02272017 business

business@tribunemedia.net

MONDAY, FEBRUARY 27, 2017

$4.20 Dionisio: Govt creating ‘country of dependents’

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net The FNM’s Freetown candidate yesterday accused the Government of seeking “to create a country of dependents” through ever-increasing social programmes that the Bahamas cannot afford.

Dionisio D’Aguilar told Tribune Business he believed the Government wanted to make Bahamians ever-more dependent on it for jobs, social relief and welfare in a bid to secure their general election votes.

Speaking after the Central Bank’s January economic developments report revealed that the Government’s first half fiscal deficit had more than doubled to $314.2 million, Mr D’Aguilar charged that it was using Hurricanes Matthew and Joaquin as cover for “reckless spending”.

While agreeing that Bahamians in economic and social distress needed assistance, the Superwash president said this had to be done in accordance with the financial resources available to the Government.

Urging the Government not to subsidise May’s Junkanoo Carnival, and to

Claims storms used as cover for ‘reckless spending’ Fears pre-election ‘splurge’ will expand deficit ‘Selling Mercedes, when only Nissans affordable’ “cut back” on the monies being allocated to National Health Insurance (NHI), Mr D’Aguilar argued that the Government was misleading Bahamians into “thinking we can have a Mercedes when all we can afford is a Nissan Sentra”.

With the Government having spent $314.2 million more than it earned in income for the six months to end-December 2016, Mr D’Aguilar said the potential consequences of recurring deficit spending were “lost on most Bahamians”.

“The take away is that the Government is being fiscally irresponsible, and they’re using the hurricane as a pretext for them to spend See pg b4

GB Chamber chief ‘more comfortable’; tax queries remain

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net The Grand Bahama Chamber of Commerce’s president says he feels “more comfortable” with Freeport’s new ‘tax breaks’ regime following Friday’s meeting with the Government, although key private sector questions remain unanswered.

Mick Holding told Tribune Business that “we made progress” in clarifying the uncertainty and confusion that resulted over the Government’s demand that the Grand Bahama Port Authority’s (GBPA) 3,500 licensees apply for renewal of key investment incentives

by March 6.

However, he confirmed that the private sector’s two key issues - how long the tax exemptions will be granted for, and whether non-expanding businesses See pg b5

$4.24

$4.22

$4.23

‘Decisive measures’ call as deficit soars to $314m

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net A key Ministry of Finance adviser last night warned that the 112 per cent increase in the half-year fiscal deficit to $314.2 million was an “early warning signal” that the Government must take “very decisive measures” to stabilise the national finances.

James Smith told Tribune Business that the Christie administration needed to resist the traditional pregeneral election urge to increase government spending, after the Central Bank revealed how far Hurricane Matthew has blown the fiscal consolidation plan offcourse.

James Smith Warning that the 20162017 fiscal deficit may return to the $500 million-plus range seen at the start of the Christie administration, should the half-year trend

hold, Mr Smith said the Government needed to better align initiatives such as National Health Insurance (NHI) with its financial capacity.

He was speaking after the Central Bank, in its monthly economic report for January, revealed that the Government’s fiscal deficit for the six months to end-December 2016 had more than doubled year-over-year.

Attributing much of this to the fall-out from Hurricane Matthew, the Central Bank said: “The Government’s budgetary operations for the first six months of fiscal year 2016-2017 were dominated by hurricane rebuilding outlays and disruptions in revenue collection, See pg b7

Govt adviser: 112% rise ‘an early warning signal’ Urges spending controls; no preelection binge Recurrent rise shows Matthew not sole reason Concern on target for $500m-plus fullyear red ink

Port left licensees ‘hung out to dry’

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

Carey Leonard

A former Grand Bahama Port Authority (GBPA) attorney has accused the quasi-governmental authority of leaving its 3,500 licensees “hung out to dry” over Freeport’s new investment incentives regime.

Carey Leonard, once the GBPA’s in-house counsel, questioned why it had “not

seen fit to educate” its licensees on the process they must now undergo to obtain renewed real property tax, capital gains and income tax exemptions.

Now an attorney at Callenders & Co, Mr Leonard suggested the GBPA would have had intimate knowledge of the mechanisms unleashed by Grand Bahama (Port Area) Investment Incentives Act 2016, and their implications See pg b4

Attorney: GBPA ‘cut its own deal’; cut licensees loose Calls for Port license fee ‘offset’ due to new regime Urges Govt to ‘come to senses’ on March 6 deadline

Private sector ‘input’ sought on 5-year staff lock-in March 6 deadline ‘push back’ likely Further discussions planned this week

Mick holding

Cable losses hit $16.7m amid wait for growth pay-off

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net Cable Bahamas suffered a 12.5 per cent increase in annual net losses to $16.658 million for 2016, driven by Hurricane Matthew-related repair costs and the wait for expansion investments to pay off.

The BISX-listed communications provider, in unveiling its figures for the 12 See pg b6

Aliv accounts for over 50% of bottom line ‘red ink’ But expected to gain 30% share by 2017-end Results also hurt

by Matthew restoration impact

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PAGE 2, Monday, February 27, 2017

THE TRIBUNE

Water Corp moves to paperless billing The Water and Sewerage Corporation (WSC) is introducing paperless billing, in a bid to enhance service quality and customer billing.

Months after successfully launching its WSCmobile APP for both Apple and Android devices, the Cor-

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Our values:

poration is set to introduce its e-mailed bill notification system.

This will allow customers to view and pay their bills from their own homes, via their personal computers, phones and IPads.

“Good customer service is a part of our brand. It’s

what we’ve become known for, so we continue to find ways to offer customers more convenient ways of doing business with us,” said Visna Armbrister, the Water and Sewerage Corporation’s pubilc affairs manager.

“Water conservation

is also part of our brand, which we continue to promote, so it simply makes sense for us to try to conserve in other ways, too.

Going ‘paperless’ is another avenue we choose to do this, while improving on our efficiencies and reducing costs. So, it’s a win-win

the new system.

To access the paperless billing feature, customers need only visit the corporation’s website at http://www. wsc.com.bs and sign up for e-notification to have their monthly bills delivered directly to their respective inboxes, and receive $10 off their first e-bill.

Generali Worldwide is looking for a

Nurse Case Manager Northern Bahamas Organizational Ability: — Reviews medical facts to determine if the treatment is medically approved per client policy and is the most cost effective while maintaining quality of care.

— Evaluates insured eligibility status and benefits, while providing pre-certification authorization as required, including the length of stay and the procedures that have been approved.

— Ensures treatment plans are appropriate for patients’ medical conditions.

— Provides clinical assessment to determine medical necessity of air ambulance transfers and coordinates transfers as required.

— Coordinates and communicates all relevant medical/benefit information to key stakeholders, including presentations at rounds when applicable.

— Manages a case from inception through completion of treatment.

— Maintains comprehensive and accurate case notes, cost estimates and other relevant data.

— Identifies cases ready for closure and completes applicable procedures.

— Manages and nurtures relationships with Healthcare Providers.

Financial Efficiency: — Presents cost effective options for treatment to both the client and the insured.

— Ensures treatment is delivered at the appropriate level of care (outpatient vs. inpatient).

Requirements: — 2+ years of nursing experience in a hospital or clinical setting.

— Registered Nurses diploma or degree (copy to be provided).

— Excellent working knowledge of computer programs.

— Superior verbal and written communication skills.

Successful candidates will receive a competitive salary and excellent benefits.

Please send a resume and cover letter to employment@generali-worldwide, indicating the job title Nurse Case Manager in the subject line.

Only candidates selected for an interview will be contacted.

No telephone enquiries will be accepted. generali-worldwide.com

situation for the Corporation and our customers.”

To assist customers with this new feature, WSC has created TV and radio ads to showcase the simplicity of the service. The ads feature WSC customer, ShirleyMae Johnson, and her TV grand-daughter, played by Avani Sawyer who explain

Generali Worldwide Insurance Company Limited 83 Sandringham House, Shirley Street, Nassau, Bahamas

BTC’s new Mobile Sales Station continues the company’s tradition of featuring talented young Bahamians who have made their mark on the world stage, including Grand Bahama’s WNBA player, Jonquil Jones.

Photo courtesy of Alfred Anderson/Barefoot Marketing

BTC takes services direct to the people The Bahamas Telecommunications Company (BTC) has been bringing its products and services to customer doorsteps throughout west Grand Bahama during February.

While BTC has opened store locations across Grand Bahama, this initiative is part of BTC’s ‘Retail on the Move’ promotion, which has been designed to add another layer of convenience for its customers.

“Our primary goal has always been to ensure that BTC customers receive the best from us in terms of quality products and services,” said BTC vice-president, Eldri Ferguson-Mackey.

“It’s important to us that our customers understand how much we value their business, and this is just another way that we get to prove that we’re prepared to go the extra mile for them every day”.

Sales agents on board the BTC Mobile Sales Station

were in the Martin Town and Seagrape areas on February 18-19, whole customers from Bootle Bay to West End were targeted on February 24-25.

Area residents were able to purchase Mobile Top up, pay their phone bills and purchase handsets without having to go far from home.

For residents living in the Eight Mile Rock area, the BTC Mobile Sales Station will make the rounds each Saturday, while the generalpublic is welcome to visit it on Tuesdays in Downtown Freeport in the old WinnDixie parking lot.

NB: BTC says it has also alerted the authorities to copper theft, and persons cutting and/or stealing its telephone cables and wires, in Grand Bahama.

The company said this is disrupting telephone services and causing “extreme inconvenience” to customers.

THE TRIBUNE

Monday, February 27, 2017, PAGE 3

URCA aims to ‘take Bahamas to world’

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

The Utilities Regulation and Competition Authority (URCA) aims to “take the Bahamas to the world” as a leader in information and communications technology (ICT), its top executive saying: “We have a very good foundation for ICT in the country”.

Stephen Bereaux, its acting chief executive, said: “It is our hope that both domestically and internationally, the country will begin to leverage what we have. We have a very good foundation for ICT in the country.

“We have great off-island connections, a very good domestic network if you compare us with countries of similar size, particularly considering the number of islands that we have, but we are a very interconnected archipelago. The Government sees, and we share the view, that ICT is a way you can improve your economy.”

