Protestors to Occupy Wall Street... mansions

NEW YORK (CNNMoney) -- Occupy Wall Street is on the move ... uptown.
Why uptown? Because that's where the rich folks live!

Community groups and progressive organizations that have been working with the broader Occupy Wall Street movement are planning a march on Tuesday that will visit the homes of JP Morgan Chase (JPM, Fortune 500) CEO Jamie Dimon, billionaire David Koch, hedge fund honcho John Paulson, Howard Milstein, and News Corp (NWSA, Fortune 500) CEO Rupert Murdoch. The millionaires and billionaires are being targeted for what event organizers called a "willingness to hoard wealth at the expense of the 99%."

Read more at link above

NEW YORK (CNNMoney) -- They're mad as hell, and they're not gonna take it anymore.

Take what? Bank fees.

Recent fee hikes from some of the nation's biggest banks have attracted the wrath of customers, some of whom are taking their business elsewhere.

Prime targets: Banks of America, which slapped a $5 monthly fee on debit cards, and Citigroup (C, Fortune 500), which will start charging $20 a month for some checking customers who don't maintain a $15,000 balance on their combined accounts.

"I dropped Bank of America like a hot potato," said Tim O'Brien a partner in a Seattle-based television advertising agency. "I felt like I was getting nickel and dimed."

O'Brien took his business to Key Bank (KEY, Fortune 500) -- a mid-sized lender based in Cleveland that has $90 billion in assets and just over 1,000 locations.
The best part? No fees on his new account.

"They rolled out the red carpet for us," O'Brien said. "The difference really is amazing."

There is no industrywide data on how many customers are leaving their banks because of new fees. And experts note that it takes a lot for most people to make a move. "It's a big hassle to change banks," said Bert Ely, a banking consultant.

Still, new fees are proving the final straw for some customers.

BofA chief: We have a 'right to make a profit'

Ely said the new fees at Bank of America in particular seem to have hit a nerve, and that the bank is likely to lose customers as a result. "People are always opening and closing accounts for a variety of reasons. You have kind of a normal churn," Ely said. "The challenge is measuring the additional turnover due to a policy change."

It's a trend that has been going on for some time, as more and more free accounts disappear.
For Jeff Fisher, a graphic designer and author from Oregon, a new $15 a month fee on his Chase (JPM, Fortune 500) business account prompted a switch to a credit union earlier this year.

"That really was the last straw," Fisher said of the fee. "That's when I lost it and decided to switch."

Changing banks was going to mean a loss of convenience for Fisher. The local Chase branch was just a couple of blocks from his home. So where to go?
Fisher took his case to the Internet, tweeting about his dissatisfaction. To his surprise, he received two unsolicited offers -- one from a credit union, and one from a smaller bank.

The message? We want your business. One even asked him to come in for a cup of coffee.

"I didn't get the coffee, but I did go talk to both banks," Fisher said. After evaluating his options, he moved his business account to OnPoint Credit Union in February.
"I really appreciate the way I was treated as a small business person," Fisher said. "They treated me like I was one of the biggest businesses in the city coming in."
Banks with lower fees seem to be in the best position to capitalize on the new charges.

Navy Federal, a credit union with about 3 million members, experienced a surge in new accounts after Bank of America (BAC, Fortune 500) announced its new fee. Instead of the usual 2,600, Navy Federal opened a record 3,200 new checking accounts in one weekend, according to spokeswoman Jennifer Sadler.
Why have banks been hiking fees in recent days?

9 most annoying bank fees

Banks are dealing with a new cap on the fees they can charge retailers when customers swipe their debit cards.

While banks used to charge an average fee of 44 cents, now the maximum is 21 cents. They are looking for a way to make up the difference. Smaller banks -- those with less than $10 billion in assets -- are exempt from the new regulation.

No matter the reason -- there isn't a lot of sympathy for banks.

George Lettis, a Citi customer in Maryland, was about to be hit by the bank's new $20 fee -- unless he raised his balance by a substantial amount.

