Dire economy led Georgia news in '08

The vast economic crisis has left scores of Georgia's houses empty, its banks shuttered and sent thousands of its residents searching for jobs even as its unemployment rate balloons to heights not seen since Ronald Reagan was president.

The nationwide recession was the top Georgia news story of 2008, according to state editors and news directors voting in The Associated Press' annual survey.

Other stories high on most lists included an energy crisis that sent gas prices on a roller-coaster ride, the U.S. Senate runoff that thwarted Democratic plans for a super-majority in the Senate and the months-long trial of courthouse gunman Brian Nichols.

Yet the economic doldrums was the top choice for seven of 12 Georgia AP members participating in the news cooperative's survey.

Georgia residents began feeling the economic fallout early this year as a growing number of homes remained unsold and credit grew tighter. Firms fired workers, governments furloughed staffers, foreclosures spiked and the state unemployment rate soared to 7.5 percent - the highest in 25 years.

The bleak economy forced regulators to close down five state banks, and led Gov. Sonny Perdue to order spending cuts of at least 6 percent to narrow a deficit that could top $2 billion in 2009.

The new year is unlikely to bring much relief. State economists warn unemployment will climb higher and housing prices will continue to plummet through the first half of 2009.

Volatile energy prices were the No. 2 story of the year. The topsy-turvy fuel market sent the price of crude soaring to as high as $150 a barrel in July before crashing to $33 this month.

The jump in prices, which soared after Hurricanes Gustav and Ike shuttered Gulf Coast refineries, sparked panic among Georgia drivers. Gas stations advertised fuel at $8 a gallon, while some drivers camped out at gas stations to be first in line for new deliveries.

Georgia's seemingly endless U.S. Senate campaign notched the No. 3 spot.

Residents headed to the polls four times to vote on the Senate contest, beginning with the July primaries and ending with a Dec. 2 runoff when Saxby Chambliss was elected to a second Senate term. The Republican's victory over Jim Martin deprived Democrats of a 60-seat filibuster-proof majority.

The conviction and sentencing of Brian Nichols for a deadly shooting spree that began in the Fulton County Courthouse was the year's No. 4 story.

After more than three years and a tangled trail of legal delays, a jury found Nichols guilty of murder. But it deadlocked over whether he deserves the death penalty, forcing a judge to sentence him to life in prison without parole. Now some legislators are intent on changing the state's death penalty rules.

The stubborn drought still squeezing parts of the state emerged as the No. 5 story of the year. While a soggy December helped elevate most of the region from the epic conditions, much of north Georgia - including devastated Lake Lanier - remains in a "severe" drought.

The No. 6 story was the deadly explosion at the Imperial Sugar refinery in February near Savannah that killed 14 workers and injured dozens more. Investigators determined the blast was caused by sugar dust that ignited like gunpowder in the plant's storage silos.

The presidential election, which dominated national headlines, was voted the No. 7 story in Georgia. Democrat Barack Obama's campaign recruited thousands of volunteers focused on turning the state blue, but Republican John McCain managed to claim Georgia's 15 electoral votes.

The No. 8 story of the year broke just hours after New Year's Day.

Meredith Emerson was abducted while walking with her dog that day in the north Georgia mountains, and police later found her body. Authorities soon arrested Gary Michael Hilton, who is now serving a life sentence after pleading guilty to her murder.

The Delta Air Lines merger with Northwest Airlines took the No. 9 slot, as the combination made the Atlanta-based carrier the world's largest airline. It completed a remarkable turnaround for Delta, which had filed for bankruptcy in 2005.

Clayton County's education woes was the year's tenth-ranked story. The Southern Association of Colleges and Schools revoked the county's accreditation after it failed to meet a range of recommendations. More than 3,200 students have since bolted.

Stories close to making the list included convicted murderer Troy Davis' efforts to get a new trial and avoid execution, a legislative session that again ended in gridlock and an explosion at a Dalton law firm that killed the person responsible and injured four others.

(AP)

Georgia gas prices continue to fall

Away from the national economic crisis, there is some good news for Georgians--it comes from the gas pump. There is another drop in the average price for a gallon of regular unleaded this morning, down 8 cents to $3.58. The AAA fuel gauge report shows that is still 23 cents above the national average, which fell another 5 cents to $3.35.

