AAA TRIPTIK MOBILE

Previously available for iPhones, you can now download it to your Android! The AAATripTik Mobile app is a GPS-based mobile version of AAA’s popular TripTik Travel Planner. Services provided by the app include:

• Turn-by-turn directions, including voice if enabled.
• Pinpointed AAA Approved and Diamond Rated hotels and restaurants, attractions, AAA offices and discount locations along a user’s route.
• The option to call for lodging reservations with the touch of a button.
• AAA office locations
• Points of interests are automatically updated as your location changes or as you move the map

This is my favorite because when you hungry, in an area your not familiar with,finding a good place to eat is a problem. Not with this app, it gives you a birds eye view of all the restaurants around you, including the ones that give discounts.

Named one of the “Top Six Apps to Battle Rising Gas Prices” by the Associated Press, the app also identifies the cheapest fuel near you using data updated daily from more than 100,000 fuel stations nationwide, making it a valuable savings tool in everyday driving.

AAA Discounts

This app also taps into the phone’s GPS technology to acquire the user’s location in order to display AAA Member Discount locations nearby. Downloaded more than 1.1 million times, the app displays discounts at more than 164,000 establishments across the U.S. and Canada, including:

• Attraction tickets: AAA offers discounts at dozens of the most popular summer attractions, including Disney World, Universal Orlando, SeaWorld, Six Flags and Busch Gardens.
• Lodging: With more than 31,000 AAA Approved and Diamond Rated lodgings, travelers are sure to find one that fits their budget and style.

AAA Roadside

While members can always summon service by calling 1-800-AAA-HELP, the AAA Roadside app brings AAA’s legendary roadside assistance to motorists’ fingertips. Downloaded by more than 560,000 users, the app allows members who experience a vehicle breakdown to quickly:

• Transmit their location to AAA using the phone’s GPS capability.
• Input and send vehicle description information, including year, make and model. Send specific breakdown details to AAA, which helps the auto club dispatch specialized assistance to help the member get back on the road.
• Identify the nearest AAA Approved Auto Repair locations and Hertz rental car locations.
• Utilize additional features, including a digital membership card and maps.

These free apps are available for download at the iTunes Store or Android Market. For more information on AAA’s mobile solutions, visit AAA.com/Mobile.

Simple Money Advice For The College Student

Image via WikipediaMy wife and I just got back from taking my step-son back to college. He is starting his 3rd year and has taken a lot of my advice on how to be smart with money. I have seen many of his friends fall into the easy trap of getting into credit card debt. So far he has heeded my warnings and stayed away form credit cards.

When the student is away at school and not under the influence of mom and dad all those great lessons learned can be forgotten. A little independence can sometimes short circuit good money lessons. So before leaving for college it's good to plan ahead.

A budget is necessary for managing your money. A written budget or one done online at personal finance websites like Mint.com can help in managing a budget and also track spending. It's important to put in the budget items that money will be spent on every month. Budget items like food, entertainment, clothing, gas, and essentials. It's important to track spending to see if the amount budgeted is adequate, we don't want anyone broke by Thanksgiving.

Getting a job. There are two good reasons for getting a job while at school. The first one is that the money earned will contribute to providing necessary funds to help support the student. It shouldn't be all up to mom and dad to support junior. Also the lessons of showing up for work on a regular basis is necessary in instilling the work ethic. A job teaches the responsibility of taking care of one self. Also having a job during the summer is important to maintain the students responsibility toward his own money needs.

Saving money. Just because the student has a job it doesn't mean all that money is to be spent. Some of that money should go into a savings account for unexpected or future expenses. It is thought by some students that their money goes toward all the fun things in life and the parents money goes toward paying the students school and living expenses. This is wrong because it teaches an entitlement mentality. Connecting the lesson that work = money is a life lesson all students need to learn.

Checking and Savings accounts. Setting this up before hand is critical to setting up a ground work for spending and is essential to staying on budget. The account should be one that would allow the parents to deposit money into it as needed. It doesn't hurt to use the joint access, of a checking account, to keep an eye out on what the student is spending money on. Once you check out the spending habits of the student and see everything is working well you usually won't have to check very much. This ability to take a peek at the account will be a natural incentive to the student to stay on track because they know the parents are looking in from time to time.

Credit Cards. This is one way students can get into trouble. The excuse to have a credit card for the student is that what if there were some unforeseen emergency. With the checking account mom and dad will be able to deposit money into it if any emergency arises. Another excuse for the card is the students are told that to build your credit score you must have one. The debate, if that is true or not, can discussed another time but for the student today, they can wait for when they graduate to build their credit. There is no need for a credit score while they are in school.

But if you insist on having a credit card you do not have to have it in the students name. The parents credit card company can issue a card for the student to use if necessary. This way you can monitor it's use. If the card must be used, it can only be for emergencies and with the consultation of the parents.