"It just wasn't financially possible to keep that balance in there," Lettis said.

Now he's moving his checking account to Pentagon Federal Credit Union.

"Unless you have a big balance, the big banks aren't working for everyday people anymore," Lettis said.

At a local level, banks appear resigned to losing a few customers. "We went to our local branch in Seattle," said O'Brien, the Bank of America customer. "The manager didn't even try to keep our business."



Personal note: We have several banking type accounts and the ones that serve us best are the Credit Unions where we now do all of our primary banking business.

Six people arrested by Capitol Police - Updated: Tuesday, 11 Oct 2011, 1:57 PM EDT - WASHINGTON - Several arrests were made inside of the Senate Hart Office Building Tuesday after demonstrators who have spent five days camping out in downtown Washington to protest war and other causes refused to cooperate with police.
PHOTO GALLERY - Protesters Arrested in DC
According to U.S. Capitol Police six demonstrators were arrested in the Hart Senate Office Building by the USCP and charged with Unlawful Conduct-Demonstrating in a Capitol Building. They are currently being processed at Headquarters (119 D Street, NE).

The organization known as October2011 says 75-100 of their members marched from Freedom Plaza to the Hart Senate Office Building.


Read more: http://www.myfoxdc.com/dpp/news/local/demonstrators-arrested-inside-senate-hart-office-building-101111#ixzz1aUzSAA26

Slovakia faces a key vote on measures to bolster the powers of the eurozone bailout fund, seen as vital in combating the bloc's debt crisis.

With one coalition party vowing to abstain, the goverment looks set to lose the vote, but may keep trying.

After Malta approved the plans late on Monday, Slovakia is now the last of the eurozone's 17 member states to vote.

Slovakia's prime minister says she will tie the vote to a confidence vote - putting her government at risk.

"I have to say that the coalition partners have failed to reach an agreement," Prime Minister Iveta Radicova said.

The country's future in Europe was at stake, she said.

"It's unacceptable for a prime minister to allow the isolation of Slovakia."

While three of the four parties in the government coalition back the expansion, a fourth, the liberal Freedom and Solidarity (SaS), is holding out.

Continue reading the main story
NEW BAILOUT MEASURES

Changes to the bailout fund, the EFSF, include:

Increasing the fund's effective lending capacity to €440bn (£380bn)
Giving it the power to inject capital into banks
Allowing it to buy the bonds of distressed governments on the open market
The SaS has balked at Slovakia - one of the poorest countries in the eurozone - being asked to guarantee 7.7bn euros of the 440bn European Financial Stability Facility (EFSF).

It demanded a binding agreement that Slovakia would refuse to take part in the European Stabilisation Mechanism - which is meant to replace the EFSF in 2013 - and a veto over future bailout disbursements from the EFSF.

When the government failed to bow to its demands, it said it would abstain from the vote.

That means the vote is likely to be lost, as the socialist opposition has also said it will abstain.

read more at link above...

This chart shows how much GDP has grown, or contracted, every year since the launch of the euro.

It shows very clearly the damage caused to the whole of the eurozone by the financial crisis.

Notice that while Portugal did not experience a huge dip in 2009, its GDP growth was relatively low for much of the previous decade, which made the big infrastructure projects it was pursuing difficult to afford.

The chart shows data for all of the countries that officially use the euro as well as the UK, which is included to allow for comparisons.

International financial inspectors say they have reached agreement with Greece on reforms to put the nation's troubled economy back on track. "Economic and financial policies" have been agreed between Greece and the troika of bodies which has been mulling if Athens will get any new loans.

The EU, IMF and European Central Bank say Greece is now likely to get 8bn euros ($11bn; £7bn) more bailout cash.

It came as they said Greece's fiscal target for 2011 was not achievable.

"Once the Eurogroup and the IMF's executive board have approved the conclusions of the fifth review, the next tranche of 8bn euros will become available, most likely, in early November," a statement said.

Some 5.8bn euros would come from the euro area member states, and another 2.2bn from the International Monetary Fund.

