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Tag: Subsidies

  • Child care programs just lost thousands of federal dollars. Families scramble to cope

    Child care programs just lost thousands of federal dollars. Families scramble to cope

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    WILLIAMSON, W.Va. — Kaitlyn Adkins is studying law to help families in her community impacted by the opioid epidemic at the heart of West Virginia coal country.

    But to do that, she needs someone to help look after her three toddlers. The first-generation college graduate said she wouldn’t be able to finish law school without access to reliable daycare.

    Providers say millions of children and their families are now at risk of losing that vital service. After two years of receiving federal subsidies, 220,000 child care programs across the country were cut off from funding Saturday. The largest investment in child care in U.S. history, the monthly payments ranged from hundreds to tens of thousands of dollars, and stabilized the industry during the COVID-19 pandemic.

    “It feels like they’re just setting everyone up for failure,” Adkins said, dropping her 2-year-old and 1-year-old twins at daycare on a recent morning before an hour-and-a-half drive to class.

    For years, providers have been raising alarm about an unsustainable business model that burdens families with high costs and leaves centers with razor-thin profit margins — issues only exacerbated by inflation and a significant workforce shortage.

    Now, providers say that without additional investment, they face the possibility of shutdown. The Century Foundation, a progressive think tank in Washington, D.C., analyzed a provider survey and government data, and concluded that in six states — Arkansas, Montana, Utah, Virginia, West Virginia, as well as Washington, D.C. — up to half of all providers may be forced to close.

    Many families and providers are calling on Congress to create a permanent funding solution to the crisis, warning of the ripple effects on the nation’s economy. A Democratic proposal failed last month without any Republican support. It would have continued the grants for five years with $16 billion allocated annually.

    The most at-risk providers are those in rural communities that predominately serve low-income families. In West Virginia, where a quarter of all children live in poverty, the situation is especially dire.

    Adkins brings her children to a center affiliated with a church in Williamson, West Virginia, where nearly 90% of families qualify for federal aid to help cover child care costs. For a family of four, that means making less than $45,000 a year. Williamson is the seat of Mingo County, where one in three residents live below the poverty line, and more than 75% of children in the county school system are being raised by someone other than their parents, often grandparents.

    Most mornings, Adkins wakes up at 5:30 a.m. to shuttle her kids to Living Water Child Care Center. She typically gets home late, and plays with and bathes her children before studying until early morning.

    The proud daughter of a former coal miner, Adkins said she’s witnessed the loss of coal jobs and the influx of opioids in the state with the highest rate of overdoses. She said taxpayers will end up paying more in the long run to welfare programs if the government doesn’t make investments now in child care.

    “We’re seeing our kids really suffer — and that’s a big problem,” said Adkins, who wants to practice law focused on child abuse and neglect. “If they have no structure and no guidance, we’re going to keep repeating cycles.”

    Starting in October 2021, Democrats’ American Rescue Plan Act disbursed $24 billion in payments to providers across the country, with varied funding based on program size and quality rating. In West Virginia, centers received an average $5,000 to $27,000 a month and family providers got between $750 to $3,200. The legislation also included $15 billion to expand the block grant program that subsidizes the cost of child care for low-income families, though it is set to expire in September 2024.

    At Living Water, a $7,000 monthly subsidy went to purchasing new curriculum and advancing employee certifications, according to Director Jackie Branch. The investment paid off: In April, the center moved up a tier in its state quality rating, increasing its monthly stabilization funding to $11,000.

    When staffers realized many children didn’t get outside playtime at home, they installed a rubber playground and colorful sunshades.

    School-aged kids can finally work on homework assignments in the after-school program thanks to recently purchased computers.

    Like most providers in the state, Living Water was also able to offer staff bonuses.

    As of May 2022, the median pay for a child care worker in the U.S. was $13.71, compared with $10.47 in West Virginia, according to the U.S. Bureau of Labor. Wage growth in the industry has fallen behind other low-wage professions.

    Over the years, Goldie Huff, a waitress at a steakhouse in Williamson, has cared for more than two dozen foster care children. There are just two child care centers in the entire county, and the community can’t afford to lose either one, she said.

    “It would be horrible,” she said, if Living Waters closed. All of her foster children have attended Living Water, along with kids, grandchildren and other family members. The state has the highest number of youth in foster care in the country.

    She said a lot of the kids she cares for are recovering from traumatic childhood experiences and need structure. “How many kids do you know that don’t wake up to breakfast? They don’t know where the meals are coming from. They’ve not had baths. They’ve never had nice clothes.”

    The center serves three meals a day, plus snacks. They also distribute donations such as clothes and school supplies.

    Branch said it will be an uphill battle to find other grants to make up for lost funds.

    Policymakers should not only be worried about shuttering centers, but also about the quality of care and education available with such limited resources, said Melissa Colagrosso, CEO of A Place To Grow Children’s Center, in Fayetteville, West Virginia. Since they opened 28 years ago, the number of accredited centers in the state has been halved.

    “Right in the beginning, that’s our opportunity to really change the brain and change a child’s future,” she said. “You invest in early childhood, then you invest less in prisons.”

    West Virginia’s Department of Health and Human Resources announced last week it was sending providers a final bonus payment as September drew to a close, but that funds were tapped. The agency also allocated $24 million in TANF funds to reimburse providers for children whose costs are subsidized based on enrollment rather than attendance for another year.

    But providers say what they need instead is a permanent, long-term funding solution.

    If West Virginia wants to grow its economy, child care is part the infrastructure necessary for that to happen, Tiffany Gale said. She isn’t a parent herself, but just months before the pandemic started, she began caring for six children at her home in West Virginia’s northern panhandle.

    In just three years, she’s moved up a level in the state’s quality rating status and expanded into an empty commercial space downtown. She has five staff members and 18 children — 24 split between the two sites — who would have otherwise been waitlisted. Three-quarters of them are considered low-income, and qualify for government-subsidized care.

    With the help of federal subsidies, Gale was able to purchase the two units next door. But now that the pandemic-era support is ending, Gale doesn’t know if she’ll be able to stay in business.

    Policymakers have relied on the passion of child care providers — who are mostly women — to find a way to make ends meet without the resources and support they really need, Gale said.

    “They’re still going to do it, whether they’re living in poverty and having to go to the food bank every week or not,” she said, of child care workers’ commitment to work. “I think we really take advantage of that instead of lifting them up, lifting children up and lifting our communities up.”

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  • State governors from Arizona, New Mexico seek stronger economic ties with Taiwan

    State governors from Arizona, New Mexico seek stronger economic ties with Taiwan

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    SANTA FE, N.M. — Governors from the Southwestern United States are pursuing stronger business ties with Taiwan in hopes of attracting new foreign investments and jobs to their landlocked states.

    Trade missions this week have taken New Mexico. Gov. Michelle Lujan Grisham and Arizona counterpart Katie Hobbs, both Democrats, to the self-governing island of Taiwan.

    Hobbs said her goal was to encourage ongoing investments to make Arizona a hub for semiconductor manufacturing. She met Monday with Taiwan Semiconductor Manufacturing Co. executives and suppliers, visiting their plant as well as water treatment facilities.

    Arizona leaders have been touting that the state will be the home of a Taiwanese microchip manufacturer’s first U.S. plant, generating 12,000 construction jobs.

    Construction started in 2021 on that sprawling facility that will utilize precision trademark technology for semiconductor fabrication with the capacity to produce 20,000 wafers per month. Once completed and operational next year, the plant is estimated to create 4,500 high-tech jobs.

    Democratic President Joe Biden visited the site in December, praising it as a demonstration of how his policies are fostering job growth. Biden has staked his legacy in large part on major investments in technology and infrastructure that were approved by Congress along bipartisan lines.

    At a business conference in Taipei on Tuesday, Lujan Grisham urged entrepreneurs and leaders to consider investment opportunities in her home state, touting a workforce with access to subsidized child care and tuition-free college.

    Lujan Grisham says she hopes to expand the presence in New Mexico of Taiwanese companies that already including the label printing business Cymmetrik and wire manufacturer Admiral Cable – both with facilities at Santa Teresa, New Mexico, near a port of entry for freight between the U.S. and Mexico.

    “Strengthening our relationships here is good for New Mexico, good for America, and good for Taiwan as we develop a global economy with a more stable and resilient supply chain,” Lujan Grisham said in a statement.

    Beijing wants to reunite the mainland with the self-governing island of Taiwan, a goal that raises the prospect of armed conflict.

    At the U.N. General Assembly on Tuesday, Biden described U.S. partnerships around the globe aimed at creating economic, security and other advancements, even as he stressed that those relationships were not about “containing any country” — a clear reference to Beijing.

    Several other governors — Democratic and Republican — have recently traveled on trade missions to Taiwan. Democrat Gretchen Whitmer became the first serving governor of Michigan to visit Taiwan, during an investments-related tour this month that included stops in Japan. Republican Indiana Gov. Eric Holcomb traveled to Taiwan in August on a separate trade mission.

    In August, Singapore-based Maxeon Solar Technologies announced plans to build a major solar panel manufacturing plant in Albuquerque, New Mexico, pending approval of a loan application with the U.S. Department of Energy.

    The factory would employ about 1,800 people to provide photovoltaic solar panels for use in residential, commercial and utility-scale solar arrays.

    Hobbs’ trade mission includes a visit to South Korea.

    ___

    Tang reported from Phoenix.

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  • Dutch police cleared out climate protesters blocking a highway over fossil fuel subsidies

    Dutch police cleared out climate protesters blocking a highway over fossil fuel subsidies

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    THE HAGUE, Netherlands — Several thousand climate activists blocked a Dutch highway on Saturday in anger at billions of euros in government subsidies for industries that use oil, coal and gas — before police dispersed them with water cannons.

    A report earlier this week detailed 37.5 billion euros ($40.5 billion) in such subsidies in the Netherlands, notably related to the shipping industry, prompting calls for a quick halt to the practice.

    The protesters — from Extinction Rebellion, Greenpeace and other organizations — broke through a police barrier Saturday morning and sat on a main road in The Hague heading to the temporary venue for the lower house of parliament.

