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Wright-Patterson Air Force Base provided a more than a $5.1 billion annual boost to the region last year, up $700 million from the previous year, according to a new report prepared by base officials.

The document shows a total of 27,406 military, civilian and contract employees work for the base, up about 1,700 compared to 2008. The addition of 2,400 civilian workers offset a slight drop in military and contract personnel. Annual payroll in 2009 topped $2 billion.

The base also is responsible for more than 33,000 indirect jobs with an annual value of $1.38 billion, which is up from 3,000 jobs and $200 million compared to 2008, according to the report.

Last year, Wright-Patt spent nearly $1.75 billion for construction, services and supplies.

Local companies snagged some of that construction work. Last summer, for example, Wilcon Construction of Dayton, won a $13 million expansion and renovation project at the 88th Security Forces Squadron Operations facility at the base.

In April, 2009, Beavercreek-based Butt Construction Co. captured the final Base Realignment and Closure contract at Wright-Patt, a $36 million design/build project to add and renovate space in the Air Force Research Laboratory sensors complex. Butt Construction snagged at least seven military construction contracts at Wright-Patt during a two year period ending in 2009, totaling more than $300 million in work.

The economic impact of the base was expected to grow over the next several years as new missions complete moves as part of the Base Realignment and Closure Process, or BRAC. However, that is now in doubt because of a directive by U.S. Defense Secretary Robert Gates to cut contractor funding 10 percent for each of the next three years (link to Friday’s article?)

The 2009 Economic Impact Analysis from Wright-Patt used data through September, 2009, and included Clark, Greene, Miami, Montgomery and Preble counties.

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Kansas Speedway has gotten NASCAR’s approval to host a second NASCAR Sprint Cup Series weekend, starting in 2011.

The Kansas City, Kan., speedway and its parent, International Speedway Corp. (Nasdaq: ISCA), said Tuesday that the first NASCAR Sprint Cup Series event would be June 4-5; the second will be the fourth race in the Chase for the NASCAR Sprint Cup, which will be Oct. 8-9.

Requesting another Sprint Cup Series race at Kansas Speedway was one of the sweeteners that casino developer Kansas Entertainment LLC offered when pitching its proposal to local and state officials. The first phase of the Hollywood Casino project, which broke ground in April, is expected to cost $386 million and open during the first quarter of 2012. It will overlook the second turn of the speedway track.

“Our fan support for the past 10 years has been tremendous and as a result of that support and the new Hollywood Casino at Kansas Speedway, we are fortunate enough to gain an additional NASCAR Sprint Cup Series race starting in 2011,” Kansas Speedway President Pat Warren said in a release.

Tickets for the 2011 races will go on sale after the speedway’s 2010 NASCAR Sprint Cup Series event in October. The full 2011 Sprint Cup Series schedule will be released later this year.

ISC CEO Lesa France Kennedy said the casino project “will make Kansas Speedway two of the most anticipated stops on the NASCAR Sprint Cup schedule Payday advance.”

The casino, planned to be a $700 million project when all phases are complete, is being developed by a joint venture of ISC and Penn National Gaming Inc. (Nasdaq: PENN). The first phase is to include a 100,000-square-foot casino floor with enough room for 2,300 slot machines and 86 table games, a lounge and several dining and entertainment concepts.

Later phases are planned to include a hotel, more gambling space, a spa, a convention center and an entertainment retail district. International Speedway also has committed to building a road course at Kansas Speedway and using two free track-side billboards to promote Kansas tourism.

Hollywood Casino at Kansas Speedway is expected to bring more than 1,700 construction jobs, more than 1,000 full-time jobs and other economic benefits for the Kansas City region.

In 2007, Kansas approved a law that allowed four destination casinos in specific areas of the state, including one in Wyandotte County. Developers competed to be chosen to build and manage the project.

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A federal court has dealt YRC Worldwide Inc. a setback in its attempt to avoid making more than $21 million in debt payments next month.

In April, the Overland Park-based trucking company (Nasdaq: YRCW) asked for summary judgment against Deutsche Bank Trust Co.

Deutsche Bank is acting as trustee for bondholders that did not participate in last year’s debt-for-equity exchange, announced Dec. 31, which eliminated about a third of YRC’s total debt and gave bondholders a majority share of the company. YRC had said a bankruptcy filing was possible if the debt-for-equity swap didn’t succeed.