"The success of the programme continues to depend on mobilising adequate financing from private sector involvement (PSI) and the official sector, " the troika statement continued.

"Ongoing discussions on PSI together with assurances provided by European leaders at their 21 July summit suggest that the programme remains fully financed," it said.

The statement said that, "the fiscal target for 2011 is no longer within reach, partly because of a further drop in GDP, but also because of slippages in the implementation of some of the agreed measures".

Start Quote

The mixture of economic policy which is currently being applied to the Greek economy is completely in the wrong direction”

However, it added that that 2012's deficit target of 14.9bn euros should be met if there was a "determined implementation" of the government's austerity plan.

Workplace reforms
The inspectors said they believed Athens was committed to its privatisation plan. Ministers hope to raise 35bn euros by the end of 2014.

The troika said the key to achieving that goal was to ensure that the privatisation fund, which supervises the sell-offs, remains independent.

The auditors also praised a decision to end sector-wide collective labour agreements as "a major step forward".

The government wants pay and terms to be negotiated at a company-level rather than across whole industries, as they have been previously. The move should make it easier for managers to sack employees.

Unions oppose the reform. However the inspectors say it will boost growth and prevent unemployment from becoming entrenched.

The news provoked a mixed reaction.

read more at link above...

US Economy at a Glance http://www.bls.gov/eag/eag.us.htm

How Does the Current US Economy Crisis Affect You?
The Subprime Mortgage Crisis http://moneyfor20s.about.com/od/moneyinyour20sbasics/a/economyandyou.htm

To understand how this really began you need to understand how the mortgage market works. First a subprime mortgage is a mortgage lent to someone who would not normally qualify. This could be due to income, poor credit history or both. As a safeguard these loans usually have a higher interest rate. In addition many of these loans were made as adjustable rate mortgages—which means that the rates would adjust up over time and increase the monthly payments.

The subprime mortgage loans have a greater risk of default and so banks usually limit the percentage that they have on the books. However with the dropping interest rates of the last few years many more people who wouldn’t normally qualify for a mortgage took advantage of the lower interest rates and got mortgages. Many of these people stretched themselves to the limit, assuming that they would be able to refinance when their interest rates adjusted up. However the housing boom ended and many did not build as much equity as they were hoping to, and did not qualify to refinance their mortgages. They found they could no longer make payments and began defaulting on the loans.

It is also important to understand the secondary mortgage market. The secondary mortgage market is the market where banks sell mortgages to other banks. They will package groups of mortgages together and sell the groups to other banks. In theory this spreads the risk between multiple banks, and protects everyone if the housing market were to burst in one area. For example a typical bank would hold mortgages in several different locations: California, New York, London and Georgia. Chances are that mortgages spread over such a wide area.

Fannie Mae and Freddie Mac are key in helping the secondary mortgage market to function. They purchase the loans from the original banks, so that the banks will have liquidity to make new loans, and then sell them to other banks, often investment banks. The secondary mortgage market experienced trouble when investment firms, other countries and banks stopped wanting to buy these mortgages. They feared that they were no longer valuable because of the recent foreclosures and defaults on all the subprime mortgages.

What Caused the Subprime Mortgage Crisis? http://useconomy.about.com/b/2008/02/25/what-caused-the-subprime-mortgage-crisis.htm

In response to Understanding the Subprime Mortgage Crisis, a reader asks:

You didn't say a word about why this whole thing happened. Banks do not normally lend to people who are bad credit risks so why did they all of a sudden decide (or were forced) into doing this? How about some words on this?

The Subprime Mortgage Crisis was caused by several factors, including

the increase of interest-only loans,

the invention of collateralized debt obligations (CDO's), and

fradulent lobbying by mortgage companies.

