Volume 6 Number 4 January 23, 2009
This week, millions of Americans journeyed to our nation’s capital to watch President Barack Obama take the oath of office and become the 44th President of the United States. In a departure from the optimistic tone echoed during his campaign, President Obama spoke somberly of the hardships facing the nation, with particular emphasis on the global economic crisis and international relations.
President Obama also spoke about the federal economic stimulus money that is set to provide a much-needed boost to the nation’s economy. He is meeting with leaders from both parties and taking a bipartisan approach to the creation of this stimulus package, which promises to aid the many states suffering from budget deficits.
The federal economic stimulus is expected to be finalized in February, and CFO Sink will continue to work with Florida’s Congressional delegation and President Obama's administration in an effort to maximize Florida’s allocation of federal money.
With one in 10 Floridians on food stamps, an 8.1 percent unemployment rate, and continually decreasing state revenues, Floridians need to receive as much federal support as possible.
On Thursday, CFO Sink spoke to the Florida Philanthropic Network (FPN) as part of the organization’s annual summit. FPN is a statewide coalition of grant makers working to strengthen philanthropy through research, education and public policy. Collectively, the group’s grant makers invest more than $180 million annually in the state’s nonprofit sector.
In her keynote address, CFO Sink cited the tough economic times affecting Floridians, noting the state’s $2.3 billion budget deficit, growing unemployment rate, and 22-month inventory of homes on the market. She stressed the importance of prioritizing and smart long-term financial planning in light of declining revenues.
“Whether applied to state government or the nonprofit sector, smart fiscal leadership is instrumental in navigating these tough budget times,” said CFO Sink. “I advocate taking a more surgical approach to the state budget and prioritizing mission-critical services, and I know these ideas also apply to the economic and social challenges you’re facing.”
On Monday, January 26, CFO Sink will help kick off Super Bowl XLIII week by distributing free copies of “Financial Football,” an NFL-themed, interactive, money management video game. The game, which was created specifically for teenagers and college students, will be distributed to every high school, college and public library in the state.
The centerpiece of Visa’s nationwide educational initiative with the NFL and PLAYERS INC, “Financial Football” helps students tackle their financial futures. This computer-based game is accompanied by a classroom curriculum and can also be downloaded for free on cell phones.
More than 150 investors attending the Waller-Wax annual breakfast in Tampa shared their thoughts with Florida’s CFO Sink on Florida’s current economic issues following her opening remarks on “Making Florida the Best State in the Nation.”
“I don’t know about anyone else, but I think Florida is the best state in the nation,” said CFO Sink. “Florida is in many ways a mirror of the U.S. economy. I am confident that the entrepreneurial spirit that is our state’s history, combined with thoughtful leadership in our state government, will lead us through these difficult times.”
CFO Sink noted that a secure financial future for Florida – just as for individuals and businesses – requires discipline and planning for the long-term. Planning that would diversify Florida’s economy, state government’s revenue stream and build increased workforce talent.
Florida’s ongoing work to diversify the economy and create more high-tech and higher paying jobs has paid off and has been a buffer for the state’s economy from faltering real estate market. The CFO encouraged those in attendance to engage with their legislators and local elected officials to share ideas in resolving Florida’s economic challenges.
Anyone who purchases a life insurance plan should consider adding a waiver of premium, sometimes called disability waiver of premium.
A waiver of premium is usually an extra option added to your life insurance policy that protects you in the event of serious illness or injury. By purchasing this option, your insurance company agrees to pay your premiums for you under certain specified conditions.
You purchase life insurance to protect your family and loved ones should you die. That coverage would be difficult to continue if you are disabled through accident or illness and cannot work. With financial difficulty the struggle to pay your premiums could cause your policy to lapse and the life insurance policy you initially purchased will be of no use to your loved ones.
A waiver of premium is an extra cost in addition to your life insurance policy premium. Your monthly premium will go up but only slightly. This will of course vary across life insurance companies but most will make it worth your while to buy it. Some offer it for as little as 2 percent on top of your normal policy.
The definition of serious illness or injury will certainly be different for various insurance companies. The terms and conditions of the waiver of premium are set by the individual insurance company and should be considered carefully when choosing a company and policy.
In case of illness or injury, the life insurance company should be notified so that the proper forms can be filed and documentation provided to ensure that the waiver of premium goes into effect during the time of disability.
This video from Good Morning America follows a Florida family and its struggle to get a life insurance policy paid.
The Internal Revenue Service recognizes that many people may be having difficult times financially. There can be a tax impact to events such as job loss, debt forgiveness or tapping a retirement fund. If your income decreased, you may be newly eligible for certain tax credits, such as the Earned Income Tax Credit.