    They threatened to stay until the subsidies are lifted, and to come back every day if the police remove them.

    “This is much larger than any one of us. This concerns the whole world,” activist Yolanda de Jager said.

    The activists brandished signs with sayings like “Fossil Fuel Subsidies are Not Cool,” and warned that the extreme temperatures seen around the world this summer are a sign of the future, if fossil fuels aren’t abandoned.

    After several hours, police moved in and fired volleys from water cannons at the crowd, and picked up or dragged some protesters away, wheeling them away in special orange wagons.

    Protesters on the front line held up their fists in resistance or put their heads down to protect themselves from the jets of water. Those farther back danced and jumped up and down under the spray, appearing to enjoy the shower on an unusually hot September day for the Netherlands

    The roadblock is part of a series of protests led by Extinction Rebellion targeting the Dutch parliament.

    The report published Monday said the Dutch government spends tens of billions per year in subsidies to industries that use fossil fuels. It was published by the The Centre for Research on Multinational Corporations, known as SOMO, the Dutch arm of Friends of the Earth and Oil Change International.

    The country is often seen as a leader in renewable energy and progressive climate policies, and Minister for Climate and Energy Rob Jetten acknowledged that the country has to end the subsidies, but has offered no timeline.

    The report calls on lawmakers to begin phasing out the subsidies before the country’s Nov. 22 general election.

    A new protest is planned for Sunday.

    ___

    Angela Charlton in Paris, and Ahmad Seir, in The Hague contributed to this report.

    ___

    For AP’s climate and environmental coverage, visit https://apnews.com/hub/climate-and-environment

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  • Nigerian workers walk off the job again to protest rising costs after gas subsidies are removed

    Nigerian workers walk off the job again to protest rising costs after gas subsidies are removed

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    Government workers in Nigeria have begun their second strike in a month to protest the growing cost of living after the government removed subsidies that had made gas affordable

    ByCHINEDU ASADU Associated Press

    September 5, 2023, 3:49 AM

    ABUJA, Nigeria — Workers from all sectors in Nigeria walked off their jobs on Tuesday to protest the growing cost of living caused by the government’s removal of gas subsidies, threatening to “shut down” Africa’s largest economy if their demands for improved welfare are not met.

    The Nigeria Labor Congress workers association began a two-day “warning strike” on Tuesday, their second in over a month. They met last week and complained that the decision of Nigeria’s President Bola Tinubu to remove gas subsidies has “unleashed massive suffering on Nigerian workers and masses.”

    Last-minute efforts to avert the strike failed on Monday evening after the labor unions’ leaders shunned a meeting called by the Labor Ministry. Drawn from all sectors including health and electricity, the workers’ strike is expected to disrupt activities in many offices, further hurting Africa’s largest economy whose growth has been slowed by declining government revenues and oil theft.

    The president of the labor association, Joe Ajaero, said there would be a “total and indefinite shutdown of the nation” in two weeks unless the government fulfills the workers’ demands including an increase of wages.

    Sworn in as president in May, Tinubu’s bid to revamp Nigeria’s economy has led him to introduce some bold measures, which he said would save more money, strengthen the naira currency and attract investors. But those steps also caused hardship for millions in the country with critics accusing Tinubu of not acting fast to cushion the effects of his policies.

    After he ended the yearslong subsidies for gas on his first day in office, the price of petrol more than doubled, resulting in a similar hike in the price of other commodities. The government’s devaluation of the currency further increased the prices including foodstuff.

    Tinubu’s administration has taken several steps to alleviate the hardship, including a $5.5 million package comprising as both loan and grant to states. But the workers have said such steps are not enough with their wages still the same.

    Many workers are no longer able to pay for transport to work, Ajaero said, speaking of the “excruciating mass suffering and the impoverishment experienced around the country.”

    The government, meanwhile, said a strike would worsen the condition of Nigerians and requested more time to find ways to resolve the dispute. “We cannot do this in an atmosphere devoid of industrial peace,” Labor Minister Simon Lalong said.

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  • Thousands take to Colombia’s streets to protest 50% increase in gasoline prices

    Thousands take to Colombia’s streets to protest 50% increase in gasoline prices

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    BOGOTA, Colombia — Thousands of protesters on cars and motorbikes took to the streets of Colombia’s main cities on Monday to reject recent hikes in gasoline prices that have drastically increased the price of fuel in the South American country.

    Protesters say that the monthly price hikes set by Colombia’s first leftist government are making it harder for small businesses to operate, and could push up the price of food.

    But the government of President Gustavo Petro says the gasoline subsidies cost about $11 billion a year. It says it must eliminate the subsidies to pay debts to the national oil company Ecopetrol, which produces most of the country’s fuel, and to free up more funds for social programs.

    The protest comes as discontent grows with Petro’s administration a year after he took office promising to reduce poverty and make peace with the nation’s remaining rebel groups.

    Petro’s administration has struggled to stop violence in rural parts of the country, and to boost Colombia’s economy, which is expected to grow by just 1% in 2023, according to the International Monetary Fund.

    “This government is making decisions that are anti-business,” said Alejandra Mendoza, the manager of a small company that transports frozen food and other goods for supermarkets in Colombia. She attended Monday’s protest wearing her company’s yellow jacket.

    “Our costs have gone up by a third, and we have to adjust our budget each month because of the gasoline hikes” Mendoza said.

    The price of gasoline in Colombia has risen from 9,000 pesos a gallon in August of last year (US $2.50) to more than 14,000 currently ($3.40) as Colombia’s government cuts back on subsidies each month.

    Officials in Colombia’s Finance Ministry have said they want gasoline to reach a price of 16,000 pesos per gallon –about $4 — by the end of the year, which would mirror current gas prices in the U.S., where the federal minimum wage, however, is more than four times greater than Colombia’s minimum wage of $280 a month.

    In July, the ministry said that subsidies for diesel, which is used by most cargo trucks in Colombia. will be removed after municipal elections in October, and that the price of diesel fuel will double by the end of next year.

    Petro has argued that the nation’s gasoline subsidies mostly benefited wealthier Colombians who own vehicles. But he has shown signs that he is willing to negotiate gasoline prices with some groups.

    Over the weekend, Petro’s administration cut a deal with the nation’s taxi driver unions, under which gasoline prices will be frozen for the country’s estimated 200,000 yellow taxis.

    However members of Colombia’s opposition say that the government needs to go further because gas hikes are also hurting delivery workers, drivers and small business owners who are struggling to recover from the pandemic.

    Jennifer Pedraza, a congresswoman who helped to organize Monday’s protest, pointed out that the government could moderate the hikes in fuel prices, by charging less sales taxes on gasoline and diesel.

    “The people are asking the administration to negotiate a different gasoline policy” she said, adding that its time for Colombia’s national oil company to “take an interest, in making gasoline affordable for all.”

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  • Broadband subsidy program that millions use will expire next year if Congress doesn’t act

    Broadband subsidy program that millions use will expire next year if Congress doesn’t act

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    LOS ANGELES — One of the features that President Joe Biden cited in his plan to bring internet to every home and business in the United States by 2030 was affordability. But an important federal program established to keep broadband costs down for low-income households is set to expire next year.

    The Affordable Connectivity Program has not reached everyone who is eligible. According to an Associated Press analysis of enrollment and census data, less than than 40% of eligible households have utilized the program, which provides monthly subsidies of $30, and in some cases, up to $75, to help pay for internet connections.

    Still, the program has been a lifeline for Kimberlyn Barton-Reyes, who is paraplegic and visually impaired. Barton-Reyes did not have to wait for an in-person appointment when a seizure-alert system disconnected from her electric wheelchair in November. The company that services her chair assessed the problem remotely, ordered the parts she needed and got the chair fixed quickly.

    “Most people are like ‘Internet is not a basic need,’” said Barton-Reyes, who lives in Austin, Texas. “It absolutely is for me.”

    Barton-Reyes relies on Social Security disability insurance for her income while she takes part in a vocational program for adults who are newly blind. She is able to pay for her internet connection with an assist from the Affordable Connectivity Program. Barton-Reyes, who said an autoimmune issue damaged her vision, is working to get other eligible Austin residents signed up, too.

    But the program’s future is uncertain. Its primary source of funding, a $14.2 billion allocation, is projected to run out by the middle of 2024. That could end access to affordable broadband for millions of people and hinder the Biden administration’s push to bring connectivity to the people who need it most.

    “ACP is the best tool we’ve ever had to help people afford broadband,“ said Drew Garner, broadband policy advisor for Common Sense Media.

    Advocacy groups are pushing Congress to extend the program.

    “It’s a successful program in many ways, but with a lot of untapped potential because there’s still a long way to go to really make this universal to all people that are eligible for ACP,” said Hernan Galperin, a University of Southern California professor who has researched the program.

    Enrollment in approximately 30 states lags behind the national average. Louisiana and Ohio have enrolled more than half of all eligible households.

    “There’s probably nowhere in the state, no matter how populated the location is, where someone is not receiving a benefit from the ACP program,” said Veneeth Iyengar, executive director of Louisiana’s broadband program.

    Ryan Collins, the broadband program manager of the Buckeye Hills Regional Council in Appalachian Ohio, said the ACP provides crucial assistance.

    “If it were a matter of affording groceries or affording the internet, they chose groceries and so they would cancel their subscription,” Collins said.

    The program emerged from a pandemic-era benefit and began with some 9 million households nationally. Participation has increased every month since, and today it serves approximately 20.4 million households.

    “If the funding drops, all of that momentum will be lost,” said Khotan Harmon, senior program officer for the city of Austin.

    Agriculture Secretary Tom Vilsack said the program has already proved itself.

    “The Affordable Connectivity Program, the popularity of it, I think, is the kind of thing that will create the political-level support necessary for Congress to see that this is, at the end of the day, an appropriate utilization of resources,” Vilsack said on a recent media call announcing new grants to bolster rural broadband.

    Advocates say letting the program expire could damage the already tenuous relationship between consumers and internet service providers just as the nation embarks on an ambitious plan to expand access nationally.