To find out how these factors all created the current crisis, see What Caused the Subprime Mortgage Crisis?
http://useconomy.about.com/od/criticalssues/tp/Subprime-Mortgage-Crisis-Cause.htm

The subprime mortgage crisis has put the U.S. economy into the worst recession since 1982. This primer explains the innovative financial tools that allowed lenders to lend to subprime borrowers without taking responsibility for the risk of future default. As adjustable mortgage interest rates reset, and borrowers defaulted, these tools spread that risk into every corner of the globe. This created a widespread crisis that shows no signs of ending.

Subprime Mortgages
Subprime borrowers are those who have poor credit histories and are therefore more likely to default. Lenders usually charge higher interest rates to provide more return for the greater risk. Normally, this makes it too expensive for many subprime borrowers to even make monthly payments.

Interest-only Loans
The advent of interest-only loans helped to lower monthly payments so subprime borrowers could afford them. This increased the risk to lenders, however, because the initial rates usually reset after 1, 3 or 5 years. However, the rising housing market of the last few years comforted lenders, who assumed the borrower could resell the house at the higher price rather than default.

Mortgage-backed Securities
Mortgage-backed securities allow lenders to bundle loans into a package and resell them. In the days of conventional loans, this allowed banks to have more funds to lend. With the advent of interest-only loans, this also transferred the risk of the lender defaulting when interest rates reset. However, as long as the housing market continued to rise, the risk was small.
In fact, the advent of interest-only loans combined with mortgage-backed securities added so much liquidity in the market that it created a housing boom.

Downturn in Real Estate Could Threaten Economy
Every boom has its bust, and by 2006 the housing market started to decline. When subprime borrowers couldn't sell their houses at a higher price, they were forced to default. Since the loans had repackaged and sold, they couldn't even negotiate a settlement with their bank.

Could Hedge Fund Housing Losses Cause Economic Slump?
Hedge funds are unregulated and are under tremendous pressure to surpass the stock market. By March of 2007, it became apparent that they had bought a lot of subprime mortgages that were now defaulting. This caused a correction in the stock market. However, at that time, analysts proclaimed that the damage was restricted to real estate.

Subprime Mortgage Crisis Looking Even MORE Like S&L Crisis
What made matters even worse was that many lenders spent millions of dollars to lobby state legislatures to relax laws that could have protected borrowers from taking on mortgages they really couldn't afford.

Collateralized Debt Obligations
However, the risk was not just confined to mortgages. All kinds of debt was repackaged and resold as Collateralized Debt Obligations (CDO's). As housing prices declined, many homeowners who had been using their homes as ATM machines found they could no longer support their lifestyle. Defaults on all kinds of debt started to slowly creep up. Holders of CDO's included not only lenders and hedge funds, but also corporations, pension funds and mutual funds - and the individual investors who owned them.

Fed Governor Kroszner Says Credit Crisis May Not Be Over
The real problem with CDO's was that they were so complicated and so new that buyers did not know how to price them. The stock market was booming, and everyone was under so much pressure to make money that they often bought these products based on nothing more than word of mouth.

http://useconomy.about.com/od/criticalssues/tp/Subprime-Mortgage-Crisis-Cause.htm

Economy News
http://money.cnn.com/news/economy/

Not a recession. But who cares? http://money.cnn.com/2011/10/07/news/economy/thebuzz/index.htm?iid=SF_E_River
The September jobs report was better than expected. But it's still going to be a painfully long economic recovery.
CNNMONEY - OCT 11 2011 9:22 AM ET

$1.3 trillion deficit for 2011, CBO says http://money.cnn.com/2011/10/07/news/economy/deficit_2011/index.htm?iid=SF_E_River
Deficit was about the same as 2010, though it was smaller as a percentage of the economy. Individual tax receipts rose as many areas of spending fell or moderated compared to a year earlier.
CNNMONEY - OCT 7 2011 3:27 PM ET

