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By Mike Nester For The Prairie Advocate News

MOUNT CARROLL – The Carroll County Board of Review denied two requests on Monday, Feb. 20, made by the Eastland School District regarding the recent tax assessments in Freedom Township.

The Review Board ruled against a written protest and appeal regarding the tax assessment increase and also refused a motion requesting recusal of board member Lou Schloderbach.

In the Protest and Appeal of the tax assessment in Freedom Township, the Eastland School Board was seeking an eight percent decrease in real estate assessments instead of the nearly 20 percent that the state formula had determined.

At its January meeting, the Eastland Board voted 5-2 to protest the assessments

“No one refuted the fact that property values had declined,” Eastland Supt. of Schools Mark Hansen said. “The concern was that the re-assessments as published not only corrected for real declines in value, but were improperly lowered below that level in a non-quadrennial year.”

“This is particularly concerning as Eastland depends primarily on property taxes for its funding, and given the fact that state funding is being reduced,” added the Eastland School leader. “If the appeal is not successful, District revenues will be reduced by approximately $275,000 above and beyond what is already being lost as a result of declining EAV and reductions in state funding.”

Too much, too soon

In their protest, Eastland argued the property in question shouldn’t have been reassessed prior to the four-year statute and it should have only been reduced by eight percent, instead of the 18.27 percent.

The Review Board, comprised of Judy Dampman and Richard Delaney, examined all 17 points of the Eastland complaint, but disagreed with the school district’s view of how the property taxes were derived; going strictly by numbers determined by state statutes.

Carroll County Chief Assessor Annette Gruhn presented the Board of Review with state statutes that showed her legal obligation to reassess Freedom Township.

Gruhn said after receiving the states numbers on the 58 sales of property in Freedom Township in 2010, plus sales for the past two years, the sales ratio was 58.48, way over the 33.3 percent range. She stated this was the reason for the reassessment and added it was the highest level they ever had.

Carroll County’s assessor explained that housing sales weren’t off much but the lots, especially those at Lake Carroll, were way over-assessed. She said many of the lots lost 3/4 their value.

Gruhn held a telephone conference call with members of the Illinois Dept. of Revenue about the reassessment of Freedom Township and discussed the Sales Ratio Study of 58.48. She also spoke with IDOR officials regarding the early reassessment and presented two state statutes verifying the early assessment and the action.

Gruhn said Carroll County followed the same procedure in 2003 when property values were on the rise and increased the assessed value by 14.3 percent.

The Board of Review felt the Eastland School District didn’t provide any evidence to dispute the state’s numbers, similar to when citizens protest their personal real estate taxes. Both Dampman and Delaney said they needed to see some numbers to help prove the property was under assessed.

Supt. Hansen told the Prairie Advocate it’s important to understand that whether or not the District is successful in its appeal, it will be generating less revenues next year than this year. 

“Because everyone agrees that property values have declined, the only question is how much less,” said Hansen.

According to Hansen, if property is under-assessed it:

- further reduces the revenue the District can access to operate its programs;

- increases the burden on property owners whose property is accurately assessed;

- creates a “false bottom” from which future equalizations may be applied;

- and does undue harm at a time when the State is not meeting its constitutional obligation to fund public education.

He said these were some of the considerations that individual Eastland Board members weighed in deciding whether to appeal the assessments.

In 2010 the equalized assessed value of the Eastland District was $195,525,469. It is now estimated to be $171,075,140.

Recusal request denied

The Eastland School District also filed a motion with the Board of Review requesting recusal of board member Lou Schloderbach because in part they felt he couldn’t “fairly and impartially review” and give a “fair and impartial assessment of all property” while ruling on the Freedom Township issue. Schloderbach resides in Freedom Township.

In the motion, the Eastland Board said Schloderbach addressed the school board at its Jan. 18 meeting and according to the motion, “expressed concern about any attempt by the Board of Education to protest tax assessment within Freedom Township, the legal costs of such protests, and asked questions that reasonably indicate that he believed such effort was unwarranted.”

The Eastland Board felt Schloderbach had publicly and irrevocably demonstrated that he cannot fairly and impartially consider the matter.

The Board of Review denied the motion citing that Schloderbach was acting as a taxpayer in the Eastland School District and not as a member of the Carroll County Board of Review. They were presented with a legal ruling from State’s Attorney Scott Brinkmeier who said he felt the law stated that Schloderbach was not in any violation of “fair and impartial” review.

