After $200M state error, a $343M MTA shortfall

The Metropolitan Transportation Authority will end 2009 where it begin: amidst a financial crisis that could lead to service cuts — but hopefully no fare hikes — in 2010.

In an e-mail to the MTA Board members this afternoon, MTA CFO Gary Dellaverson said that, in addition to the $143 million in state appropriations cuts, the MTA is now facing the reality of a shortfall in the payroll tax collections that will reach approximately $200 million. In total, the MTA’s 2009 revenue totals will miss expectations by $343 million, and although the agency can roll this cuts over into 2010, the MTA faces, in the words of Dellaverson, some “very difficult choices” as it prepares its balanced budget for next year.

“Receipts from the recently enacted mobility tax now appear to be under-running projections by about $200 million for this calendar year,” Dellaverson said. “This is a shocking development both because of the magnitude of the under-run (about 20%) and the late date of its discovery. As recently as last week, the State was continuing to advise us of their comfort with the forecast. We do not yet know what is causing these disappointing results. While compliance and timing may be a part of the answer, there is a substantial disconnect from the current performance of other similar tax sources.”

MTA officials were prepared for the original $143 million in state cuts, but this new shortfall caught them by surprise. “It’s the extra $200 million that’s really painful,” MTA spokesperson Jeremy Soffin said.

Although the MTA has long borne the brunt of a public skeptical of its ability to manage its own finances, officials at the agency and outside transit watchdogs stressed the state’s role in this new found gap. Jeremy Soffin called it, a “significant unraveling of the rescue package passed by the Legislature in the spring.”

Gene Russianoff of the Straphangers Campaign was more pointed in his ire toward Albany. “The Campaign,” he said in a statement, “calls on Governor Paterson to investigate whether New York State Department of Taxation and Finance has adequately administered and enforced the new payroll tax and on the MTA to redouble its efforts to find new administrative savings and financial actions that will maintain current fare and service levels in 2010. In 2010, both the governor’s office and the State Legislature are up for election. Hundreds of thousands of riders will not take kindly to broken promises on decent and affordable transit.”

While we await a state response to this Albany accounting error, the MTA is springing into action. The agency’s fiscal year ends at the end of the calendar year, and the Board is under a legal obligation to approve a balanced budget before the end of the month. Furthermore, the agency has committed to avoid a fare hike in 2010 but has plans to raise fares in 2011 and 2013. “It remains our intentions to stick with that understanding on the fare schedule,” Soffin said.

So the agency will look to roll this budget problem into 2010, and as Dellaverson turns his gaze internally, agency spokespeople could not say how the MTA would cover a gap. Service cuts remain on the table, and Jay Walder, the new CEO and Chairman, will continue his initiative to “overhaul with how the MTA does business.”

Furthermore, the MTA is now putting a $350 million bond issuance on hold until the agency board has a chance to review the budget.

All in all, this news caps a turbulent fiscal year for the MTA, and it is news we all could have done without. The agency has promised to “be as transparent as possible about where we were, what caused the situation and what we’re trying to do,” and Dellaverson will have an updated budget proposal when the Board’s Finance Committee meets next Monday.

Still as the authority looks for guaranteed revenue sources, as state calculations continue to fail, the East River Bridges remain free, and congestion pricing is but a glimmer in the eyes of transit advocates. As 2009 nears its end, this story is far from over.

Former Bank of America employee offers inside look at bank's practices

While millions of credit card customers have been through the painful process of negotiating past-due or over-the-limit accounts, few have dealt with their credit company face-to-face. Usually, the conversation is with a customer-service representative in another city who cheerfully outlines the fees and penalties that the cardholder must pay, regardless of whether he or she can afford it.

Jackie Ramos, a former "customer advocate" from the collections department at Bank of America (BAC), posted a video on YouTube in which she offered an inside glimpse into what happens on the other end of the phone. While Ramos notes that her former employer encouraged her to "do the right thing for the customer," she says she soon came to realize that her job was actually to squeeze as much money as possible from the company's cardholders.

In her video, Ramos describes the strategies that Bank of America used to maximize its profitability. From charging a $15 "convenience fee" for payments over the phone to tacking on $39 late fees and $39 overlimit fees, Ramos says her bosses encouraged her to nickel-and-dime customers, drawing out every penny possible.




For some debtors, Bank of America offered "Fix Pay," a program that would effectively transform a credit card account into a loan; in the process, it would eliminate fees and close the account. According to Ramos, customers had to answer what she describes as a series of "irrelevant" questions and meet certain income requirements before they could qualify for the Fix Pay program. Ramos' infraction, which ultimately cost her her job, was that she encouraged some cardholders to lie about their finances in order to get into the program. Her logic was simple: If their accounts were manageable, fewer customers would default on their obligations.

While Bank of America declined The Huffington Post's request for a comment on the video, it did confirm Ramos's account of the firing with the blog.