Mr Bereaux continued: “The Government policy is that the country will be a leader. URCA, as regulator and advisor to the Government, is also responsible for promoting that policy and implementing it.

“One of the things we are doing is taking the Bahamas to the world as a leader in the ICT space. We do that through our work with the International Telecommunications Union (ITU).”

Mr Bereaux said that this year, URCA, on behalf of the Government, will host for the first time a major ITU conference - a symposium expected to attract between 600-700 government regulators, in addition to the Caribbean Telecommunications Union (CTU) conference.

Mr Bereaux said the regulator was currently finalising its annual plan for 2017, and added: “The key matter this year, obviously, is on the electricity side. We hope to complete our work on small-scale renewables within the next month or so. That would finally enable people to install solar installations on their houses and sell back to BPL. That will be critical. We’re happy about that.

“The electricity sector should see a lot of work in terms of getting the framework up and running, getting BPL’s consumer protection plan rolled out properly to the public. Hopefully, we will be finishing that.

“During the course of this year we also plan to begin an efficiency study of BPL. We will try to investigate to figure out whether there are changes and adjustments that can be made to assist in meeting the challenges with the electricity supply, both the supply and the cost of it,” the URCA chief executive added.

“On the electronic communications side the focus is pretty much the same thing. We’re in the process of liberalisation, getting Aliv’s services rolled out to all of the islands that they are responsible for, which will continue through this year into the next.”

Mr Bereaux added that URCA is also focusing on its own performance.

“There is a lot of work we are doing. We just revised our strategic plan,” he said.

“We want to find ways to create subjective measures of the impact of our regulation on the public and, internally, our own performance, whether or not we are doing what we should be doing and whether it is having the impact it should be having.”

‘Subdued’ 2017 start for tourism industry

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net The Bahamian economy endured a “soft” January amid “constrained” tourism output, with passenger traffic passing through Lynden Pindling International Airport (LPIA) up just 0.1 per cent year-over-year.

The Central Bank of the Bahamas, in its report on January’s economic developments, said the “subdued” tourism industry performance offset increased construction activity related to the post-Hurricane Matthew rebuilding and

LPIA passenger traffic up just 0.1% year-on-year Excess bank liquidity hits $1.5bn mark the impact from ongoing foreign direct investment (FDI) projects.

“Preliminary indicators suggest that domestic economic activity remained soft during January,” the Central Bank said. “This reflected subdued tourism gains, which dampened strengthened construction output from the post hurri-

cane rebuilding efforts and stimulus from varied-scale foreign investment (FDI) projects.

“Initial data on foreign currency purchases by commercial banks from the private sector underscored some gains in trade and FDI-related activity.

“However, statistics on airport traffic showed that the tourism impulse was constrained. Data from the Nassau Airport Development Company (NAD) indicated a marginal, 0.1 per cent uptick in passenger traffic through the main airport in January, yearon-year, a slowdown from the 4.1 per cent increase recorded in the previous

month,” the Central Bank added.

“An analysis by region showed that the dominant US segment rose by 1.5 per cent following December’s 5.7 per cent upturn.

However, traffic from other markets contracted by 6 per cent, extending the prior month’s 4.2 per cent falloff.”

The Central Bank, though, is sticking to its forecast that Baha Mar’s purported ‘phased’ opening, and the gradual rampup to a 3,000-4,000-strong workforce, together with ongoing hurricane restoration and other FDI projects, will gradually improve both See pg b5

Bahamas urged: ‘Don’t over-react’ to rating agencies

By NATARIO McKENZIE

Budget period, with Hurricane Matthew blowing it slightly higher than the prior year.

The international credit rating agency, in its latest quarterly assessment of the Bahamas’ sovereign creditworthiness, gave an insight into the extent of Matthew’s impact on the Government’s finances by

Tribune Business Reporter

nmckenzie@tribunemedia.net

The Bahamas should not “over-react” to assessments from the international credit ratings agencies regardless of whether they are negative or positive, the Chamber’s chairman saying: “We should have a plan.”

Gowon Bowe told Tribune Business: “We should not be over-reacting to anything they say because we should have a plan. In reality, what we should be saying is that as long as we are moving according to our plan, we can live with the outside observations because they will soon come to realise that we are achieving the plans we set out.”

He added: “If we fail to meet our goals, we have to revisit our plans and set up proven strategies that will allow us to align with those plans. We don’t need to fear saying we have not met cer-

Gowon Bowe tain targets, but we do need to have very clear analysis as to why not and what we are doing differently.

“We have to get to the point of demonstrating empirical evidence and documents we can supply. I think that’s the main part people are looking at. If they don’t, there is always that trepidation and scepticism.”

Moody’s last week forecast that the Bahamas’ fiscal deficit will remain above $300 million for the current

projecting a deficit equivalent to 3.6 per cent of GDP for 2016-2017.

“We estimate that the fiscal balance in fiscal year 2017 will deteriorate to -3.6 per cent of GDP from -2.8 per cent the previous year, due to the negative impact from the damages caused

by Hurricane Matthew last October,” Moody’s said.

PAGE 4, Monday, February 27, 2017

Dionisio: Govt creating ‘country of dependents’ From pg B1 recklessly,” he told Tribune Business, implying that the 2016-2017 deficit would widen further as the Christie administration seeks to shore-up its re-election.

“As we approach a general election, the Government is going to spend, spend, spend to facilitate their reelection,” Mr D’Aguilar continued.

“Given the size of the deficit, they should be acting in the best interests of the country, and once again they’re demonstrating they’re not acting in the best interests of the country; they’re acting in the best interests of them winning.”

The outspoken business-

man, a newcomer to Bahamian politics and general election campaigns, said he had been informed by Progressive Liberal Party (PLP) supporters that the Government intended to unleash a surge in spending and social programmes prior to the general election.

“If you speak to PLPs, they say unabashedly that they’re going to juice this economy, and were only waiting until after their convention,” Mr D’Aguilar told Tribune Business.

“They’re going to unleash a spending splurge on this country that we’ve never seen before, they say.

They’re going to fix every house, give out as many jobs as they can, spend what they have to spend to

Port left licensees ‘hung out to dry’ From pg B1 for its licensees, given that it was last year’s agreement between itself and the Government that unleashed the new law.

Mr Leonard said the GBPA instead appeared to have effectively abandoned its licensees, and “cut them loose”, having obtained what it wanted via the ‘blanket’ 20-year renewal of its own tax breaks via the same Act. “I’m surprised the Port Authority hasn’t said anything about this,” Mr Leonard told Tribune Business, adding that he had been informed the GBPA knew about the March 6, 2017, application deadline well in advance.

“I’m interested if the March 6 date was in the Memorandum of Understanding (MoU) between the Port Authority and the Government,” Mr Leonard said. “I’m told from a pretty good source that the date was there.

“I’m surprised the Port Authority has not seen fit to educate their licensees on this matter. Perhaps it’s be-

cause they’ve cut their own deal, themselves and Hutchison Whampoa. They’ve cut the GBPA licensees loose in many ways.

“I think the reason they have remained silent is they [the GBPA] don’t give a damn. They don’t care.

They’ve got no vested interest in it, and have left them [the licensees] hung out to dry.”

The real property tax, capital gains and income tax exemptions once enshrined in the Hawksbill Creek Agreement, Freeport’s founding treaty, expired on August 4, 2015.

They underwent a series of extensions to allow the Government time to seal its MoU with the GBPA in early summer 2016, which introduced far-reaching reforms to Freeport’s governance and investment incentives regimes.

The latter aspect led directly to the Grand Bahama (Port Area) Investment Incentives Act 2016, which now requires all Freeportarea businesses (the GBPA and Hutchison excepted) to now apply to the Govern-

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give people the feeling everything is good.”

Suggesting there were more sinister motives driving this, Mr D’Aguilar said the effect would be to make Bahamians ever-more dependent on the Government and those paying taxes, eroding the desire of persons to be independent and stand on their own feet.

“Their intention, and this is my personal belief, is to create a country of dependents as opposed to independents who can stand on their own two feet,” Mr D’Aguilar told Tribune Business, “using money from their jobs to fix their homes.”

“No matter the need to go out and grow the economy, they prefer to indulge in these social outlays to get people to depend on them. It’s because of us that you’re getting what you’re getting.”

An increase in social dependency means an everincreasing social security and welfare burden that has to be financed by Bahamian businesses and taxpayers, with Mr D’Aguilar’s message effectively being: ‘Don’t give a man fish; you teach him how to catch fish for himself’.

The Freetown candidate, meanwhile, said the Central Bank’s fiscal figures, especially the $52.6 million year-over-increase in recurrent spending, showed that the $1 billion-plus in ValueAdded Tax (VAT) revenues had been used to finance expanded social programmes.

“They have not spent it where it was supposed to go; on the deficit,” he said.

“This is why everybody is so worried about the state of the economy, Moody’s and S&P, because we have not stopped spending the VAT money.

“We have an economy of anemic growth, projected at 0.5 per cent last year, but possibly as low as 0.1 per cent, yet they are spending as if the economy is growing. This is a formula for disaster.

“If we keep on this trajectory of no growth and recklessly increasing spending, spending money we don’t have, I’m projecting the deficit is going right back to where it was before we had VAT. It’s irresponsible.”

The Christie administration ran deficits in the $500 million range during its first two years in office.

While acknowledging that the surge in the 2016-2017 first half deficit was partially driven by Hurricane Matthew, Mr D’Aguilar said the Bahamas needed to “cut back in other areas” to compensate for the revenue losses and increased spending associated with

the storm.

“I don’t dispute that we should help people,” he told Tribune Business, “but we should do it with what we have.

“Let’s get rid of Carnival, cut back on these transfers to NHI.... In the last few years we’ve employed 5,000 civil servants. Has it got any better? What do we have for that? You’re giving jobs to buy votes.

“We can’t have a first world life with a third world economy,” Mr D’Aguilar argued. “It’s so drastic. If we don’t turn this economy now it’s going to cause endless pain for Bahamians.

“We’re giving people things we can’t afford.

