Bell Canada has admitted to problems tracking Internet use for some customers.
This is embarrassing, given the company
Federal regulators on Thursday filed insider-trading charges against six people they say worked for an expert-networking firm and passed on confidential corporate information to investors.
Expert networks connect analysts and experts with investors seeking information, for a fee. They are playing a growing role on Wall Street.
The Securities and Exchange Commission announced the civil charges against the six, accusing them of passing tips to hedge funds and other investors that enabled them to make about $6 million in illegal profits. They had previously been named in criminal cases brought by federal prosecutors, as part of what authorities say is the biggest hedge fund insider-trading case in history.
The SEC said four of the six were employees of technology companies who moonlighted as consultants and exploited their access to confidential information about Advanced Micro Devices Inc., Apple Inc., Dell Inc. and other companies.
The six were consultants or employees of Primary Global Research, based in Mountain View, Calif., which connects experts and consultants with investors seeking information in the technology, health care and other industries. Prosecutors have portrayed the firm as an incubator for insider trading.
Named by the SEC were Mark Anthony Longoria, Daniel DeVore, Winifred Jiau, Walter Shimoon, Bob Nguyen and James Fleishman.
The U.S. attorney’s office in Manhattan announced that an indictment was returned Thursday against Fleishman on criminal charges of conspiracy to commit securities fraud and conspiracy to commit wire fraud.
His attorney, Ethan Balogh, said “Mr. Fleishman is innocent of these charges, and we intend to contest them and establish his innocence at trial.”
Balogh declined to comment on the SEC charges, saying he hadn’t yet seen the civil lawsuit.
Nguyen and DeVore pleaded guilty to similar charges in federal court in Manhattan in recent months.
The six Primary Global consultants and employees “schemed to facilitate widespread and repeated insider trading by several hedge funds and other investment professionals,” SEC Enforcement Director Robert Khuzami said in a statement payday loan.
The SEC is seeking unspecified restitution and civil fines from the six; the agency also seeks to bar Longoria, DeVore and Shimoon from serving as officers or directors of any public company.
Attorneys representing Longoria, DeVore, Jiau and Nguyen declined to comment Thursday. Shimoon’s lawyer didn’t return a telephone call seeking comment.
The networks of industry analysts, experts and consultants channel details between corporate America and Wall Street about what companies are up to _ potentially giving some investors an unfair edge. The networking firms set up meetings and calls between current and former managers, and traders who want an investing edge.
The government’s investigation targeting financial industry players accused of masking inside information as legitimate research is an offshoot of what’s been called the biggest hedge-fund insider-trading probe in history. That probe of the Galleon group of hedge funds, revealed with arrests last year, accused more than two dozen defendants of conspiring to share secrets that led to over $50 million in illegal profits.
Among those arrested was Raj Rajaratnam, a one-time billionaire who founded the Galleon group. Free on $100 million bail, he has pleaded not guilty and maintains that he only traded on publicly available information. A person familiar with the probe said Wednesday that the government has identified Rajaratnam’s brother, Ragakanthan, as a co-conspirator in the scheme.
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Associated Press writer Larry Neumeister in New York contributed to this report.
The Federal Reserve will probably push forward with $600 billion in securities purchases even as the biggest jump in business loans in more than two years adds to signs the U.S. economy is gaining strength.
Commercial and industrial loans increased at an annual rate of 7.6 percent last month, the largest gain since October 2008, according to Fed data. Total bank credit has risen in three of the past six months as business loans cushioned against declines in real estate and consumer credit.
Bernanke and his fellow policy makers will probably note improvements in the economy such as higher consumer spending in a statement to be released tomorrow, former Fed governor Lyle Gramley said. Encouraging signs like firmer bank credit are unlikely to prompt a reduction in stimulus so long as growth remains weak and unemployment persists near 10 percent, he said.
“The Fed is not ready to let up on its accelerator,” said Gramley, senior economic adviser for Potomac Research Group in Washington. “They are going to be impressed with the fact the economy has gained some momentum, but there are still strong headwinds to growth, and bank lending is quite modest.”
The Federal Open Market Committee today begins a two-day meeting in Washington that culminates with a policy statement at around 2:15 p.m. tomorrow.
Policy makers will probably affirm their plan to buy Treasury securities through June to reduce long-term yields and spur lending, said Mark Gertler, a New York University professor and research co-author with Bernanke.
