Feds poke a hole in revived NJ/NY Gateway Tunnel plan

Karen Yi reports for NJ.com:


A crucial infrastructure deal to fund a multi-billion-dollar rail tunnel under the Hudson River suffered a major setback Friday, after the Trump Administration announced the project relied on a “non-existent” agreement to secure federal funding. 


The tunnel is part of the larger Gateway Project and would build a two-track commuter tube for Amtrak and New Jersey Transit trains traveling between New Jersey and New York Penn Station — among the busiest transit hubs in the country.


But the Federal Transit Administration said Friday it did not recognize the agreement struck under former President Obama that would have the federal government kick in half of the bill, according to a letter sent to New York and New Jersey officials.


“There is no such agreement,” FTA Deputy Administrator K. Jane Williams wrote. “We consider it unhelpful to reference a non-existent ‘agreement’ rather than directly address the responsibility for funding a local project where 9 out of 10 passengers are local transit riders.”


A copy of the letter was published online by Crain’s New York. 


Williams wrote she had “serious concerns” about the first phase of the project that asked for $11.1 billion from the federal government. “Your proposal also overlooks that 50% would be considerably higher than much existing precedent for past ‘mega projects,'” she said. 


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Incoming NJ Assembly Speaker names his staff members

Alyana Alfaro reports for Observer:


Assemblyman Craig Coughlin (D-Middlesex) on Thursday announced senior staff members that will join the Assembly Leadership Office and the Democratic Assembly Campaign Committee in January after he takes the helm as New Jersey’s next Assembly speaker.
“This experienced team will help lead our caucus and our state towards a better future for New Jersey’s working middle-class families,” said Coughlin in a statement. “As our state grapples with the many issues before us in the years ahead, I could not be more proud to have assembled a team that will meet those challenges head on to ensure a better future for New Jersey.”
Francisco Maldonado-Ramirez will remain the deputy executive director of the Majority Office after Coughlin is sworn in as speaker. Mickey Quinn, a current member of the leadership staff, will also be bumped up to deputy executive director.
Coughlin’s senior advisor will be Daniel Smith, most recently a staff member of the Communications Workers of America Local 1036. Laurie McCabe will be another of Couglin’s senior advisors. She will also continue her chief of staff role in Coughlin’s 19th legislative district, a post she has held since 2014.
Under Coughlin’s leadership, Iris Delgado will serve as the executive director of the DACC. Delgado has worked with the New Jersey Democratic Party and was the National Campaign Operations Director for SEIU.
Coughlin will be sworn in on January 9, 2018 the start of the next legislative session. Prieto began his tenure as speaker in 2014 but, despite initial efforts to keep his post ahead of the new session, was unable to stave off Coughlin and lock of up the necessary votes to remain in his post. Coughlin has been a member of the Assembly since 2010.
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Can Iceland regrow the forests that the Vikings razed?

A reforestation site in southern Iceland. The amount of land in the country covered in forest is still tiny.

Henry Fountain reports for The New York Times:

GUNNARSHOLT, Iceland — With his flats of saplings and a red planting tool, Jon Asgeir Jonsson is a foot soldier in the fight to reforest Iceland, working to bring new life to largely barren landscapes.


Jon Asgeir Jonsson, who works for a private forestry association, with larch saplings in western Iceland.

The country lost most of its trees more than a thousand years ago, when Viking settlers took their axes to the forests that covered one-quarter of the countryside. Now Icelanders would like to get some of those forests back, to improve and stabilize the country’s harsh soils, help agriculture and fight climate change.

But restoring even a portion of Iceland’s once-vast forests is a slow and seemingly endless task. Despite the planting of three million or more trees in recent years, the amount of land that is covered in forest — estimated at about 1 percent at the turn of the 20th century, when reforestation was made a priority — has barely increased.

“It’s definitely a struggle,” said Mr. Jonsson, a forester who works for
the private Icelandic Forestry Association and plants saplings with volunteers from the many local forestry groups in this island nation of 350,000 people. “We have gained maybe half a percent in the last century.”