The bank claims that obligations for those bonds still are coming due Aug. 9, but YRC says the swap relieved it of those requirements.

In a securities filing Tuesday, YRC said the U.S. District Court for Kansas sided with the bank, saying the company could not eliminate its obligations without approval from those bondholders. The company said about $21 paydayloans.6 million in notes are outstanding.

YRC said it was considering its options, including appealing the decision. If it doesn’t, the company said it could make the debt payments with money raised through a $70 million private debt placement it agreed to in February.

The company said that it still is waiting for the debt placement to go through and that if it doesn’t receive the financing, it would have to use existing cash or seek additional third-party financing, which would require approval from its lenders.

“The company cannot assure you that it will have sufficient cash or that its senior lenders will grant their consent or whether the terms of any other financing will be favorable to the company or its stakeholders or that such financing can be obtained prior to Aug. 9,” YRC said in the filing.

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Piedmont Triad International Airport will hold its first-ever “5K Run on the Runway” event tomorrow to celebrate numerous airport projects ranging from the facility’s new 9,000-foot runway to the FedEx hub.

The 8 a.m. run is expected to attract 700 runners. It will benefit the Leukemia and Lymphoma Society in honor of Jay Kirby, whose father designed the airport runway that opened in January. A ceremony will begin at 10 a.m.

Saturday’s event is the culmination of years of development designed to make the airport the mid-Atlantic hub for FedEx, which chose PTI in 1998 cheap payday advance. Ted Johnson, executive director of the Piedmont Triad Airport Authority, said grading on the FedEx site began in 2004. FedEx moved into its new facility at the airport in June 2009, he said.

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Gaithersburg-based GenVec, whose stock has tumbled this year after pulling the plug on one of its lead cancer treatments, has been notified that its stock price no longer meets Nasdaq Stock Market requirements.

GenVec stock, trading around 62 cents per share, has been below the minimum requirement of $1 per share for more than 30 consecutive business days. The company has until Nov. 8 to regain compliance, which requires trading at $1 per share or more for ten consecutive days.

GenVec shares have lost almost half their value this year.

The notification comes just four months after GenVec regained compliance following a previous warning about its stock price.

The Nasdaq notification does not currently affect GenVec's Nasdaq trading. If it fails to meet compliance by November, the Nasdaq can delist the stock.

"The company intends to actively monitor the bid price for its common stock between now and Nov. 8, 2010, and will consider available options to resolve the deficiency and regain compliance with the Nasdaq minimum bid price requirement," GenVec said in a statement, with offering specific plans for boosting its share price.

In March, GenVec decided to shut down its advanced clinical trails for its lead pancreatic cancer drug after it failed to show significant differences from standard care.

The company is focusing on other vaccine research programs that are funded mostly through government grants. It is working on treatments for HIV, foot and mouth disease, influenza and malaria.

GenVec (NASDAQ: GNVC) also has a licensing agreement with Novartis AG for a hearing loss treatment.

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TechCrunch is reporting that Marc Andreessen's social networking hosting startup Ning is cutting its staff by 70 people, or 40 percent.

The move comes a month after founding CEO Gina Bianchini was replaced by chief operating officer Jason Rosenthal, who announced the cuts in a memo. In addition, Rosenthal said Ning would stop offering free services, forcing networks to either pay or move easy pay day loans.

The cuts will leave Ning with 98 employees.

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Just as they are contending with massive gaps in their operating budgets, states and localities must also deal with a $1 trillion deficit in public employees’ retirement benefits’ funds, a new report found.

The shortfall amounts to more than $8,800 for every household in the nation, according to the Pew Center on the States, which published its findings Thursday.

States largely got themselves into this mess by failing to make annual contributions while also enhancing benefits, the study found. Now, they are behind by a total $452 billion in their pension accounts and $555 billion in their retiree health funds, as of the end of fiscal 2008, which ended June 30 for most states.

The deficit is likely even more severe because the report did not take into account the crumbling of the stock market in the latter half of 2008. The typical pension plan lost 25% of its value in 2008.

States must find ways to make up these gaps because retiree benefits for public workers are largely guaranteed by union contract. And they are funded through contributions from both employees and state employers, as well as investment returns.

So when gaps appear, states must ask their residents to make up the difference, usually through property tax or income tax hikes.