Close to Zero
Since reducing its target federal funds rate to near zero in December 2008, the central bank has used its balance sheet as a monetary policy tool. Its assets have tripled to $2.43 trillion from $873 billion in February 2008.
The committee may continue to describe credit as “tight” while acknowledging a pickup in growth in the fourth quarter to the fastest pace in three quarters, Gramley said.
Gross domestic product rose last quarter at a 3.5 percent annual rate, up from 2.6 percent in the previous three months, according to the median estimate of 67 economists surveyed by Bloomberg News before a Jan. 28 Commerce Department report.
Bernanke probably won’t be in a hurry to withdraw stimulus with joblessness persisting at 9.4 percent and inflation low, Gertler said. The Fed will probably affirm its pledge to keep interest rates low for an “extended period.”
“This is likely to be a stay-the-course meeting,” Gertler said.
Timing Withdrawal
When weighing the timing for a withdrawal of stimulus, the Fed will look for a sustained rise in credit such as business loans, said Paul Kasriel, chief economist at Northern Trust Corp. in Chicago. This would signal banks are deploying record reserves, potentially rekindling inflation, he said.
“That is going to be a tipoff that the Fed has to start an exit strategy” from its stimulus, said Kasriel, a former research economist at the Chicago Fed cash advance. “We are not there yet.”
Treasury yields have risen amid signs of a stronger economy. The yield on the 10-year note increased to 3.40 percent yesterday from 2.57 percent after the Nov. 3 FOMC meeting, when the asset purchases were announced.
Yields have increased because of “a stronger economy and better expectations,” Bernanke said at a forum in Arlington, Virginia on Jan. 13.
Jim Comiskey, a senior market strategist at Lind-Waldock in Chicago, disputed that view, saying yields have risen on concern that Fed bond purchases will stoke inflation.
“The market is scared about the inflationary impact of what the Fed is currently doing,” Comiskey said.
Slight Increase
The personal consumption expenditures index excluding food and energy rose 0.8 percent in November from a year earlier, according to Commerce Department data released last month. Including all items, prices rose 1 percent. That’s less than policy makers’ long-term goal for inflation of 1.6 percent to 2 percent.
Fed officials will update their economic forecasts at the meeting beginning today. In their forecasts at the Nov. 2-3 meeting, most central bankers saw inflation excluding food and energy ranging from 0.9 percent to 1.6 percent this year and from 1.0 percent to 1.6 percent in 2012.
Since the announcement of the Fed’s asset purchases on Nov. 3, the dollar has risen 3.7 percent against the euro as of yesterday in New York and the Standard & Poor’s 500 Index has climbed 7.8 percent.
Investment-Grade Companies
The premium that investment-grade companies pay to borrow above government debt narrowed to 1.59 percentage points yesterday from 1.78 points on Nov. 3, according to Bank of America Merrill Lynch index data.
The Fed needs to keep rates low to aid deleveraging and fuel growth, said Lena Komileva, head of G-7 market economics at Tullett Prebon Plc, a broker for commercial and investment banks in London.
“The economy’s debt level is so high it will make it extremely difficult for the Fed to begin raising borrowing costs in the near future,” Komileva said. The central bank probably won’t begin to raise rates until the middle of next year, she said.
Back in the good old days, when his family still controlled the nation’s largest brewery and no one doubted the Busch family name was the closest thing St. Louis had to royalty, August A. Busch IV would host a small party on Super Bowl Sundays for top marketing executives.
It was an informal gathering, held at Busch’s home in Huntleigh, a 6,300-square-foot mansion with 16 rooms and a massive six-columned portico set on 4 1/2 wooded acres of an exclusive suburb. The same place is now the setting for the many unanswered questions surrounding a young woman’s death last Sunday, the type of curious tragedy that previously has stricken Busch and his famous family.
But back then, the mansion was still just a place to watch a football game, or really to watch the many Super Bowl TV ads for Budweiser and Bud Light, their Clydesdales and talking frogs.
It was a good period in Busch’s life. He had risen in 2006 at age 42 to be Anheuser-Busch’s chief executive, just like his father and his father’s father and so on. That same year he settled down and got married, ending years of broken engagements and endless relationships.
He appeared to have retired the problems of his wild youth, including a 1983 car accident that killed a young woman when he was a college freshman and a car chase with police in 1985 through the streets of St. Louis. He no longer appeared to be the party boy with a reputation for speedboats and blondes.
Many acquaintances said that Busch, known widely as the Fourth, had grown up. As he told Fortune magazine in 1997, when he was climbing the corporate ladder, “I’m not going to hang out in a bar till 11 if I need to be up at 5 to conquer the world.”