Even in a small country like Iceland, a few million trees a year is just
a drop in the bucket.

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Guess who’ll foot the bill for PPL’s $900M investment?



By Alison Burdo – Philadelphia Business Journal


A $900 million investment to improve an Allentown-based utility company’s infrastructure will reportedly fall on PPL Electric Utilities customers starting in 2018.


A 5-0 vote last week by the Pennsylvania Public Utility Commission gave the green light to spend $903 million between 2018 and 2022 to repair, upgrade and replace parts of its distribution system, some of which dates back more than four decades.

Following the approval, PPL submitted additional documents with the PUC to allow for its distribution system improvement charge to be 0.91 percent starting Jan. 1, according to the Morning Call.

The utility’s spending plan faced criticism with some saying the huge financial request reflects poor long-term planning, but PPL spokesman Kurt Blumenau told the Lehigh Valley newspaper:

“The PUC has reviewed this and has determined our plan is cost-effective, and it will ensure safe and reliable service for customers.”


The rate increase will add just some change to most PPL customers’ monthly bills.

The PPL Corporation serves about 1.4 million customers in Pennsylvania.
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Six years later, Penn State still torn over Sandusky scandal

As school leaders try to move on, Joe Paterno loyalists, including many university trustees, continue to fight over the coach’s role in his assistant’s crimes.
Supporters of Joe Paterno, right, question the evidence used to conclude he ignored or covered up the assaults
committed by Jerry Sandusky, left. (1999 photo by Paul Vathis/Associated Press)




Will Hobson writes today in The Washington Post:

In July, Penn State’s board of trustees met to discuss the most important issues facing a school system with 99,000 students and
a $5.7 billion budget. It took about three hours before someone brought up Jerry Sandusky and Joe Paterno.

As the chairman tried to end the meeting, a hand rose from the back of the room. The chairman’s smile faded as he acknowledged an alumni-elected trustee.

Anthony P. Lubrano, a 57-year-old wealth management executive, launched into a lengthy statement assailing the board and administration. Lubrano’s criticism, as always, focused on the Freeh Report, the NCAA and the Penn State administration’s efforts to distance the university from the iconic coach.

“Hundreds of thousands of alumni who care about our past and our future have been deceived and, in the process, disenfranchised,” Lubrano said. “We will never heal without truth and reconciliation.”

While some of the nine alumni-elected trustees nodded their heads in agreement, some of the remaining 29 trustees rolled their eyes or shook their heads in frustration. Some walked out. When Lubrano finished, the room was half-empty.

Six years after the Sandusky scandal rocked Penn State, university leadership is still fighting a civil war over the case, a conflict fueled, in part, by weaknesses that have developed in investigations that concluded top Penn State officials covered up for the convicted child molester.

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New tax law has Philly law firms reviewing their structure

Provisions of the new federal tax-reform law affect companies such as law firms with pass-through income.

Erin Arvedlund reports for the Philadelphia Inquirer:
 @erinarvedlund | EArvedlund@phillynews.com

Philadelphia law firms are holding urgent meetings this week to decide whether to remain partnerships for tax purposes or to change into different corporate entities, attorneys and legal executives said Wednesday.

Why? The new Tax Cuts and Jobs Act. Pass-through companies — which include both mom-and-pop businesses and large partnerships such as law and accounting firms and hedge funds — may find tax filing more complicated starting next year.


Many law firms are set up as partnerships today and are taxed as pass-throughs, so attorneys pay taxes as individuals. Under the new law, partnerships may not be so attractive tax-wise.

At Stradley Ronon LLP, “we’re having a management committee meeting [Thursday] to discuss it,” said chairman William “Bill” Sasso. MAGGIE HENRY CORCORAN photo

Bill Sasso, chairman of Stradley Ronon law firm in Philadelphia.
His firm is meeting to discuss how to proceed.


“The tax partners are coming to the meeting,” he said. “It’s complicated, to say the least. The way [the tax-reform law] was rushed through, there’s a lot of uncertainty and unanswered questions.”