Most importantly, if you believe you may have trouble paying your tax bill contact the IRS immediately. There are steps we can take to help ease the burden. You also should file a tax return even if you are unable to pay so you can avoid additional penalties.
Here are some “What if” scenarios and the possible tax impact:
Information and resources from irs.gov.
Almost half of all prescriptions filled in the United States use generic drugs. Many people are concerned because generic drugs are often substantially cheaper than the brand-name versions, wondering if the quality and effectiveness have been compromised to make less expensive products. The FDA (U.S. Food and Drug Administration) requires that generic drugs be as safe and effective as brand-name drugs.
Actually, generic drugs are cheaper because the manufacturers have not had the expenses of developing and marketing a new drug and the generic market is competitive. When a company brings out a new drug, the firm has already spent substantial money on research, development, marketing and promotion of the drug. A patent has been granted that gives the company an exclusive right to manufacture and sell the drug while the patent is in effect. The U.S. government stipulates twenty years as enough time for the recovery of those costs and after twenty years the patient need not pay the extra cost.
There's no truth to the idea that generic drugs are manufactured in poorer-quality facilities or are inferior in quality to brand-name drugs. The FDA applies the same standards for all drug manufacturing facilities, and many companies manufacture both brand-name and generic drugs. In fact, the FDA estimates that 50% of generic drug production is by brand-name companies.
Another common misbelief is that generic drugs take longer to work. The FDA requires that generic drugs work as fast and as effectively (comparable bioavailability) as the original brand-name products. Bioavailability is the amount of time the drug takes to be absorbed into the body under identical circumstances; manufacturers of generic drugs must show that the bioavailability of their product does not differ by any statistically significant amount (often considered 20 percent from the mean absorption) from that of the brand-name product. Generics have the same amount of active ingredient; the amount of time it takes for your body to absorb it may be slightly different, but not by enough to change the effectiveness of the drug.
Generic versions of a drug have different colors, flavors, or combinations of inactive ingredients than the original medications. Trademark laws in the United States do not allow the generic drugs to look exactly like the brand-name preparation, but the active ingredients must be the same in both preparations, ensuring that both have the same medicinal effects.
Be aware that this applies to over-the-counter medications, too. Most brand-name non-prescription drugs are identical to store-brand alternatives when it comes to active ingredients per the law in the U.S. So read the active ingredients on the brand-name box and match it up to the proper generic to find the same medicine at a fraction of the cost.
The only catch is that the specific drug you have been prescribed may not yet have a generic version. You and your doctor might consider switching to a similar medication with a generic version already on the market in order to save money or use your insurance's prescription coverage. Some insurance plans do not pay for more expensive, newer drugs. Review your options with your insurance company by calling the customer service phone number and/or visiting the Web site.
Resource: Office of Generic Drugs, Center for Drug Evaluation and Research, U.S. Food and Drug Administration.
One of the current green discussions is whether the use of paper towels is environmentally more or less friendly than the use of cloth towels and rags in your kitchen. The issue generally comes down to a split decision:
Use environmentally friendly cloth dish towels and rags for most kitchen drying and cleanup and reserve the use of paper towels for only the dirtiest of jobs.
To improve the green factor in your kitchen, purchase paper towels made of 100 percent recycled materials, as new paper comes from virgin fiber straight from a tree. Buy paper products that contain a minimum of 90 percent post-consumer waste, including the core of the roll. If every household in the United States replaced one roll of virgin-fiber paper towels with 100 percent recycled paper towels, we could save 1.4 million trees.
Bright white paper towels are bleached, a process that releases numerous toxins, so choose unbleached paper towels. If those are unavailable, opt for process chlorine free (PCF) next, or elemental chlorine free (ECF) as a last choice.
Choose paper towels with no added pigments, inks or dyes, thus no printed patterns.
Select packaging with minimal environmental impact, such as that made of recycled and recyclable materials; imprinted with safe inks; and containing no toxic metals, dyes or inks. Items with the largest amount of product will minimize packaging waste.
If you approach the use and cleaning of your dish towels with care, cloth is the greener option. Some say that washing cloth must be more energy-intensive than using paper, but electric dryers are actually twice as energy efficient as the manufacture of paper towels. When you factor in all of the components of making a paper towel for a single use, paper towels are about twice as energy-intensive as cloth and create more greenhouse gases overall. A dish towel may go through similar processes to get to your kitchen drawer, but it will be used over and over, rather than being sent directly to the landfill.
Toss dish towels in with other laundry so as to minimize wash time and energy. For big spills, use cleaning rags cut from old bath towels or washcloths.
If you are buying new dish towels, be aware that conventional cotton is a crop intense in pesticides, so purchase organic cotton. Alternatively, choose hemp or linen, which are more sustainable than conventional cotton.