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Friday PM March 13th, 2009

Texas comptroller reports sluggish sales tax revenue…OPEC considers production cuts this weekend…Texas agriculture officials say ranchers have already lost nearly $1 billion because of ongoing drought…

State Comptroller Susan Combs reports sluggish sales are hurting sales tax revenue for Texas cities and counties. Combs says local governments got $433 million from sales tax in March. That’s a drop from $665.6 million returned to local governments last month. The state’s revenue from sales tax also dropped $180 million to $1.74 billion in February. Though revenue had been up in previous months, the Comptroller’s Office doesn’t expect to see funding bounce back right away due to the declining economy.

The government says the U.S. trade deficit plunged in January to the lowest level in six years as a deepening recession cut demand for imported goods. The Commerce Department said the trade imbalance dropped to $36 billion in January–a decline of 9.7 per cent from December and the lowest level since October 2002. The improvement was better than economists had expected and reflected the fact that crude oil imports dropped to the lowest point in three years and demand for a wide variety of other foreign goods from autos to heavy machinery and household appliances declined.

OPEC representatives meet in Vienna on Sunday. They could reduce daily production by up to half a million barrels, or stand pat. It supplies more than a third of world oil output. OPEC meetings are usually more clear-cut. If oil ministers of the 12-nation organization think prices are too low, they decide to crimp output–as they have at the last two meetings. If oil is too pricey, as was the case less than a year ago, they boost production. And if they are happy, they keep to the status quo. While prices are off their lows of around $30 just a few weeks ago, a barrel of crude still fetches less than a third of what it did over the summer. That’s well below the break-even point for producing nations, which could affect not only their national budgets, but oil production as well. The International Energy Agency says world demand will drop for a second consecutive year for the first time since 1982-1983. Separately, OPEC said demand for oil produced by the cartel is expected to fall this year.

AT&T is renegotiating contracts that cover 112,500 workers to reduce its health care costs. The Dallas-based telecom giant is the largest employer of union labor in the country. Five regional union contracts expire on April 4th, and a sixth expires a few months later. All are being negotiated at the same time. The last time this batch of contracts was up for negotiation five years ago, there was a four-day strike that was seen as a minor victory for the Communications Workers of America. This time, the economic meltdown has shifted the balance of power decidedly toward the employer. While the phone company’s overall results are holding up well in the recession, the contracts cover AT&T’s shrinking wired phone business rather than the growing cell phone division. Dallas-based AT&T wants concessions on health benefits, saying the wire line workers pay far fewer of their health care costs than employees on the mobile phone side. Retirees’ health benefits are also likely to be affected.

Rice University says tuition for the 2009-2010 freshmen class will be $31,430—an increase of 4.9 per cent, or $1,470 over last fall. The university also announced increases in financial aid. Next year’s tuition for current undergraduates will increase 4.9 per cent over the present rate. For sophomores and juniors, that means the same rate as entering freshmen. For seniors and fifth-year students, tuition will be $30,920 and $28,700. Tuition for most graduate students will also increase 4.9 per cent, or $1,470, to $31,430.

The NAACP is accusing Wells Fargo andHSBC of forcing blacks into subprime mortgages while whites with identical qualifications got lower rates. Austin Tighe, co-lead counsel for the National Association for the Advancement of Colored People, tells the Associated Press that class-action lawsuits are being filed in federal court in Los Angeles. Tighe says black homebuyers have been three-and-a-half times more likely to receive a subprime loan than white borrowers, and six times more likely to get a subprime rate when refinancing. He says blacks still were disproportionately steered into subprime loans when their credit scores, income and down payment were equal to those of white homebuyers. Similar NAACP lawsuits are pending against a dozen other subprime lenders.

Texas agriculture officials say ranchers in the nation’s largest cattle-producing state have already lost nearly $1 billion because of the ongoing drought. Officials said that cattle raisers have lost $829 million since last summer, $569 million of that since November. Recent rains, though welcome, came too late. Ranchers have spent substantial money on hay and supplemental feed, and the drought losses also include failed wheat crops usually used for grazing. The U.S. drought monitor map says all of Texas is in some stage of drought for the second straight week.

Large employers have lost some confidence they’ll continue to offer health benefits, according to a survey from the consulting firm Watson Wyatt. A total of 62 per cent of employers were “very confident” they will still offer benefits ten years from now, according to the survey, which was conducted late last year and in January. That’s down from 73 per cent last year. The drop marked the first decrease in employer confidence in the 14 years the survey has been conducted, according to Arlington, Virginia-based Watson Wyatt. It did the survey with the National Business Group on Health.

Jim McIngvale’s Gallery Furniture has opened its second location, after 28 years of the original store operating on I-45 North between Tidwell and Parker. The new store is in the Galleria area at Post Oak and Westheimer. The new location has 15,000 square feet of space, and another 7,500 square feet will be added later this year.

Rolls Royce is opening a marine service center in Galveston, according to the Houston Business Journal. The UK company’s Rolls-Royce Commercial Marine service center will provide repair and overhaul services starting in April for what they call a growing customer base in the region.

The Greater Houston Convention & Visitors Bureau has opened an office in Washington D.C. The GHCVB estimates that the 2,400 associations in the D.C. area have contributed more than $118 million into the Houston economy through convention business over the past three years. The bureau hopes to increase the number of bookings by 15 per cent with a year. The bureau also has sales representatives in Dallas, New York City and Chicago.

Flights between Santa Fe and Dallas will begin June 11th. The city and Dallas-based American Eagle announced that the airline will offer a nonstop daily flight. Late last month, the Federal Aviation Administration gave the Santa Fe Municipal Airport approval for regional jet service after Democratic U.S. Senator Jeff Bingaman expressed concern last year over the FAA’s delay in issuing a final environmental assessment for such service. Santa Fe Mayor David Coss calls American Eagle’s decision to start flights “a great day for Santa Fe.” The Dallas flights will be offered on a 60-day test basis using Embraer 44-seat ERJ-140 planes, which fly at an altitude of 40,000 feet and a speed of 500 mph.

The number of rigs actively exploring for oil and natural gas fell nationwide this week. The number of active rigs in the united states dropped by 44. Texas is down by 24 rigs. Baker Hughes has tracked rig counts since 1944.

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