With a little planning and communication the finances of the college journey can be easily planned and carried out. This can give the parents a worry free school year and the student can concentrate on their studies.

For Many Seniors Retirement May Never Come

The Wall Street Journal had a good article about how because of the the economy and small retirement savings, some seniors will never be able to retire. For many, to make ends meet, seniors are postponing their retirement or have no plans to quit working. They see their retirement accounts at a level that is to low to tap. Prices of everything continue to rise. The returns on safe investments at all time lows and prospects for higher rates of interest being low for many years to come.

Many have no choice but to continue working to pay the bills. They never saw this day coming. Most of their money is in their home and selling the home couldn't be done because of the falling prices in home sales.

This months battered market is just a reminder of how much of a hit retirement savings has taken over the last few years. With interest rates almost at zero, Treasurys and certificates of deposit provide almost no income. According to the Federal Reserve, they intend to keep rates at historical lows at least until 2013.

More than three in five U.S. workers in their 50s and 60s plan on working past 65 -- and 47% of that group say they'll do so because they'll need the money or health benefits, according to a 2011 study from the nonprofit Transamerica Center for Retirement Studies.

Is there any way make the situation better?

All you can do is just continue at your current place of work. But now more than ever you must be a better employee. You are competing with younger employees who are making less of a wage than you. They are less experienced than the older worker but when times get tough whose job will the boss cut. Even with greater experience the boss has to make the bottom line work. So you have to be more valuable than ever. You should take on more projects and work. Making yourself a valuable asset of the company will be reason to keep you over another employee.

What if I have to start over?

It's going to be tough to find work for the older worker. You have to prove yourself all over again. Try to stay in the same industry where your skills will shine the most. If you can't stay in the same industry find a place where your skills can also be used affectively. Some employers are known to hire senior citizens. AARP (aarp.org) has a directory. Search for "National Employer Team." Some temporary-employment agencies, including Kelly Services and Adecco, specialize in placing seniors.

Starting your own business.

If you continue to find yourself not earning enough from your job or finding yourself unemployed, another path you could try is starting your own business. It is possible to transfer your present jobs skill set to a self-employment plan. Also to start yourself off in the direction of a completely new trade which you have always wanted to try.

The sad truth is most seniors can't do anything about their situation. They will have to continue struggling and waiting for the federal government to help them out. That help will never come because the cupboards are bare in Washington and it will get worse before it will get better.

The 4 Ways to a Better Emergency Fund

Image by lism. via FlickrThe worst mistake people make in their journey to a better financial future is failing to create a fully funded emergency fund. Many people get into credit card trouble because when that inevitable emergency comes they have to go into debt to take care of the problem. They don't have the money to pay off their debts and the cycle repeats till they are over their heads in major debt. An emergency fund is your insurance to staying out of debt.


If you are a fan of Dave Ramsey you know his first "Baby Step" is to save up a $1,000 emergency fund before ever starting to pay off debt. That emergency fund is the number one way to be prepared for what trouble life hands you.


A rainy day fund or emergency fund is a cushion of money that keeps us afloat when times are tough but actually building one is sometimes harder than paying off debt. To get started building the fund you need a plan.


Create a Plan. The rule of thumb for an emergency fund is it must be at least three months worth of expense. So add up your mortgage or rent, utilities, food, health insurance, etc., multiply it by three, and that's your minimum goal for emergency savings. If you spend $3,000 a month, you will want to have at least $9,000 in your emergency fund. Having more than that depends on if you are self-employed or have any other issues that may affect you losing your job or any health issues. Another way to determine the size of the fund is your "sleep well" ratio. If you don't sleep well at night because your worried about a future layoff or other expense issue, maybe raise the amount of the fund till you can sleep well. It's a common indicator of satisfaction and peace.


Make it Automatic. It's hard to save money every month if you are doing manually. You may forget or be distracted by some work or family problem. It's best to make the process automatic. Set up a payrole deduction at work that adds money to you emergency fund automatically. If not at work set up an automatic transfer of money from your checking account to a savings account. It will all be simple and painless and won't be forgotten.


Where is the Right Place to Put it? It would be a good idea to put the money in a place where it could make some interest. But in today's savings environment a good place is hard to come by. The place has to be somewhere that it is completely safe and guaranteed not to lose principle. Today's low interest environment is bad for now but it may be better in the years to come. Accessibility is key for a good emergency fund.


Don't Touch it. The only real reason to access this money is for a true emergency. A true emergency is any event where you where you could not have predicted it's occurrence. It's not to fix that broken washing machine. You know that baby will someday breakdown, it doesn't qualify. An emergency fund is for a dire event not one that you are temporarily uncomfortable.