AMERICA'S JOBS CRISIS
Senate targets China's currency http://money.cnn.com/2011/10/10/news/economy/china_currency/index.htm?iid=SF_E_River
In what may be mostly a symbolic gesture, the Senate is expected to pass a bill on Tuesday that would penalize Chinese imports if the yuan isn't allowed to appreciate. WASHINGTON (CNNMoney) -- The Senate is expected to pass a bill on Tuesday that targets China's undervalued currency -- long accused of hampering the U.S. economy by spurring global trade imbalances and economic hardship for U.S. manufacturers. The Senate bill would slap new duties on imports from nations whose currency is undervalued -- a provision aimed squarely at China.
CNNMONEY - OCT 10 2011 11:54 AM ET

Buffett: Obama's jobs plan is 'stimulus' http://money.cnn.com/video/news/2011/10/04/n_buffett_jobs_act.cnnmoney/?iid=SF_E_River
The Berkshire Hathaway chairman says the American Jobs Act is another stimulus proposed by a government that's running out of ammunition.
CNNMONEY - OCT 4 2011 5:41 PM ET

More Brits queuing up in bread lines http://money.cnn.com/video/news/2011/10/10/n_UK_food_poverty.cnnmoney/?iid=SF_E_River
As the U.K.'s economy falters, many are finding it increasingly difficult to feed themselves and their families.
CNNMONEY - OCT 11 2011 8:34 AM ET

Millionaire tax would cover cost of Obama jobs bill http://money.cnn.com/2011/10/07/news/economy/jobs_bill_obama/index.htm?iid=SF_E_River
Congressional Budget Office says measure to stimulate economy would reduce deficits by $6 billion over decade.
CNNMONEY - OCT 7 2011 5:59 PM ET

AMERICA'S JOBS CRISIS
Local government jobs evaporate http://money.cnn.com/2011/10/07/news/economy/local_government_jobs/index.htm?iid=SF_E_River
Despite renewed strength in the private sector, local government jobs continue to disappear as teachers get hit by state budget cuts.
CNNMONEY - OCT 7 2011 2:33 PM ET

Obama, Cantor spar over Occupy Wall Street http://money.cnn.com/2011/10/07/news/economy/occupy_wall_street/index.htm?iid=SF_E_River
Cantor says Obama encouraged attack on "nation's bedrock principles." Obama says Republicans to blame for Occupy Wall Street protesters' frustrations.
CNNMONEY - OCT 7 2011 2:54 PM ET

State tax revenue falters as economy weakens http://money.cnn.com/2011/10/07/news/economy/state_tax_revenue/index.htm?iid=SF_E_River
A growing number of states are lowering their tax revenue forecasts as the economy takes a turn for the worse. This could mean more state budget cuts on the horizon.
CNNMONEY - OCT 7 2011 11:52 AM ET

NEW YORK (CNNMoney) -- In the latest blow to the European banking sector, Standard & Poor's on Tuesday announced negative rating actions on 15 Spanish banks.
The rating agency also had some harsh words for the nationwide economy of Spain, one of several European nations -- including Greece -- that have been hit hard by the debt crisis.

"In our view, Spain's economy faces dimming growth prospects in the near term, real estate market activity remains depressed, and turbulence in the capital markets has heightened," S&P said in its report.

S&P said it lowered by one notch the long-term "counterparty" credit ratings on 10 financial institutions, including the prominent banks Banco Santander S.A. and Banco Bilbao Vizcaya Argentaria S.A.

Greece: One step closer to bailout funds
The rating agency announced actions on other banks, including revising the outlook to negative from stable on four banks, placing one bank on CreditWatch negative, and lowering credit profile assessments on two banks.

S&P said its outlooks on all Spanish financial institutions are negative, "reflecting the possibility that we could downgrade some banks further if the economy deteriorates more than we anticipate."

Whitney: Many European banks will fail
The rating agencies have cast a harsh eye on other troubled European nations as well. In one of the most recent actions, Moody's Investors Service downgraded Italy on Oct. 4.
In one of S&P's most dramatic rating actions this year, the agency downgraded the United States on Aug. 5, stripping the world's largest economy of its prized AAA-status

NEW YORK (CNNMoney) -- U.S. stocks were mixed Tuesday, with the technology sector bucking a broader decline, as investors await Slovakia's vote on the proposed overhaul of the European bailout fund.
The Dow Jones industrial average (INDU) fell 12 points, or 0.1%, in afternoon trading. The S&P 500 (SPX) eased less than 1 point, while the Nasdaq composite (COMP) gained 7 points, or 0.3%.

