Volume 5 Number 42 October 17, 2008
Volatility in the financial markets continued this week as the Dow Jones Industrial Average fluctuated between record highs and lows. On Monday, stocks skyrocketed 11 percent -- the biggest one-day gain in 75 years -- anticipating the Treasury Department’s plan to invest $250 billion into banks in exchange for equity on Tuesday. By Wednesday, however, the Dow dropped 733 points, which essentially wiped out gains made earlier in the week. Thursday, the Dow went up and down the charts more than 800 points, though in the final minutes before closing, the overall was up 401 points.
While the U.S. Treasury continues to work toward market stabilization, it is important to analyze the proposals that have been presented and understand the ways they may impact our state in times ahead. This week, I wrote a letter to Chairman Ben Bernanke requesting that the Fed’s recent proposal to create a Commercial Paper Funding Facility (CPFF) be extended to local governments strapped by the credit crisis. Without this important access to credit, the already-constrained market for municipal debt is forcing some city and county governments into financing arrangements with skyrocketing interest rates that are ultimately borne by the taxpayer.
As we continue to look for ways to provide relief to those struggling most in this economy, it’s important for everyone to find out what they can do to better weather the storm. Now is the time for consumers to educate themselves on financial issues: from fraud protection to saving for retirement, knowledge is instrumental in guaranteeing long-term fiscal security.
While the economy proceeds on its rocky path to recovery, we will continue to provide updates and information.
Florida’s Chief Financial Officer (CFO) Alex Sink, while in Washington, D.C., speaking before the U.S. Department of the Treasury’s National Roundtable on Insurance Literacy, issued the following statement:
“On behalf of struggling local Florida governments, today I have sent Federal Reserve Chairman Ben Bernanke a letter requesting that the Fed’s recent proposal to create a Commercial Paper Funding Facility (CPFF) be extended to local governments strapped by the credit crisis.
“Including government commercial paper in the CPFF will help stabilize the $2.3 trillion short-term tax-exempt bond market and help facilitate a return to more normal market conditions for local governments in Florida and across the country,” said Sink. “The short-term tax-exempt market, including government commercial paper, is experiencing severe difficulties with short-term interest rates resetting at five percent to eight percent or higher over the last several weeks.”
Editor’s Note: Read CFO Sink’s letter to Chairman Bernanke.
Florida’s Disaster Preparedness and Consumer Awareness Programs Highlighted During National Roundtable on Insurance Literacy
Florida Chief Financial Officer Alex Sink joined several members of the National Association of Insurance Commissioners (NAIC) at a National Roundtable on Insurance Literacy, held Wednesday at the U.S. Treasury Department.
CFO Sink served as the program's keynote speaker, kicking off a full day of panel discussions about insurance education. Sink highlighted the NAIC's “Insure U: Get Smart About Insurance” consumer-education campaign, the states' emergency response to disasters and success of the My Safe Florida Home program.
“In Florida, and on a national level at the NAIC – disaster preparedness has become the hallmark of our consumer awareness,” Sink said. “Working together, we are creating a better insurance environment for consumers and sharing our successes with other states facing similar situations.”
Later in the day, several state insurance regulators participated in a panel discussion titled, “What Americans Should Know About Insurance and Regulation.” Panel participants included:
CFO Sink’s contracting site is first in state government to feature original contracts online
Continuing her efforts to increase accountability over government contracting, Chief Financial Officer Alex Sink has blazed a new path in providing open access to agency contracts online. By visiting CFO Sink’s Web site, www.MyFloridaCFO.com, and clicking on “Contract Search,” Floridians can not only review the type of contracts issued by the Department of Financial Services (DFS), but also can view direct order renewals and original contracts online, complete with signatures.
“We need to make government more accountable, and that means making it easy for Floridians to see their tax dollars at work,” said CFO Sink, who oversees DFS. “I encourage Floridians to take advantage of their constitutional right to see their government in action and hope that other agencies will follow our lead in providing more transparency in government contracting.”
CFO Sink’s Contract Search feature provides a list of all DFS contracts that can be sorted according to the user’s preferences. Each individual contract inquiry is met with both a brief summary of each contract and a PDF attachment of either the original contract including the signature page and terms and conditions, or the direct order renewal contract through www.MyFloridaMarketPlace.com.
Users can refine their searches by making selections within the following menu options:
At the Enterprise Florida Board Meeting in St. Petersburg on October 16, Florida Chief Financial Officer Alex Sink spoke to fellow members about the state of Florida’s financial position in light of current issues in the market and a slowing economy.
“Many of my teammates responsible for paying Florida’s obligations and managing our investments have never seen the economic challenges we are facing today because the revenue has always been there,” said CFO Sink. “The good news is that Florida remains financially solid and although this is one of the toughest budget years we’ve seen for some time, we are monitoring events daily to guard against market-driven surprises.”
The CFO described bringing together a working group from the State Treasury, the Division of Accounting and Auditing, the Governor’s Economic and Demographic Research Group, and the Legislative Budget Office to ensure that the state is prepared to respond to further slows in the economy. Their first task was to graph Florida’s revenues and disbursements over the budget horizon.
