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Show Page 10 The Ogden Valley news Volume XV Issue X May 1, 2008 Utah’s Economy Slower but not Likely to Experience Recession in 2008 According to the Spring 2008 issue of Zions Bank’s “Insight - Economic News of Utah and the Nation” released April 14, the Utah economy has decelerated to a slower growth pace in recent months but is not likely to experience a recession in 2008. Utah employment growth during 2008 is likely to be the weakest since 2003, although it will remain among the nation’s leaders. Though Utah’s commercial real estate sector remains strong, the weakness in the state’s new home construction market should continue throughout the year, before some improvement in 2009. “Serious global credit market anxiety and a weak Utah home construction sector have contributed to less vibrant Utah economic growth,” said Jeff Thredgold, economic consultant to Zions Bank and author of “Insight.” “Even as it slows, the state will rank among the nation’s leaders in job growth. Utah’s longer-term economic posture remains one of the most attractive in the nation.” The quarterly “Insight” publication features updates on current and projected economic and financial developments for the state of Utah, the nation, and the global economy. The Spring 2008 issue also exam- ines the economic value of education. Following are a few highlights from the Spring 2008 issue: • The Utah economy added 28,000 net new jobs over the most recent 12-month period, a 2.3 percent growth rate that ranks among the nation's strongest. • Though Utah's unemployment rate has seen a modest rise to 3.0 percent, the state's goods-production sector has seen solid gains in both manufacturing and natural resources jobs, though the field of construction has stalled. • On a national scale, a budget deficit of $162 billion in fiscal year (FY) 2007 was the smallest in five years, but the weak U.S. economic growth, war spending, and congressional fiscal stimulus could see the deficit in FY 2008 approach $400 billion. • The Fed cut its important federal funds rate six times by a total of 3.00 percent between Sept. 18 and March 18, with the rate falling to 2.25 percent. That aggressive monetary ease ranks with any comparable period in the Fed's 95-year history. FLAT TAX cont. from page 1 State Legislature enacted H.B. 359 Third Substitute, an omnibus, “kitchen-sink” bill. Introduced on the last night of session and therefore not subject to open and public debate, the legislation incorporated S.B. 31, Income Tax Amendments, (which sat in the House Rules Committee since February 14) into the substitute bill. “It is highly probable that this maneuver was an abuse of legislative process and violated the one subject rule. The legislators’ efforts to ‘hide the ball’ do not sit well with informed citizens.” said Lisa Watts Baskin, attorney for the initiative sponsors. The details of the initiative are being posted at <www.utahtax.org> Citizens need to take the time to investigate this resource to discover the actual impacts that recent tax policy changes will produce. Frandsen added, “In light of the current economic fallout, Utahns, along with the nation, should expect former policy analyst, and retired chemical engineer explained, “The recent income tax revisions by the Utah Legislature do not codify true income tax reform. Tax cuts do not amount to progressive tax reform. Instead, the 5% flat tax will benefit the very wealthiest of Utahns, leaving the public schools with an estimated revenue loss in excess of $190 million annually and increasing taxes for approximately 100,000 middle and low income taxpayers.” Sponsor Doug Macdonald, a petition signer, economic consultant, and former Chief Economist for the Utah State Tax Commission, stated, “Despite the fact that recent income tax reform was highly touted as a means to protect the state’s long-term economic viability, those responsible for this concept did not produce any empirical findings to support the notion.” In the 2008 General Session, the Do I Need Flood or Earthquake Insurance? Large earthquakes with magnitudes of 6.5 By Carrie Batchelor, Batchelor Insurance Agency Your home has a 26% chance of being damaged by a flood during the course of a 30 year mortgage, compared to a 9% chance of being damaged by fire. Accumulation of snow, warm temperatures, and rain increase the risk of flooding. The development of land may also increase flood risk if it changes the natural flow of water. Most homeowners’ insurance excludes damage caused by flood; thus the need for separate flood insurance. The cost of flood insurance depends on the value of your home and the flood zone your home is situated in. In the Valley, most of the premiums I have quoted have been around $350 a year, though I have given a quote an annual premium of $1,650. The difference in price is related to, again, the designated flood zone. Zones are determined by FEMA as low, moderate, or high risk. If you decide to purchase a flood policy, it takes 30 days after your purchase for the Zions Bank is Utah’s oldest financial institu- policy to become effective. Therefore, it is tion. Additional information on Zions Bank is important to purchase insurance before the available at <www.zionsbank.com> flood waters begin to rise! a severe recession, despite a general downplay by the financial talkingheads. The sponsors agree that the illusion of superior economic normalcy (or well-being) has been used to justify reallocation of education money as tax rebates. However, any single rate tax policy runs up against social justice or a sustainable society for Utahns. Taxpayers shouldn’t be taxed at the maximum rate when earning $6.00 per hour.” The initiative sponsors will illustrate this inequity and continue to re-educate the public about the use of faulty projections and inaccuracies enacted into tax policy by the Legislature. Professor Norm Waitzman, University of Utah Economics Department and petition signer, stated “In the face of unprecedented increases in the inequality of incomes in nearly a century in the United States, a trend that, along with the housing crisis and rising fuel costs, threatens the middle to 7.5 have occurred along the Wasatch fault on average of once every 400 years. These quakes have been along the fault’s central position between Brigham City and Levan. The chance of a large earthquake happening along the Wasatch Front during the next 50 years is about one in four. (UUSS) Earthquake insurance can be written as a stand-alone policy or added to your existing homeowners’ insurance. Premiums are based on style of home, construction type, and value. Earthquake deductibles are usually 10% of your dwelling’s value, or higher. So, for example, if you insure your home for $200,000, your deductible, most likely, will be $20,000. Your earthquake insurance becomes effective immediately. There is no waiting period. If there has been an earthquake in your area, the insurance companies will put a moratorium on writing policies from 30 to 90 days. So if the ground has been a shaking, it’s probably already too late to buy insurance. For more information about flood or earthquake insurance, please call 745-1155. class, our nearly flat income tax adds insult to injury. 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