california finally agrees on a state budget...while other states continue to struggle to come up with a spending plan....a look at what's behind the delay. and, target funds miss the mark...how the recession is impacting these types of retirement investments even as more people are including them in their nest eggs. plus, from movies to maps...how one technology company is bringing a new meaning to luxury...as it teams up with a high-end hotel to help bring in business..it's all ahead on this edition of first business. base for planning in glad you're along for the ride is scenes like the worries of november are longboat forgotten at this point. the last time we saw the u.s. stock market these prices was in back in early november

is everything seemed to be falling off a cliff for the second time but we concede to see buyers moved into the stock market. we get some news out of that securities and exchange commission this week in a monday made that day and we're making sure selling permit which means who now have to share borrowed shares if you wanna sell them in bet against stocks and as ec hopes that this move will help avoid extreme price drops in stocks. one of many regulatory response is we've seen over the past six to nine months and we haven't yet seen in response about health care reform remains a big uncertainty as a last week of congress before the august recess. just a handful of states in the u-s have yet to pass their 2010 budgets including connecticut, pennsylvania and north carolina they are operating under temporary spending plans and this week, california's governor is expected to sign that state's budget - after months of political wrangling over what kinds of cuts to make. but experts say many states are

still bogged down with structural problems... that ensure these big budget gaps will continue for several more years... because states keep borrowing money to pay for expenses like pensions. all of the deadlock has forced credit downgrades this year - for several states including michigan, california, ohio, nevada and illinois. and next year when state lawmakers are sure to encounter big deficits again - credit rating agencies are likely to be a lot tougher. they've been burned by other areas.. they are concerned...and getting to think it could be serious problem.. they have a reputation to protect and will be taking it more seriously. once a state's credit rating is downgraded it's borrowing costs go higher - and it all falls back onto taxpayers... david merriman - with university of illinois says the 2 solutions are deeper cuts to services or large tax increases

he says both will be even more painful next year... because states will not be able to rely on stimulus money from the federal government.california able to pass a budget without higher taxes illinois: likely to raise taxes later this year or next year david merriman says he's pretty optimistic that higher state taxes will *not hurt an economic recovery for the nation: state tax rate small relative to federal taxes ... business taxes are small part of their bills.. income and sales taxes relatively minor in scheme of things. i don't think it will have a major role - in fact having structurally sound

system.. more to encourage development.. than higher taxes busiensses don't know wha ttax burdens going to be.. those kinds of things make it difficult for state to operate.. personal hardship as well this could be a real issue.. in some sense.. most leverage to get states get house in order if they downgrading bonds... cause a lot of costs to state.. raise cost of borrowing they will have to pay more to service bonds.. borrowing for capital payments.. pensions.. significant expenditure.. 15% of state budgets servicing your debt states have the economic capacity to pay bills.. power to tax.. no state has defaulted... no state has defaulted in history so credit rating agencies don't expect eefaulta.. looks quite bad stimulus money kept problem from being nearly as bad .. states gotten lot of federa

lmoney next year revenues still down.. continyue for a number o fyears.. and those downturns.. long term proble states not dealt with underlying problems... structural adjustments to budgets if difficult to borrow: other solution drastic cuts or large tax increases very painful getting there optimistic they wou'dn't play major role in reducing recovery slowing it many states have settled on budget.. don't have long term plan.. some states.. governor fix prblem.. revenues still far short i think prospects for a state default.. relatively high.. if that happens.. credit rating agencies.. stand up and take notice quickly.. deficintly possible in the next year.. businesses hate fiscal uncertainty hard to plan.. if know tax rate.. can around that.. hiring decisions.. ivnestment decisions sound bases.. uncertainty businesses reluctant to hire. invest.. rather locate in an area.. where feel stability... businesses don't like politcal gridlock one of the world's biggest debtors and its biggest owner of those i-o-us continue their economic summit tuesday. the u- s and china have been meeting twice a year since 2006 and since then, china's holdings of u-s government debt has jumped by 40 percent. the relationship between the united states and china will shape the 21st century, which makes it as important as any bilateral relationship in the world as in some relationships, money plans a big role between the u-s and china. china is by far the biggest foreign holder of america's government debt, having about 20 percent more than the next biggest holder, japan. and this summit this week comes as the treasury department is looking for buyers of a load of new government debt... some $115 billion in all. it sets a new record for government bond auctions in a week. trade also is key to the u-s, china relationship. and americans have been buying less stuff made in china. as americans save more and chinese are able to spend more we can put growth on a more sustainable foundation because

just as china has benefited from substantial investment and profitable exports, china can also be an enormous market for american goods. these talks are broader than previous meetings. clean energy, north korea and human rights also are on the agenda. on tuesday, investors get a check up on how well home prices are holding up across the nation. over the past 1 year, home prices continue to fall but they are going down at a slower pace in recent months. according to a bloomberg survey, economists estimate that home prices in 20 major cities - probably fell about 18% over the past 1 year. the s&p case shiller home price index is back down to levels not seen since 2003. which means this indicator measures home prices declining 33% from their peak in 2006. since march 13 of the 20 biggest cities saw a small improvement in home prices but some experts say it's still too

early to say a turnaround has started yet. after an unchaste monday a couple of items could set the tone for both days ahead for the record supply of government debt auctions and also believe this to read on the housing market and we begin at the cme group with some generally positive feelings around the housing market. yes. the market started out pretty firm into the upside even though it was very much a monday at the board of trade. the equities trade very thin but nonetheless there were firm. of the house a number that happened monday it was better than expected you would have thought that i would have thought that we would have had upside a little bit they rabbit for a handle s and p a sold off trying to figure out what that means i'm thinking that there has to be some pent-up demand and it is getting to be august