"Ultimately, taxpayers could face higher taxes and cuts in services," said Stephen Fehr, one of the report’s authors. "You can’t ignore the problem. It’s just going to be more serious budget trouble for states down the road."

To be sure, the bill isn’t due all at once and no state is in danger of default. These benefits are paid out over decades. Still, the deficits must be addressed sooner than later or the gaps will simply balloon more.

In the most trouble

The consequences of the shortfall could be severe. It comes at a time when states are wrestling with a cumulative $180 billion budget gap for fiscal 2011.

Eight states are in the most dire shape, according to the Pew report. These include: Alaska, Colorado, Illinois, Kansas, Kentucky, Maryland, New Jersey and Oklahoma.

Two of these states — Illinois and Kansas — have less than 60% of the necessary assets on hand to meet their long-term pension obligations.

Only four states — Florida, New York, Washington and Wisconsin — had a fully funded system in 2008, down from just over half at the beginning of the decade.

Overall, state pension systems are 84% funded.

Many states have been lax about funding their pension systems, even during more prosperous times earlier this decade. Some 21 states failed to contribute at least 90% of the required amount during the past five years.

Retiree health care and other non-pension benefit accounts are in even worse condition. Only about 5% of their total liabilities are funded. States generally paying these bills as they come due, rather than setting aside money in advance.

Also, some states sweetened their retiree benefits during the 1990s and earlier this decade, reducing employee contributions or providing cost-of-living increases. But they didn’t allocate money to pay for these changes.

What’s being done

Recognizing the seriousness of the situation, states have begun to act. Fifteen states passed legislation reforming their pension systems in 2009 and 16 are looking at making changes this year.

Since it’s tough to make changes to union contracts, most states apply the new rules to incoming employees only.

Several states, including Kentucky, Nevada, New Jersey, New York, Rhode Island and Texas, have reduced benefits offered to new employees or raised the retirement age. Some are also asking workers to contribute more to their pension accounts or retiree health benefits. And a few have created 401(k) style plans to go alongside their traditional pensions.

In Nevada, for instance, those hired in 2010 and beyond will have to wait until age 62 to retire, instead of age 60. They will also have a less generous funding formula: Their years of service will be multiplied by 2.5, rather than 2.67, to derive the percentage of salary being replaced by pension benefits.

In New York, new hires can’t retire until age 62, instead of age 55, and they will have to work for 10 years instead of five.

"A growing number of policy makers recognize that their states’ fiscal health depends on how well they manage the bill coming due for public sector retirement benefits," said Susan Urahn, the center’s managing director. "We are seeing more and more states explore policy reforms aimed at putting their systems on stronger fiscal footing."

The study looked at 231 state-administered pension plans and 159 state-administered retiree health care and other non-pension benefit plans, which include some localities’ and teacher plans. 

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Wednesday marks the one-year anniversary of the stimulus bill, and from here on out the pace of spending should pick up, according to administration officials.

The federal government expects to spend more money on projects — such as high-speed rail — rather than payments to states and individuals, according to Vice President Joe Biden, who released his annual stimulus progress report Wednesday.

On Feb. 17, 2009, Congress passed a $787 billion economic stimulus program — the largest in the nation’s history — and it has elicited both praise and scorn.

The White House is mounting an all-out campaign this week to tout the benefits of the Recovery Act, saying the package has largely lived up to its promises of stemming job losses and boosting economic growth. Administration officials are touring the nation to highlight stimulus-funded work and detailing where the money has been spent in the past 12 months.

Through the end of January, some $334 billion in spending has been approved, of which $179 billion has actually left federal coffers. Another $119 billion has gone to tax cuts.

"Our work is far from over, but we have rescued this economy from the worst of this crisis," said President Obama on Wednesday, though he noted many Americans may not feel the Recovery Act’s impact because they remain unemployed.

Detractors, however, counter that stimulus has been a waste of money and produced few jobs. And few Americans believe the stimulus program is really working. Only 36% of respondents said the Recovery Act is helping the economy, according to a recent CNN poll.

"In the first year of the trillion-dollar stimulus, Americans have lost millions of jobs, the unemployment rate continues to hover near 10%, the deficit continues to soar and we’re inundated with stories of waste, fraud and abuse," said Senate Minority Leader Mitch McConnell, R-Ky. "This was not the plan Americans asked for or the results they were promised."