In 2000, then-Post-Dispatch gossip columnist Jerry Berger lamented Busch’s failure to produce fodder, writing: “The young Busch is much more likely these days to race from one corporate meeting to another than to posh watering holes.”
And then, in 2008, the brewery was sold.
Busch was blindsided by the $52 billion takeover of his family business, according to former co-workers. He had barely moved into the CEO’s office when it appeared that his father and former A-B CEO, August Busch III, decided to sell out. Father and son had a notoriously icy relationship. Now, one more common bond had been cut.
Busch disappeared from public view. Anheuser-Busch InBev kept him on as a nonexecutive director and gave him a rich contract as a consultant that runs through 2014. Corporate filings show that Busch attended seven board meetings in 2009. He still has an office at A-B InBev’s North American headquarters in St. Louis, although it is unclear if he has ever used it. Beer industry veterans noted his absence from the trade shows and conferences and meetings that once dominated his life.
In 2009, he and his wife divorced. Friends said he spent his time in Florida or at his Lake of the Ozarks house.
They wondered and worried what Busch would make of himself.
A-B InBev also had agreed to provide Busch with “personal security services” through the end of 2011. It was not known if security personnel were with him last weekend. An A-B spokeswoman declined to comment.
Last Sunday’s death of Adrienne N. Martin at Busch’s home is still being investigated. The St. Louis County medical examiner’s office has said it has not determined the cause of death. Results from toxicology and other tests were pending.
Martin’s ex-husband has told the Post-Dispatch that she had a heart condition, but that has not been confirmed by authorities.
Martin was pronounced dead at 1:26 p.m. last Sunday.
Martin, 27, of St. Charles, was the divorced mother of a son. She and Busch had been dating for a year, Busch attorney Art Margulis said.
A law enforcement source told the Post-Dispatch the death was being investigated as a potential overdose.
Martin’s death recalled what happened to Busch 27 years ago, when he was a freshman engineering student at the University of Arizona in Tucson.
In November 1983, also on a Sunday, Busch crashed his new Corvette. Michele Frederick, a 22-year-old waitress, was killed in the accident. Police discovered Busch at his home six hours after the accident, disoriented and suffering from a fractured skull. After lengthy legal wrangling, prosecutors in Arizona declined to press charges.
In 1985, Busch sped away from undercover St. Louis police officers, later saying he thought the detectives were kidnappers. A jury acquitted him of three counts of assault, stemming from accusations that he tried to run down detectives when they approached his car in the city’s Central West End.
The Busch family has been touched by tragedy before, in unusual ways that seemed to only confirm the family’s role as what Life magazine once termed “the baronial Busches.”
In 1976, Busch’s uncle Peter Busch fatally shot his friend David W. Leeker in a bedroom at the Grant’s Farm mansion. Peter Busch said the pistol fired accidentally. He pleaded guilty of manslaughter and received probation.
In 1974, the youngest child of August “Gussie” Busch Jr., Christina, died in a traffic accident. She was 8 years old.
The Grant’s Farm mansion, which resembles a Bavarian-styled castle, was also the place where August Busch Sr. committed suicide with a gun in 1934.
Authorities have not indicated there were any signs of wrongdoing in last Sunday’s death. But tragedy once again has visited the Busches.
And outside Busch’s home in Huntleigh, the massive iron gates blocking the driveway seemed to be less a reflection of the privilege of wealth, than Busch’s desire to block out the world.
Treasury Secretary Tim Geithner outlined the benefits of the government’s bailout of the financial system Thursday, saying that the overall cost will be a "fraction" of the original estimate.
Geithner told the Congressional Oversight Panel that the cost of TARP, the Troubled Asset Relief Program, will be no more than the amount spent on the program’s housing initiatives.
"The remainder of the investment programs under TARP — in banks, AIG, credit markets, and the auto industry — will likely, in the aggregate, ultimately yield a positive return for taxpayers," he said.
The government created the $700 billion program at the height of the financial crisis in 2008. But the cost of TARP has been significantly reduced in the years since, as the economy has stabilized and investments made under the program have become profitable.
"Because of the success of the program, TARP is likely to cost a fraction of that amount," he said. The bailout, he said, "will rank as one of the most effective crisis response programs ever implemented," in terms of direct financial cost.
The Congressional Budget Office estimated last month that TARP will cost taxpayers $25 billion, down from a previous projected cost of $109 billion in March.