The choppy trading comes after stocks rallied sharply late Monday, as investors cheered a pledge from European leaders to unveil a plan for solving the eurozone's debt crisis by the end of the month.

Stocks have advanced on four of the last five trading days, amid cautious optimism that a state-sponsored rescue of European banks is in the works.
The gains reflect "a concerted effort by Germany and France to say 'we've got this one, we're going to get this figured out,'" said Art Hogan, managing director at Lazard Capital Markets.

Stocks: The bears are back
But the tone remains cautious, as investors await the outcome of the deeply divided Slovakian parliament's vote to overhaul the European Financial Stability Fund (EFSF) -- essentially a bailout fund for the region's most troubled nations.

The reforms must be ratified by all 17 eurozone nations, and Slovakia is the last country to vote.

read more at link above...

NEW YORK (CNNMoney) -- The New York state comptroller expects Wall Street to lose 10,000 jobs by the end of 2012.
The job losses are projected to occur in New York City's securities industry from now through December, 2012, according to Eric Sumberg, press spokesman for state comptroller Thomas DiNapoli.

"It now seems likely that profits will fall sharply, job losses will continue, and bonuses will be smaller than last year," DiNapoli said in a press release. "These developments will have a rippling effect through the economy and adversely impact state and city tax collections."

The comptroller blamed the dismal outlook on "uncertainty due to the European sovereign debt crisis, a sluggish domestic economy, volatile stock markets and regulatory changes."

The comptroller's office highlighted Wall Street's strong start for 2011, noting that the securities industry has weakened considerably through the rest of the year.
Wall Street added 9,900 jobs from January 2010 and April 2011, but then lost 4,100 jobs through August.

read more at link above...

NEW YORK (CNNMoney) -- Millions of unemployed Americans are waiting for Congress to do something other than trade barbs over their job creation plans.
If lawmakers don't act soon, the jobless see their unemployment checks start to disappear come January.

More than 6 million Americans are set to lose federal unemployment benefits in 2012, with 1.8 million running out in January alone, according to new figures from the National Employment Law Project.

President Obama's $447 billion American Jobs Act would extend the deadline to file for federal unemployment benefits for another year. Though the Senate is expected to take up the controversial jobs bill on Tuesday, it's unlikely to get very far.

While many Washington observers say the administration's jobs bill is dead in the water, it's possible the unemployment extension could be separated and sent through on its own, or as part of another bill before year's end. The extension is estimated to cost $44 billion, according to the Congressional Budget Office.

read more at link above...

The housing crisis has cost Minneapolis Public Schools $150 million in state funding as students were forced to move from the area after their families' homes were foreclosed, according to a new report.

The report, by nonprofit advocacy group Minnesota Neighborhoods Organizing for Change, found that there have been more than 13,000 foreclosures in Minneapolis since 2006, leading to an estimated loss of 4,000 students from MPS. The majority of state funding for school districts is based on enrollment numbers.

Those figures are derived from research by the Center for Urban and Regional Affairs at the University of Minnesota that indicates 58 percent of households moved away from MPS zones after foreclosure and enrolled in other school districts.

Foreclosures in Minnesota also disproportionately affected homes with school children -- 17 percent of all Minneapolis households have children in MPS, while 39 percent of foreclosures in the city affected a household with a child in MPS, according to the CURA research cited in the NOC study.

The NOC report contends that banks, particularly Wells Fargo and U.S. Bank have driven the housing crisis in Minneapolis through their combined foreclosures of more than 500 homes in Minneapolis in the last year, costing MPS an estimated $47 million in state funding.

A spokesperson for U.S. Bank, however, told KARE that the NOC foreclosures figures are dubious, arguing that U.S. Bank only served as a trustee for many properties.