State leaders mull gas crisis solutions

Some 200 motorists lined up at a Kroger gas station in Marietta, Ga., on Sunday, Sept. 28, 2008. Scenes similar to this were common throughout the metro Atlanta area, as well as in other parts of the state in recent weeks. (Dave Bender)

Georgia leaders are debating whether to revise the state's emergency fuel plan and are considering ways to bolster gas supply in the aftermath of the abrupt shortage of gas that sent some motorists into a frenzy.

As lines outside gas stations grow shorter, frustrating searches for fuel have given way to soul-searching among Georgia legislators. Critics, meanwhile, have sharply condemned the state's response to the crisis.

The gas shortage started with the one-two punch of Hurricanes Gustav and Ike, which shut down refineries along the Gulf Coast. And the hankering among panicky drivers to top off their tanks when they passed an open fueled station made things worse.

Soon many gas stations around metro Atlanta were shuttered, and some lines outside those that stayed open could stretch for hours. Radio stations eagerly broadcast the names of open stations, and some drivers tailed fuel trucks in hopes of filling up their tanks.

Georgia's leaders updated an emergency plan last year to better handle a gas crisis. Among other options, the plan allows the governor to limit drivers to fill up their tanks every other day and set minimum and maximum limits on how much fuel they can purchase.

Gov. Sonny Perdue lobbied the Environmental Protection Agency to permit delivery of high-sulfur gasoline to metro Atlanta because the cleaner-burning low sulfur fuel normally required was in short supply.

But he ruled out more stringent options amid worries they would spark an even greater panic. Some of the measures proved too difficult to enforce while others weren't feasible, said Perdue spokesman Bert Brantley.

Gas retailers, for one, complained their pumps weren't equipped to set minimum fuel limits. And state officials were uncertain how they would enforce the every-other-day limits if they were enacted.

"You're looking at asking retailers to hire additional folks to be out there and try to enforce something like this," said Brantley. "And what do you do about the guy who's on empty, but it's not his day?"

Perdue, who returned Friday from a weeklong trade mission in Europe, has also taken heat from critics for the his absence in the middle of the fuel crisis.

"The governor should have gotten on MARTA to go to the Capitol as an example to use mass transit," said DuBose Porter, the House's top Democrat. "But he was in Spain, so it would be kind of difficult for him to lead by example."

Perdue's office countered that the governor was still calling the shots from abroad.

"This isn't the '50s where you'd go out of the country and not be reachable for a week," said Brantley. "He is incredibly reachable.

As the dust settles, the governor's office said it will consider several changes to the emergency gas plan, including a more structured policy to apply to the EPA for high-sulfur gasoline permits.

And state officials say they will explore ways to bolster supply of gas. Two pipelines that run from Houston through Georgia supply most of the state's gas, but officials sound eager to explore ways to ship in more fuel.

"There are some capacity issues and supply issues we want to look at in the future," said Shane Hix of the Georgia Environmental Facilities Authority. "We'll look at improving supply, including the diversity of supply from the port of Savannah."

House Speaker Glenn Richardson's office said he'll be looking at "various options" to prevent another crisis.

Legislators could also consider another effort to speed along the construction of a $2 billion pipeline that would stretch from Louisiana to Atlanta's suburbs. A bill to fast-track the construction failed in the Legislature last year, but the project is still moving forward.

Some say the state should have done more.

Democrats said the state should have warned the public about the tight gas supply sooner, and should have been quicker to implement anti-gouging protection. And Porter, the House leader, said legislators should dedicate more funding for alternative transportation by allowing a penny of the gas sales tax to fund mass transit.

"We're lucky it was a better case scenario, not a worst case scenario," Porter said. "But we weren't prepared either way."

Tom Smith, a finance professor at Emory University's Goizueta Business School, said legislators should tighten gouging rules and draft firm plans to take to the airwaves to soothe panicky residents and encourage them to telecommute amid the crisis.

"It's times like these where you have to give people incentives to behave in ways that are counterintuitive," said Tom Smith, a finance professor at Emory University's Goizueta Business School. "You have to convince them to buy less gas."

Some frustrated drivers simply wanted more of a warning.

Lining up at the pump in Marietta, on Sunday, Sept., 28, 2008. (Dave Bender)

Jack Brownfield, who passed 10 Atlanta gas stations this week before finally finding one with one fuel, said state officials should have done more to warn residents about Georgia's precarious gas supply.

"It was predictable," he said.

(The Associated Press)

Click here for more GPB News coverage of the gas crisis.

