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PAGE 6A - THE COMMERCE (GA) NEWS, WEDNESDAY. SEPTEMBER 24, 2008
Accepting The Money
The Jackson County Senior Center recently received a $500,000 grant
for expansion from the Department of Community Affairs. Board of
Commissioner chairman Pat Bell was presented the check recently in
Savannah, but also wanted to recognize the local people involved. Left to
right are (front) senior center director Shirley Smith, Bell, consultant Don
Clerici, (back) commissioner Dwain Smith, director of finance Jon Hulsey,
building and grounds superintendent Marty Rubio and county manager
Darrell Hampton.
School Consortium Withdraws Suit
Financial Crisis To Have
Impact On Local Economy
More Regulations, Less Available
Capital Likely Outcomes Of Crisis
The Consortium for
Adequate School Funding
in Georgia announced
Sept. 16 that it has with
drawn its lawsuit in Fulton
County Superior Court
so that it can take other
actions, including filing a
new suit in another court.
The Consortium is
composed of 50 Georgia
school systems, including
Commerce’s, which have
long contended that the
state government is failing
to provide adequate fund
ing for education.
According to a
press release from the
Consortium, leaders with
drew the suit after learn
ing that the case is being
transferred from Judge
Elizabeth E. Long, who has
presided over the case for
three years, to Judge Craig
L. Schwall just seven weeks
before the trial begins.
“Coming on the eve of
the long-awaited trial, the
transfer of our case to a
new judge created serious
problems,’’ said Joseph G.
Martin Jr„ executive direc
tor of the Consortium. “We
lost the benefit of the sub
stantial knowledge that has
been acquired by the previ
ous judge and faced the
prospect of further delays
in the case. We were also
concerned that the critical
issues in the case would
not receive a fair hearing
under the new judge.’’
Schwall, who was
appointed by Gov. Sonny
Perdue in 2005, was previ
ously the chairman of the
Fulton County Republican
Party.
Perdue hailed the with
drawal of the case as a “vic
tory for Georgia citizens
who have been paying both
sides of this lawsuit.’’
“Georgia taxpayers have
paid well over $2 million in
both bringing and defend
ing this suit,’’ said Perdue.
“When the Consortium filed
the lawsuit, they ignored the
fact that we are spending
more on education than
ever before in the state’s
history. State spending on
K-12 education makes up
nearly half of the state’s
budget. Through targeted
and innovative approaches,
we have raised the gradu
ation rate from 63 percent
in 2003 to over 74 percent.
And millions of dollars
later, the Consortium failed
to demonstrate the central
premise of its flawed argu
ment: that increased funds
always increase student
achievement.’’
Perdue also said the
Consortium showed disre
spect to Judge Schwall.
“Before Judge Schwall
could even make a rul
ing, the Consortium base-
lessly accused him of not
being impartial, retreated
and expressed plans to
file again in a transparent
attempt at forum shop
ping that undermines the
most basic principles of
this country’s legal system
and the rule of law,’’ said
Perdue. Martin said recent
cuts in state funds have
been “especially harmful to
the local school systems
that were already in finan
cial difficulty.’’
“The problems in financ
ing of Georgia’s schools
have become so wide
spread that we will seek
the support of all school
systems in Georgia,’’ said
Martin. “This interruption
gives us the opportunity
to refocus the issues in the
case and file a new law
suit.’’
By Mark Beardsley
Regardless of the success
— or failure — of the federal
government in shutting
down a financial crisis that
has seen major companies
collapse and has created a
mini-panic on Wall Street,
local financial profession
als foresee major changes
in the banking industry.
While the headlines may
relate to Wall Street, the
reverberations will be felt
on Main Street USA, says
George Evans, an advisory
director of First Georgia
Bank and a 49-year veteran
of the business — some of
it as a bank examiner.
“I think we will see more
regulation,’’ he said. “I think
you’re going to see the reg
ulatory authorities, FDIC,
the state, OCC, really get
stiffer in their policies.’’
Evans expects bank prof
its to remain depressed
until the housing crisis
eases. Part of that will be
for the lack of money to
lend as banks are forced
to set aside more of their
profits to cover bad debt.
“That’s good,’’ Evans
noted. “It shows strength,
but it cuts into profits.’’
That’s because the banks
won’t have the money to
loan and business — from
merchants to homebuilders
— will find capital scarcer
and more expensive.