You’re telling people we can have a Mercedes, when we can only afford a Nissan Sentra. They’re [the Government] fiscally irresponsible, and the numbers speak volumes.”

ment for renewal of these key ‘tax breaks’.

The Christie administration has thus effectively removed them from the Hawksbill Creek Agreement’s embrace, and instead placed them under Nassau’s direct control via legislation.

Mr Leonard told Tribune Business that this change had ‘devalued’ the worth of a GBPA license, given that the ‘tax breaks’ were no longer automatically granted via the Hawksbill Creek Agreement.

Given that licensees will now be paying a fee to the Government for these incentives, he suggested that a percentage should be deduced from the GBPA license fee as “an offset”.

“The GBPA licensees were paying a license fee to the Port Authority for certain exemptions,” Mr Leonard said. “They seem to be exemptions that are no longer extended, and licensees are now going to have to pay a license fee to the Bahamas Government for these same exemptions.

“I feel the licensees should be able to deduct those license fees from their GBPA license fees, as they are no longer getting what they paid for. The Port Au-

thority can no longer provide it to you, and you’re going to have to go somewhere else.”

Despite not having gazzetted the accompanying regulations to give them effect, the Government has already moved to implement its Grand Bahama (Port Area) Investment Incentives Act 2016.

A newspaper advertisement on February 20 called on GBPA licensees to obtain, complete and submit an application form for continuation of the real property tax, income and capital gains tax exemptions that expired on May 4, 2016, last year.

They were given just two weeks until March 6, 2017, to accomplish this, the date having been chosen because it corresponds to the 10-month application deadline set out in the Act. It is unclear whether the GBPA would have been aware of the March 6, 2017, date when it signed the MoU last summer. The initial deadline was six months from May 4, placing it at November 4, 2016. This, though, was extended for a further four months due to Hurricane Matthew.

Mr Christie, in tabling the regulations and incentive

‘application form’, touted that it would “secure the economic growth of Grand Bahama and the welfare” of its residents.

Mr Leonard, though, noting that the regulations were only tabled in the House of Assembly on February 9, 2017, said the Government had given GBPA licensees an impossibly short time in which to meet its requirements.

“How can you possibly introduce regulations and then, 10 days later, put an advertisement in the paper and say everybody’s got to comply with everything in a further 10 days,” he told Tribune Business.

“How the heck are businesses supposed to be prepared for this? Hopefully, somebody will come to their senses and extend the deadline out; quite frankly, not for a minimum of six months, but a year.”

The application form attached to the Act’s regulations divides GBPA licensees into two categories; those planning a business expansion within the next 12 months, and those who “expect to operate as a going concern and maintain current staffing levels for at least the next five years”.

All businesses, when ap-

plying for their real property tax, income and capital gains tax exemptions, have to supply ‘the estimated market value’ of their real estate holdings and number of staff employed.

Those planning expansions in the next 12 months, though, must provide extra details such as the number of jobs created and the timeframe over which this will take place; any land development and associated timelines; the amount of capital to be invested; and the source of financing.

These businesses are then also asked to “provide evidence that the investment is sufficiently financed”, “the manner and period within” which the investment will be made, and its projected impact on the Freeport economy.

Evidence of Value-Added Tax (VAT) compliance, along with site plans, plus economic and environmental impact assessments, are also being demanded by the Government.

Mr Leonard said he and fellow Callenders & Co attorney, Fred Smith QC, were still assessing whether to take legal action over the new ‘tax breaks’ regime on behalf of GBPA licensee clients.

THE TRIBUNE

Monday, February 27, 2017, PAGE 5

GB Chamber chief ‘more comfortable’; tax queries remain From pg B1 will incur penalties if they break a five-year ‘lock in’ to maintain existing staffing levels - remain “open”.

Mr Holding said the Chamber and wider business community had been asked to provide their “input” and guidance on both points, ahead of further discussions that are supposed to take place this week.

“I think it’s fair to say that we made progress, and those questions that we didn’t get answered are still open,” the GB Chamber president said of Friday’s meeting. “There was no negativity, and it was all positive stuff. It was in the spirit of working together.

“Our points were well received. Some answers were received, some they [the Government] wanted to think about, and on others they asked us to give our thoughts in writing.”

Mr Holding declined to go into detail on the answers that the business community did obtain on Friday, although Tribune Business understands that the Government is expected to push back the March 6 application deadline.

It is unclear how far it will be rolled back, but Mr Holding said Dr Michael Darville, minister for Grand Bahama, was supposed to

issue a formal media statement on the way forward today.

However, Friday’s meeting did not answer the “main concern” over whether GBPA licensees will be stripped of their tax breaks, and forced to pay retroactive ‘back’ taxes, if they break a seeming commitment to maintaining existing workforce levels for five years.

Nor did it provide an answer on how long real property tax, capital gains and income tax exemptions will last for, with the duration and extent of such ‘breaks’ seemingly at the discretion of the Investments Board and the minister responsible for investments.

“That is probably the two remaining questions,” Mr Holding replied, when Tribune Business raised the issues. “Our points were heard, and they’ve asked for our input.”

He added that there was “no definitive answer” on the ‘tax breaks’ duration, adding: “That is one of the points that we’ve been asked for opinion and comments on.”

The application form attached to the Grand Bahama (Port Area) Investment Incentives Act 2016’s regulations divides GBPA licensees into two catego-

‘Subdued’ 2017 start for tourism industry From pg B3 GDP growth and employment prospects during 2017.

“Expectations are that the domestic economic indicators will show mild improvement during 2017, as tourism capacity is increased as result of Baha Mar and other sector-related investments,” the Central Bank said.

“The near-term boost to construction is expected to continue, in line with both hotel sector investments and hurricane rebuilding efforts. Against this backdrop, employment conditions are anticipated to improve gradually, while domestic inflationary pressures are expected to remain contained, notwithstanding some recent elevation in crude oil prices that could push domestic energy cost higher.”

On the monetary front, excess liquidity in the Bahamian commercial bank-

YOUR

ing sector increased by $52.9 million to break the $1.5 billion mark, the latter figure representing assets available for lending but unable to find suitable, creditworthy borrowers.

The industry’s loan arrears remained relatively flat, standing at just over $1 billion or 17.3 per cent of total outstanding bank credit, having reduced by $1.3 million in January 2017.

Short-term delinquencies, meaning loans between 31-90 days past due, fell by $3.5 million or 1.2 per cent month-over-month to $278.1 million, while non-performing loans that are 90 days or more past due jumped to $731.3 million.

Assessing the longerterm trend, the Central Bank said the banking industry’s arrears to total loan ratio had dropped by 3.2 percentage points compared to January 2016,

CHOICE FOR THE FAMILY @JOYFMBAHAMAS WWW.FACEBOOK.COM/JOYFM1019

ries: Those planning a business expansion within the next 12 months, and those who “expect to operate as a going concern and maintain current staffing levels for at least the next five years”.

The latter category appears innocuous, but when the application form is read with the Act, it effectively “locks in” GBPA licensees to maintaining employment levels for a five-year period regardless of whether there are further market or economic downturns outside their control.

Should a licensee be forced to downsize in those five years to survive, the Act’s section six, ‘Failure to fulfil obligations’, would appear to come into play.

This allows the Minister for Investments to strip Freeport businesses, partially or in full, of their tax breaks, and even enables them to demand payment of taxes that should have been paid if no concessions were granted.

The Act enables the Minister to “reduce or revoke in full” the tax breaks granted, and even “demand payment in respect of any money that would have been payable had no concessions under the Act been conferred”. In effect, it demands retroactive or ‘back’ taxes.

The Act also gives the Investments Board and Minister complete discretion to determine the extent of the tax breaks granted to each GBPA individual licensee, and for how long, as they see fit.

They can also “stipulate

conditions for inspection” to check that GBPA licensees are fulfilling the commitments they made on the ‘tax breaks’ application form, with expanding businesses required to undertake regular reporting.

Mr Holding, though, expressed confidence that the Freeport private sector would obtain the resolution it was seeking, despite its main concerns still being ‘open’.

“I’m feeling more comfortable about the whole thing,” he told Tribune Business, “and if we make the same degree of progress at the next meeting, I think we’ll be there. I’m quietly confident that we will get a satisfactory conclusion to these points.”

Mr Holding said last week’s meeting was attended by 35 persons, including officials from the Ministry of Grand Bahama, the full Hawksbill Creek Review Committee membership, and representatives from the Attorney General’s Office.

“They did gather the people who would be able to field the questions, which was positive,” he added.

A date and time has yet to be set for this week’s planned meeting, but Mr Holding added: “At the moment we’re at the table and on the inside, which is positive.”

Others, though, have been more strident in their criticism of the Grand Bahama (Port Area) Investment Incentives Act 2016, and its accompanying reg-

ulations and application form, warning that they further increase the costs and ‘red tape’ facing local and foreign investors, and will ultimately drive investment away.

Carey Leonard, the Callenders & Co attorney, told Tribune Business. “The only thing I can say is I’ve never seen a disincentive quite like it.

“The way this application form reads is that if you can’t maintain employment levels, the Government is entitled to demand its money back.”

He added of the application form: “I think it was hurried, and I don’t think it was thought through. It’s certainly not going to make Grand Bahama any more attractive; it makes Grand Bahama less attractive than anywhere else.”

Mr Leonard pointed out that nowhere else in its investment incentive legislation did the Government, via its Heads of Agreements, the Hotels Encouragement Act and others, require investors to ‘pay back’ received tax breaks if they failed to live up to their obligation.

Another Freeport attorney, speaking on condition of anonymity, said: “The more look at this Incentives Act, the more confused I am.

“Everyone up here doesn’t know what to do.

It looks like you’ve got to apply in a short timeframe, and businesses will have difficulty with this five-year commitment to keep your

employees.”

The Government may view the maintenance of existing employment levels as a reasonable ‘tradeoff’ in return for granting a business the real property, capital gains and income tax ‘breaks’ dealt with under the Act. However, this goes completely against how the private sector works in a capitalist economy, and is likely to be viewed by some observers as the Government pushing towards a socialist state, with business owners exposed to ‘retroactive taxes’ should they elect to close their enterprises completely.