“Adding this level of attention to our managing the state’s finances will provide the early warning signs necessary for Florida leaders to take action swiftly,” she said. “If it becomes necessary to have a special session on the budget, at least it won’t come as a surprise, and we’ll be prepared.”
CFO Sink noted that the Department of Financial Services (DFS) is also watching the status of Florida’s banks carefully to protect consumers, and she asked banking lenders at the meeting to do what they can to continue lending to Florida businesses to keep the economy moving.
She also explained the growing credit crisis impacting Florida’s local and county governments and a letter she recently sent to U.S. Federal Reserve Chairman Ben Bernanke. The CFO requested that the Fed’s recent proposal to create a Commercial Paper Funding Facility (CPFF) be extended to include municipalities who have seen that avenue for financing dry up completely, pushing them into high-interest loans that will ultimately increase the cost of services to Florida families.
“It is so important that businesses and local governments work together in these difficult economic times,” said CFO Sink.
As a member of the Florida Cabinet, General Bob Milligan helped create the current position of Chief Financial Officer. During his years as Comptroller of Florida, General Milligan earned a reputation as an independent leader who puts people ahead of politics by doing the right thing.
Over the past several years, the General has served as Insurance Consumer Advocate for Chief Financial Officer Alex Sink, and has stepped up to supervise the State Board of Administration during the current economic changes.
Having served the State of Florida with great distinction, General Bob Milligan has earned the respect and admiration of his peers, his community, and the State of Florida. The Governor and Cabinet thank and recognize General Milligan for his devotion to the State of Florida and our citizens.
Recent data from the Employee Benefit Research Institute indicates that in the United States less than two-thirds of workers or their spouses are currently saving for retirement. Workers have access to defined benefit and defined contribution plans to assist in preparing for retirement, yet may not be taking advantage of these plans. The Governor and Cabinet declare the week of October 19-25, 2008, as National Save for Retirement Week in Florida and encourage citizens to support the goals and ideals of this week.
CFO Alex Sink, with the Governor and Cabinet, recognized October, 2008, as Disability Employment Awareness Month in Florida and commended three programs for their dedication and outstanding assistance toward improving the quality of life for the citizens of Florida with disabilities.
Florida’s Agency for Persons with Disabilities provides services so more than 35,000 Floridians with developmental disabilities can live and work in local communities. Florida’s Vocational Rehabilitation and Blind Services programs within the Department of Education assist people with disabilities so they may become employed.
These three programs have had an overwhelming impact on the lives of thousands of citizens in Florida with disabilities by offering services such as job placement, job training, support services, and job coaching.
Are you the chief financial officer of your family? Are you always looking out for the best deals, wise investments and smart moves for your family's financial security?
As your family's fiscal watch dog, keep an eye on this column for money-smart ideas from the Chief Financial Officer of Florida, Alex Sink.
Idea: Enroll uninsured children in Florida KidCare
Florida KidCare is the state’s children’s health insurance program for uninsured children under age 19, including four different programs: MediKids, Healthy Kids, Children's Medical Services and Medicaid.
Some of the services Florida KidCare covers are doctor visits, check-ups and shots, hospital, surgery, prescriptions, emergencies, vision, hearing, dental and mental health care.
When application is made for insurance coverage, Florida KidCare will check which program the child may be eligible for based on age and family income. There is no charge for Medicaid for children (KidCare Medicaid). For other Florida KidCare programs, monthly premiums depend on the household’s size and income. Most families pay $15 or $20 a month. Grandchildren who live with grandparents may be eligible for Florida KidCare.
To apply for Florida KidCare, call 1-888-540-5437 by telephone, apply online or print an application and instructions.
Energy tips for Florida families - these actions represent ways to behave kindly toward Mother Earth, AND save money as well as energy.
These tips are presented by CFO Alex Sink's science advisor Meg Lowman, Ph.D., on the faculty at New College of Florida. Dr. Lowman has written numerous award-winning books and is an expert on the rainforests of the world.
A Few Tips Around the House to Save Money (and Energy)
Although much of our energy consumption comes from large activities such as agriculture, transportation, and manufacturing, we can all collectively save energy in our households (and save money at the same time). Here are a few win/win suggestions for families looking at ways to save a few pennies (and energy as well) during these turbulent economic times:
1. Switch out your incandescent light bulbs to CFLs (compact fluorescent lighting) throughout the house – the initial cost will quickly be outweighed by the savings in utility bills.
2. Install one ceiling fan every year in your home -- starting with your living room or kitchen -- and they will reduce the need for AC in highly-trafficked areas.
3. Check out your kitchen, and give away two small appliances if you have an excessive diversity of electrical gadgets.
4. Hair-dryers consume a lot of energy – if you can shower ten minutes earlier, perhaps you can partially air-dry your hair as part of your daily routine.
5. Take shorter showers where possible – engage your kids in a competition!
6. Consider foregoing hot water for washing clothes.
7.Air-dry clothes if you can.