Geithner said he thinks the final cost will be below the CBO’s estimate. "I think it’s a little high," he said about the $25 billion projection. Although he acknowledged much of it depends on how the government’s housing initiatives play out, among other things.
TARP, enacted under the Bush Administration, was initially intended to stabilize the banking system by buying or backing "troubled assets." It subsequently evolved into a broader effort to rescue the economy and prop up the housing market.
The bulk of the remaining cost of TARP stems from the bailout of insurance giant AIG and the auto industry, as well as efforts to prevent foreclosures, according to CBO. Those programs cost about $45 billion, while other transactions resulted in a net gain of $20 billion for taxpayers.
Geithner said the economy has made "substantial progress" since the recession ended last year. But he acknowledged that significant challenges remain for the economy and the financial system.
"We are still living with the scars of this crisis, and both our financial system and the economy as a whole continue to show signs of significant damage" he said.
While household wealth has begun to recover, Geithner noted that many families are still struggling with high unemployment and financial stress. The housing market "remains weak" and small businesses are still under pressure, even as larger companies have returned to profitability, he said.
"It’s going to take years — years — to repair the damage," he said.
The economy grew slightly faster last summer than first thought, benefiting from stronger spending by U.S. shoppers and improved overseas sales of U.S. goods.
The Commerce Department reports that gross domestic product increased at a 2.5 percent annual rate in the July-September quarter. That was better than the 2 percent pace initially estimated last month.
More brisk spending by American consumers, especially on autos and other big-ticket goods, and stronger sales of U fast payday loans.S. exports to foreign customers were the main reasons for the upgrade.
Still, the modest improvement isn’t enough to drive down the 9.6 percent unemployment rate.
Reserve Bank of Australia policy makers said they raised interest rates this month to counter an expected rise in inflation as strengthening mining investment, employment and trade propel the nation’s economy.
“The board judged that the balance of risks had shifted to the point where a modest tightening of monetary policy was prudent,” the RBA said in minutes of its Nov. 2 meeting released in Sydney today. The RBA increased its benchmark interest rate at that meeting to 4.75 percent after a five-month pause.
Surging shipments of iron ore, coal and energy to China are boosting Australia’s growth, prompting companies such as BG Group Plc to increase investment and hiring. A report last week showed the nation’s employers added workers in October for an eighth consecutive month and the participation rate in the labor force surged to a record.
“A gradual upward trend in inflation remained likely over the medium term,” policy makers said in the minutes. “If monetary policy was to be conducted in a forward-looking way, these developments meant there was a case for increasing interest rates at the current meeting.”
Governor Glenn Stevens has raised the RBA’s overnight cash rate target seven times since October 2009, in contrast with the U.S. Federal Reserve’s policy of a benchmark rate near zero since December 2008. That divergence has contributed to a 9.7 percent increase in the local dollar versus the U.S. currency this year, the second-best performer among the 16 major currencies.
The Australian dollar surged this month to the highest level since exchange controls were removed in 1983, reaching $1.0183 on Nov. 5.
Currency Effects
Policy makers said that while the stronger currency was affecting industries including tourism, surveys indicated that conditions for the nation’s manufacturers were “around average.” That partly reflected the benefits of cheaper imported capital equipment and components, according to the minutes.
In the minutes, the central bank said that while this month’s decision to increase rates was also “finely balanced,” some of the uncertainties that were a reason to keep borrowing costs steady, including risks to the global economy, “had lessened recently.”
Policy makers noted the possibility that the nation’s banks would boost rates on loans by more than the move in the benchmark rate, while saying that “this tendency would not be lessened by delaying a change in the cash rate,” the minutes showed.
Banks’ Increases
Westpac Banking Corp. and National Australia Bank Ltd. last week announced increases to their standard variable home-loan rates, following Australia & New Zealand Banking Group Ltd. and Commonwealth Bank of Australia. All boosted borrowing costs by more than the quarter percentage-point rise in the RBA cash rate.
RBA policy makers aim to keep inflation within a target range of 2 percent to 3 percent. While the rate slowed to 2.8 percent in the third quarter, a monthly gauge compiled by TD Securities Ltd. and released Nov. 1 showed an annual jump in consumer prices of 3.8 percent for October.
“While inflation had moderated, it was likely that the decline was now largely complete,” the minutes said today. “Inflation was expected to remain around the current level for several quarters, but was likely to move higher thereafter.”