    “That will have longer-term breakdowns in our effort to close the digital divide if people are not believing the programs that we’re offering them will be around for a while,” said Joe Kane, director of broadband policy at the Information Technology and Innovation Foundation.

    Biden announced plans in June to distribute $42.5 billion to ensure broadband access for every U.S. home and business. But internet service providers that bid on state contracts will want to be sure they have customers.

    “So not only will the ACP ending make it harder for individuals to afford service, it will make it less likely that ISPs build them the service to begin with,” Garner said.

    Lawmakers from both parties, as well as the White House, support the program. Affordable internet was listed as a priority in an Aug. 10 letter from Biden’s budget director, Shalanda Young, to House Speaker Kevin McCarthy, R-Calif.

    Participation also straddles the political divide.

    As of the end of June, approximately 9.3 million households in Democratic districts and about 9.1 million households in Republican districts receive the monthly benefit, according to AP’s analysis.

    Before receiving ACP benefits, New Hampshire-based mother Joanne Soares and her three school-age children had to use her phone to access the internet. Soares, who is deaf, said the home internet connection she can now afford lets her reliably access a video-based interpreting service needed to communicate over the phone.

    “I need to have an internet to be able to connect with others,” Soares said. “Without the internet, how am I supposed to make any calls?”

    ——

    Harjai is a corps member for The Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on undercovered issues.

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  • Broadband subsidy program that millions use will expire next year if Congress doesn’t act

    Broadband subsidy program that millions use will expire next year if Congress doesn’t act

    [ad_1]

    LOS ANGELES — One of the features that President Joe Biden cited in his plan to bring internet to every home and business in the United States by 2030 was affordability. But an important federal program established to keep broadband costs down for low-income households is set to expire next year.

    The Affordable Connectivity Program has not reached everyone who is eligible. According to an Associated Press analysis of enrollment and census data, less than than 40% of eligible households have utilized the program, which provides monthly subsidies of $30, and in some cases, up to $75, to help pay for internet connections.

    Still, the program has been a lifeline for Kimberlyn Barton-Reyes, who is paraplegic and visually impaired. Barton-Reyes did not have to wait for an in-person appointment when a seizure-alert system disconnected from her electric wheelchair in November. The company that services her chair assessed the problem remotely, ordered the parts she needed and got the chair fixed quickly.

    “Most people are like ‘Internet is not a basic need,’” said Barton-Reyes, who lives in Austin, Texas. “It absolutely is for me.”

    Barton-Reyes relies on Social Security disability insurance for her income while she takes part in a vocational program for adults who are newly blind. She is able to pay for her internet connection with an assist from the Affordable Connectivity Program. Barton-Reyes, who said an autoimmune issue damaged her vision, is working to get other eligible Austin residents signed up, too.

    But the program’s future is uncertain. Its primary source of funding, a $14.2 billion allocation, is projected to run out by the middle of 2024. That could end access to affordable broadband for millions of people and hinder the Biden administration’s push to bring connectivity to the people who need it most.

    “ACP is the best tool we’ve ever had to help people afford broadband,“ said Drew Garner, broadband policy advisor for Common Sense Media.

    Advocacy groups are pushing Congress to extend the program.

    “It’s a successful program in many ways, but with a lot of untapped potential because there’s still a long way to go to really make this universal to all people that are eligible for ACP,” said Hernan Galperin, a University of Southern California professor who has researched the program.

    Enrollment in approximately 30 states lags behind the national average. Louisiana and Ohio have enrolled more than half of all eligible households.

    “There’s probably nowhere in the state, no matter how populated the location is, where someone is not receiving a benefit from the ACP program,” said Veneeth Iyengar, executive director of Louisiana’s broadband program.

    Ryan Collins, the broadband program manager of the Buckeye Hills Regional Council in Appalachian Ohio, said the ACP provides crucial assistance.

    “If it were a matter of affording groceries or affording the internet, they chose groceries and so they would cancel their subscription,” Collins said.

    The program emerged from a pandemic-era benefit and began with some 9 million households nationally. Participation has increased every month since, and today it serves approximately 20.4 million households.

    “If the funding drops, all of that momentum will be lost,” said Khotan Harmon, senior program officer for the city of Austin.

    Agriculture Secretary Tom Vilsack said the program has already proved itself.

    “The Affordable Connectivity Program, the popularity of it, I think, is the kind of thing that will create the political-level support necessary for Congress to see that this is, at the end of the day, an appropriate utilization of resources,” Vilsack said on a recent media call announcing new grants to bolster rural broadband.

    Advocates say letting the program expire could damage the already tenuous relationship between consumers and internet service providers just as the nation embarks on an ambitious plan to expand access nationally.

    “That will have longer-term breakdowns in our effort to close the digital divide if people are not believing the programs that we’re offering them will be around for a while,” said Joe Kane, director of broadband policy at the Information Technology and Innovation Foundation.

    Biden announced plans in June to distribute $42.5 billion to ensure broadband access for every U.S. home and business. But internet service providers that bid on state contracts will want to be sure they have customers.

    “So not only will the ACP ending make it harder for individuals to afford service, it will make it less likely that ISPs build them the service to begin with,” Garner said.

    Lawmakers from both parties, as well as the White House, support the program. Affordable internet was listed as a priority in an Aug. 10 letter from Biden’s budget director, Shalanda Young, to House Speaker Kevin McCarthy, R-Calif.

    Participation also straddles the political divide.

    As of the end of June, approximately 9.3 million households in Democratic districts and about 9.1 million households in Republican districts receive the monthly benefit, according to AP’s analysis.

    Before receiving ACP benefits, New Hampshire-based mother Joanne Soares and her three school-age children had to use her phone to access the internet. Soares, who is deaf, said the home internet connection she can now afford lets her reliably access a video-based interpreting service needed to communicate over the phone.

    “I need to have an internet to be able to connect with others,” Soares said. “Without the internet, how am I supposed to make any calls?”

    ——

    Harjai is a corps member for The Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on undercovered issues.

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  • Broadband subsidy program that millions use will expire next year if Congress doesn’t act

    Broadband subsidy program that millions use will expire next year if Congress doesn’t act

    [ad_1]

    LOS ANGELES — One of the features that President Joe Biden cited in his plan to bring internet to every home and business in the United States by 2030 was affordability. But an important federal program established to keep broadband costs down for low-income households is set to expire next year.

    The Affordable Connectivity Program has not reached everyone who is eligible. According to an Associated Press analysis of enrollment and census data, less than than 40% of eligible households have utilized the program, which provides monthly subsidies of $30, and in some cases, up to $75, to help pay for internet connections.

    Still, the program has been a lifeline for Kimberlyn Barton-Reyes, who is paraplegic and visually impaired. Barton-Reyes did not have to wait for an in-person appointment when a seizure-alert system disconnected from her electric wheelchair in November. The company that services her chair assessed the problem remotely, ordered the parts she needed and got the chair fixed quickly.

    “Most people are like ‘Internet is not a basic need,’” said Barton-Reyes, who lives in Austin, Texas. “It absolutely is for me.”

    Barton-Reyes relies on Social Security disability insurance for her income while she takes part in a vocational program for adults who are newly blind. She is able to pay for her internet connection with an assist from the Affordable Connectivity Program. Barton-Reyes, who said an autoimmune issue damaged her vision, is working to get other eligible Austin residents signed up, too.

    But the program’s future is uncertain. Its primary source of funding, a $14.2 billion allocation, is projected to run out by the middle of 2024. That could end access to affordable broadband for millions of people and hinder the Biden administration’s push to bring connectivity to the people who need it most.

    “ACP is the best tool we’ve ever had to help people afford broadband,“ said Drew Garner, broadband policy advisor for Common Sense Media.

    Advocacy groups are pushing Congress to extend the program.

    “It’s a successful program in many ways, but with a lot of untapped potential because there’s still a long way to go to really make this universal to all people that are eligible for ACP,” said Hernan Galperin, a University of Southern California professor who has researched the program.

    Enrollment in approximately 30 states lags behind the national average. Louisiana and Ohio have enrolled more than half of all eligible households.

    “There’s probably nowhere in the state, no matter how populated the location is, where someone is not receiving a benefit from the ACP program,” said Veneeth Iyengar, executive director of Louisiana’s broadband program.

    Ryan Collins, the broadband program manager of the Buckeye Hills Regional Council in Appalachian Ohio, said the ACP provides crucial assistance.

    “If it were a matter of affording groceries or affording the internet, they chose groceries and so they would cancel their subscription,” Collins said.

    The program emerged from a pandemic-era benefit and began with some 9 million households nationally. Participation has increased every month since, and today it serves approximately 20.4 million households.

    “If the funding drops, all of that momentum will be lost,” said Khotan Harmon, senior program officer for the city of Austin.

    Agriculture Secretary Tom Vilsack said the program has already proved itself.

    “The Affordable Connectivity Program, the popularity of it, I think, is the kind of thing that will create the political-level support necessary for Congress to see that this is, at the end of the day, an appropriate utilization of resources,” Vilsack said on a recent media call announcing new grants to bolster rural broadband.

    Advocates say letting the program expire could damage the already tenuous relationship between consumers and internet service providers just as the nation embarks on an ambitious plan to expand access nationally.

    “That will have longer-term breakdowns in our effort to close the digital divide if people are not believing the programs that we’re offering them will be around for a while,” said Joe Kane, director of broadband policy at the Information Technology and Innovation Foundation.

    Biden announced plans in June to distribute $42.5 billion to ensure broadband access for every U.S. home and business. But internet service providers that bid on state contracts will want to be sure they have customers.

    “So not only will the ACP ending make it harder for individuals to afford service, it will make it less likely that ISPs build them the service to begin with,” Garner said.

    Lawmakers from both parties, as well as the White House, support the program. Affordable internet was listed as a priority in an Aug. 10 letter from Biden’s budget director, Shalanda Young, to House Speaker Kevin McCarthy, R-Calif.

    Participation also straddles the political divide.

    As of the end of June, approximately 9.3 million households in Democratic districts and about 9.1 million households in Republican districts receive the monthly benefit, according to AP’s analysis.