The fact that Bank of America disagreed with Ramos's actions should hardly come as a surprise for anyone who has held a credit card over the past ten years or so. Late fees, convenience fees, interest rate increases, credit limit decreases, and other gimmicks have become common, effectively transforming credit cards into the economic equivalent of a game of Russian roulette.

Can government regulation save consumers and credit card issuers?

The C-CARD Act, which President Obama signed into law in April 2009, was designed to halt the strategies that credit card companies use to squeeze their consumers. Unfortunately, almost as soon as C-CARD made its way out of Congress, credit card companies began using their nine-month grace period to come up with fresh charges and innovative new ways to cheat consumers. Some, like Bank of America and Citibank are experimenting with annual fees, while others are playing with the idea of charging fees for inactive accounts. Meanwhile, lawmakers are expanding the fight to debit card companies, most of which "double dip" on ATM fees. In fact, as we draw closer to February 22, 2010 -- the date that the Credit CARD Act will go into effect -- it seems likely that debit card fees might be the next tool that banks will use to ensure a fresh stream of charges.

Yet the C-Card Act may be the salvation of the credit card industry. While the methods that Ramos describes have short-term benefits, they ultimately seem designed to push customers into insolvency. In one case, she describes a customer who owed $6,000 on a card. The cardholder, a recent widow facing single parenthood, complained to Ramos that the 29.99% interest rate that Bank of America was charging her, in addition to various fees, made it impossible for her to continue making payments. Unable to qualify for Fix Pay, she had little choice but to default on the debts. Given her situation, it seems unlikely that Bank of America can hope to recoup any of the money she owed.

Ultimately, that may be the lesson of Jackie Ramos: while her willingness to place her morals ahead of her career is inspiring, the truth of the matter may be that she was putting Bank of America's long-term health ahead of its own shortsighted policies.

Woman Rushed to Hospital from Tiger Woods's Home

A person was taken from Tiger Woods's multimillion-dollar Florida home "on advanced life support" after firefighters received a call at 2:36 a.m. Tuesday, reports local station WESH-TV.

Witnesses told the NBC affiliate station, which aired footage of what appeared to be a blond woman receiving oxygen as she was carried on a stretcher, that an ambulance transported the patient to Health Central Hospital.

The station speculated, but could not confirm, that the woman seen in the video was the patient taken from Woods's house, based on the time that the amublance arrived at the hospital in Ocoee, the same facility where Woods was treated after his one-car crash the day after Thanksgiving.

The station further reported that a black Escalade seen leaving the hospital shortly afterward had registration information similar to the Escalade driven by Woods on the night of his crash.

The Orlando Sentinel also reported, based on fire department records, that an ambulance responded to a call at Woods's home. Contacted in Sweden, a spokeswoman for the mother of Tiger Woods's wife, Elin Nordegren, said she had not heard of the incident.

There were also reports on Monday, unconfirmed, that Woods's wife, Elin Nordegren, had moved out of the couple's home into a nearby house.

South African Actors Up in Arms Over Jennifer Hudson's Casting as Winnie Mandela

Oscar-winning actress Jennifer Hudson, recently cast to play Winnie Madikizela-Mandela in 'Winnie' -- a new film about the wife of Nelson Mandela, South Africa's first black president -- has come in for some flack for being cast in the role.

According to AFP and other sources, the Creative Workers Union of South Africa, a group representing that country's actors, said "using foreign actors to tell the country's stories undermined efforts to develop the national film industry ... It can't happen that we want to develop our own Hollywood and yet bring in imports," the union's president Mabutho Sithole said in the Citizen newspaper.

In addition, the IOL, a South African news site representing a host of South African newspapers, asked its readers in November if Jennifer Hudson was the right choice to play Winnie Mandela; 64% responded in the negative.

The film will be directed in South Africa by South African filmmaker Darrell J. Roodt, whose movies include 'Cry, the Beloved Country' and 'Sarafina.' Although Madikizela-Mandela stood by her husband during his years of imprisonment in South Africa, her image was tarnished when she was associated with a bodyguard involved in a murder; she was later convicted of fraud for stealing from a funeral fund. The Mandelas were divorced in 1996.

Weird Car News - Corvette stolen in 1970 found in perfect condition

A 1965 Corvette stolen from its owner in 1970 was found by Scottsdale, Ariz. police and returned to its owner.

Chance Mayfield was in a bar in Nashville 39 years ago when his car was stolen,a story by the Tennessean.com said. "That ruined my night," Mayfield told the Nashville-based newspaper. When the car didn't show after a few years, Mayfield said he forgot all about it -- until he received a call on his 68th birthday saying his car has been found.

The car was discovered when a collector who bought the car for $65,000 took it to the Arizona department of motor vehicles for inspection, the story said. A routine check of the serial number identified the completely restored car as stolen.