The Board of Review had also requested a recording of what Schloderbach had said at the meeting and were told that no such copy existed.

Both Dampman and Delaney said Schloderbach could abstain if he felt there was an issue. Schloderbach did not attend the Feb. 20 hearing.

The Eastland School District now has the option of having a hearing on the tax assessment issue with the Board of Review. According to Gruhn, a hearing has yet to be scheduled.

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Board of Review Denies Eastland on Both Counts

News that Barclays (LSE: BARC.L - news) has fallen foul of the authorities for “highly abusive” tax avoidance schemes will not come as a surprise to those who follow Britain’s banks.

Barclays has long been perceived as the most aggressive player in the tax structuring business, devising products that arbitraged the rules to reduce clients’ bills. At its peak, Barclays even turned a part of its operation structured capital markets (SCM) over to tax avoidance.

SCM, under Roger Jenkins, became a huge profit engine. In one year, it was reported to have made £1bn for the bank and, shortly afterwards, Jenkins shot to notoriety as Barclays’ best-paid employee pocketing a reputed £40m a year. As SCM sat within the investment bank, Barclays Capital, the details were never properly disclosed, but never officially rebutted either.

Though legal, the behaviour raised ethical questions that came into particular focus after the financial crisis as, although Barclays never received direct taxpayer support, it relied at times on state funding schemes to keep afloat.

The backlash began in 2009, when Barclays hit the headlines after a whistleblower leaked documents to the Liberal Democrats which purported to show that it was using a network of subsidiaries in the Cayman Islands and Luxembourg to minimise clients’ taxes.

Barclays had the story injuncted on the grounds that the material was commercially sensitive, but its reputation took a hit and questions began to be asked about how much tax the bank itself was avoiding.

Early last year, it was forced into an embarrassing admission. In front of the Treasury Select Committee, chief executive Bob Diamond, who had nurtured SCM when he was head of BarCap, was forced to reveal that the bank operated nearly 300 subsidiaries in tax havens and had paid just £113m of corporation tax in the UK in 2009 a year in which it handed out £3.4bn in bonuses.

Since then, the questions have not gone away. Politicians have queried whether a bizarre deal struck in 2009 to move billions of toxic assets off its balance sheet was not just a tax ruse. The Protium arrangement raised such serious concerns in the US that the authorities would not let it drop until the deal was unwound at great expense to shareholders last year.

Analysis of Barclays accounts by The Daily Telegraph has raised further questions. According to the 2010 results, the bank generated £591m in “tax losses carried forward” despite making £6bn of profits before tax. The tax gain suggested the bank crystallised £2bn of losses that year, which the annual report said “mainly relates to entities in the USA, the UK and Spain”.

However, Barclays would not disclose where the £2bn of losses were incurred once again muddying the waters. The bank now has assets that it can offset against future tax payments that are almost as large as Royal Bank of Scotland and Lloyds Banking Group (LSE: LLOY.L - news) . While both the state-backed banks made huge visible losses, Barclays has reported profits every year for more than a decade.

The bank has always tried to draw attention to the tax it is paying, which the latest results showed was 32.8pc of profits in 2011, but so far it has not been enough to answer its critics.

Meanwhile, the question of business ethics keeps arising. At the end of last year, in his BBC Business Lecture, Diamond remarked that “rebuilding trust requires banks to be better citizens”. Barclays has also repeatedly stressed: “We are signatories of the UK Government’s code of conduct on tax and comply with the spirit and letter of the tax code.”

However, the authorities this week clearly decided that Barclays has been complying with the letter but not the spirit of the code. According to David Gauke, Exchequer Secretary to the Treasury, Barclays should never have devised the schemes that it has been ordered to close in the first place.

“The bank that disclosed these schemes to HM Revenue & Customs (HMRC) has adopted the Banking Code of Practice on Taxation which contains a commitment not to engage in tax avoidance,” he said. “The government is clear that these are not transactions that a bank that has adopted the code should be undertaking.”

As Gauke observed, the retrospective charge, which sources say will cost Barclays about £150m, will deliver the bank “a substantial reputational hit”. And, once again, it is not a surprise it was Barclays that came under fire.