    Before receiving ACP benefits, New Hampshire-based mother Joanne Soares and her three school-age children had to use her phone to access the internet. Soares, who is deaf, said the home internet connection she can now afford lets her reliably access a video-based interpreting service needed to communicate over the phone.

    “I need to have an internet to be able to connect with others,” Soares said. “Without the internet, how am I supposed to make any calls?”

    ——

    Harjai is a corps member for The Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on undercovered issues.

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  • Millions struggle to pay AC bills in heat waves. Federal aid reaches only a fraction

    Millions struggle to pay AC bills in heat waves. Federal aid reaches only a fraction

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    DENVER — Bobbie Boyd is in a losing battle against near triple-digit temperatures in northwest Arkansas.

    Her window air conditioner runs nonstop and the ballooning electric bill carves about $240 out of her $882-a-month fixed income. So the 57-year-old cuts other necessities.

    Boyd eats one meal a day so her 15-year-old grandson, who she’s raising alone, can have two. She stopped paying car insurance and skips medical appointments.

    “The rent and the light bill. And I’m broke,” said Boyd, who needs the cooling to stave off her heat-induced asthma attacks.

    As climate change ratchets up temperatures across the U.S., millions of the poorest Americans grapple with the same agonizing decisions as Boyd — between perilous indoor heat or paying costly bills. While President Joe Biden has invested billions into federal programs that subsidize the poorest Americans’ energy costs, the money reaches only a fraction of the most vulnerable during the sweltering summer months.

    Nationwide, nearly 30 million American households struggle to pay their energy bills and qualify for the subsidy, but less than 3% receive it for their summer bills, according to the latest, preliminary federal data.

    Compared to food stamps, which reach over 80% of the eligible population nationwide, the Low Income Home Energy Assistance Program, or LIHEAP, falls far short even as climate change helped make July Earth’s hottest month on record and air conditioning becomes a means of survival.

    That’s because most states run out of their federal funding every year, according to the Department of Health and Human Services, which oversees the program.

    “We’re likely to see the energy insecure population grow unless we have some pretty significant and substantial government intervention,” said Michelle Graff, who studies the federal subsidy at Cleveland State University.

    As it stands, many states don’t even offer the assistance for summer months, and those that do often run out of funds before the hottest days roll around. The program was founded decades ago with a focus on winter heating bills and has been slow to adapt to climate change’s hotter summers.

    Biden has promoted LIHEAP as “crucial for low-income families to help with their energy bills,” saying last week that during the sweltering summer, “even when the heat is over, many of our families may see their largest-ever energy bill.”

    On a visit Tuesday, Biden told a crowd north of Phoenix — where residents endured 31 straight days above 110 degrees in which at least 18 people died indoors without air conditioning — that “extreme heat is America’s No. 1 weather-related killer.”

    Still, in Arizona, the nation’s hottest state where roughly 650,000 low-income households qualify for the federal energy help for cooling assistance, only about 11,600 actually received it, according to the federal data.

    Samira Burns, a Health and Human Services official, said in a statement that the Biden administration doubled the LIHEAP budget through the American Rescue Plan and that HHS has updated guidance to help states target support during extreme heat.

    “The Biden-Harris Administration has prioritized ensuring that eligible households seek and receive the utility assistance they need,” she said. “We know we must continue to do all that we can.”

    Just outside Phoenix five years ago, the death of 72-year-old Stephanie Pullman on a sweltering day after her electricity was cut off because of a $51 unpaid bill brought attention to the danger heat poses to people who are energy insecure.

    While regulated Arizona power companies are now banned from cutting off customers during periods of extreme heat, last year nearly 3 million Americans had their power disconnected for failing to pay bills — a third within the three hottest summer months, according to data collected by the Energy Justice Lab.

    “In the more extreme, but not at all rare circumstance, the risk is death,” said Sanya Carley, who studies energy policy at the University of Pennsylvania and is co-director of the Energy Justice Lab.

    When Candace Griffin of Houston, Texas, received disconnection notices this summer, she scrambled to keep the electricity flowing by seeking nonprofit assistance to pay monthly bills that surpassed $400. There wasn’t anywhere else to pull extra money from.

    “I have to pay the energy bill, I have to have lights, I have to have AC,” the 51-year-old said. And, “I have to eat.”

    The poorest Americans and minority communities already live in hotter neighborhoods and many suffer without air conditioning at all. While there are tax credits and rebates to help install air conditioning, most remain out of reach for impoverished households.

    But even with air conditioning, those with the lowest incomes face higher costs than their wealthier counterparts — in part because they are more likely to live in older, less insulated and drafty homes.

    Energy insecure households paid 20 cents more per square-foot for energy usage than the national average, according to the U.S. Energy Information Administration.

    The federal Weatherization Assistance Program helps shore up low-income homes to make them better insulated, less leaky and reduce reliance on air conditioning and heating altogether. Still, while almost 40 million low-income households are eligible, only about 35,000 households get the help each year, according to the U.S. Department of Energy.

    “It’s because, just, lack of funds,” said Bruce Tonn, who studies the program at a Tennessee research nonprofit. Biden has since infused billions into the program, investments he touted Tuesday.

    The program is critical because it reduces energy bills, which tip roughly a quarter of low-income households into debt, according to Carley of the Energy Justice Lab. And, if electricity is disconnected, costs just add up. The fridge warms and the food goes bad; utility companies charge hefty reconnection fees.

    “It becomes very, very difficult for them to dig out and to be able to … pay their next energy bill,” said Carley, who added that about half of households who are disconnected have been disconnected before.

    National nonprofits, including the The Salvation Army and Catholic Charities, offer emergency financial aid, which thousands rely upon, especially since LIHEAP requires a multi-step application every year.

    Vivian Romero, who is raising two teenage granddaughters outside Phoenix, has used federal LIHEAP money in the past to pay her electric bill, before the family experienced a few months of homelessness.

    But Romero hadn’t reupped her request for LIHEAP this year, so to pay her $314 June power bill she looked to Catholic Charities, which wrote a check.

    Still, nonprofits often can only provide relief once a year, said Romero, adding she will reapply for LIHEAP help. “The Catholic Charities funding was a one-time thing.”

    In Arkansas, Boyd recently got a disconnection notice if she didn’t pay the electric bill after receiving an extension. Last time her power got shut off, she and her grandson slept in the car. This time, The Salvation Army kept Boyd from being disconnected.

    Boyd doesn’t receive LIHEAP; she didn’t even know that the financial aid was available.

    “The only thing between me and the sun is the roof,” she said.

    ___

    This article corrects that only regulated Arizona power companies are banned from disconnections during hot weather.

    ____

    Associated Press writer Anita Snow in Phoenix contributed.

    ____

    Bedayn is a corps member for the Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on undercovered issues.

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  • Nigerian leader has announced economic measures to ease hardship as labor unions threaten protests

    Nigerian leader has announced economic measures to ease hardship as labor unions threaten protests

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    ABUJA, Nigeria — Nigeria’s President Bola Tinubu on Monday announced economic measures to ease growing hardship in Africa’s most populous country as labor unions threatened protests to demand more action.

    Several government policies introduced by Tinubu since he took office in May have further squeezed millions of Nigerians. The government ended decades-long gasoline subsidies that Tinubu said favored the rich, but the decision has more than doubled the price of gas, causing a sharp spike in prices of food and other essential commodities.

    In a state broadcast late Monday, the Nigerian leader said he understands that Nigeria’s economy is going through a “tough patch” but added the government has saved more than one trillion naira ($1.16 billion) since the subsidy was scrapped in late May. Past funds for the subsidies were “being funneled into the deep pockets and lavish bank accounts of a selected group of individuals,” he added.

    “What I can offer immediately is to reduce the burden our current economic situation has imposed on all of us,” the Nigerian leader said as he announced incentives and credit facilities for businesses many of which would be implemented over the next year.

    The hardship has squeezed many in the country of more than 210 million people which already had been struggling with record inflation and poverty rates. Many businesses have shut down and more Nigerians are trekking to work, unable to afford increasing transport fares.

    While the doctors in Nigerian hospitals have embarked on strike to demand better welfare, Nigeria’s labor unions said they will hold protests on Wednesday to demand more actions from the government and improved social welfare programs for their members, most of whom they said now spend at least 70% of their salaries on transportation.

    Tinubu admitted the government was not fast enough in introducing measures to cushion the effect of the subsidy removal and requested more patience from citizens.

    “The federal government is working closely with states and local governments to implement interventions that will cushion the pains,” he said.

    Some of the interventions, according to Tinubu, include the provision of one billion naira ($1.16 million) credit to each of 75 manufacturing companies over the next year and the provision of 125 billion naira ($145 million) in the form of grants and loans to small, medium-sized enterprises and other businesses in the informal sector.

    The Nigerian leader said he has ordered the release of 200,000 metric tons of grains to households across the country to help stabilize the price of food while 225,000 metric tons of fertilizer, seedlings and other inputs are being provided to farmers. At least 200 billion naira ($232 million) would also be invested in agriculture to boost farming, he said.

    Tinubu also said the government is continuing to negotiate a new salary structure with civil servants.

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  • It’s almost time to resume student loan payments. Not doing so could cost you

    It’s almost time to resume student loan payments. Not doing so could cost you

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    NEW YORK — After three years, the pandemic-era freeze on student loan payments will end soon. Student loan interest will start accruing on September 1 and https://studentaid.gov/ starting in October.

    It might seem tempting to just keep not making payments, but the consequences can be severe, including a hit to your credit score and exclusion from future aid and benefits.

    More than 40 million Americans will have to start making federal student loan payments again at the end of the summer under the terms of a debt ceiling deal approved by Congress.

    Millions are also waiting to find out whether the Supreme Court will allow President Joe Biden’s student loan forgiveness plan to go ahead. But payments will resume regardless of what justices decide.

    That means tough decisions for many borrowers, especially those in already-difficult financial situations.

    Experts say that delinquency and bankruptcy should be options of last resort, and that deferment and forbearance — which pause payments, though interest may continue to accrue — are often better in the short term.