Shifting the mix

In the coming months, the pace and mix of spending will change, senior administration officials said. Until this point, the bulk of the spending has been on tax relief and direct aid — such as unemployment benefits — in order to stop the economic freefall.

Going forward, the government will distribute $32 billion in Recovery Act funds per month, up from an average $27 billion a month over the past year, according to Biden’s annual report.

To date, only $31 billion has been spent on projects — such as infrastructure, high-speed rail, broadband and health technology. But in the second phase of the act, the amount of money going to these initiatives will more than double to $7 billion a month as the work ramps up. The administration views this spending as setting the stage for a lasting expansion.

"Many projects are just now getting underway, and will be creating jobs throughout 2010 and beyond," said Biden, noting that the administration will announce an additional $1.5 billion of surface transportation projects Wednesday. "Work on many Recovery Act projects will accelerate in the spring and summer months as weather conditions permit work on roads, bridges, water projects, and Superfund site clean ups."

Payments to states and individuals will fall to $11 billion, from $14 billion, per month. Much of this spending — such as Medicaid funding and additional unemployment benefits — was meant to stabilize the economy during the recession.

The administration will reach its goal to disburse 70% of the Recovery Act funds, or $551 billion, by Sept. 30, senior administration officials said.

The Congressional Budget Office recently hiked the cost estimate of the Recovery Act to $862 billion, though the administration still uses the original $787 billion figure.

Shortcomings highlighted

Republicans, however, were quick to point out stimulus’ shortcomings, stressing the nation’s stubbornly high unemployment rate, which stands at 9.7%.

"Taxpayers aren’t getting their money’s worth from the trillion-dollar ’stimulus’ and struggling families and small businesses are rightly asking, ‘Where are the jobs?’," said Rep. John Boehner, R-Ohio, the House’s top Republican.

Republican Whip Rep. Eric Cantor, R-Va., said states have lost a total of 2.9 million jobs between the bill’s enactment last February through December, though the administration projected stimulus would save or create 3.5 million positions.

In the final quarter of last year, the Recovery Act funded 595,263 direct jobs, according to Recovery.gov. The figure is based on about 160,000 reports from state, local and corporate recipients who have spent $57.9 billion in stimulus money.

It does not tally jobs created indirectly through companies buying supplies for stimulus projects, people spending their tax cuts, increased unemployment benefits and the like.

In total, the economic stimulus program has boosted employment by 1.5 million to 2 million jobs, the president’s chief economic adviser said in mid-January. That number is derived from a mathematical formula based on how much money has flowed out the federal door.

A week ago, the president’s top economic adviser praised the Recovery Act, calling it the "great unsung hero of the past year." Council of Economic Advisers Chair Christina Romer reiterated that the program has funded up to 2 million jobs and helped turn the economy around. 

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London home sellers raised asking prices to a record high this month as they took advantage of a “stock-starved” housing market, Rightmove Plc said.

The average cost of a home in the capital jumped 5 percent to 427,987 pounds ($671,000), the most since records began in 2002, the owner of the U.K.’s biggest property Web site said in a statement today. Average asking prices in England and Wales increased by 3.2 percent, the most since April 2007.

A small apartment in London’s Pimlico district received “astronomical” interest from buyers, real-estate agent James Gubbins said in an interview. The Bank of England said in its quarterly economic forecasts this month that the strength in the housing market may reflect “unusually weak” supply.

“A price jump of 5 percent is more comparable to the pre- credit crunch boom,” Miles Shipside, commercial director of Rightmove, said in the statement. “If sellers return to the market in larger numbers, the current upwards price pressure will not be sustainable with the restricted number of mortgage- strapped buyers.”

London’s Westminster district led gains in the capital, with prices rising 14.9 percent on the month to an average of 1.3 million pounds. The most expensive area is the borough of Kensington and Chelsea, where a 4.6 percent increase pushed up the average value to 1.9 million pounds.

‘Tiny Little Flat’

“The shortage is the main thing that’s cushioning the market,” said Gubbins, an agent at Dauntons in Pimlico, a neighborhood in Westminster. “Last year, buyers were socked to the teeth on the economy and didn’t know what they were going to do, and now they’ve decided to get on with it and stop putting their lives on hold.”

Gubbins said he recently had an “astronomical” number of viewings for a “tiny little flat” in Tachbrook Street in Pimlico, close to the Tate Britain art museum business card. Last year, “it wouldn’t have done at all well.” The one-bedroom property sold close to the asking price of almost 300,000 pounds, he said.