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Barclays has previous when it comes to tax avoidance

HAVING missed every major financial crisis or corporate collapse in the past 20 years, the three big global ratings agencies seem hell-bent on a mission to prove themselves relevant.

The only problem is that, whereas in the past they failed to spot anything at all, they now appear to be jumping at shadows.

Take the decisions by two of them on Australian banks in recent days.

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On Friday, Fitch downgraded three of the big four banks - it excluded ANZ Banking Group as it already was on the lower rating - because it suddenly discovered Australian banks have borrowed heavily offshore and, apparently, there has been some kind of financial trouble in Europe recently.

That bizarre announcement was followed yesterday by an even more laughable proposition from Standard & Poor's.

It breathlessly announced Australia's banks could well be at risk if China's economy collapses.

I hate to be the bearer of bad tidings. But if China's economy has a ''hard landing'', as the agency postulated, there's certain to be more than just our banks that will suffer. Try our resources companies for starters. Try the global economy for seconds.

Despite all the hype about recovery, the US economy has sputtered to life only after copious doses of fuel from the US Federal Reserve, courtesy of zero interest rates and two massive doses of money printing.

Europe is now in recession, with the European Central Bank also cranking up the printing presses in a desperate effort to keep things ticking over. And in Japan, well, it's been the same old story since it collapsed in the early '90s.

China and emerging Asia are the driving forces for global commerce, the only geographic region showing any sign of life, powering the Australian economy to the greatest export performance in history. It's a somewhat myopic view to suggest that if China collapses, Australian banking could suffer some hard times.

Is it possible the ratings agencies missed the latest round of bank mega earnings?

Could they have overlooked our banks' monopolistic behaviour, their unique ability to be price-makers rather than price-takers when it comes to interest rates? And what about their terrific margins or world-beating returns on equity?

Investors largely took the Fitch banking downgrades in their stride yesterday with little movement in early trading. But the finance sector came under pressure during the session as the general market retreated.

Each of the big four has taken massive steps in reducing the impact of offshore funding. They've dramatically shifted reliance from offshore markets to onshore and they now rely far less on short-term debt than when the financial crisis hit in 2008.

On top of that, Europe finally has begun the long process of reducing the risk of a calamitous break-up. So you'd have to question the logic of downgrading Australian banks at this point. Surely, they faced greater risks three years ago.

It is true that back then, the federal government rode to the rescue, covering the foreign debts of all our financial institutions and insuring their deposits. But it is equally true that, in the event of a similar meltdown, the federal government would again support the banks. So the risk to the banking system now is lower, not higher.

The Reserve Bank governor, Glenn Stevens, also was at a loss to understand the downgrades. Other Australian companies with much greater risk profiles, he told a Senate hearing last week, could borrow offshore at cheaper rates than our banks.

You could argue the RBA governor has a vested interest in maintaining stability and so naturally would bat for the banks. But if you want to compare track records on financial analysis and economic management, Stevens wins by a country mile. And while he may want to eliminate overly negative sentiments, he's certainly not prone to boosterism.

But really, the banks have only themselves to blame. They invited these downgrades with their ridiculous posturing on interest rates.

In the past few months, they've been moaning at length about the enormous costs of borrowing offshore and how the ructions on European wholesale funding markets have walloped their profit margins.

At every opportunity, senior executives at the big four have loudly broadcast how captive they were to offshore funding costs. And their spinmeister, the Australian Bankers Association, has rarely been so busy, detailing the perilous nature of global finance and the abyss into which Australia may soon descend unless they raise interest rates.

They have virtually held up a big red flag to the ratings agencies, all the time screaming: ''Look at us! We are in serious trouble here.''

Guess what fellas. You were heard.

Collectively, they have made a serious error in judgment, not just strategically, but from an operational viewpoint.

The problem facing the banks is not funding costs. It is that demand for new loans has shrunk alarmingly. With lending growth at all-time lows, smashing profit records becomes virtually impossible.

You don't need to be an economics whizz to figure out that if you raise the price of a good or service, demand will shrink.

So by pushing rates higher, by pumping up their margins to maintain the record earnings streak, the big banks have ensured decreased demand for new loans, potentially pushing them into a vicious circle.

Oh yes, let's not forget that those lowered credit ratings will force the banks to pay more to raise cash on international wholesale markets.

Sometimes you need to be careful what you wish for.