The RBA, in a quarterly report on Nov. 5, reiterated its forecast that economic growth will strengthen to 3.75 percent by the end of 2011, climbing to 4 percent by the end of 2012. Consumer prices will rise 2.75 percent through June 2012; previously, the RBA had estimated inflation of 3.25 percent through mid-2011.
Job Growth
A report last week showed Australian employers added 29,700 workers from September, almost 50 percent more than the median forecast for a 20,000 increase in a Bloomberg News survey of 24 economists. The unemployment rate rose to 5.4 percent in October, a six-month high as the participation rate in the labor force surged to a record.
BG Group, a U.K.-based energy company, said last month it will begin work on a $15 billion liquefied natural gas venture in Queensland, generating 5,000 construction jobs.
Even so, policy makers said in the minutes that Australian consumers, whose spending accounts for more than half of gross domestic product, remained cautious.
Home-building approvals and retail sales were weaker than economists forecast in September, and house-price gains decelerated in the third quarter, reports published this month showed. Consumer confidence declined in November to a five-month low, according to a survey released last week.
Traders in futures contracts are betting on a 6 percent chance the RBA will boost its key rate by a quarter point to 5 percent next month, according to Bloomberg calculations based on interbank futures on the Sydney Futures Exchange before the minutes were released.
A longtime hot spot that helped set the stage for the development of the Seventh Avenue retail corridor has closed its doors.
My Florist Cafe, at 530 W. McDowell Road, was closed as of Friday. Its phone number was disconnected.
The Ventura, Calif., location remains open. An employee there said each location operated independently, and he didn't know what had happened to the Phoenix restaurant.
The Phoenix restaurant, which sits on the corner of Seventh Avenue and McDowell, was one of the first independent shops to locate along the Seventh Avenue curve. Pei Wei, Starbucks, Zoe’s, a number of antique shops, Flo’s on Seventh, the Wag N’ Wash and Copper Star coffee are among the retailers that conduct business there.
According to the National Restaurant Association, the industry has been hit especially hard by the recession as consumers cut back on discretionary spending. Consumers also are opting for cheaper alternatives when they go out to eat, an industry practice known as “trading down.”
Independents aren’t the only ones being hit. Other restaurants that have recently announced closures include two national chains, Lone Star Steakhouse and Jack in the Box.
NRA figures show 44 percent of restaurant operators reported negative same-store sales for the fourth consecutive month in July, and 46 percent reported a decline in traffic — up from 43 percent in June.
An index used by NRA, compiled through a confidential monthly survey of its members, reflected a decline in the outlook of restaurateurs, who expect the economy to remain challenging.
Restaurant sales are expected to hit $580 billion nationwide and $8.6 billion in Arizona this year. There are almost 9,000 eating establishments in this state, employing more than 250,000 people.
The 3PAR bidding war finally came to its conclusion Thursday after Dell conceded victory to Hewlett-Packard.
The winning bid was HP’s offer of $33 a share, or $2.1 billion — a stunning 242% premium over the value of 3PAR’s stock before the bidding war between Dell and HP began on Aug. 16.
That was too rich for Dell’s blood, the company said.
"We took a measured approach throughout the process and have decided to end these discussions," Dave Johnson, Dell’s senior vice president of corporate strategy, said in a prepared statement.
3PAR had previously notified Dell that it would go with HP’s offer of $30 a share, made Aug. 27, but Dell came back with a revised offer of $32 a share. HP then topped that offer with a bid of $33 a share, or $2.1 billion, 3PAR said Thursday.
Dell had three days to match or improve upon HP’s bid, but it opted instead to end its pursuit. 3PAR now owes Dell a $72 million breakup fee to terminate its earlier agreement with Dell.
Dell attempted to negotiate a higher termination fee of $92 million in its latest bid, but 3PAR actually never accepted that offer, calling some of its terms "unacceptable."
The latest offers represented the eighth and ninth bids for 3PAR between the two tech giants. Dell’s first bid, for $18, came three weeks ago, kicking off a fierce bidding war.
Dell and HP had both sought out 3PAR for its portfolio of high-end data storage technology, which is a necessary component of the high-growth cloud computing business. Cloud computing enables companies to remotely access applications stored and managed in off-site data centers. The process is cheaper and more efficient than traditional models.
Both Dell and HP license others’ technology for their cloud computing offerings. They saw 3PAR as a relatively cheap acquisition and the easiest way into a high-growth business. But the company quickly grew much more expensive.