Given the Bahamas’ fiscal predicament, and a longheld belief that it gave away too much under the Hawksbill Creek Agreement, the Government’s now wants GBPA licensees to apply to it for their investment incentives, rather than be given the previous blanket exemption.

It feels too many previously pocketed the savings, and then ‘sat’ on their land and other assets, rather than undertake job-creating expansions and investments.

The Christie administration also believes the Treasury spends more in Freeport than it earns from the city, despite providing no conclusive evidence yet to support this, further increasing the need to get the necessary ‘value for money’ from the tax breaks on offer.

when it had been at 20.3 per cent.

The non-performing loans ratio, in particular, had fallen by 2.9 percentage points, largely due to one commercial bank selling off a portion of its nonperforming mortgage portfolio.

“An assessment by loan type showed that the most significant decreases occurred for mortgages, which fell by $6.5 million (1.2 per

cent) to $514.6 million, reflecting a $4.6 million (3 per cent) decrease in shortterm delinquencies, and a $1.9 million (0.5 per cent) rise in the non-performing loan component,” the Central Bank said.

“In contrast, consumer loan arrears rose by $3.1 million (1.2 per cent) to $260.8 million, amid a $3.6 million increase in the nonperforming loan category, which eclipsed the $0.5 mil-

lion (0.5 per cent) softening in the 31-90 day segment.

“Similarly, commercial loan arrears were $2.1 million (0.9 per cent) higher at $233.9 million, reflecting gains in both the short and long-term components by $1.6 million (3.8 per cent) and $0.5 million (0.3 per cent), respectively.”

The Central Bank added: “On a monthly basis, banks reduced their total provisions for loan losses by

$46.7 million (9.1 per cent) to $468.2 million in January.

“Accordingly, the ratios of provisions to both arrears and non-performing loans contracted by 4.6 and 6.6 percentage points to 46.4 per cent and 64 per cent, respectively. During the review period, banks also wrote off a total of $9.5 million in bad debts and recovered $2.7 million of overdue loans.”

PAGE 6, Monday, February 27, 2017

Cable losses hit $16.7m amid wait for growth pay-off From pg B1 months to end-December 2016, stayed away from its bottom line ‘red ink’ to focus on the positive, namely its record $180.588 million in revenues.

Cable Bahamas also reiterated its expectation that Aliv, the second mobile operator, for which it has Board and management control to go with its 48.25 per cent equity stake, will seize 30 per cent market share from the Bahamas Telecommunications Company (BTC) by 2017 yearend.

Based on BTC’s subscriber and revenue figures, that would give Aliv estimated subscriber and revenue numbers of around 100,000 and $80-$90 million, re-

spectively. Cable Bahamas said its mobile affiliate accounted for 2.5 per cent of its total revenues in 2017, following Aliv’s November launch.

However, until Aliv’s business ramps-up, it is acting as a temporary drag on Cable Bahamas’ overall results as the latter’s management, Board and shareholders wait for their $62.5 million investment in the spectrum fee and other expenditures - taking the total outlay to $65 million - to pay-off.

‘Non-controlling interests’ accounted for $8.816 or more than 50 per cent of Cable Bahamas’ total net loss for the 2016 financial year, with that likely to be related to Aliv, as most of the ‘red ink’ - some $6.146

million - was incurred in the fourth quarter when the mobile operator launched.

The same ‘non-controlling interest’, not present on the balance sheet the year before, also boosted Cable Bahamas’ total equity by $61.352 million to $152.14 million.

On the revenue front, Cable Bahamas’ top-line rose 9 per cent year-over-year, from $165.678 million to $180.588 million. However, operating expenses grew by 20.2 per cent from $113.93 million to $136.957 million, as the BISX-listed provider continued to invest for future profit growth and rebuild its network after Hurricane Matthew.

As a result, earnings before interest, taxation, depreciation and amortisation (EBITDA) dropped by 15.7 per cent, from $51.748 million to $43.631 million, while operating income fell by 68 per cent - from

$21.594 million to $6.907 million.

Despite the increased net loss compared to 2015’s $14.371 million, there appears to be no cause for shareholders to panic yet.

Cable Bahamas has sharply increased the amount of debt (bank financing and preference shares) on its balance sheet to fund both its $100 million worth of US acquisitions, and their expansion, and its mobile growth opportunity at home.

The company is effectively in the same position as it was in 2015, investing for projected future gains and shareholder returns tomorrow, and these have yet to materialise - although they should be a year closer.

In the meantime, increased payments associated with the new debt financing are weighing on Cable Bahamas’ financial performance, along with the Hur-

ricane Matthew restoration costs. The key now is for the company to execute, and deliver the expected profits increase and returns from these investments.

Cable Bahamas’ release described 2016 as “tumultuous”, as it sought organic growth from its legacy business in the Bahamas, cemented its foothold in Florida with Summit Broadband and launched Aliv. It also had to contend with Hurricane Matthew.

“The progress of these business plans has required careful financial planning, which has been undertaken in the past and continues today,” the company said.

“Already, Cable Bahamas has a very solid financial base with a total funding of $700 million over recent years. This comprises bank loans, preferred shares and, of course, ordinary equity.

“All in all, Cable Bahamas is a picture of financial

THE TRIBUNE strength. However, this expansion and growth does come with significant expense, namely the network expansion, coupled with ever increasing programming and regulatory fees in the Bahamas, consolidation of operations in Florida and the Aliv network roll out and launch.”

“All employees should be very proud of all that was achieved in 2016, both financially and operationally,” stated Cable Bahamas’ president, Anthony Butler, in a statement. “That springboard will enable the company to forge ahead in the coming years.”

Cable Bahamas added that the company’s Board and management were “working toward a concerted plan of consolidation and growth that will play out in the future”.

Democrats, GOP spar over Medicaid reform at govs’ meeting WASHINGTON (AP) — Tensions emerged Saturday between Democratic and Republican U.S. governors over a GOP-led proposal for a major overhaul to Medicaid, with Democrats saying the changes would take away people’s health coverage to finance tax cuts for the wealthy.

GOP governors intend to present Congress with a plan that they say would give states more flexibility to administer health coverage for poorer residents while protecting states from absorbing the costs of re-

pealing the Affordable Care Act. Democratic governors said Saturday that their Republican counterparts were being dishonest about the effects of their plan.

“They want to spend less money on people’s health care so they can do tax cuts for the rich. They’ve tried to put this camouflage on it that somehow they’re giving governors flexibility. We’ve got plenty of flexibility,” Democratic Washington Gov. Jay Inslee said. “This is not what we are asking for.”

While major changes to former president Barack Obama’s signature health

care law appear inevitable with Republicans controlling the White House and both houses of Congress, Inslee said there’s still a chance that Democrats can win over GOP lawmakers who’ve been facing angry constituents at town hall meetings.

“People are madder than hops about this. Look, there’s four Republican members of the House in the state of Washington, and they’re now in the witnessprotection program,” Inslee said. “We think churches are going to offer them sanctuary at some point, given

how mad people are about this.”

Inslee, whose national profile is rising as Democrats look for new leaders following Hillary Clinton’s loss in November, led a successful legal challenge against President Donald Trump’s ban on travel from seven predominantly Muslim countries.

The angry rhetoric about health care reform brought a dose of political reality to the nonpartisan National Governors’ Association’s winter meeting, where governors otherwise spend time praising each other and participating in panels on noncontroversial topics, such as early childhood education, a cause that got a boost from actress Jennifer Garner.

On Saturday afternoon, the governors met behind closed doors with Health Secretary Tom Price, who according to several governors said the Trump administration wanted to partner with states to reform health care but did not provide specifics.

Meanwhile, at the White House, Trump met with two Republican governors, Wisconsin’s Scott Walker and Florida’s Rick Scott, and discussed “how best to solve the problems” of

Arizona Gov. Doug Ducey, center right, leaves a Governors lunch, with his staff, during the National Governors Association Winter Meeting in Washington, Saturday, Feb. 25, 2017. (AP Photo) the Obama-era health law, with “special emphasis” on states’ role in health care, according to a statement by his press secretary.

The entire governors’ group will meet with Trump and congressional leaders on Monday.

The governors also listened to a consultant’s report about the fiscal impact of a Medicaid overhaul on states. The report, a copy of which was obtained by The Associated Press, predicted that Medicaid reforms being proposed by House Republicans would result in tens of thousands of people losing

their insurance coverage in an average-size state.

Inslee and Democratic Gov. Terry McAuliffe of Virginia called the report “disturbing.”

Republican Gov. Matt Bevin of Kentucky said if Democrats were disturbed, they haven’t been paying attention.

“The kind of conversation that’s being had now — sobering, shocking, surprising as it might be to some — is the conversation that we must have because the piper has to get paid at some point,” Bevin said. “People are looking at reality, and that’s good.”

THE TRIBUNE

Monday, February 27, 2017, PAGE 7

‘Decisive measures’ call as deficit soars to $314m From pg B1 which contributed to an expansion in the deficit to $314.2 million from an estimated $147.9 million in first half of the previous fiscal year.

“Total expenditure rose by $121.9 million (11.7 per cent) to $1.166 billion, while revenue contracted by $44.4 million (5 per cent) to $851.8 million.”

The $314.2 million in first half ‘red ink’ is more than triple the $100 million fullyear deficit that the Government projected in its 20162017 Budget last May, and equal to the full-year projection given last week by Moody’s, the international credit rating agency, Mr Smith, a former minister of state for finance and Central Bank governor, said the first half fiscal deficit was equivalent to about 3 per cent of Bahamian gross domestic product (GDP) or economic output.

Should this trend hold for the full year, the nowMinistry of Finance adviser warned that it would hit 5-6 per cent of GDP for 20162017 - equivalent to the $500-$600 million deficits that the Christie administration ran in its first two years in office.

“If the rule of thumb after six months is to double it, we don’t want to be back up to 5-6 per cent of GDP,” Mr Smith told Tribune Business.

“I think it’s an early warning signal that we have to begin addressing it immediately... I would take it as the first blush early warning signal to take some very drastic measures.

“A great part of the explanation is the extra expenditure incurred by a natural disaster, but when it [the deficit] begins to balloon like that, you also have to take extra counter-measures. The most important thing is to recognise it for what it is, and adopt some counter-cyclical measures shortly.”