More here:
Banks can only blame themselves

KUALA LUMPUR: Owners of Offshore Support Vessels (OSVs) in the oil and gas industry, are urging the Government and local banks to look into tax and financing issues affecting their business.

According to Malaysia OSV Owner's Association president Tasripin Masotee, local vessel owners were facing stiff competition from foreign-owned vessels (including Labuan registered vessels) that were offering lower daily-charter rates by as much as US$1,000 (RM3,015) to US$2,000 (RM6,030) per day.

He emphasised that OSV players were not asking for handouts from the Government.

“We want a level playing field and tools for us to be competitive and market-driven,” said Tasripin in a statement.

He said factors that had led to the “uncompetitive” charter rates offered by Malaysian-owned vessels included unfavorable fiscal and monetary legislation on corporate tax, high operation and maintenance costs in Malaysia due to tax, work permit fees for foreign crews, and comparatively high cost of financing from local banking institutions.

Tasripin cited Singapore as offering a more favourable environment for OSV owners.

“Currently Singapore offers fiscal benefits or tax exemption to OSVs registered in Singapore. Income derived from the operating or chartering of such ships in international waters, enjoy tax exemption.

However, sadly this is not happening in Malaysia, where the tax exemption is only applicable to merchant cargo ships.”

He also pointed out that in Malaysia, imports of ship engine spare parts, equipment, machinery, mooring and anchor wires, anchors and navigational equipment were taxable items.

“In Singapore, these items are exempted from tax.”

Tasripin also said the cost of financing with banks in Malaysia was much higher, compared with offshore foreign banking institutions, by almost 50%.

“For example, Singaporean owners are paying 3%, while Malaysian owners pay between 6% and 7%. The interest rates in Malaysia are not competitive while margin of financing is lower and repayment periods are shorter. There is no way for local OSV owners to expand their fleet until they have settled the loan of the previous vessels.”

The association's membership consists of 17 companies with a combined fleet strength of 198 vessels.

Malaysia OSV members are said to have a combined revenue of more than RM15bil, and assets of RM10bil, with about 12,000 employed marine crews serving on offshore vessels nationwide.

Presently, there are 49 Malaysian-registered companies (including those registered in Labuan) that own and operate OSVs, with vessels having an average age of six years.

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Tax on local vessels needs review

NEW YORK, Feb. 28, 2012 /PRNewswire/ -- "From David to Goliath: How Entrepreneurs Overcome the Challenges of Company Growth," a report released today by Credit Suisse and Dr. Helena Yli-Renko, Associate Professor of Entrepreneurship at the Lloyd Greif Center for Entrepreneurial Studies at the University of Southern California, provides an intimate look at the challenges and triumphs of 13 successful entrepreneurs across the US and Latin America. The report highlights these high-growth entrepreneurs and traces the trajectories of their respective companies—which have created jobs, introduced innovations and transformed entire industries. It also examines entrepreneurs' responses to common business issues.

(Logo: http://photos.prnewswire.com/prnh/20091204/CSLOGO )

"At Credit Suisse, we are privileged to serve the wealth management needs of many of the world's leading entrepreneurs and their families," said Bill Woodson, Managing Director and Head of Credit Suisse Private Banking USA's Family Wealth Planning Group. "In 'From David to Goliath: How Entrepreneurs Overcome the Challenges of Company Growth,' we are pleased to shed light on the war stories entrepreneurs share with each other. It is always heartening to hear how they have all overcome so many challenges to create the high-growth, high-impact firms that are the subjects of this white paper."

Findings:
The report categorizes enterprises into two camps: David and Goliaths, depending on their size.
Entrepreneurs, the authors found, have common challenges that they must address: people, financial resources, business networks and environment jolts.

High-growth entrepreneurs have shared approaches to meeting these challenges:

People: The popular conception of entrepreneurs is that they are lone wolves — fiercely independent individuals seeking to forge their own paths. In reality, successful entrepreneurs tend to be collaborative and humble, skilled in communicating their vision and in getting other people to help them. High-growth entrepreneurs are persistent, but not bull-headed. They are highly responsive and adaptive ("There is No 'I' in Team" Principle). Financial Resources:  High-growth entrepreneurs are extremely resourceful when it comes to capitalizing their growth-- often through unconventional means ("Bird in Hand" Principle). Business Networks:  Entrepreneurs' networks are multidimensional—they include friends, family advisors, customers, suppliers and even competitors.  These diverse networks provide checks and balances for entrepreneurs to adjust their personal approach, their business model or both ("It Takes a Village" Principle). Environmental Jolts: High-growth entrepreneurs have a "little engine that could" mindset.  They have little fear of failure. Persistence is their most defining trait. Experienced entrepreneurs excel in turning the unexpected into the profitable ("The Lemonade" Principle).