The new law changes the way pass-throughs — companies that pass profits directly to their owners as personal income — are treated.


In 2018, many will be able to cut 20 percent off their taxable earnings. Someone earning $50,000, for example, may have
to pay taxes on only $40,000.

Owners of pass-through businesses such as sole proprietorships, LLCs and S corporations are entitled to a 20 percent deduction for business-related income, applied to tax years beginning after Dec. 31, 2017, and expiring for tax years beginning after Dec. 31, 2025. But personal-service businesses — such as law firms, accounting firms, investment-advisory businesses, consulting firms, or medical-service businesses — do not qualify for the deduction.


That 20 percent deduction for pass-through income is limited to the first $315,000 in income for couples filing jointly and $157,500 for single filers. Still, it may incentivize some law firms to reclassify their tax status.


And under the new law, firms also may lose their charitable deductions, as well as business-expense deductions such as
event sponsorships and meals.


“We have to take a careful look at everything,” said Stradley Ronon’s Sasso.

Taking advantage of the lower pass-through tax rate “is definitely going to be helpful to smaller law firms — to reorganize and get the pass-through that way,” said lawyer Robert H. Louis, of Saul Ewing in Center City.


“Another idea floating around is spinning off associate attorneys
in law firms into a separate entity,” Louis said. “Those associates could become partners in their own partnership. They would get
the benefit of the pass-through because they are at lower income levels. Bottom line: It’s going to be helpful for smaller firms, and lawyers in big law firms with lower incomes, to reorganize” away from the partnership and into a pass-through entity.


Much of America makes money through pass-through income, according to the Harvard Business Review. Those who don’t
may start gaming the tax code so they can. “For example, if I’m
a partner in a law firm, and there’s income in the law firm, and it goes straight to me, and I get taxed as an individual at my labor marginal rates of 39.6 percent, let’s say, today, if I was in the top bracket,” noted Mihir Desai, a professor of finance at Harvard Business School.


Under the new law, Desia told Harvard Business Review, “that income that gets passed through to you as a partner in a partnership, we’re going to actually let you deduct 20 percent of it, which is basically like saying, we’re going to cut tax rates on those kinds of incomes by one-fifth. That’s a pretty big deal. And that is going to make people want to become pass-through entities, and it’s going to make some people want to become corporations.”


The tax games begin as the corporate rate also drops: The current graduated corporate rate structure, with its top rate of 35 percent
is replaced with a flat 21 percent rate beginning Jan. 1, 2018.


For sole-practitioner lawyers, the new tax law definitely helps.

“The deduction phases out after about $150,000 of income, so for solo practitioners that don’t make a lot of money, it’s great,” said Jeremy Wechsler, a lawyer in Willow Grove with his own practice.


“Larger law practices currently organized as an LLC will be thinking about converting their practices to C corps, since they’re going to get the 21 percent corporate tax rate,” Wechsler said.
MATTERN & ASSOCIATES
Rob Mattern, founder of Mattern & Associates in Chadds Ford,
said the new tax law took away deductions such as the home
equity line of credit.


For owners of legal-related businesses such as Rob Mattern, “personally, the law got rid of the home equity line deduction,
which was a loss for me. I use that to supplement my business credit line,” said the founder and president of Mattern & Associates, a Chadds-Ford-based legal support services consulting business that helps law firms outsource back- and middle-office operations.


“And the small businesses still take a hit on health care. My premiums went up 120 percent this year” for his employees’ benefits, Mattern added. “That problem wasn’t solved.”


As a solo practitioner, Wechsler said, he operates as a single member LLC/pass-through entity, and “I won’t be reorganizing
at this point because I can likely take advantage of some of the pass-through deductions at this time. However, I will keep an eye on what Congress does to fix parts of the new tax law that are temporary.


“They’re going to have to get back to work on this at some point. Otherwise, they’ll let middle-class tax cuts expire while corporate rates perhaps stay at 21 percent,” Wechsler said. “I’ll probably take a fresh look at my structure again in 2019 or 2020.”


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