Archive for the ‘Lynn Fitch’ Category

Grant to fund financial literacy program at MSU

July 10th, 2013 No comments

A $40,000 grant from the Council of Graduate Schools will help Mississippi State University develop a financial education program for undergraduate and graduate students.

The grant is part of CGS’ Enhancing Financial Education Project, and is co-sponsored by financial services provider TIAA-CREF. The program will be designed to educate students about how to manage their personal financing and make good decisions related to saving, spending and borrowing money.

It will include face-to-face workshops, online training, traditional courses, career counseling, communication networks and social media.

Karen Coats, MSU associate dean of the Graduate School and co-principal investigator for the project, said student loan debt exceeded $1 trillion nationwide last year.

“As students amass debt at the undergraduate level, many of our best and brightest are unable to continue their education in graduate or professional school, preventing them from achieving mastery of their discipline and limiting their ability to reach their full potential,” Coats said in a school press release. “Mississippi State is committed to the well-being of our students and recognizes the need to help students make sound and informed financial decisions.”

Mississippi State’s Office of the Graduate School, in partnership with faculty and staff experts in financial literacy, student financial aid, information systems and technology, career counseling, and other student services, will use the funding to establish a comprehensive financial literacy program for MSU students.

“It is our hope that this program will promote financially informed students who will leave our institution with a brighter future,” Coats said.

CGS President Debra W. Stewart said that the project addresses an area of leading concern for graduate deans, according to an annual survey of CGS members.

“In collaboration with 14 other awardees and 19 affiliate partners, Mississippi State University is stepping up to help students prepare for the financial challenges of college life and beyond,” Stewart said.

At the Capitol, state Treasurer Lynn Fitch supported legislation this last session that would have mandated financial literacy courses for Mississippi high school students. The legislation failed, but Fitch has said she will push it again in 2014.

Fitch: Audit finds problems with MPACT’s pricing structure

January 11th, 2013 No comments

The firm state Treasurer Lynn Fitch hired to audit the Mississippi Prepaid Affordable College Tuition Program, or MPACT, identified 12 areas of concern, nine of which were related to the program’s pricing structure.

Fitch announced last fall that was suspending the state-backed college savings program, due to concerns she had over its financial condition. She hired Michigan-based Gabriel Roeder Smith and Co. shortly thereafter to audit it.

Fitch released the results, which she said made up Phase I, Friday morning, to go with her legislative agenda.

The first-term treasurer said GRS & Co. found the plan had a 43 percent of chance of reaching its 7.8 percent target rate or return. For fiscal year 2012, the rate of return was 1.10 percent. The estimated rate for fiscal year 2013, according to Fitch, is 4.98 percent. The plan, which has 22,000 enrollees and $274 million in trust, is currently is 76 percent funded. The last time it was 100 percent funded was 2000.

Auditors said that lowering the plan’s expected rate of return would drop the funding level into the low 70s, and increase the plan’s unfunded liability to more than $100 million.

Some of the preliminary recommendations auditors made were:

  • Incorporate bias load into the pricing structure. For example, some participants pay a price based on average annual tuition at one institution, then attend an institution whose tuition is markedly higher, leaving a difference between what the participant paid in and what they received.
  • Changing the way administrative expenses are paid in the pricing. Currently, administrative fees are captured by lowering the plan’s interest rate, which has contributed heavily, Fitch and auditors said, to its low rate of return.
  • Allowing the plan to recover losses when the average price of tuition rises. Currently, there is no way to do that when tuition increases are higher than assumed over periods that are hover close to the participation period.

Fitch said the next phase of the audit would be completed within 90-120 days. “This will not be a quick turn. It will take some patience.” She said those already participating in the plan would receive their designated benefits.

Ten states have already permanently closed similar programs, something Fitch said “would be an option” for MPACT. “This is the fault of no one, “she said. “It’s strictly an economic issue.”

The highlight of Fitch’s legislative agenda was the implementation of a statewide financial literacy program, which would require high school sophomores, juniors and seniors to take a one-semester course that taught the particulars of using credit, budgeting, managing money and making wise financial decisions. The cost in the first year of the program, Fitch said, would be about $5 million. That would likely decrease over time, she said.