    WHAT HAPPENS IF I DON’T MAKE STUDENT LOAN PAYMENTS?

    Once the moratorium ends, borrowers who can’t or don’t pay risk delinquency and eventually default. That can badly hurt your credit rating and make you ineligible for additional aid and government benefits.

    If you’re struggling to pay, advisers first encourage you to check if you qualify for an income-driven repayment plan, which determines your payments by looking at your expenses. You can determine this by visiting the Federal Student Aid website. If you’ve worked for a government agency or a non-profit organization, you could also be eligible for the Public Service Loan Forgiveness Program, which forgives student debt after 10 years.

    Carolina Rodriguez, Director of the Education Debt Consumer Assistance Program at the Community Service Society of New York, emphasizes that anyone temporarily unemployed should be able to qualify for a $0 payment plan. And many others qualify based on income and family size.

    “The repercussions of falling into delinquency can be pretty severe,” Rodriguez said. “The federal government can administratively intercept tax refunds and garnish wages. And it can affect Social Security, retirement, and disability benefits. Does it make financial sense at that point? Probably not.”

    Rodriguez says her organization always advises against deferment or forbearance except once a borrower has exhausted all other options. In the long term, those financial choices offer little benefit, as some loans will continue to accrue interest while deferred.

    Abby Shafroth, senior attorney and director of the Student Loan Borrower Assistance Project at the National Consumer Law Center, said that, of the two, deferment is generally a better option.

    That’s because interest generally does not accrue on Direct Subsidized Loans, the subsidized portion of Direct Consolidation Loans, Subsidized Federal Stafford Loans, the subsidized portion of FFEL Consolidation Loans, and Federal Perkins Loans. All other federal student loans that are deferred will continue to accrue interest.

    “Forbearance allows you to postpone payments without it being held against you, but interest does accrue. So you’re going to see your balance increase every month.”

    WHAT ABOUT DECLARING BANKRUPTCY?

    For most student loan borrowers, it’s still very difficult to have your loans discharged, or canceled, through bankruptcy. Borrowers must prove a very hard standard of financial circumstances, called “undue hardship.”

    “That doesn’t mean people shouldn’t look into it,” Rodriguez said. “But they may not be successful at discharging their loans.”

    For borrowers who show that level of financial strain, chances are they have other options, Rodriguez said.

    She advises that borrowers make sure they are speaking to a bankruptcy attorney who understands student loan bankruptcy, which requires a different proceeding than other types of bankruptcy.

    Shafroth, of the NCLC, says that new guidance on student loan bankruptcy has been coming out in recent years.

    “Though it is difficult to get your loans discharged through the bankruptcy process, an increasing number of borrowers are eligible to get their loans discharged that way,” she said. “A lot of people write that off as ‘there’s no way,’ it’s impossible.’ But it’s increasingly possible.”

    WHAT HAPPENS WHEN A LOAN GOES INTO DEFAULT?

    When you fall behind on a loan by 270 days — roughly 9 months — the loan appears on your credit report as being in default.

    “At that point, it’s not just behind, it’s in collections,” Shafroth said. “That’s when you become ineligible to take out new federal student aid. A lot of people go into default because they weren’t able to complete their degree the first time. This prevents them from going back to school.”

    Once a loan is in default, it’s subject to the collection processes mentioned above. That means the government can garnish wages (without a court order) to go towards paying back the loan, intercept tax refunds, and seize portions of Social Security checks and other benefit payments.

    WHAT ARE OTHER OPTIONS IF I CAN’T MAKE PAYMENTS?

    Shafroth said that many borrowers may still be eligible to have loans canceled via a patchwork of programs outside of the Biden administration’s proposed debt relief program.

    “If your school closed before you could complete your program, you’re eligible for relief. If your school lied to you or misrepresented the outcome of what your enrolling would be, you can file a borrower defense application, and request your loan be canceled on that basis,” she said. “If you have a disability, you can sometimes have your loans canceled on that basis.”

    Shafroth encourages borrowers to look at the Student Aid website to see what their options might be before missing payments.

    WHAT IF MY LOANS WERE IN DEFAULT BEFORE MARCH 2020?

    Under the Biden administration’s Fresh Start program, borrowers with federal student loans who were in default before the pause have a chance to become current.

    Borrowers who were in default will not be subject to collection processes or have wages garnished through about August 2024, or roughly one year after the payment freeze ends. These borrowers have also been granted permission to apply for federal student loans again, to complete degrees. Lastly, these defaulted loans are now being reported to credit bureaus as current.

    That said, borrowers must take action if they want to stay out of default after this year-long leniency period ends.

    To eliminate your record of default, you should contact the Education Department’s Default Resolution Group online, by phone, or by mail, and ask the group to take the loans out of default via the Fresh Start policy. In four to six weeks, any record of default will be removed from your credit report, and the loans will be placed with a loan servicer. This will also give you access to income-driven repayment plans and Public Service Loan Forgiveness, if applicable.

    WHAT IF I WAS BEHIND ON PAYMENTS OR DELINQUENT BEFORE MARCH 2020?

    The Fresh Start program also applies to borrowers who were delinquent prior to the payment pause. Those accounts will be considered current, and borrowers will have the option to enroll in income-driven repayment plans that can lower bills to as little as $0, or to apply for deferment, forbearance or bankruptcy.

    ___

    The Associated Press receives support from Charles Schwab Foundation for educational and explanatory reporting to improve financial literacy. The independent foundation is separate from Charles Schwab and Co. Inc. The AP is solely responsible for its journalism.

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  • It might seem tempting to not pay your student loans. Here’s why that’s a bad idea

    It might seem tempting to not pay your student loans. Here’s why that’s a bad idea

    [ad_1]

    NEW YORK — After three years, the pandemic-era freeze on student loan payments will end in late August.

    It might seem tempting to just keep not making payments, but the consequences can be severe, including a hit to your credit score and exclusion from future aid and benefits.

    More than 40 million Americans will have to start making federal student loan payments again at the end of the summer under the terms of a debt ceiling deal approved by Congress.

    Millions are also waiting to find out whether the Supreme Court will allow President Joe Biden’s student loan forgiveness plan to go ahead. But payments will resume regardless of what justices decide.

    That means tough decisions for many borrowers, especially those in already-difficult financial situations.

    Experts say that delinquency and bankruptcy should be options of last resort, and that deferment and forbearance — which pause payments, though interest may continue to accrue — are often better in the short term.

    WHAT HAPPENS IF I DON’T MAKE STUDENT LOAN PAYMENTS?

    Once the moratorium ends, borrowers who can’t or don’t pay risk delinquency and eventually default. That can badly hurt your credit rating and make you ineligible for additional aid and government benefits.

    If you’re struggling to pay, advisers first encourage you to check if you qualify for an income-driven repayment plan, which determines your payments by looking at your expenses. You can determine this by visiting the Federal Student Aid website. If you’ve worked for a government agency or a non-profit organization, you could also be eligible for the Public Service Loan Forgiveness Program, which forgives student debt after 10 years.

    Carolina Rodriguez, Director of the Education Debt Consumer Assistance Program at the Community Service Society of New York, emphasizes that anyone temporarily unemployed should be able to qualify for a $0 payment plan. And many others qualify based on income and family size.

    “The repercussions of falling into delinquency can be pretty severe,” Rodriguez said. “The federal government can administratively intercept tax refunds and garnish wages. And it can affect Social Security, retirement, and disability benefits. Does it make financial sense at that point? Probably not.”

    Rodriguez says her organization always advises against deferment or forbearance except once a borrower has exhausted all other options. In the long term, those financial choices offer little benefit, as some loans will continue to accrue interest while deferred.

    Abby Shafroth, senior attorney and director of the Student Loan Borrower Assistance Project at the National Consumer Law Center, said that, of the two, deferment is generally a better option.

    That’s because interest generally does not accrue on Direct Subsidized Loans, the subsidized portion of Direct Consolidation Loans, Subsidized Federal Stafford Loans, the subsidized portion of FFEL Consolidation Loans, and Federal Perkins Loans. All other federal student loans that are deferred will continue to accrue interest.

    “Forbearance allows you to postpone payments without it being held against you, but interest does accrue. So you’re going to see your balance increase every month.”

    WHAT ABOUT DECLARING BANKRUPTCY?

    For most student loan borrowers, it’s still very difficult to have your loans discharged, or canceled, through bankruptcy. Borrowers must prove a very hard standard of financial circumstances, called “undue hardship.”

    “That doesn’t mean people shouldn’t look into it,” Rodriguez said. “But they may not be successful at discharging their loans.”

    For borrowers who show that level of financial strain, chances are they have other options, Rodriguez said.

    She advises that borrowers make sure they are speaking to a bankruptcy attorney who understands student loan bankruptcy, which requires a different proceeding than other types of bankruptcy.

    Shafroth, of the NCLC, says that new guidance on student loan bankruptcy has been coming out in recent years.

    “Though it is difficult to get your loans discharged through the bankruptcy process, an increasing number of borrowers are eligible to get their loans discharged that way,” she said. “A lot of people write that off as ‘there’s no way,’ it’s impossible.’ But it’s increasingly possible.”

    WHAT HAPPENS WHEN A LOAN GOES INTO DEFAULT?

    When you fall behind on a loan by 270 days — roughly 9 months — the loan appears on your credit report as being in default.

    “At that point, it’s not just behind, it’s in collections,” Shafroth said. “That’s when you become ineligible to take out new federal student aid. A lot of people go into default because they weren’t able to complete their degree the first time. This prevents them from going back to school.”

    Once a loan is in default, it’s subject to the collection processes mentioned above. That means the government can garnish wages (without a court order) to go towards paying back the loan, intercept tax refunds, and seize portions of Social Security checks and other benefit payments.

    WHAT ARE OTHER OPTIONS IF I CAN’T MAKE PAYMENTS?

    Shafroth said that many borrowers may still be eligible to have loans canceled via a patchwork of programs outside of the Biden administration’s proposed debt relief program.