Accidental Child Porn Download Leads to Jail Time

Matthew White, of Sacramento, California, has found himself in a rather unfortunate situation; he's been accused of downloading child pornography. On the advice of his public defender, White is pleading guilty in hopes of cutting his potential 20-year sentence down to three and a half years. After serving his time, White will have to serve 10 years of probation and register as a sex offender.

What makes this unfortunate is that the 22-year-old White claims he downloaded the child pornography on accident from the file-sharing service LimeWire. According to White, he was attempting to download a 'Girls Gone Wild' video two years ago, but when he opened the files, instead discovered images of underage girls. White claims to have immediately deleted the images and never looked back -- at least until the FBI showed up at his door a year later.

Last year, agents showed up at the door and asked if they could examine the family's computer. The Whites agreed, and, at least at first, the agents found nothing incriminating. Not satisfied with their preliminary search, the agents used software to dig deep into the hard drive and to recover deleted files. There, they recovered the illegal images. Matt told his local CBS News affiliate:

"I asked them, 'Where did you get that? I don't remember that.' I asked them, 'Could I access that if I wanted to?' They said no."
Despite the admission by the FBI that he could not access the files even if he wanted to, Matt was still arrested. Quick Google searches, conducted by CBS and ourselves, revealed plenty of complaints from LimeWire users of accidentally downloading child pornography disguised as more innocuous files.

In the event you ever accidentally download child pornography, the FBI advises you to immediately notify it. The Bureau admits that there is a chance your computer would be confiscated, but when your other option is facing 20 years in prison, that seems like a small price to pay.

Brooks & Dunn Confess Break-Up Almost Happened Years Ago

Brooks & Dunn, who shocked country music fans by announcing their split after more than 20 years together, are continuing to speak out about the reasons they're calling it quits. And if recent comments are any indication, the end of country's most successful duo was a long time coming.

"Twenty years – that's a long time to go fishing in the same well," Kix Brooks tells USA Today. It's a sentiment echoed by his partner, Ronnie Dunn. "It has run its course," he says simply.
Both also admit the last 20 years have been difficult. So difficult, in fact, the end of the road almost came years ago. The acrimony between the two became so strong that in the late '90s, they recorded songs for their album in separate studios, using different producers. "Looking back, we should have just taken a break and let all the dust settle under us," Ronnie says.

But the pair forged on, continuing to sell millions of albums and perform in front of sold-out crowds. Still, the longer they went on, the more difficult it became to agree on songs. "That's always a challenge where you're having to compromise," says Kix. "There have always been hurt feelings. There have always been opinions."

It was one of their ongoing disagreements about songs which ultimately caused the end of the duo -- instigated when Ronnie said he was unwilling to compromise anymore on what he wanted. "We both knew this was probably it," Kix says. "He called back the next day and said, 'I don't want to do this anymore.' And I was in agreement. I really was. I was willing that day to try and work it out, but when he said, 'This is it, I really think it is,' I said, 'I think it is, too' ... I was and still am totally at peace with it. It's a good time for us to stop."'

Even when it came to deciding how to officially split up, the pair disagreed. "I was willing to walk out and never look back," Ronnie says. "Sometimes, I work a little more from emotion than I do from rational thought."

Kix had a different idea. "I really felt like we owed it to the fans to let them know that we are going to stop," he says, "but we are going to do one more tour, so let's get together and have that party one last time."

Just because Brooks & Dunn is ending, doesn't mean that either Ronnie or Kix plan on retiring from their music careers. "To think that either of us would lock up our guitars and not make music again because this thing has run its course doesn't really make any sense, if you know anything about us," Kix says. Already nominated for his first CMA Award on his own, for Broadcaster of the Year for his hit radio show 'American Country Countdown,' he plans to continue pursuing his interests as both a singer and a songwriter. "I'll try to find some hits in there. But I'd also like to write some songs that mean something from that singer/songwriter mentality that I come from. I've been chasing Guy Clark since I learned how to tune a guitar," he admits.

Ronnie is already working on his first solo album, which he hopes to release next year. "I'm probably three-quarters of the way through it," he says. He says, however, that he usually gives a different answer when people ask what his plans are. "I'm looking for a used van, a horse trailer to haul equipment, and a beer-joint band," he jokes.

Even though the pair are splitting at least in part because of personal and creative differences, they still have a lot of respect for the other. Kix is, according to Ronnie, "a stand-up guy. He'll come at you head-on. Whether I agree with it or not, he'll step up. That's good to be around."

Kix has equally kind words to say about Ronnie. "I'm proud of him. He's a great singer and an amazing talent. When he's on, I just stand there some nights and I smile."

Brooks & Dunn's final tour, the 'Last Rodeo' will run from April to August of next year, with Jason Aldean as the opening act for the first half of the tour, followed by Gary Allan.