Wells Fargo issued a statement noting that it prioritizes foreclosure prevention and will continue to work directly with customers to do so, according to Minnesota Public Radio.

Johnny Jones Jr., an NOC supporter and father of two, told KSTP that banks must be more open to loan modifications for families facing foreclosure.

"If they don't, our kids are going to end up in jail and prison," Jones said. "They're not going to go to school. They're going to drop out."

NOC is calling for several changes to state policy, including adopting a foreclosure mediation program, requiring mortgage providers to submit a disclosure affidavit indicating why it couldn't modify a loan on a foreclosed home and having local governments, school boards and public agencies require "responsible lender criteria."

NOC leaders will present its findings to the Minneapolis school board Tuesday. School officials say they comment after they review the NOC's findings, KSTP reports.

The report on Minneapolis comes amid large statewide budget cuts, forcing districts to seek out lenders for funding. In July, Gov. Mark Dayton signed a budget to end a 20-day government shutdown that in part delayed another $700 million in payments to schools.

It's not iPads, SMART boards or after school activity programs that the majority of U.S. schools are struggling to provide, it's something much more basic, and somewhat shocking:

Access to water.

Sparked by a new federal requirement that all public schools provide access to free drinking water at lunchtime, administrators are having trouble finding the funds in the midst of widespread budget cuts, MSNBC's Vitals reported.

Almost a year ago, President Barack Obama signed the Hunger-Free Kids Act of 2010.

As well as including the free water provision, the act also aimed to provide healthy meal options to children from households where food is harder to come by. From the White House's Child Nutrition Fact Sheet:

"Over 31 million children receive meals through the school lunch program and many children receive most, if not all, of their meals at school. With over seventeen million children living in food insecure households and one out of every three children in America now considered overweight or obese, schools often are on the front lines of our national challenge to combat childhood obesity and improve children’s overall health."

Despite the legislation's September deadline, some schools have said they simply can't afford to comply. One west coast school district said in June that it will have 10 schools in noncompliance without $300,000 in additional funding, California Watch reported.

In August, Rita Sudman offered a different solution that wouldn't cost school districts as much money.

"Why don’t children just bring water to school in refillable bottles?" Sudman told California water news blog Aquafornia. "The reason often is that many schools don’t allow children to bring liquids into their schools, fearing something harmful may have been put in the container. In Germany children are allowed to fill reusable water bottles at school and store them there."

Either way, noncompliance to the act could result in consequences, Deputy Regional Administrator for the U.S. Department of Agriculture's Food and Nutrition Service Jesus Mendoza told California watch.

"Corrective action would depend on the situation," Mendoza said. "If the district says, 'I don't want to be in compliance because I don't believe in enforcing this requirement,' fiscal action would be possible."

Most states have cut state funding for schools this year, and a majority of states are funding K-12 education at levels lower than before the recession, after adjusting for inflation.

A survey published Thursday by the Center on Budget and Policy Priorities examined 46 states -- where 95 percent of the country's elementary and secondary students reside. Delaware, Idaho, Indiana and Washington were excluded because the way they report funding data makes historical comparisons difficult, the researchers note.

Of the states studied, 37 have trimmed K-12 educational funding since last year, after adjusting for inflation -- 19 of those states cut funding by more than 5 percent.

Looking back to before the recession, at least 30 states are funding schools at levels lower than they were in 2008. More than half of those -- 17 -- have cut funding by more than 10 percent, while Arizona, California, Hawaii and South Carolina saw the deepest spending cuts, slashing educational funding by more than 20 percent since pre-recession.

Since nearly half of all education spending is state-funded, according to the report, state cutbacks force districts to raise revenue on their own -- which is difficult -- or trim resources like educational services and lay off teachers -- thus threatening educational reform efforts. The cuts have also hurt economic recovery, as 194,000 school jobs nationwide were lost between August 2010 and August 2011 -- more than three times the cuts in the year before.