Economist: With state’s economy vulnerable, expect slow growth

January 19th, 2012 No comments

Mississippi’s economy isn’t terrible.

It isn’t great, either, and it’s going to be a while before it totally rebounds from the last few years.

That was the gist of Thursday morning’s legislative economic briefing by state economist Dr. Darrin Webb and state Treasurer Lynn Fitch.

Webb said the fourth quarter of 2011 was strong, with state revenue up 3.8 percent at year end versus the same period last year. “But I do not expect to maintain that pace,” he told lawmakers.

Where the state is especially vulnerable is employment. Webb’s figures show that there are still fewer people in Mississippi employed now than there were in May 2000, when the state’s number of nonfarm employees peaked. Employment numbers have recovered somewhat from the depths of 2008 and 2009, but not across the board.

“There are still areas of the state that have not participated in the recovery,” Webb said, singling out rural areas of the state where unemployment rates are still closer to 20 percent than 10 percent. It will be at least 2016 before employment rates in the state return to pre-recession levels, Webb said.

More discouraging news can be found in the number of building permits issued. In the first seven months of 2005, right before Hurricane Katrina hit, 7,615 permits were issued. For the same period in 2011, that number dropped to 2,580, a decrease of 66 percent. Permits did trend upward in the second half of 2011, Webb said, but cannot be expected to return to pre-Katrina level for another few years.

The national economy will likely slow in the first half of 2012, Webb said. Fading inventory, a weak housing sector, high government and consumer debt and trouble in Europe will make sure of that.

“And these are issues that just are not going to disappear anytime soon,” Webb said.

National GDP has started the process of recovering from the recession, showing modest growth in 2011 (1.7 percent). That will slow in 2012, Webb said, to 0.2 percent; 0.5 percent in 2013; with the possibility of a jump in 2014 to 3.1 percent. Mississippi’s GDP will follow a similar track. The overall outlook for both, Webb said, is pessimistic “but that doesn’t mean worst case.” Webb estimated the chances of another recession at 30 percent.

“I cannot stress enough the slow pace of this recovery,” he said. “As a rule, slow growth is the new norm.”

Fitch said low interest rates and the availability of GO Zone bonds after Katrina were the primary culprits for the state’s bonded indebtedness increasing over $1 billion the past six years. At year end 2011, the state’s total amount of bond obligations was $4.1 billion, representing about 12 percent of the constitutional debt limit for FY 2012. All but $995,000 of that came from general obligation bonds. That $995,000 is a self-supporting bond, Fitch said, and is paying for the Deer Island restoration project. That will be paid off in November.

Damages cap briefs due to fly any minute

February 14th, 2011 No comments

A couple of newsy items on a pretty Monday morning …

The Mississippi Supreme Court has set a Feb. 28 deadline for parties to file briefs related to the damages cap question the Fifth Circuit Court of Appeals kicked back to the state court earlier this year.

If last year’s premises liability case that also addressed the punitive damages cap is any indication, the briefs should come in by the truckload.

Mississippi’s $1 million cap on punitive damages was the cornerstone of 2004’s tort reform. It essentially eliminated the massive judgments that had earned the state a reputation as a plaintiff attorney’s paradise. The premises liability case reached the state’s high court last year after the plaintiff appealed the trial judge’s setting aside a $4 million jury verdict, and reducing it to comply with the $1 million cap. The Mississippi court clearly answered the premises liability issue, but did not rule on the constitutionality of the damages cap. That’s what the Fifth Circuit is asking the Supreme Court to do now.

Expect every business group and trade association there is to file a friend of the court brief in support of the cap. Gov. Haley Barbour, like he did in the premises liability case, will probably do the same.

A lawyer friend of Magnolia Marketplace told us a few weeks back that if the Court rules the damages cap is out of line with the Mississippi Constitution, “it’ll be like 1995 all over again” as far as the state’s tort climate goes. “All hell will break loose,” he said. “It’ll be like tort reform never happened.”

A lot of folks have a lot on the line in this deal.

In other news, Dave Dennis officially kicks off his campaign for governor this week, with stops planned all across the state. Unofficially, he’s been campaigning for over a year now.

Lynn Fitch, executive director of the State Personnel Board, will also start her campaign for treasurer with a three-day announcement tour.

Strap in. It’s going to be a busy week.