    “If your school closed before you could complete your program, you’re eligible for relief. If your school lied to you or misrepresented the outcome of what your enrolling would be, you can file a borrower defense application, and request your loan be canceled on that basis,” she said. “If you have a disability, you can sometimes have your loans canceled on that basis.”

    Shafroth encourages borrowers to look at the Student Aid website to see what their options might be before missing payments.

    WHAT IF MY LOANS WERE IN DEFAULT BEFORE MARCH 2020?

    Under the Biden administration’s Fresh Start program, borrowers with federal student loans who were in default before the pause have a chance to become current.

    Borrowers who were in default will not be subject to collection processes or have wages garnished through about August 2024, or roughly one year after the payment freeze ends. These borrowers have also been granted permission to apply for federal student loans again, to complete degrees. Lastly, these defaulted loans are now being reported to credit bureaus as current.

    That said, borrowers must take action if they want to stay out of default after this year-long leniency period ends.

    To eliminate your record of default, you should contact the Education Department’s Default Resolution Group online, by phone, or by mail, and ask the group to take the loans out of default via the Fresh Start policy. In four to six weeks, any record of default will be removed from your credit report, and the loans will be placed with a loan servicer. This will also give you access to income-driven repayment plans and Public Service Loan Forgiveness, if applicable.

    WHAT IF I WAS BEHIND ON PAYMENTS OR DELINQUENT BEFORE MARCH 2020?

    The Fresh Start program also applies to borrowers who were delinquent prior to the payment pause. Those accounts will be considered current, and borrowers will have the option to enroll in income-driven repayment plans that can lower bills to as little as $0, or to apply for deferment, forbearance or bankruptcy.

    ___

    The Associated Press receives support from Charles Schwab Foundation for educational and explanatory reporting to improve financial literacy. The independent foundation is separate from Charles Schwab and Co. Inc. The AP is solely responsible for its journalism.

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  • Nevada Legislators weigh plan to put MLB stadium on Las Vegas Strip

    Nevada Legislators weigh plan to put MLB stadium on Las Vegas Strip

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    CARSON CITY, Nev. — Lawmakers are considering a proposal to finance and incentivize construction of a Major League Baseball stadium on the Las Vegas Strip, with an initial public hearing scheduled Monday at the Nevada Legislature.

    The plan would authorize up to $380 million in incentives for the potential $1.5 billion retractable-roof stadium, mainly through state transferable tax credits and county bonds to help provide a home for the Oakland Athletics. The state would forgo up to $180 million in transferable tax credits, with a cap at $36 million per year. The $120 million in county bonds would help with construction costs and be paid off gradually.

    The proposal’s price tag and behind-the-scenes negotiations have sparked debate about public subsidies and equity in state economic development efforts.

    State lawmakers also are considering billions of dollars in tax credits to bring major film studios to Las Vegas. The governor’s office of economic development has approved hundreds of millions of dollars in tax abatements for Tesla in efforts to broaden Nevada’s tourism and gaming-based economy.

    The stadium financing bill was introduced late Friday night after more than a month of speculation, as the A’s move away from Oakland appears increasingly imminent. As of Monday morning, it is already the most-commented on proposal this session with over 1,500 opinions — nearly three-quarters of which are in opposition.

    Many proponents say that Las Vegas has an increasing capacity to support major league professional sports, and that bringing the Athletics to the Strip would add sustainable jobs to an area hit especially hard by the pandemic. Opponents say the stadium is not worth hundreds of millions of dollars in subsidies to bring another large corporation on the Las Vegas Strip, especially as A’s management has switched proposed locations and drawn out negotiations for how much public assistance they are requesting.

    The A’s have been looking for a home to replace the Oakland Coliseum, where the team has played since 1968 after departing Kansas City. The team previously sought to build a stadium in California at Fremont, then San Jose, and finally the Oakland waterfront — ideas that never materialized.

    The plan in the Nevada Legislature would not directly raise taxes, meaning it can move forward with a simple majority vote in the state Senate and Assembly.

    Lawmakers have until June 5 to act on the proposal, when the four-month legislative session adjourns. Though it could potentially be reviewed later if a special session is called.

    Until then, the plan faces an uncertain path. On Thursday, Democratic leaders said financing bills, including for the A’s, may not go through if Republican Gov. Joe Lombardo follows through on threats to veto several Democratic-backed spending bills if his legislative priorities are not addressed.

    ___

    Stern is a corps member for the Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms. Follow Stern on Twitter: @gabestern326.

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  • Nevada Legislators weigh plan to put MLB stadium on Las Vegas Strip

    Nevada Legislators weigh plan to put MLB stadium on Las Vegas Strip

    [ad_1]

    CARSON CITY, Nev. — Lawmakers are considering a proposal to finance and incentivize construction of a Major League Baseball stadium on the Las Vegas Strip, with an initial public hearing scheduled Monday at the Nevada Legislature.

    The plan would authorize up to $380 million in incentives for the potential $1.5 billion retractable-roof stadium, mainly through state transferable tax credits and county bonds to help provide a home for the Oakland Athletics. The state would forgo up to $180 million in transferable tax credits, with a cap at $36 million per year. The $120 million in county bonds would help with construction costs and be paid off gradually.

    The proposal’s price tag and behind-the-scenes negotiations have sparked debate about public subsidies and equity in state economic development efforts.

    State lawmakers also are considering billions of dollars in tax credits to bring major film studios to Las Vegas. The governor’s office of economic development has approved hundreds of millions of dollars in tax abatements for Tesla in efforts to broaden Nevada’s tourism and gaming-based economy.

    The stadium financing bill was introduced late Friday night after more than a month of speculation, as the A’s move away from Oakland appears increasingly imminent. As of Monday morning, it is already the most-commented on proposal this session with over 1,500 opinions — nearly three-quarters of which are in opposition.

    Many proponents say that Las Vegas has an increasing capacity to support major league professional sports, and that bringing the Athletics to the Strip would add sustainable jobs to an area hit especially hard by the pandemic. Opponents say the stadium is not worth hundreds of millions of dollars in subsidies to bring another large corporation on the Las Vegas Strip, especially as A’s management has switched proposed locations and drawn out negotiations for how much public assistance they are requesting.

    The A’s have been looking for a home to replace the Oakland Coliseum, where the team has played since 1968 after departing Kansas City. The team previously sought to build a stadium in California at Fremont, then San Jose, and finally the Oakland waterfront — ideas that never materialized.

    The plan in the Nevada Legislature would not directly raise taxes, meaning it can move forward with a simple majority vote in the state Senate and Assembly.

    Lawmakers have until June 5 to act on the proposal, when the four-month legislative session adjourns. Though it could potentially be reviewed later if a special session is called.

    Until then, the plan faces an uncertain path. On Thursday, Democratic leaders said financing bills, including for the A’s, may not go through if Republican Gov. Joe Lombardo follows through on threats to veto several Democratic-backed spending bills if his legislative priorities are not addressed.

    ___

    Stern is a corps member for the Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms. Follow Stern on Twitter: @gabestern326.

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  • Just in case: Anxious retirees, social service groups among those making default contingency plans

    Just in case: Anxious retirees, social service groups among those making default contingency plans

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    WASHINGTON — Phoenix retiree Saundra Cole has been watching the news about the debt limit negotiations in Washington with dismay — and limiting her air conditioning use to save money just in case her monthly Social Security check is delayed due to a default.

    For her, air conditioning is no small thing in a city where the average daily high hits 94 degrees in May. If the government can’t make good on its obligations, she says, “I would be devastated.”

    “What I’m worried about is food banks and electricity here because you know, we’ve had deaths with seniors because of the heat,” says Cole.

    Politicians in Washington may be offering assurance that the government will figure out a way to avert default, but around the country, economic anxiety is rising and some people already are adjusting their routines.

    Government beneficiaries, social service groups that receive state and federal subsidies and millions more across the country are contemplating the possibility of massive and immediate cuts if the U.S. were to default on its financial obligations.

    Treasury Secretary Janet Yellen warned last week that a default would destroy jobs and businesses, and leave millions of families who rely on federal government payments to “likely go unpaid,” including Social Security beneficiaries, veterans and military families.

    “A default could cause widespread suffering as Americans lose the income that they need to get by,” she said.

    The number of people potentially impacted is huge. According to the Census Bureau, in 2020 roughly 35% of U.S. households included someone receiving Social Security benefits, 36% received Medicaid benefits and more than 13% of the total population received food stamps.

    A recent poll by The Associated Press-NORC Center for Public Affairs Research found that 66% of Americans said they’re very or extremely concerned about the impact on the U.S. economy if the debt limit is not raised and the government defaults, though only 21% said they’re following the debate closely.

    Robert Gault, 63, who depends on a $1,900 monthly Social Security disability payment, says an economic default “would make life so real awfully hard on me.” The former longtime factory worker said he suffers from chronic back pain caused by degenerating disks in his spine.

    Gault, who lives in Bradford, Pennsylvania, near that state’s border with New York, said he thinks about the debate — and the stalemate — in Washington a lot.

    He hasn’t made any drastic changes to the way he lives, but said, “I’m more conscientious of everything and I think about everything I do now.”

    Negotiations between the president and congressional leaders are down to the wire as they try to break an impasse. GOP lawmakers have been pressing for spending cuts in exchange for agreeing to increase the government’s borrowing authority and President Joe Biden wanted a “clean” debt ceiling increase without conditions.

    Without a deal, the U.S. could default as soon as June 1, according to Yellen.

    House Speaker Kevin McCarthy, R-Calif., was asked Monday if people should start preparing for default, and insisted “no, no, no, no.”

    But people on fixed incomes and organizations that serve the poor — already feeling the after-effects of the pandemic and dealing with inflation — are bracing for a potential debt default that would deal an overwhelming blow to their finances.

    Clare Higgins, executive director of Community Action Pioneer Valley in Massachusetts, said demand at the organization’s food banks has skyrocketed since the start of the pandemic, and is growing again.

    With a possible debt default, she said, she’s seeing more demand for food from the three pantries that the organization either runs or financially supports.

    “Yes, demand has gone up — but it was already up before,” she said.