However, the most surprising finding of this research, according to the authors, is that smaller companies failed to perceive larger, more established companies as threats—but rather as motivating forces.

According to co-author Yli-Renko,  "The key lies in viewing entrepreneurship and company growth as a learning process where entrepreneurs continually hone their ability to make decisions in rapidly changing, uncertain environments. Entrepreneurs should be viewed as problem-solvers and improvisers, making use of whatever resources they have."

The case studies show how founders of fast-growth companies must continually balance and adjust as their companies grow and change. The report features:

Juan Blum, Efficacitas Consulting – Carving out a new market for environmental consulting in Ecuador Andrew Burgert, Nextive –Scaling up an international software company Daniel Davison, OneNews –Creating a model for real-time news reporting Alejandro Diego, Ollin Studios –Scaling and building a reputation as a Latin American visual effects producer Marco Giannini, Dogswell – Managing inventory and continuous innovation: Growing and selling a pet food company Rhonda Kallman, Boston Beer Company and New Century Brewing – Fighting unexpected battles to bring a new beer to the masses Joe Kaplan, Innovative Merchant Solutions –Leading a payments business to acquisition Jim Marggraff, LiveScribe – Launching a ground-breaking consumer technology product Liz McKinley, Pinnacle Petroleum – Learning to delegate while keeping that personal touch Adam Miller, Cornerstone OnDemand – Business model innovation to drive change in the emerging SaaS market Rafael Soares, Yoguland – Creating an overnight sensation: Building a successful frozen yogurt franchise in Brazil Harry Tsao, MeziMedia – Spurring growth with an offshore development initiative Rob Ukropina, Overnite Express – Growing and selling an overnight delivery company

Please click here for a copy of "From David to Goliath: How Entrepreneurs Overcome the Challenges of Company Growth."

Third Annual Entrepreneurs Summit – Sundance, Utah – March 1-2
Private Banking USA will host its third annual Entrepreneurs Summit in Sundance, Utah on March 1-2. This year's Summit will focus on a theme of the new white paper: "Overcoming the Challenges of Growth." It will feature various keynote speakers and experts who have experienced these challenges first-hand. 

The Entrepreneurs Summit is an opportunity for entrepreneurs to learn from one another, to network with like-minded individuals, and to share best practices in an exclusive and intimate environment.

Credit Suisse AG
Credit Suisse AG is one of the world's leading financial services providers and is part of the Credit Suisse group of companies (referred to here as 'Credit Suisse'). As an integrated bank, Credit Suisse offers clients its combined expertise in the areas of private banking, investment banking and asset management. Credit Suisse provides advisory services, comprehensive solutions and innovative products to companies, institutional clients and high-net-worth private clients globally, as well as to retail clients in Switzerland. Credit Suisse is headquartered in Zurich and operates in over 50 countries worldwide. The group employs approximately 49,700 people. The registered shares (CSGN) of Credit Suisse's parent company, Credit Suisse Group AG, are listed in Switzerland and, in the form of American Depositary Shares (CS), in New York. Further information about Credit Suisse can be found at http://www.credit-suisse.com. View our Corporate Responsibility policy and our full Corporate Citizenship Report at http://www.credit-suisse.com/responsibility.

Private Banking
In Private Banking, Credit Suisse provides comprehensive advice and a broad range of wealth management solutions, including pension planning, life insurance products and wealth and inheritance advice, which are tailored to the needs of high-net-worth and ultra-high-net-worth individuals worldwide. In Switzerland Credit Suisse supplies banking products and services to individual clients, corporates and institutions.

Credit Suisse Securities (USA) LLC is an indirect subsidiary of Credit Suisse. The Private Banking USA business in Credit Suisse Securities (USA) LLC is a U.S. regulated broker dealer. It is not a chartered bank, trust company or depository institution. It is not authorized to accept deposits or provide corporate trust services and it is not licensed or regulated by any fe
deral banking authority.

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