Prime Minister Perry Christie, at a PLP candi-

dates ratification ceremony on Friday, again blamed Hurricanes Joaquin and Matthew for derailing the Government’s fiscal consolidation plans, effectively blaming ‘acts of God’ for the Budget woes.

Simon Wilson, the Ministry of Finance’s financial secretary, earlier this month estimated that Hurricane Matthew cost the Government some $100 million in revenues.

And given that the Government was forced into $150 million of unanticipated borrowing in Matthew’s aftermath, as it sought emergency funding to effect repairs to homes and infrastructure, it is possible the Category Three/Four storm may inflict a total $250 million hit to deficit projections.

However, the Central Bank data shows not all the 112.44 per cent deficit increase can be blamed on Hurricane Matthew. For recurrent spending, which goes on the Government’s fixed costs, such as the civil service wage bill and rents, grew by $52.6 million or 5.5 per cent year-over-year during the 2016-2017 first half.

This spending category is not impacted by Matthew, as it represents the Government’s normal operational or running costs, with the Central Bank attributing much of the increase to preNHI launch activities.

“Current outlays rose by $52.6 million (5.5 per cent) to $1.005 billion, led by a $29.9 million (6.5 per cent) increase in transfer payments to $488.5 million,” the Central Bank report said.

“Specifically, subsidies and other transfers rose by $27.2 million (8.2 per cent), owing mainly to expansions in health-related outlays on National Health Insurance (NHI) initiatives, while transfers to non-profit institutions grew $3.8 million (24.9 per cent).

“In addition, consumption expenditure firmed by $22.7 million (4.6 per cent), reflecting an increase in per-

sonal emoluments of $13.9 million (4.2 per cent). In addition, purchases of goods and services firmed by $8.8 million (5.5 per cent).”

Mr Smith told Tribune Business that the Government needed to better plan its social initiatives, and align them with its finances and their affordability, given the Bahamas’ deteriorating fiscal position.

“I think that a number of initiatives are coming online at the same time, and going forward one would have to stagger them, moving only when we have the capacity to do so,” he said.

“We’ve got to do a bit more planning in terms of the timeline for executing initiatives based on our fiscal capacity.”

Mr Smith added that spending controls were “the quickest way” to arrest deterioration in the Government’s fiscal position, adding that increased taxes and revenues “can’t do it” due to timing issues related to when monies are collected.

The CFAL chairman said “even economic growth over two quarters will not do the job”, as there was a lag time between improved GDP expansion resulting in increased revenues and a narrowing of the debt.

Mr Smith, though, warned that “the timing element is not working in our favour”, given that the need for spending controls and restraint was occurring just when the Government is feeling general election pressures.

“We’ve made that expenditure three to four months earlier because of the hurricane, and something’s got to be done to control spending increases going forward,” Mr Smith said.

The Government will likely argue that its ongoing crackdown on tax cheats, which is said to be yielding $15 million a month in extra revenues on New Providence alone, and is targeting $400 million within two years, will repair some of the Matthew-related damage.

The second half of its fiscal year is also when it collects the majority of its revenues, as this coincides with

the peak winter tourism season and increased economic activity, plus the payment of all Business License fees and bulk of real property taxes.

However, the timing of the tax crackdown’s start, just one month after Hurricane Matthew, indicates that the move was forced upon the Government by the hole blown in its finances by the storm.

The Central Bank, too, acknowledged the damage done to a fiscal consolidation plan that was progressing far more slowly than expected based on the Government’s targets.

“The potential for nearterm improvement in the Government’s operations remains contingent on sustained revenue enhancement initiatives and expenditure constrain,” the Central Bank said. “However, the unplanned hurricane-related spending will diminish the current period’s consolidation potential.”

The Central Bank said capital spending grew by $71.7 million or 80.2 per cent to $161 million during the 2016-2017 first half, due to the demands imposed by hurricane rebuilding, and coast and infrastructure repairs. Infrastructure spending almost doubled by $66.5 million to $135.6 million.

Meanwhile, the revenue decline was due largely to a $39.5 million, or 4.9 per cent, drop in tax collections.

Value-Added Tax (VAT) revenues fell year-overyear by $15.4 million or 4.9 per cent to $302.1 million, a fall blamed on filing extension deadline and economic disruption related to Hurricane Matthew.

“Selected taxes on services decreased marginally by $0.5 million (5.3 per cent) to $9.7 million, as gaming taxes narrowed by $0.4 million (3.9 per cent),” the Central

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Bank said. “The disruption was also reflected in other ‘miscellaneous’ taxes, which fell by $31.1 million (15 per cent) to $176.1 million, amid a $21 million (49.8 per cent) decrease in unclassified receipts, and an $18.1 million (36.7 per cent) reduction in property tax collections.

“In contrast, business and professional fees increased by $2.7 million (20.9 per cent) to $15.4 million, departure taxes by $5 million

(9.2 per cent), and ‘other’ stamp taxes - mainly on mortgages - by $4 million (8 per cent).

“In addition, non-tax revenue fell by $4.7 million (5 per cent) to $89.9 million, with an $11.8 million (40.7 per cent) timing-related reduction in income from ‘other sources’ outpacing the $7.2 million (11.4 per cent) expansion in fines, forfeits and administrative fees.”

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PAGE 8, Monday, February 27, 2017

THE TRIBUNE

Trump administration blocks changes on coal mining royalties BILLINGS, Mont. (AP) — The Interior Department has put on hold changes to how the federal government values huge volumes of coal extracted from public lands, primarily in the Western United States, after mining companies challenged the agency in federal court.

The move by the Trump administration means current rules governing the industry will remain in place pending decisions in the courts, according to an agency notification due to be published Monday in the Federal Register.

The changes, crafted under the administration of President Barack Obama, were aimed at ensuring companies don't shortchange taxpayers on coal sales to Asia and other markets.

Coal exports surged over the past decade even as domestic sales declined.

Yet federal lawmakers and watchdog groups have long complained that taxpayers were losing hundreds of millions of dollars annually because royalties on coal form public lands were being improperly calculated.

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In 2016, companies sold 316 million tons of coal from federal and Indian lands valued at $5.4 billion. Those sales generated almost $600 million in reported royalties, according to Interior department data. Most coal from public lands is mined in Wyoming.

Mines in Montana, Colorado, Utah and New Mexico also play a significant role.

The fuel is used to produce about one-third of the nation's electricity, a figure that has dropped sharply in recent years as cheap natural gas has gained a much larger share of the power market.

Rules in place since the 1980s have allowed companies to sell their fuel to affiliates and pay royalties to the government on that price, then turn around and sell the coal at higher prices, often overseas. Under the suspended rule change, the royalty rate would be determined at the time the

a mechanized shovel loads coal from an 80-feet thick seam into a haul truck at Cloud Peak Energy’s Spring Creek mine near Decker, Mont. Coal from the mine is shipped to power plants for generating electricity. The Interior Department has put on hold changes to how it values coal extracted from public lands after mining companies sued in federal court to challenge the rules.

Interior officials say in a Federal Register announcement due to be published Monday, Feb. 27, 2017, that current rules will remain in place pending a court decision. The changes, crafted under the administration of President Barack Obama, were aimed at ensuring companies don’t shortchange taxpayers on coal sales to Asia and other markets. (AP Photo) coal is leased, and revenue will be based on the price paid by an outside entity, rather than an interim sale to an affiliated company.

Conservationists criticized the administration's move, saying it was a “sweetheart deal” for the industry and will deprive states of much-needed revenues. About half the coal royalties collected by the federal government is disbursed to states.

“This announcement is a gift to coal companies trying to avoid paying their fair share,” said Steve Charter, a Montana rancher who

lives next to the Bull Mountain coal mine near Roundup, which has sold fuel to customers in Asia.

Companies including Gillette, Wyoming-based Cloud Peak Energy argue that the higher price includes transportation expenses and other logistical costs that shouldn't be factored into royalty payments.

The hold placed on the rule was welcomed by lawmakers from Western states. Montana U.S. Sen. Steve Daines said the rule would have had “immediate detrimental effects” on

the mining industry.

U.S. Rep. Rob Bishop of Utah, chairman of the House Natural Resources Committee, said the rule change threatened to increase electricity rates for rural communities by raising the cost utilities pay for coal. “The Trump administration made the right decision to suspend this illogical and legally dubious rule,” Bishop said.

The Interior Department rule also included changes to oil and gas valuations, but those changes have attracted far less attention than coal royalties.

THE TRIBUNE

Monday, February 27, 2017, PAGE 9

AP Analysis: Will China be North Korea’s Trump card?

TOKYO (AP) — China’s announcement that it has suspended North Korean coal imports may have been its first test of whether the Trump administration is ready to do something about a major, and mutual, security problem: North Korea’s nukes. While China is Pyongyang’s biggest enabler, it is also the biggest outside agent of regimechallenging change — just not in the way Washington has wanted.

Judging from Trump’s limited comments so far, and the gaping chasm between Washington’s longheld focus on sanctions and punishment and Beijing’s equally deep commitment to diplomatic talks that

don’t require the North to first give up its arsenal, a deal between the two won’t come easily.

But if Beijing is indeed sending a signal to Trump about Pyongyang, its opening bid was a big one. North Korea’s coal exports to China totaled $1.2 billion last year, according to Chinese customs. U.S. officials say that represents about one third of the North’s total export income.

For Kim Jong Un, that’s going to hurt.

In a bitter critique, the North’s official media on Thursday likened the decision by Beijing to an enemy state’s move “to bring down” their social system and, in a tone it normally

reserves for Washington, Tokyo or Seoul, accused Beijing of “dancing to the tune of the U.S.” It was one of the most biting attacks the North’s media has ever made against China.

Trump, meanwhile, has often appeared to be more interested in bashing China than dealing with it. He has accused Beijing of not helping at all with the problem, and at the height of his bombast last year on the campaign trail, claimed China has “total control over North Korea.”

“China should solve that problem,” he said. “And if they don’t solve the problem, we should make trade very difficult for China.”