if you are going to make a move you better do it now i think that maybe what the number reflects the slow will see if the beat goes on. the think the bias to the upside is after the massive rally that we've seen since march but some new highs lately. i do. there aren't any bears to be found right now and it seems that most of these institutions have their targets ranging from the 11 handle down to 1020. so we're looking at the first stop at 102010 half type of area and will see how she x. i have a feeling that we're setting up for a nice september to october ride back down south. so it'll be a repeat of what we saw last september of fortunately yes sir. by the way parents report a matter of days to training camp to let the chicago bear fans know because there's plenty of them on the flow. dave bahoric just let you know my other fans are already

there. all right dave bahoric trade the news over at the cme group. take care. still to come a small technology company teams up with a luxury hotel in hopes of capturing the attention of travelers. but first...more people are turning to target funds even as some go way off target.

retirement savings has been clobbered by this bear market and even though the rally since march has made up for some of the lost ground, time goes only in one direction. more people have been turning to lifecycle or target funds....basically mutual funds that have a specific retirement date on the calendar...and then are supposed to change what's inside the fund as retirement approaches. but those funds haven't held up too well during this bear market. greg carlson covers target funds at morningstar.

online items the hold-up behind president obama's homeowner rescue plan....why so many struggling homeowners have not been able to modify their loans or refinance. plus, how moms are dealing with the recession...and what some companies are doing to tug at their purse strings. and...hear what two market pros are saying about the recent rally...can it last?...you can find these stories and more on our website at firstbusinessx.com. and straight ahead on the show... how one hotel is using technology to draw in

business...that's next after this in-the know message.

as the summer travel season ticks away, hotels across the country are looking fo every opportunity to differntiate themselves and attract more customers. while pric is always a factor, adding new ammenities can also help bring in more guests. roomlinx is a new in-room entertainment and business service that aims to take advantage of the trend. our sukmeke rainey caught up with the c-e-o of the company. hotels across the country are having a tough time filling rooms. smith travel research reports that the hotel occupancy rate is down roughly

8% from this year to last. the new wit hotel in downtown chicago has installed roomlinx on two floors of the hotel to bring in more customers. "so mike, tell me a little bit about roomlinx, what is it? the roomlinx interactive t-v system is a new system that embraces new guest habits. guests are going online to get their content and number two, they're bringing their own media with them." roomlinx is designed with both the leisure and business traveler in mind. overall, business travel makes up 18 percent of total u-s trips. despite the downturn, 52 percent of business travelers expect to the same number of trips over the next year and 22 percent actually expect that number to rise. 26 percent forecast a drop in travel. "you have a lot of travelers for business, what are some of the tools they can use? from a business aspect, we have a business tools button, where

you're actually able to work on your power point presentation, your word presentation. if you bring a usb with you, you're actually able to work on your own documents. "so mike whenever i go to a new hotel, new city, the first thing i look up is shopping. how can i find out what's going on for shopping in chicago? click on the local services button, click, attractions, shoopiing and check out 900 north and learn about the shops there." the system also folds in regular t-v viewing with additional options. "full h-d on demand movies, watch as many as you want. you also have full access to web- tv." from the hotel's perspective, the aim is to give guests what they want. "people are looking for content that they pick and choose, not just a pick of first-run movies and old favorites. this is the opportunity to get customized content that people want

immediately." wasik uses getting music online at a site called pandora as an example. "i think i have jimmy buffett. i was listening to him this morning. i don't ususally search jimmy buffett when i go to pandora. well, i guess i'm a little older than you." of course all the added features, come with a higher price tag. "these services won't cost any more than what you're paying for a regular hotel room? what the wit has done is create the media plus hotel room at the wit. i believe its an additional 14.99 and it includes everything." the wit's chief technology officer darren pinkham calls the fee a simple room upgrade. "its like getting a spa room. you pay more for a room at a resort with a great view and you get a spa visit included. the guests in these types of room

get that added benefit and we think 15 dollars a day is a great value to the consumer." roomlinx stock is traded over the counter and has a market cap of roughly 8 million dollars. to help grow the company, it recently secured 5 million dollars in debt financing which it will then lend to hotels to help pay for the installation of the system. the news keeps getting worse for the nation's airlines coming in chart talk will take a closer look at the stock charts of some of the struggling airline companies.

the news for the u.s. airline industry continues to get worse by the weak and the news this week's increase in u.s. air up waves on credit watch citing cash flow, a province and it may downgrade its credit which is best that is right now is already jaunt is likely to get into the drug territory in shares of have carved out the bottom rung to dollars a share but in airline is not a whole lot that looks attractive and it charged with any of these major carriers because of imports they seem to be doing a lot of business but the fact the matter is you see a cut to ticket prices and as pat the planes in hasn't necessarily been a profit. ual's united again u.s. airways the stocks are under $5 a share so they're pretty much flat lining but strong winds blew include southwest and continental but they are significantly down on the year. south was we took a look at the uc the line in the sand about seven and half dollars a share that has been

some resistance this is where it topped out and their march to april and march to may rally and were back at these levels again. basically these airlines need the economy to turn round sooner the were talking within the next few months if any of them or both of them are born to survive. jobless and e-mail and comments at first business x. c o m. think you for watching we'll see you next time everybody.