Shares of HP (HPQ, Fortune 500) rose 1%, and Dell’s (DELL, Fortune 500) stock also rose 1% after falling earlier in the day. Shares of 3PAR (PAR) rose 2% to $32.83 after rising as high as $33.84 Thursday morning.
More children are crowding into classrooms in Modesto, Calif. Parents are paying extra to send their kids to full-day kindergarten in Queen Creek, Ariz. And the school buses stopped rolling in one St. Louis area school district.
These are but a few of the unwelcome changes greeting children as they start the school year. Tight fiscal times are forcing school districts to lay off teachers, enlarge class sizes, cut programs and charge for services that were once free.
"School districts are going to be stripped down from what there were a few years ago," said Jack Jennings, head of the Center on Education Policy, an advocacy group. "They are really feeling the economic squeeze."
The national economic downturn has sucked state coffers dry, forcing cuts to school districts and municipalities. The Obama administration’s stimulus package softened the impact, but many districts still found themselves having to downsize.
"Every student is being affected in some way or another," said Dan Domenech, executive director of the America Association of School Administrators.
Teachers are experiencing the brunt of the budget cuts this year, even though Congress last week gave states an additional $10 billion to keep an estimated 140,000 educators and support staff employed.
Still, the number of teachers who won’t have a job this school year could be as high as 135,000, experts said.
While grateful for the federal funds, school officials are not sure they will be able to use it to bring back many teachers this year. Many states have yet to say how they will distribute the money and many districts have already started or set up their class schedules.
Some plan to use it to hire tutors, counselors and non-core classroom educators such as art and music teachers. But others say they may hold onto the money until the next school year, when the last of the stimulus money is set to disappear.
"We’re all looking ahead over the next couple of years and not seeing any respite," said Chris Nicastro, Missouri’s commissioner of education.
More kindergarteners per class
The great wave of layoffs means students will have to share their classrooms — and their teachers’ attention — with more of their peers.
In California, for instance, state education officials have approved 23 requests from local districts to increase their average class sizes beyond the maximum allowed. At least 33 more are scheduled to be reviewed in coming months.
This is quite a change from the previous decade, when the state received no requests.
"It’s rising exponentially," said Judy Pinegar, manager of the waiver office at the California Department of Education.
Facing a $25 million budget gap for this year, Modesto City Schools district officials decided to raise the average class size in kindergarten through third grade to 25 kids, up from 20.
The school district was initially looking to lay off one-third of its teachers, or 500 people personal loan for poor credit. But after educators agreed to give up their raises and some retired, only 50 teachers were not rehired for this school year.
Still, the larger class sizes will have an impact, said Megan Gowans, executive director of the Modesto Teachers Association.
"Students are going to feel that they are getting less one-on-one attention," she said.
Neighboring Sylvan Union School District now has elementary school classes with up to 34 students in them. That’s 12 more than the average size last year. The elementary schools now only have one librarian and no dedicated art teachers, when there used to be four of each. In all, there are 19 fewer educators on staff, said Superintendent John Halverson.
The district has gone so far to combine several grades, teaching kindergarten and first graders and first and second graders together for the first time in recent memory.
These moves allow school officials to keep some classrooms dark, helping close a $5 million gap in its $60 million budget. But the changes won’t go unnoticed.
"I can’t say it won’t have an impact because I think it will," said Halverson, who has been in the California school system for 33 years.
Paying for programs
Elsewhere in the nation, school districts have cut back on programs and services or are charging for them.
Take Queen Creek, a small town 38 miles southeast of Phoenix. When the state cut funding for full-day kindergarten programs, Queen Creek took a $900,000 hit, but decided to continue offering it…at a price. Parents have to pay $200 a month to enroll their 5-year-olds.
"Our community was used to having it," said Shari Zara, the district’s chief financial officer. "We thought we’d still offer it for those who could pay."
Some 122 kids signed up for the extended program, while another 216 are in the free half-day class. Charging tuition spared the district from having to cut teachers or programs, Zara said.
Busing is another area that has taken a hit in scores of districts.
In the Bayless school district in the St. Louis area, for example, the board and administrators decided to eliminate bus service instead of laying off staff and raising class sizes beyond the current 25 to 30 per room. The decision affects about 650 of the district’s 1,650 students and saves $240,000 a year, said John Stewart, chief financial officer.
Getting rid of transportation helped close the roughly $650,000 gap in the district’s $14 million budget. Employees also agreed to pay more toward their health insurance.
"We wanted to impact the classroom and educational process as little as possible," Stewart said.
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