Trump has vowed to “deal

with” North Korea, and his administration is conducting a broad-ranging policy review, including how to make sanctions bite. Negotiations haven’t been ruled out, said a U.S. official who wasn’t authorized to discuss internal deliberations and demanded anonymity.

Unofficial talks between North Korean government officials and former U.S. officials tentatively scheduled for early March in New York were called off after the U.S. government decided Friday against issuing visas, according to a person familiar with the decision who was not authorized to speak for the U.S. government and discussed the matter on condition of anonymity.

Markets have stabilized since the crash, allowing companies to resume raising money in stock offerings, said the agency's chairman, Liu Shiyu. He said 248 companies raised 163 billion yuan ($24 billion) last year.

Liu was appointed in February 2016 after his predecessor was fired following the market plunge.

At the same time, said Li, regulators imposed more than 200 administrative measures last year against securities firms, fund managers and others who were found to be acting improperly.

A woman walks past a a brokerage house in Beijing, yesterday. China needs to do more to stop risky behavior in its stock market, a regulator said Sunday, following a 2015 collapse in share prices and complaints investors are engaged in a dangerous new round of speculative buying.

(AP Photo)

The State Department declined to comment Saturday, saying it does not discuss individual visa cases.

Although the U.S. government was not due to participate in the dialogue, and such unofficial talks have little bearing on official U.S. policy, allowing them to proceed could have signaled the Trump administration’s openness to U.S. engagement with North Korea, whose delegation was due to be led by Choe Son Hui, director of the U.S. affairs department in North Korea’s Foreign Ministry.

It was not immediately clear why the U.S. government nixed the dialogue — a decision first reported by the Wall Street Journal.

But the decision came after Malaysian authorities announced earlier Friday that the exiled half brother of North Korean leader Kim Jong Nam had been assassinated using VX nerve agent — a killing which is widely suspected to be the work of North Korea.

Trump’s basic position on North Korea reflects a dusty old chestnut in Washington: that China can, and should, force Pyongyang to abandon its nuclear weapons but has instead, recklessly and shortsightedly, become North Korea’s great enabler because it fears South Korea, an American ally that hosts U.S. troops, controlling everything right up to its border.

That is, after all, why China fought the U.S. in the Korean War. But the pervasive Chinese economic engagement with the North that so aggravates sanctions’ advocates in Washington has dramatically advanced the growth of a gray-zone market system, the swelling of an increasingly influential merchant class that is not utterly beholden to Kim Jong Un or his ruling party and shifts in popular attitudes and social relationships that could be extremely destabilizing for the entrenched North Korean status quo.

Regulator: China needs to rein in risky stock behavior BEIJING (AP) — China needs to do more to stop risky behavior in its stock market, a regulator said Sunday, following a 2015 collapse in share prices and complaints investors are engaged in a dangerous new round of speculative buying.

Regulators need to stop “blind expansion” by financial firms, the deputy chairman of the China Securities Regulatory Commission, Li Chao, said at a news conference.

People in financial industries have warned insurance companies and others are making dangerously aggressive investments in stocks and real estate. On Friday, the chairman of a life insurer was banned from the industry for violating limits on investing.

Regulators need to “increase the intensity of su-

pervision” and “seriously deal with illegal acts,” said Li. China's stock market is one of the world's biggest but prices are volatile and complaints of insider trading and other abuses are common. The markets are largely sealed off from global capital flows but Beijing is gradually easing barriers to foreign investors owning Chinese stocks.

In 2015, share prices surged and then collapsed, wiping trillions of dollars off stock value and battering small investors.

That was a “hard lesson” that regulators need to improve their ability to keep track of what brokers and investors are doing, Li said.

Regulators plan this year to “fully implement compliance and risk control” and “standardize the investment banking business,” he said.

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PAGE 10, Monday, February 27, 2017

THE TRIBUNE

Koch leads fight to deregulate African-style braiding PAWTUCKET, R.I. (AP) — The billionaire industrialist Charles Koch and hair braider Jocelyn DoCouto have at least one thing in common. They are both part of a national movement to deregulate the business of African-style braiding.

DoCouto is pushing for legislation in Rhode Island that would exempt her from the cumbersome and expensive occupational licensing requirements for hairdressers and barbers.

“It’s something that’s taught through generations,” said DoCouto, who has been braiding her hair into Senegalese twists, also known as rope braids, since she was 11. “It’s part of my culture.”

She is supported by the Koch-affiliated libertarian law firm Institute for Justice, based in Arlington, Virginia, which through lawsuits and lobbying in more than a dozen states has been fighting to deregulate the practice of natural hairstyling.

The group’s 25-year battle has found new momentum in the past year, most recently in South Dakota, where Republican Gov.

Dennis Daugaard signed a bill this month that exempts braiders from cosmetology licensing rules. Republican Iowa Gov. Terry Branstad also signed a law in the summer exempting African-style hair braiding from the 2,100 hours of training it takes to get a cosmetology license. Democrats have supported similar measures, especially after thenPresident Barack Obama launched an occupational licensing reform initiative last year.

“We’re now at 21 states that do not require a license,” said Christina Walsh, the Institute for Justice’s activism director. The Koch-supported group has been heralding what it calls “braiding freedom” along with the nonprofit Virginia-based education group Charles Koch Institute, and Koch himself, as part of a larger fight against occupational licensing regulations.

“Charles Koch and Koch Industries are committed to pursuing policies that can help all Americans realize their potential and improve their lives,” said Dave Dziok, a spokesman for Wichita, Kansas-based Koch Industries, in a written statement. “Occupation-

al licenses required for hundreds of occupations have restricted the creation of millions of jobs and inhibit entrepreneurship, harming low-income individuals and communities the most.”

Beauty schools and some hairdressers generally oppose the deregulation efforts and argue braiders shouldn’t be excused from training and oversight in sanitation and safety.

But African-style braiders such as DoCouto are increasingly finding bipartisan support from lawmakers in many states.

DoCouto, whose family comes from Senegal and Cape Verde, said Rhode Island’s cosmetology schools don’t teach what she learned how to do from her aunt. She describes it as “protective styling,” using braiding and weaving to promote natural curls without using dyes, reactive chemicals or chemical hair-joining agents.

DoCouto does some braiding from her home in Pawtucket, Rhode Island, and would like to open her own salon, but the 26-yearold said parenthood and her day job at a bank don’t leave her enough time or money to take irrelevant and costly cosmetology classes.

Jocelyn DoCouto, top, adds braid extensions for seven-yearold Zanyrah Parrott, of Pawtucket, R.I., in DoCouto’s home, in Pawtucket. The billionaire industrialist Charles Koch might not have a lot in common with DoCouto, but they are both part of a national movement to deregulate the business of African-style braiding.

DoCouto is pushing for state legislation in Rhode Island that would exempt her from the cumbersome and expensive occupational licensing requirements for hairdressers and barbers.

(AP Photo) A Republican-sponsored braiding deregulation bill got little traction in the Democrat-controlled Rhode Island General Assembly last year, but this year a Democrat has enthusiastically taken up the cause.

In New Hampshire, the state Board of Barbering, Cosmetology and Esthetics is warning against similar legislation.

Jeanne Chappell, a board member and owner of Keene Beauty Academy, said it’s possible to pass diseases with the tools used for hair braiding if they aren’t cleaned properly, something taught through cosmetology programs.

CHAUFFEURS NEEDED

FOR REPUTABLE BAHAMIAN COMPANY This opportunity is ideal for persons who have a passion for customer service; particularly in the hospitality sector. We offer potential team members a full-time role within a well-established company with internal training and a competitive salary.

ABOUT YOU · Mature and highly professional · Excellent interpersonal skills and communication · Must have successfully completed (or in the process of completing) the Bahama Host training program · Experience driving larger standard shift vehicles is key. · Public Service Driver’s License is a strong asset but not mandatory Interested candidates can send their resumes and copies of the required documents to nassaurecruit@gmail.com.

Only serious candidates need apply.

MARKET REPORT THURSDAY, 23 FEBRUARY 2017

t. 242.323.2330 | f. 242.323.2320 | www.bisxbahamas.com

BISX ALL SHARE INDEX: CLOSE 1,911.36 | CHG -0.04 | %CHG 0.00 | YTD -26.85 | YTD% -1.39 BISX LISTED & TRADED SECURITIES 52WK HI 4.38 17.43 9.09 3.56 4.70 0.12 7.20 8.50 6.10 10.60 15.27 2.72 1.60 5.83 9.75 11.00 9.25 6.90 12.01 11.00

52WK LOW 2.70 17.43 8.19 3.50 1.77 0.12 3.80 8.15 5.50 7.72 11.00 2.18 1.31 5.80 6.78 8.56 6.60 6.35 11.92 10.00

1000.00 1000.00 1000.00 1000.00

900.00 1000.00 1000.00 1000.00

PREFERENCE SHARES

1.00 106.00 100.00 106.00 105.00 105.00 100.00 10.00 1.01

1.00 105.50 100.00 100.00 105.00 100.00 100.00 10.00 1.01

SECURITY AML Foods Limited APD Limited Bahamas Property Fund Bahamas Waste Bank of Bahamas Benchmark Cable Bahamas CIBC FirstCaribbean Bank Colina Holdings Commonwealth Bank Commonwealth Brewery Consolidated Water BDRs Doctor's Hospital Famguard Fidelity Bank Finco Focol ICD Utilities J. S. Johnson Premier Real Estate Cable Bahamas Series 6 Cable Bahamas Series 8 Cable Bahamas Series 9 Cable Bahamas Series 10 Colina Holdings Class A Commonwealth Bank Class E Commonwealth Bank Class J Commonwealth Bank Class K Commonwealth Bank Class L Commonwealth Bank Class M Commonwealth Bank Class N Fidelity Bank Class A Focol Class B

CORPORATE DEBT - (percentage pricing) 52WK HI 100.00 100.00 100.00

52WK LOW 100.00 100.00 100.00

SYMBOL AML APD BPF BWL BOB BBL CAB CIB CHL CBL CBB CWCB DHS FAM FBB FIN FCL ICD JSJ PRE CAB6 CAB8 CAB9 CAB10 CHLA CBLE CBLJ CBLK CBLL CBLM CBLN FBBA FCLB