Prices rose 10.3 percent in London from a year earlier. That compares with a 6.1 percent gain in the U.K. as a whole, where prices fell about 12 percent from the peak in May 2008 to the trough in January last year.

Rightmove said a “stock-starved housing market” supported prices across Britain as the average number of properties per real estate agent stayed at a two-year low of 63. The average total for sale at real estate branches fell to 55 in January, the lowest since July 2007, according to a survey by, the National Association of Estate Agents released Feb. 11.

Mortgage Lending

The property market may still falter if mortgage lending weakens. The number of approvals fell to 59,023 in December, the first drop in more than a year and half.

Bank of England policy makers kept the benchmark interest rate at a record low of 0.5 percent this month as they paused their 200 billion-pound emergency stimulus program. Governor Mervyn King said last week it was “far too soon” to say policy makers will make no more purchases as the economy recovers.

“The low interest rate environment is meaning that less people need to sell,” said James Perris of De Villiers Surveyors in London. “If we do see interest rates go up a bit, we may see people more inclined to sell.”

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The Federal Reserve said the U.S. economy continues to show signs of modest improvement but signaled it will stay the course and keep interest rates low to help spur a recovery.

As expected, the central bank left its key interest rate, the federal funds rate, near 0%, the level it has been at since December 2008. That rate is used as a benchmark for a broad range of business and consumer loans.

In a statement released at the end of its two-day meeting, the Fed pointed to improvement in business spending, but said that the "recovery is likely to be moderate for a time."

While that may not sound like a ringing endorsement of economic growth, it was significantly better than what the Fed had been saying in its statements since last April — "Economic activity is likely to remain weak for a time."

Still, the Fed repeated its earlier forecast that conditions are "likely to warrant exceptionally low levels of the federal funds rate for an extended period."

But one member, Kansas City Fed President Thomas Hoenig, voted against the Fed’s latest action. According to the statement, Hoenig thought that economic conditions had changed enough so that the continued expectation of low rates was "no longer warranted." It was the first dissenting vote among Fed policymakers since January 2009.

The Fed said it will stick with plans to let some of its efforts of the past two years expire in the coming months. But it provided no new details of how or when it plans to start pulling back on nearly $2 trillion it has pumped into the economy over the last two years through the purchases of mortgages, long-term Treasurys and the debt of mortgage finance firms Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500).

Some critics of the Fed have worried that the central bank is behind the curve in withdrawing that stimulus, which could feed inflation down the road. But the Fed repeated its earlier view that it believes inflation "is likely to be subdued for some time."

Bruce McCain, chief investment strategist at Key Private Bank, said Hoenig’s dissent is probably a good thing since it may assure markets that the Fed is not getting too far behind the curve in keeping prices in check.

Keith Hembre, chief economist at First American Funds, said if the Fed policymakers had followed Hoenig’s lead and dropped the language on keeping rates exceptionally low, it would have roiled financial markets not yet ready for the Fed to start raising rates.

"Hoeing is one of the more hawkish guys on inflation," Hembre said. "But I think the view [of other Fed policymakers] on inflation is on the mark."

Hembre added that due to the weakness in the job market, he thinks it will be years before there is a big enough increase in wages that could help drive the prices of goods and services higher.

Along those lines, the central bank did highlight some key economic weaknesses that remain, including tight credit, continued declines in real estate investment and employers still being reluctant to hire new staff.

McCain said that given the uneven signs of improvement in the housing market so far, it was not realistic to expect the Fed to lay out plans to start selling the $1.25 trillion in mortgages it expects to own by the end of March. Some have even argued the Fed should raise that limit in order to buy more mortgages.

"There is concern about what happens with the housing market when there is no longer the support of the Fed making these purchases," McCain said. He believes the Fed has decided its best course on mortgages is to "steer the middle course," and go ahead with the purchases it has committed to and no further.

The Fed’s latest meeting comes two days before the Commerce Department is expected to report the U.S. economy grew at an annual rate of 4.6% in the fourth quarter. That would be its strongest pace in four years.

The meeting also comes as the Senate prepares for a key vote Thursday that could clear the way towards confirming Fed chairman Ben Bernanke for another four-year term as head of the central bank. His term is set to expire Sunday, and there has been growing opposition from both ends of the political spectrum to his reappointment. 

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