    “We’re already behind the eight-ball in what we’re able to pay teachers,” she said of the organization’s head start and early learning programs. “And the inflation that has happened in the economy has already reduced our ability to stretch the dollar.”

    Higgins said while she’s hopeful that Biden and McCarthy can reach a compromise, she’s concerned the deal will include Republican-sought budget cuts that would affect the organizations she manages. And if a default does happen, Higgins said, “I hope it’s for a short period.”

    William Howell, a political science professor at the University of Chicago Harris School of Public Policy, said the notion of older people and recipients of government benefits doomsday prepping for disruptions every time budget season comes around is symptomatic of a “dysfunctional” democracy.

    “It’s not how a healthy democracy handles its business,” he said, adding that the consequences of the brinksmanship will impact the government’s ability to function and plan in coming years.

    “In this era of hyper-polarization, the way you get compromise is walking right up to the edge of economic catastrophe and threatening default — on the other side we have a president almost threatening to invoke the 14th Amendment to do away with the debt ceiling,” he said. “This is the stuff of partisan politics.”

    Adriene Clifford, 58, knows about balance sheets because she is an accounting professor in New York state. The Delhi resident said she was concerned enough about possible disruptions to the banking system in the event of a default that she withdrew money from the bank “just to tie me over.”

    “I’ve been most concerned about the banking system going down and the FDIC not being there,” Clifford said. She was referring to the Federal Deposit Insurance Corp., the independent federal agency that exists to maintain stability and public confidence in the U.S. financial system.

    At the Kids’ Stop Learning Center in Rome, Georgia, Lance Elam, owner of the family business that has been in operation since 1984, says he’s not worried that a default will actually occur. But he still has done the calculation on how long operations could last without the subsidies that the organization receives for its three locations in Rome and Cartersville, Georgia.

    “We have enough liquid funds to carry on for six to eight months,” he said, adding that state and federal funds helped the Kids’ Stop Learning Center stay in business through the pandemic.

    “We have so many kids on our waiting list,” he said, that the center would likely begin dropping kids who couldn’t pay without subsidies and prioritize families that can pay out of pocket.

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  • New ETF makes a big bet on cleaning up the environment

    New ETF makes a big bet on cleaning up the environment

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    A U.S.-based ETF is mimicking an investment trend in Europe that’s designed to boost profits while helping the climate.

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  • Canada’s Trudeau hails VW plant as ‘generational’ investment

    Canada’s Trudeau hails VW plant as ‘generational’ investment

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    VANCOUVER, British Columbia — A massive Volkswagen electric battery plant being built in Ontario will create 3,000 jobs and represent a “generational investment” for Canada, Prime Minister Justin Trudeau said Friday.

    The German automaker last month announced plans for the plant in the town of St. Thomas, and Trudeau and other government ministers presented details at a news conference at the town’s railway museum Friday. The plans came under criticism this week from opposition lawmakers following revelations that Canada would grant CDN$13 billion (US$9.6 billion) in subsidies to the automaker over 10 years.

    Trudeau defended the investment by saying it will create “good careers for years to come in St. Thomas and great middle class jobs right across Ontario and the rest of Canada.”

    Volkswagen, the world’s largest automaker, will invest CDN$7 billion (US$5.17 billion) in the “gigafactory,” which will be operated by its company, PowerCo Se. The plant will create up to 3,000 direct jobs, 30,000 indirect jobs and have the capacity to produce batteries for up to one million vehicles a year, government officials said.

    The Canadian government will provide Volkswagen with an upfront capital investment of CDN $700 million (US$516.9 million) and production subsidies for every battery the company makes and sells that could range between CDN$8 billion (US$5.9 billion) and CDN$13 billion (US$9.6 billion) over a decade.

    Those subsidies will not be in the form of tax credits but are designed to match what Volkswagen could have received if it had built the new plant in the United States. The subsidies will disappear or be reduced if the U.S. supports within the Inflation Reduction Act are eliminated or phased down.

    “Everyone wanted this, so yes, we put up a lot of money,” Trudeau said. “Money that’s going to come back in economic investments very quickly.”

    Ontario Premier Doug Ford said the province will invest CDN$500 million (US$369.3 million) in direct incentives to the company and spend hundreds of millions more to build roads, utilities, police stations and fire stations in the area.

    A federal government release said the plant will generate about CDN$200 billion (US$147.7 billion) in value.

    Pierre Poilievre, leader of the Conservative Party of Canada, has criticized the deal’s subsidies as a giveaway of Canadian resources.

    “This money belongs to Canadians,” Poilievre, who leads the official opposition, Tweeted earlier. “Not to a foreign corporation. Not to Justin Trudeau.

    “How much of Canadians’ money is he giving to this foreign corporation? How many jobs? How much is the cost per job?”

    The facility will be built on a 1,500-acre site with construction set to begin in 2024 and production expected to begin by 2027.

    Frank Blome, chief executive officer of PowerCo SE, said the factory join ones in Germany and Spain.

    “It has the great potential to become our biggest one in the world,” said Blome. “I’m pretty sure it will serve as an accelerator for future jobs, and this will develop the current economy.”

    Blome said Volkswagen and its subsidiary companies aim to produce more than 25 new elective vehicles by 2030.

    “Most of them will be equipped with batteries made in St. Thomas,” he said. Canada was attractive to Volkswagen because the country has the minerals and metals needed for the batteries plus an abundance of clean power.

    Andy Hira, a political science professor at Simon Fraser University in Vancouver, and director of the Clean Energy Research Group, said as gas vehicles are phased out, it’s important for countries like Canada to stake their place in new production methods.

    “The race is on for different countries to try to capture parts of this industry,” he said. “History tells us that if you’re first to market, then you have a much better chance to capture the employment in those jobs and create clusters around them.”

    Hira said while “it’s a positive move” to invest in projects like the battery factory, governments can’t just write a blank check.

    “You would really want to scrutinize it deal by deal,” he said.

    This will be the second electric vehicle battery factory in Ontario. Last year, automaker Stellantis and South Korean battery-maker LG Energy solution announced they were building a facility in Windsor, Ontario, with a CDN$5-billion (US$3.7 billion) price tag.

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  • Cities will get nearly $200M in grants for pipeline upgrades

    Cities will get nearly $200M in grants for pipeline upgrades

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    Federal officials have announced the first $196 million of grants in a $1 billion program to repair and replace aging and sometimes leaking natural gas pipelines across the country

    LAS CRUCES, N.M. — Federal officials announced the first $196 million of grants Wednesday in a $1 billion program to repair and replace aging and sometimes leaking natural gas pipelines across the country.

    The Transportation Department and its Pipelines and Hazardous Materials Safety Administration announced that the city of Las Cruces, New Mexico, will get $10 million as the first grant recipient. Nineteen other communities will also get grants to help upgrade 270 miles (435 kilometer) of natural gas pipelines, although the government didn’t identify all the recipients.

    Another nearly $400 million of grants will be announced later this year.

    The grants, announced by Transportation Secretary Pete Buttigieg, will be paid for with money from the infrastructure law President Joe Biden’s administration is touting in a series of events across the country.

    Several of the pipelines that will be repaired or replaced were installed decades ago, and some of them are leaking. Officials estimate that completing these repairs will help reduce methane emissions by roughly 212 metric tons a year.

    Aging pipelines have been involved in fatal explosions and massive spills that have occurred over decades in California, Michigan, New Jersey and other states.

    “Investments in pipeline safety are investments in community safety and our shared environment,” said PHMSA Deputy Administrator Tristan Brown.

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  • ‘War of the states’: EV, chip makers lavished with subsidies

    ‘War of the states’: EV, chip makers lavished with subsidies

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    HARRISBURG, Pa. — States are doling out more cash than ever to lure multibillion-dollar microchip, electric vehicle and battery factories, inspiring ever-more competition as they dig deeper into their pockets to attract big employers and capitalize on a wave of huge new projects.

    Georgia, Kansas, Michigan, New York, North Carolina, Ohio and Texas have made billion-dollar pledges for a microchip or EV plant, with more state-subsidized plant announcements by profitable automakers and semiconductor giants surely to come.

    States have long competed for big employers. But now they are floating more billion-dollar offers and offering record-high subsidies, lavishing companies with grants and low-interest loans, municipal road improvements, and breaks on taxes, real estate, power and water.

    “We’re in the second war of the states,” said John Boyd, a principal at the Florida-based Boyd Company, which advises on site selections. “That’s how competitive economic development is between the states in 2023.”

    The projects come at a transformative time for the industries, with automakers investing heavily in electrification and chipmakers expanding production in the U.S. following pandemic-related supply chain disruptions that raised economic and national security concerns.

    One of the driving forces behind them are federal subsidies signed into law last summer that are meant to encourage companies to produce electric vehicles, EV batteries, and computer chips domestically. Another is that states are flush with cash thanks to inflation-juiced tax collections and federal pandemic relief subsidies.

    The number of big projects and the size of state subsidy packages are extraordinary, said Nathan Jensen, a University of Texas professor who researches government economic development strategies.

    “It is kind of a Wild West moment,” Jensen said. “It’s wild money and every state seems to be in on it.”

    Good Jobs First, a nonprofit that tracks and is critical of corporate subsidies, said 2022 set a record for the number of billion-dollar-plus incentive deals. At least eight were finalized, though that figure might be higher since such deals can be cloaked in secrecy and take time to come to light.

    Eighteen of last year’s 23 known “megadeals,” in which state and local incentive packages to private companies exceeded $50 million in value, were for semiconductor and EV plants, according to the group’s data.

    More than $20 billion in public money was committed to subsidizing those known megadeals, according to Good Jobs First data. That total eclipsed the previous record of $17.7 billion that was committed to subsidizing such deals in 2013.

    Many of the companies drawing the biggest subsidy offers — such as Intel, Hyundai, Panasonic, Micron, Toyota, Ford and General Motors — are profitable and operate around the globe. Some lesser-known names in the nascent EV field are getting big offers too, such as Rivian, Volkswagen-backed Scout Motors and Vietnamese automaker VinFast.