SECURITY Fidelity Bank Note 17 (Series A) + Fidelity Bank Note 18 (Series E) + Fidelity Bank Note 22 (Series B) +

SYMBOL FBB17 FBB18 FBB22

Bahamas Note 6.95 (2029) BGS: 2014-12-3Y BGS: 2015-1-3Y BGS: 2014-12-5Y BGS: 2015-1-5Y BGS: 2014-12-7Y BGS: 2015-1-7Y BGS: 2014-12-30Y BGS: 2015-1-30Y BGS: 2015-6-3Y BGS: 2015-6-5Y BGS: 2015-6-7Y BGS: 2015-6-30Y BGS: 2015-10-3Y BGS: 2015-10-5Y BGS: 2015-10-7Y

BAH29 BG0103 BG0203 BG0105 BG0205 BG0107 BG0207 BG0130 BG0230 BG0303 BG0305 BG0307 BG0330 BG0403 BG0405 BG0407

BAHAMAS GOVERNMENT STOCK - (percentage pricing) 115.92 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

113.70 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

MUTUAL FUNDS 52WK HI 2.03 3.92 1.94 169.70 141.76 1.47 1.67 1.57 1.10 6.96 8.50 6.30 9.94 11.21 10.46

52WK LOW 1.67 3.04 1.68 164.74 116.70 1.41 1.61 1.52 1.03 6.41 7.62 5.66 8.65 10.54 9.57

LAST CLOSE 4.38 15.85 9.09 3.53 1.77 0.12 4.50 8.50 5.83 10.48 11.56 2.18 1.55 5.83 9.75 10.95 9.25 6.90 12.01 10.00 1000.00 1000.00 1000.00 1000.00 1.00 100.00 100.00 100.00 100.00 100.00 100.00 10.00 1.01 LAST SALE 100.00 100.00 100.00 104.92 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

CLOSE 4.38 15.85 9.09 3.54 1.77 0.12 4.50 8.50 5.83 10.48 11.56 2.12 1.55 5.83 9.75 10.95 9.25 6.90 12.01 10.00

CHANGE 0.00 0.00 0.00 0.01 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -0.06 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

1000.00 1000.00 1000.00 1000.00 1.00 100.00 100.00 100.11 100.00 100.00 100.00 10.00 1.01

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

CLOSE 100.00 100.00 100.00

CHANGE 0.00 0.00 0.00

104.85 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

-0.07 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

FUND CFAL Bond Fund CFAL Balanced Fund CFAL Money Market Fund CFAL Global Bond Fund CFAL Global Equity Fund FG Financial Preferred Income Fund FG Financial Growth Fund FG Financial Diversified Fund FG Financial Global USD Bond Fund Royal Fidelity Bahamas Opportunities Fund - Secured Balanced Fund Royal Fidelity Bahamas Opportunities Fund - Targeted Equity Fund Royal Fidelity Bahamas Opportunities Fund - Prime Income Fund Royal Fidelity Int'l Fund - Equities Sub Fund Royal Fidelity Int'l Fund - High Yield Fund Royal Fidelity Int'l Fund - Alternative Strategies Fund

VOLUME

1,000 6,000 2,400 5,000 1,000 9,200

430 400

VOLUME

NAV 2.03 3.92 1.94 168.44 141.76 1.47 1.64 1.56 1.04 6.96 8.50 6.30 9.80 11.13 9.63

EPS$ 0.029 1.002 -0.144 0.170 -0.130 0.000 -0.030 0.607 0.430 0.450 0.110 0.102 0.080 0.300 0.520 0.960 0.820 0.294 0.610 0.000

DIV$ 0.080 1.000 0.000 0.210 0.000 0.000 0.090 0.300 0.220 0.360 0.490 0.060 0.060 0.240 0.400 0.000 0.330 0.140 0.640 0.000

0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000

0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000

P/E 151.0 15.8 N/M 20.8 N/M N/M -150.0 14.0 13.6 23.3 105.1 20.8 19.4 19.4 18.8 11.4 11.3 23.5 19.7 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.00% 0.00% 0.00% 0.00% 6.25% 6.25% 6.25% 6.25% 6.25% 6.25% 6.25% 7.00% 6.50%

INTEREST 7.00% 6.00% Prime + 1.75%

MATURITY 19-Oct-2017 31-May-2018 19-Oct-2022

6.95% 4.00% 4.00% 4.25% 4.25% 4.50% 4.50% 6.25% 6.25% 4.00% 4.25% 4.50% 6.25% 3.50% 3.88% 4.25%

20-Nov-2029 15-Dec-2017 30-Jul-2018 16-Dec-2019 30-Jul-2020 15-Dec-2021 30-Jul-2022 15-Dec-2044 30-Jul-2045 26-Jun-2018 26-Jun-2020 26-Jun-2022 26-Jun-2045 15-Oct-2018 15-Oct-2020 15-Oct-2022

YTD% 12 MTH% 4.30% 4.30% 3.82% 3.82% 2.73% 2.73% 3.95% 3.95% 6.77% 6.77% 0.40% 4.04% -1.76% 1.06% -0.34% 2.70% -0.95% 1.55% 4.35% 4.69% 4.13% 4.28% 4.22% 4.64% 6.19% 3.43% 2.77% 2.98% -3.66% -3.90%

NAV Date 31-Dec-2016 31-Dec-2016 31-Dec-2016 31-Dec-2016 31-Dec-2016 31-Jan-2017 31-Jan-2017 31-Jan-2017 31-Jan-2017 30-Nov-2016 30-Nov-2016 30-Nov-2016 30-Nov-2016 30-Nov-2016 30-Nov-2016

MARKET TERMS BISX ALL SHARE INDEX - 19 Dec 02 = 1,000.00 52wk-Hi - Highest closing price in last 52 weeks 52wk-Low - Lowest closing price in last 52 weeks Previous Close - Previous day's weighted price for daily volume Today's Close - Current day's weighted price for daily volume Change - Change in closing price from day to day Daily Vol. - Number of total shares traded today DIV $ - Dividends per share paid in the last 12 months P/E - Closing price divided by the last 12 month earnings

YIELD 1.83% 6.31% 0.00% 5.93% 0.00% 0.00% 2.00% 3.53% 3.77% 3.44% 4.24% 2.83% 3.87% 4.12% 4.10% 0.00% 3.57% 2.03% 5.33% 0.00%

YIELD - last 12 month dividends divided by closing price Bid $ - Buying price of Colina and Fidelity Ask $ - Selling price of Colina and fidelity Last Price - Last traded over-the-counter price Weekly Vol. - Trading volume of the prior week EPS $ - A company's reported earnings per share for the last 12 mths NAV - Net Asset Value N/M - Not Meaningful

TO TRADE CALL: CFAL 242-502-7010 | ROYALFIDELITY 242-356-7764 | FG CAPITAL MARKETS 242-396-4000 | COLONIAL 242-502-7525 | LENO 242-396-3225

COMMONWEALTH OF THE BAHAMAS CLE/Qui/2014 IN THE SUPREME COURT QUI/No. 149 COMMON LAW AND EQUITY SIDE BETWEEN IN THE MATTER OF THE QUIETING TITLES ACT 1959 AND IN THE MATTER of Petition of “PRAYER AND PRAISE ASSEMBLY” a company incorporate under the laws of and being involved in religious worship AND IN THE MATTER of ALL THAT piece parcel or lot of land being Lot No.3 of Block No. 72, Englerston Addition Subdivision containing 4,967 square feet and situate on the Eastern side of Ragged Island Street approximately 100 feet South of Cordeaux Avenue in the Southern District on the Island of New Providence one of the Islands of the Commonwealth of the Bahamas NOTICE TAKE NOTICE PRAYER AND PRAISE ASSEMBELY claims to be the owner in fee simple in possession of the said land and has made application of the Supreme Court of the Commonwealth of The Bahamas Under Section 3 of the Quieting Title Act, 1959 to have its tile to the said land investigated and the nature and extent thereof determined and declared in a Certificate ‘of Title to be granted by the Court in accordance with the provision of the said Act. A plan of the said land may be inspected during normal working hours at: (a) The Registry of the Supreme Court, New Providence in the Commonwealth of The Bahamas and the Chambers of V. Alfred Gray & Company, Dowdeswell House, Dowdeswell and Armstrong Streets, New Providence; NOTICE IS HEREBY GIVEN that any person or persons having dower or right of dower or an Adverse Claim or Claim not recognized in the Petition shall on or before the 25th day of March A.D., 2017 file in the Supreme Court in New Providence aforesaid and serve on the Petitioner or the undersigned a Statement of their claim aforesaid on or before the 25th day of March, A.D. 2017 or it will operate as a bar to such claim.

Dated this 22nd day of February A.D., 2017 V. ALFRED GRAY & CO. Chambers Dowdeswell House Dowdeswell & Armstrong Streets Nassau, The Bahamas Attorney for the Petitioner

THE TRIBUNE

Monday, February 27, 2017, PAGE 13

the exterior of the Internal Revenue Service (IRS) building in Washington. When Republicans say they want to lower income tax rates and get rid of loopholes to make up the lost revenue, they’re talking about eliminating some very popular tax breaks enjoyed by millions of American families. (AP Photo)

What popular tax breaks are at risk if GOP overhauls taxes?

WASHINGTON (AP) — When Republicans say they want to lower taxes and get rid of loopholes to make up the lost revenue, they’re talking about eliminating some very popular tax breaks enjoyed by millions of people.

That’s why making big changes to tax laws is so hard — and why it hasn’t been done for 30 years.

Unless Congress simply cuts taxes for everyone, there will be winners and losers, and the losers won’t go quietly. If Congress does cut taxes for everyone, lawmakers risk exploding an already large budget deficit.

Republican leaders in the House and Senate say they don’t want a tax overhaul to add to the national debt.

That’s what they mean when they say “revenue neutral.”

The new system would raise the same amount of tax revenue as the old one, after taking into account some broader economic effects.

President Donald Trump has said he will make public a tax proposal in the coming weeks. Republicans in Congress are also working

on plans, with the House GOP taking the lead.