Perdue asks Bush for help to ease state gas crisis

The gas supply crisis for much of north Georgia continues, with drivers still fighting long lines at stations that have gas. This afternoon, Governor Sonny Perdue took another step in hopes of easing the shortage, by sending a letter to President Bush. Perdue is asking the White House to release a "significant amount" of crude oil from the Strategic petroleum reserve, to refineries in the Gulf. The hope is to more quickly bring the system back on-line, and get gas through the pipeline to Georgia. Late Monday afternoon, Lieutenant Governor Casey Cagle commented on Perdue’s letter in a press conference inside the State Capitol rotunda:

"I think the Governor's actions today to announce that he's calling on the President to get into the (Strategic National) Reserve is a very important process, because everyone is being impacted, because the Gulf is a huge supplier of fuel--not only to our state, but to the Southeast..."

Cagle says he expects the situation to improve "soon".

Atlanta: Pain at the pump

Motorist fills up Hummer at a station in midtown Atlanta. (file/Dave Bender)

Gas stations in parts of Georgia and the South continue to run out fuel as worried drivers keep filling their tanks. The problem is especially bad in Atlanta.

It’s a hit and miss situation in Atlanta for people who need gas. Long lines form as soon as a station gets a delivery and empties out within hours. Eric Rockcliff who has a Ford Expedition stays in close contact with friends these days:

“I set my alarm to 2:45 am and headed out look for gas. “

Rockcliff got up at 3 am one night and found gas in his neighborhood. Through networking and texting with friends he knew that QT stations were likely to have gas:

“The one closest to my house, even at 3 am line down the street in both directions.”

Rockcliff knew of another QT down the street and got lucky… no lines.

This hit and miss situation, officials say, is caused by a shortage of supply from gulf refineries still reeling from hurricane shut downs. They warn it could be a couple of weeks before things are back to normal.

Officials blame slow supply from gulf refineries still working to get up to full capacity after 2 hurricanes this season.

Click here for more GPB News reports about the gas crisis.

Bill Heard to close all dealerships

With a struggling economy and an inventory heavy with trucks and SUV’s, the largest Chevrolet dealership chain in the country has announced closure of all its locations.

Bill Heard Enterprises will close its remaining 13 nationwide dealerships--five locations in Georgia, along with those in Florida, Alabama, Tennessee, Texas and Nevada. Another dealership in Arizona closed September 12th.

The Columbus, Georgia based company says the mix of rising gas prices, a slowdown in car sales and the banking crisis created an atmosphere where its resources could not keep pace. Last month, GMAC Financial Services pulled credit for new inventory at some of the Bill Heard dealers.

The company has also been beset by legal troubles. The Governor's Office of Consumer Affairs has a lawsuit against Bill Heard, charging it with a 16-year pattern of deceptive sales practices. It’s not known how the closures will affect the state lawsuit.

The closing of Bill Heard dealers will affect about 27-hundred employees.

Gas shortages still widespread

Motorist fills up Hummer at a station in midtown Atlanta, Sept. 22, 2008. (Dave Bender)

Gas stations in much of the southeast are having a tough time getting enough fuel. Many have temporarily closed, and cars lined up at the pump are a not uncommon sight.

Atlanta, Nashville, and Tallahassee, are among other cities in the region, reporting closures or limited fuel supplies.

Motorist Tate Nichols, who lives in Atlanta suburb Stone Mountain, says he’s seen the biggest problems in town:

“Generally, out in my area, I haven’t had any problem finding gas - I have, in midtown today run across a couple of empty stations that do not have gas - but I found one within two minutes of looking that did have gas.”

State and industry officials say one factor behind the shortage are interrupted supplies from refineries in the Gulf of Mexico. Many closed for the duration of hurricanes Gustav and Ike.

And, an Atlanta law requiring stations to use cleaner-burning fuel means gas can't be easily diverted from better-supplied areas.

Governor Sonny Perdue and other officials here say they expect fuel supplies to return to normal later this week.

Click here for more GPB News coverage of the gas crisis.

Perdue may call in feds over gas gouging

The dramatic spike in gas prices from Hurricane Ike has prompted The Office of Consumer Affairs (OCA) to investigate hundreds of complaints of price gouging at the pump.

Officials have issued subpoenas for sales records of 25 gas stations statewide, and say more are on the way.

Bill Cloud, the director of administration and external affairs at the OCA says they've received over 700 complaints since Governor Sonny Perdue imposed an anti-gouging law last Friday.

But, Perdue says the skyrocketing numbers at the pump weren't only due to decisions by station owners :

"...[they] were the prices that some of the stations were having to pay up the line, and we're trying to investigate where that began and why, and what steps we should take – that probably would be outside of the purview of the State of Georgia, and while I’m a free-market guy, I certainly think it bears investigation by our federal government."