By the time the issue is
resolved, Evans thinks there
will be some bank mergers
as the market settles.
“That’s not what manage
ment wants, but it’s that or
put a tape around it,’’ com
mented Evans. Noting that
there are 120 foreclosures
being advertised in Jackson
County and 157 in Barrow,
Evans warned that: “This
thing hasn’t reached bot
tom yet. It’s going to last
awhile, and that’s tough on
everybody.’’
Elton Collins, president
of Community Bank and
Trust, voiced similar senti
ments.
“The biggest thing is the
mortgage rates,’’ he said.
“It’s going to tighten up
credit. Credit cards and
home loans are going to
be a little tougher to get.
They’re all tightening up
because of liquidity prob
lems. All loans are going
to be harder to get. Partly
because of the regula
tions and partly because
of liquidity, banks aren’t
going to have the funds to
lend out they once had.’’
Like Evans, Collins sees
no immediate end to the
crisis.
“It’s going to last for some
time. I don’t think the last
shoe has dropped yet.’’
The credit crisis has
taken down Bear Stearns,
Lehman Bros, and Merrill
Lynch. Investors are ner
vous that other companies
will go under, and one can
hardly watch the news
without warnings of banks
on the edge.
But both Evans and
Collins point out that
depositors are insured by
FDIC for up to $100,000
per individual account,
up to $200,000 for joint
accounts.
The crisis has ramifi
cations for local govern
ment.
“Like for Fannie Mae
and Freddie Mac, the gov
ernment has stepped in,’’
Collins pointed out. “But in
local markets, it’s going to
make them have to show
better how they can pay
and to come up with bet
ter balance sheets to be
able to issue those bonds.
It’s going to make rating
agencies much tougher on
them.’’
That will make it more
difficult to finance large
capital projects. But what
about existing projects?
Jackson County recently
approved $45 million in
bonds for economic devel
opment. Most of that is ear
marked for roads expected
to increase property val
ues and lure industry. But
some of those projects are
on hold because the pri
vate contributions — usu
ally from developers — are
drying up, reports Finance
Director John Hulsey.
The donation of rights of
way and cash from devel
opers and property own
ers was expected to push
the value of the program to
$82 million.
That boost to the tax
digest may be years away.
In the meantime, Jackson
County has to service the
debt — along with the debt
on the courthouse, the new
jail, the previous economic
development bonds and
the Bear Creek Reservoir.
Bond money is also
going to cost more, mak
ing it harder for local gov
ernment to finance capital
projects.
“The thing for us to do
is to be kind of cautious,’’
said Hulsey. “It’ll (servicing
the debt) be a significant
challenge to us.’’
For the upcoming fis
cal year, Jackson County
plans to use $1.9 million
in reserves to balance its
budget as its revenue from
sales taxes, permit fees,
recording fees and real
estate taxes falls.
“We were living off resi
dential building permits,’’
Hulsey said.
It can be argued that the
entire economy lived off
residential construction.
For now, at least, that meal
ticket is gone.
Hickory Smoked BBQ
4 th ANNIVERSARY
Customer Appreciation Day
Saturday; September 27
from 11:30 a.m. - 8:00 p.m.
LIVE BLUEGRASS - 5 p.m. - 7p.m.
Free Samples • Give-a-ways
Come join in the celebration!
7226 S. Apple Valley Road, Jefferson, GA.
706-367-7476
Mar-Jac Chicken Cook-Off
At The 41st Annual Autumn Leaf Festival
Saturday, October 4, 2008
Maysville, Georgia
Entries are due in the Mar-Jac booth at 12:00 noon
Any dish containing chicken may be submitted,
including casseroles, soups and salads. Fried, barbecued
or smoked chicken parts may not be entered. A copy of
the recipe used must be included with the entry. By
entering the cook-off, contestants agree to allow recipes
to be published.
UGA Baseball Head Coach David Perno will select the
final three winning dishes and be available for
autographs. Bring your baseballs!
Entries will be judged based on taste, originality and appearance.
C 1st Prize: $500
2nd Prize: $300 \
3rd Prize: $200
Prizes will be awarded following announcement of the winners.
All participants must register on or before Friday,
September 26, 2008. No entry will be allowed without prior
registration. Mar-Jac employees are not eligible to enter.
To register, call Flo Becker
at (770) 531-5000 on weekdays from 8 a.m. until 5 p.m.
Mar-Jac Poultry - Good Neighbors Since 1954!
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