Last year, House Republicans released a blueprint that would lower income tax rates and reduce the number of tax brackets. The gist of the plan is to lower tax rates for just about everyone, and make up the lost revenue by scaling back exemptions, deductions and credits.

A look at the biggest tax breaks enjoyed by individuals, along with The Associated Press’ assessment of how safe they are as Congress works to overhaul taxes. All estimates are from the nonpartisan Joint Committee on Taxation, the official scorekeeper for Congress.

RETIREMENT SAVINGS Contributions to pension plans are tax-exempt, including defined benefit plans and defined contribution plans, such as 401(k)s.

This exemption saved taxpayers $180 billion in 2016, making it the biggest tax break for individuals.

RATING: Safe.

Legal Notice International Business Companies Act, 2000

SAHAL HOLDINGS GROUP LTD. In Voluntary Liquidation NOTICE is hereby given that in accordance with Section 138(4) of The International Business Companies Act, 2000, SAHAL HOLDINGS GROUP LTD. is in dissolution.

The date of commencement of the dissolution was the 23rd day of February A.D., 2017.

Mr. Michael C. Miller, P. O. Box EE-17971, Nassau, Bahamas is the liquidator of S4 HOLDING COMPANy LTD. Michael C. Miller Liquidator

EMPLOYERPROVIDED HEALTH INSURANCE

Nearly half of all those in the United States get their health insurance from an employer. The value of those insurance policies is exempt from taxation, saving taxpayers $155 billion in 2016.

Proposals to start taxing at least some health benefits are dividing House Republicans as they struggle to replace President Barack Obama’s health law. Some see it as another version of Obama’s “Cadillac” tax on high-cost health insurance, which has been delayed until 2020.

RATING: In danger.

CAPITAL GAINS AND DIVIDENDS Investors pay reduced tax rates on long-term capital gains and qualified dividends, saving them $131 billion in 2016. The tax rate for investment income is 15 percent for most investors, though the very wealthy pay a top rate of 20 percent.

The top tax rate on regular income is 39.6 percent.

In 1986, President Ronald Reagan raised taxes on investments and used the revenue to dramatically reduce tax rates for regular income. Today, few Republicans embrace the idea of increasing taxes on investments.

RATING: Safe, as long as Republicans are in charge.

EARNED INCOME CREDIT Nearly 30 million families claimed the earned income tax credit in 2016, which targets low-income working families with children. They saved a total of $73 billion.

Republicans like the credit because it rewards work.

Democrats like it because it is one of the federal government’s largest anti-poverty programs.

RATING: Safe, but there could be changes.

THE TRIBUNE

Monday, February 27, 2017, PAGE 17

Congress returns, with health care, Supreme Court on agenda WASHINGTON (AP) — Congress returns to Washington this week to confront dramatic decisions on health care and the Supreme Court that may help determine the course of Donald Trump’s presidency.

First, the president will have his say, in his maiden speech to a joint session of Congress on Tuesday night. Majority Republicans in the House and Senate will be closely watching the prime-time address for guidance, marching orders or any specifics Trump might embrace on health care or taxes, areas where some of his preferences remain a mystery.

Congressional Republicans insist they are working closely with the new administration as they prepare to start taking votes on health legislation, with the moment finally upon them to make good on seven years of promises to repeal and replace former President Barack Obama’s Affordable Care Act. House Republicans hope to pass their legislation by early April and send it to the Senate, with action there also possible before Easter.

Republicans will be “keeping our promise to the American people,” House Speaker Paul Ryan, R-Wis., said as he sent lawmakers home for the Presidents Day recess armed with informational packets to defend planned GOP changes to the health law.

But land mines await.

The recess was dominated by raucous town halls where Republicans faced tough questions about their plans to replace the farreaching law with a new system built around tax credits, health savings accounts and high risk pools. Important questions are unanswered, such as the overall cost and how many people will be covered. There’s also uncertainty about how to resolve divisions among states over Medicaid money.

The lack of clarity created anxiety among voters who peppered lawmakers from coast to coast with questions about what would become of their own health coverage and that of their friends and family.

It’s forced Republicans to offer assurances that they don’t intend to take away the law and leave nothing in its place, even though some House conservatives favor doing just that.

“What I have said is repeal and replace and more recently I have defined that as repairing the ACA moving forward,” Rep. Leonard Lance, R-N.J., insisted to an overflow crowd in his politically divided district this past week. “I think we have a responsibility in Washington to try to make the system better.”

Senate Majority Leader Mitch McConnell R-Ky., speaks to a gathering of the Northern Kentucky Chamber of Commerce and the Cincinnati USA Regional Chamber, Thursday, Feb. 23, 2017, in Covington, Ky. (AP Photo) It remains to be seen whether the release of detailed legislation in the coming days will calm, or heighten, voters’ concerns.

Details on the size of tax credits to help people buy insurance, and how many fewer people will be covered than the 20 million who gained coverage under Obama’s law, could create bigger pushback and even more complications.

With lawmakers set to return to the Capitol on Monday, it will become clearer whether the earful many got back home will affect their plans. GOP leaders are determined to move forward, reckoning that when confronted with the reality of voting on the party’s repeal and replace plan, Republicans will have no choice but to vote “yes.”

Many Republicans say that how they will handle health legislation will set the stage for the next big battle, over taxes. And that fight, many believe, will be even trickier than health care. Already, it has opened major rifts between House and Senate Republicans.

Senators also will be weighing the nomination of federal appeals Judge Neil Gorsuch, Trump’s pick for the Supreme Court. Hear-

“What I have said is repeal and replace and more recently I have defined that as repairing the ACA moving forward”

ings soon will get underway in the Senate Judiciary Committee; floor action is expected before Easter.

Despite Gorsuch’s sterling credentials, Democrats are under pressure from their liberal supporters to oppose him, given voters’ disdain for Trump and the GOP’s refusal last year to allow even a hearing for Obama’s nominee for the high court vacancy, federal appeals Judge Merrick Garland.

Yet some Democrats are already predicting that one way or another, Gorsuch will be confirmed. Even if he doesn’t pick up the 60 votes he needs, Senate Majority Leader Mitch McConnell, R-Ky., could use a procedural gambit to eliminate Democrats’ ability to filibuster Gorsuch, an outcome that Trump has endorsed.

Congress is awaiting a budget from the Trump administration, and the slow process of rounding out Trump’s Cabinet will move forward as Republicans tee up more nominees over Democratic protests. The Senate has confirmed 14 Cabinet and Cabinet-level officials, fewer than other presidents at this point.

The most controversial nominees, including Education Secretary Betsy DeVos and Environmental Protection Agency head Scott Pruitt have been confirmed. Next up: financier Wilbur Ross for commerce secretary, Rep. Ryan Zinke to lead the Interior Department, retired neurosurgeon and 2016 GOP presidential candidate Ben Carson to be housing secretary and former Texas Gov. Rick Perry at the energy department.

THE TRIBUNE

Monday, February 27, 2017, PAGE 19

Report warns of state money fallout from health law repeal WASHINGTON (AP) — A sobering report to governors about the potential consequences of repealing the Obama-era health care law warns that federal spending cuts probably would create funding gaps for states and threaten many people with the loss of insurance coverage.

The Affordable Care Act has two main components for expanding coverage: subsidized private health insurance available in all 50 states, and an optional Medicaid expansion that has been accepted by 31 states and the District of Columbia. Those two components of the health law cover more than 20 million people.

A report by the consulting firms Avalere Health and McKinsey & Company concluded that the changes under consideration by the GOP-led House would reduce significantly federal dollars for Medicaid and subsidized private insurance.

The effect on Medicaid would be far-reaching. The federal-state program for low-income people covers more than 70 million Americans, many of whom have high health care needs.

The Associated Press obtained a copy of a slide

presentation made by the consultants to governors meeting this weekend in Washington.

The report said the combination of phasing out Medicaid expansion money from the U.S. government, plus transforming the overall program from an openended federal entitlement to one that operates under a cap would likely result in state funding gaps. States that expanded Medicaid would face the deepest cuts.

States would get more flexibility to design their programs, but the money crunch could lead to cuts in eligibility, benefits, or payments to hospitals and other service providers. The impact of federal spending reductions would compound over time.

Reduced Medicaid spending could also hurt states with dampened economic activity and fewer jobs, the consultants said.

Hospitals, which benefit from Medicaid coverage, are big employers in local communities. Costs of care for uninsured patients could become an issue.

In addition, the private insurance subsidies provided under Obama’s law would also be scaled back, according to the report.

Although states would get some additional safetynet funding, reductions in federal insurance subsidies would expose some consumers to new costs for their coverage. That would probably result in fewer people covered, as some consumers drop their plans.

According to the Kaiser Family Foundation, Medicaid consumed an average 19 percent of state budgets in 2015, the most current year available, ranging from 7 percent in Utah to 41 percent in New Hampshire.

Gov. John Kasich, ROhio, said he thinks “there’s going to be a problem in the House of getting anything out of there that still provides coverage to people.

That’s why the Republicans have to reach out to some of the Democrats. I don’t know whether this is going to happen,” he told CBS’ “Face the Nation.”

With President Donald Trump set to give his first speech to Congress on Tuesday night and his words on health care to be closely watched, a White House spokeswoman said the administration’s goal is ensure people do not lose their coverage and that costs are lowered.

“So we’re looking at every possible way to do exHealth and Human Services Secretary Tom Price is followed by reporters as he leaves a health care meeting during the National Governors Association Winter Meeting in Washington, Saturday, Feb. 25, 2017. (AP Photo)

actly that: repeal a terrible, failed system and replace with something better,” Sarah Huckabee Sanders told ABC’s “This Week.”

She depicted the current system as “collapsing under itself,” a view not shared by independent experts. It is widely acknowledged that

affordability is a serious problem, but the system is not regarded as teetering on the edge. Governors on Saturday met privately with Health and Human Services Secretary Tom Price, who according to several of the state leaders said the Trump administration wanted to work with states to overhaul

health care, but he did not provide specifics.

A Medicaid proposal by GOP governors, a draft of which was obtained by the AP, urges Congress to change Medicaid from an open-ended federal entitlement to a program designed by each state within a financial limit.

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