Perdue says Valdosta and Augusta were having the worst problems statewide in getting fuel from refineries knocked out by last week's hurricane.

Perdue and OCA officials, though, say the situation is improving and expect supply to be back to normal next week.

Click here for more GPB News coverage of the gas crisis, and here for more on Hurricane Ike.

Georgia lawmakers back Bush on drilling

Georgia lawmakers largely support President Bush's call to lift a long-standing ban on offshore oil drilling, including off the state's coast.

All nine of Georgia's Republican congressmen, including both senators, back the proposal. Three of six Democrats also support it, along with Republican Gov. Sonny Perdue.

The new push for drilling is a response to increasingly urgent complaints from constituents about $4-a-gallon gasoline.

Many experts, including Energy Department forecasters, predict that offshore supplies would amount to a drop in the global bucket and would have little effect on gas prices. But drilling supporters say no one really knows how much oil is out there and that Congress can no longer ignore it.

"People all too often want to say ... 'not in my backyard.' But as a nation in a fuel crisis, we simply cannot afford to take any option off the table," said Rep. Phil Gingrey, R-Marietta. "We're not talking about setting up an oil rig on the sandbar where you collect seashells. We're talking about responsible exploration."

President Bush on Monday lifted an executive ban that his father put in place in 1990 that prohibits offshore drilling in most parts of the country. He is pressing Congress to lift a similar legislative ban.

Based on studies done 25 years ago, the Interior Department estimates that 18 billion barrels of recoverable oil likely will be found beneath coastal waters now off limits. The U.S. consumes about 8 billion barrels per year.

In a report last year, the Energy Department forecasting arm said it would take until 2030 before offshore production really got going. Even then, the report said, "because oil prices are determined on the international market ... any impact on average wellhead prices is expected to be insignificant."

Rep. Hank Johnson, D-Lithonia, said the benefits are "not worth the risk."

"Every week I advise constituents that there is no easy fix and we will not be returning to the era of cheap gas and oil," he said.

Rep. David Scott, D-Atlanta, said that while he might support limited new coastal drilling — such as what Congress opened recently in the Gulf of Mexico — Republicans are missing the point by focusing on oil.

"We must find substitutes for oil and natural gas so that crises such as this do not occur again," he said.

But Scott and Johnson are in the minority among Georgia lawmakers, along with Rep. John Lewis, D-Atlanta, who has long opposed new drilling.

The rest of the delegation backs offshore development, including Democrats John Barrow of Savannah, Sanford Bishop of Albany and Jim Marshall of Macon.

Republican Sens. Saxby Chambliss and Johnny Isakson, who have been trying to broker a bipartisan energy compromise recently, said Congress can no longer ignore potential resources. Even if offshore production would play only a bit part in a broad energy portfolio, Isakson said, making it available would influence market forces that are driving up prices.

"Those who speculate on the future prices would understand that the United States has finally had enough," he said on the Senate floor Tuesday.

Supporters also say oil rigs would be so far off the coast that beachgoers wouldn't see them.

Rep. Lynn Westmoreland, R-Grantville, said the new production also could become a major revenue source for the state, as it has been in Louisiana and other Gulf states, which get a share of government royalties.

Rep. Jack Kingston, R-Savannah, said domestic production is "step one."

"It's just like dieting we need to reduce intake and increase output," he said.

Click here for more GPB News coverage of the gas crisis and energy issues.

(The Associated Press)

Bills would bolster GAs Fair Lending Act

Democratic lawmakers in the state House and Senate have introduced legislation they say will curb Georgia's runaway home foreclosure rate.

Lawmakers call the state’s foreclosure rate a crisis of epidemic proportions, created they say by an industry which preys on the poor and uninformed.

Now, state Democrats in both houses have signed on to a slate of bills designed to reign in Georgia's subprime mortgage lenders.

One suggestion is to extend the deadline from 15 day to 90 days, for homeowners to respond to a foreclosure notice. Another would require lenders to inform homeowners by certified letter when a home loan has been sold.

Senator Vincent Fort is a member of the Senate Consumer Affairs Committee.

"This is the greatest foreclosure crisis, mortgage crisis since the 1930s. It’s unprecedented in the history of this country."

By mid-2007, Georgia was home to nearly a quarter million subprime mortgages. Currently, the state ranks seventh in the nation in home foreclosure rates.