    The subsidy offers are generally embraced by politicians from both major parties and the business elite, who point to promises of hundreds or thousands of jobs, massive investments in construction and equipment, and what they contend are immeasurable trickle-down benefits.

    Still, academics who study such subsidies find them to be a waste of money and rarely decisive in a company’s choice of location.

    In a 2021 paper arguing that subsidies are driven by politicians for their own benefit, researchers from The Citadel, the College of Charleston and the University of Louisville-Lafayette wrote that studies conclude “they do little, if anything, to promote meaningful improvements in economic outcomes.”

    The mounting cost of competing for the projects hasn’t dissuaded states from trying. On the contrary, they’re clambering to outdo each other.

    Michigan was stung by hometown Ford’s $11.4 billion commitment in 2021 to build electric vehicle and battery plants in Tennessee and Kentucky. It responded by pledging more than $2.5 billion for electric-vehicle projects by Ford and GM and plants by makers of EV batteries and battery components.

    Pennsylvania has yet to lure a microchip or EV factory, and the state’s business elite are sounding the alarm after watching neighboring Ohio land a $20 billion Intel plant.

    In his first budget speech to lawmakers, newly inaugurated Gov. Josh Shapiro said Pennsylvania needs to “get in the game” and warned that it would take money.

    Jabbing a finger in the air, he brought the room to a standing ovation, saying: ”It’s time to compete again here in Pennsylvania!”

    Oregon lawmakers hoping to attract a major semiconductor plant are advancing legislation that would marshal $200 million in subsidies and loosen decades-old protections against urban sprawl.

    The aim is to procure huge plots of land with ready-made utilities. That has elicited protests from conservationists who say the state mishandled developable land and agricultural groups that warned of the permanent destruction of high-quality farmland.

    Dick Sheehy, a retired site selection consultant who traveled the world to inspect possible locations for semiconductor makers, told a panel of Oregon lawmakers in January that states are tipping the scales over better-qualified competitors by offering larger incentive packages.

    “The money the state is putting up is so large that certain companies can’t afford not to look at it,” Sheehy said.

    In Texas, Gov. Greg Abbott promised to win passage of “economic development tools” during the current legislative session, saying the state lost out on a massive Micron semiconductor plant because it couldn’t match the $5.5 billion in tax credits offered by New York.

    “The CEO of Micron was basically begging me because he really wanted to do business in Texas. He knew Texas was a better place. He said, ‘Please could you come up with some more?’” Abbott told a Greater Arlington Chamber of Commerce crowd in February. “We gave every penny that we could give.”

    Asked about Abbott’s assertions, Micron declined to address Abbott’s description of the phone call with CEO Sanjay Mehrotra, but it called New York the most competitive state and listed reasons why it is the “ideal home” for its plant.

    Those included a compelling case made by top officials — including Gov. Kathy Hochul and U.S. Sen. Chuck Schumer — plus an attractive local workforce, local research and development partners, and a good quality of life for employees.

    In Oklahoma, frustration among lawmakers has been bubbling over since the state lost out on a string of projects: first a Tesla plant to Texas, then a Panasonic EV battery plant to Kansas and, just days ago, a Volkswagen EV battery plant to Canada.

    That latest loss led state Senate President Pro Tempore Greg Treat to create a committee to figure out what went wrong in Oklahoma’s bidding for a “megaproject.”

    Business-friendly Oklahoma shouldn’t keep losing out to other states, Treat said.

    “You never know if you’re being used so they can go to that other state so they can say, ‘Hey, Oklahoma is willing to do this,’” Treat said in an interview. “And they intend on going to that state the whole time.”

    ___

    Associated Press writers Sean Murphy in Oklahoma City and Andrew Selsky in Salem, Oregon, contributed to this report.

    ___

    Follow Marc Levy on Twitter: @timelywriter

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  • ‘War of the states’: EV, chip makers lavished with subsidies

    ‘War of the states’: EV, chip makers lavished with subsidies

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    HARRISBURG, Pa. — States are doling out more cash than ever to lure multibillion-dollar microchip, electric vehicle and battery factories, inspiring ever-more competition as they dig deeper into their pockets to attract big employers and capitalize on a wave of huge new projects.

    Georgia, Kansas, Michigan, New York, North Carolina, Ohio and Texas have made billion-dollar pledges for a microchip or EV plant, with more state-subsidized plant announcements by profitable automakers and semiconductor giants surely to come.

    States have long competed for big employers. But now they are floating more billion-dollar offers and offering record-high subsidies, lavishing companies with grants and low-interest loans, municipal road improvements, and breaks on taxes, real estate, power and water.

    “We’re in the second war of the states,” said John Boyd, a principal at the Florida-based Boyd Company, which advises on site selections. “That’s how competitive economic development is between the states in 2023.”

    The projects come at a transformative time for the industries, with automakers investing heavily in electrification and chipmakers expanding production in the U.S. following pandemic-related supply chain disruptions that raised economic and national security concerns.

    One of the driving forces behind them are federal subsidies signed into law last summer that are meant to encourage companies to produce electric vehicles, EV batteries, and computer chips domestically. Another is that states are flush with cash thanks to inflation-juiced tax collections and federal pandemic relief subsidies.

    The number of big projects and the size of state subsidy packages are extraordinary, said Nathan Jensen, a University of Texas professor who researches government economic development strategies.

    “It is kind of a Wild West moment,” Jensen said. “It’s wild money and every state seems to be in on it.”

    Good Jobs First, a nonprofit that tracks and is critical of corporate subsidies, said 2022 set a record for the number of billion-dollar-plus incentive deals. At least eight were finalized, though that figure might be higher since such deals can be cloaked in secrecy and take time to come to light.

    Eighteen of last year’s 23 known “megadeals,” in which state and local incentive packages to private companies exceeded $50 million in value, were for semiconductor and EV plants, according to the group’s data.

    More than $20 billion in public money was committed to subsidizing those known megadeals, according to Good Jobs First data. That total eclipsed the previous record of $17.7 billion that was committed to subsidizing such deals in 2013.

    Many of the companies drawing the biggest subsidy offers — such as Intel, Hyundai, Panasonic, Micron, Toyota, Ford and General Motors — are profitable and operate around the globe. Some lesser-known names in the nascent EV field are getting big offers too, such as Rivian, Volkswagen-backed Scout Motors and Vietnamese automaker VinFast.

    The subsidy offers are generally embraced by politicians from both major parties and the business elite, who point to promises of hundreds or thousands of jobs, massive investments in construction and equipment, and what they contend are immeasurable trickle-down benefits.

    Still, academics who study such subsidies find them to be a waste of money and rarely decisive in a company’s choice of location.

    In a 2021 paper arguing that subsidies are driven by politicians for their own benefit, researchers from The Citadel, the College of Charleston and the University of Louisville-Lafayette wrote that studies conclude “they do little, if anything, to promote meaningful improvements in economic outcomes.”

    The mounting cost of competing for the projects hasn’t dissuaded states from trying. On the contrary, they’re clambering to outdo each other.

    Michigan was stung by hometown Ford’s $11.4 billion commitment in 2021 to build electric vehicle and battery plants in Tennessee and Kentucky. It responded by pledging more than $2.5 billion for electric-vehicle projects by Ford and GM and plants by makers of EV batteries and battery components.

    Pennsylvania has yet to lure a microchip or EV factory, and the state’s business elite are sounding the alarm after watching neighboring Ohio land a $20 billion Intel plant.

    In his first budget speech to lawmakers, newly inaugurated Gov. Josh Shapiro said Pennsylvania needs to “get in the game” and warned that it would take money.

    Jabbing a finger in the air, he brought the room to a standing ovation, saying: ”It’s time to compete again here in Pennsylvania!”

    Oregon lawmakers hoping to attract a major semiconductor plant are advancing legislation that would marshal $200 million in subsidies and loosen decades-old protections against urban sprawl.

    The aim is to procure huge plots of land with ready-made utilities. That has elicited protests from conservationists who say the state mishandled developable land and agricultural groups that warned of the permanent destruction of high-quality farmland.

    Dick Sheehy, a retired site selection consultant who traveled the world to inspect possible locations for semiconductor makers, told a panel of Oregon lawmakers in January that states are tipping the scales over better-qualified competitors by offering larger incentive packages.

    “The money the state is putting up is so large that certain companies can’t afford not to look at it,” Sheehy said.

    In Texas, Gov. Greg Abbott promised to win passage of “economic development tools” during the current legislative session, saying the state lost out on a massive Micron semiconductor plant because it couldn’t match the $5.5 billion in tax credits offered by New York.

    “The CEO of Micron was basically begging me because he really wanted to do business in Texas. He knew Texas was a better place. He said, ‘Please could you come up with some more?’” Abbott told a Greater Arlington Chamber of Commerce crowd in February. “We gave every penny that we could give.”

    Asked about Abbott’s assertions, Micron declined to address Abbott’s description of the phone call with CEO Sanjay Mehrotra, but it called New York the most competitive state and listed reasons why it is the “ideal home” for its plant.

    Those included a compelling case made by top officials — including Gov. Kathy Hochul and U.S. Sen. Chuck Schumer — plus an attractive local workforce, local research and development partners, and a good quality of life for employees.

    In Oklahoma, frustration among lawmakers has been bubbling over since the state lost out on a string of projects: first a Tesla plant to Texas, then a Panasonic EV battery plant to Kansas and, just days ago, a Volkswagen EV battery plant to Canada.

    That latest loss led state Senate President Pro Tempore Greg Treat to create a committee to figure out what went wrong in Oklahoma’s bidding for a “megaproject.”

    Business-friendly Oklahoma shouldn’t keep losing out to other states, Treat said.

    “You never know if you’re being used so they can go to that other state so they can say, ‘Hey, Oklahoma is willing to do this,’” Treat said in an interview. “And they intend on going to that state the whole time.”

    ___

    Associated Press writers Sean Murphy in Oklahoma City and Andrew Selsky in Salem, Oregon, contributed to this report.

    ___

    Follow Marc Levy on Twitter: @timelywriter

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