Thursday, June 18, 2009
At least it's given us something to talk about beside the lousy weather.
Governor Rendell has to balance the state budget. In addition to cuts in spending, he's proposed raising the income tax by more than 16 per cent. If you make $50,000 a year, this will cost you five dollars a week.
Look, no one doubts the state is in economic trouble. All states are. The economy is in tough shape, and there are no signs of a quick turnaround. Can more be cut? Sure. The governor reasons that more state cuts mean local governments would have to pick up the slack, translating into property tax increases. You're going to pay one way or the other.
Here's the thing that really bugs me. Rendell calls the tax increase "temporary." It's a three year thing. Does anyone really believe that?
In another money related note, Eddie Bauer has filed for Chapter 11 bankruptcy, and the company is being sold. It's a familiar story. Sales are down. The debt load is crushing. The new owner says it will keep the stores and the catalog operation. The Chapter 11 filing bankruptcy gives the company a chance to reorganize and shed some of its debt.
I do like Eddie Bauer merchandise. I don't like the prices.
Looking back over old news stories, there were predictions a lot of other retailers would go Chapter 11 or close totally this year. It's happened to a few, but not as many as predicted.
Does that mean things aren't as bad as we think, or these companies are hanging on until the very end?
AT 12:01 AM