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The state's yawning budget gap is likely to delay some of the tax breaks and economic development projects cherished by local and state business groups.

These groups are watching anxiously as legislators get final budget estimates before heading back to Topeka on Jan. 12 for the 2009 session.

Business groups hope to hang onto the hard-won cuts in business taxes from the past three years.

They also worry about state funding for AirTran Airlines, research into aircraft and medical devices, and training for technical workers and doctors.

The prospects aren't good for all of them to get through the session unscathed, say legislators.

There is no Hollywood ending in sight in 2009 for the entertainment industry, which along with the rest of the nation is experiencing its worst economic slump in decades.

The fallout from declining local TV ad revenue, weakening DVD sales and diminishing sources of film financing will continue to pound Los Angeles' signature industry, which employs more than 200,000 people and pumps an estimated $20 billion to $30 billion into the local economy.

Many people expect that will trigger further layoffs at the studios, networks, independent production outfits and other media companies on top of the thousands of job losses that have occurred in recent months. Industry executives contend that the steep downturn will force Hollywood to change the way it does business.

"You can eliminate all the limos and velvet rope events you want," said former studio executive Marty Kaplan, director of the Norman Lear Center and research professor at the University of Southern California Annenberg School for Communication.

"But if you're still spending $100 million on pictures that have little chance of being hits, you're in a business that is inherently nuts."

Editor's note: The 2009 outlook for the energy sector was inadvertently omitted from Thursday's Business Today section.

ENERGY

What happened in 2008

It was a year to remember but also one the energy industry would like to forget.

Oil prices gyrated wildly in 2008. Good times rolled for producers when the spot price for West Texas intermediate crude hit a record-high $145.29 a barrel on July 3. Autumn brought a long tumble, taking the price to a five-year low of $30.28 on Dec. 23.

The Wichita Area Association of Realtors' winter-spring slate of real estate sales and broker education courses, accredited by the Kansas Board of Regents, begins next week at the WAAR headquarters, 170 W. Dewey.

They're the first of a year-long slate of courses designed to fulfill continuing education requirements and keep Realtors updated on laws and procedures.

Courses begin at 1 p.m. Thursday with "No One Looks Good in Horizontal Stripes," a three-hour course on real estate law by Trista Curzydlo, WAAR's government affairs director and legal counsel.

The courses are open to all local agents, not just WAAR members, said Laura Raudonis, WAAR chief executive.

They also supplement in-house education programs offered by many of the Wichita area's larger brokerages, said outgoing WAAR president Tony Utter, along with education offered at the state and national level.

The recession will worsen and unemployment rates will likely soar in nine Midwest and Plains states over the next few months, but a new survey of business leaders on Friday suggests the region may fare better than the nation as a whole.

The overall index for the region's Mid-America Business Conditions survey fell to 33 in December from November's record low of 37.8. Any score below 50 on the index, which ranges between 0 and 100, indicates a contracting economy over the next three to six months.

"December's employment reading was the weakest that we have recorded since we began the study in 1994," said Creighton University economics professor Ernie Goss, who coordinates the survey. "Job cuts were recorded across the broad sectors of durable and nondurable manufacturing as well as value-added services. I expect regional job losses to mount in the months ahead."

The December employment index slid to 34.5 from November's 39 and October's 47.4.

Kansas business conditions fell for the third month in a row, according to the survey.

While stockholders in some of the nation's biggest banks saw the value of their shares decline in 2008, those with holdings in several regional banks were rewarded.

That's according to a Kansas City Star and Eagle analysis of the 52-week high and low stock prices of publicly traded banks doing business in the Wichita area.

Owners of Capitol Federal Financial not only avoided the stock market's meltdown, they also pocketed a 47 percent gain in 2008.

UMB Financial Corp. delivered a 28 percent gain for its stockholders.

And Commerce Bancshares eked out a gain of nearly 3 percent.

New orders for non-military aircraft fell a seasonally adjusted 37.7 percent between October and November, following an 8.7 percent drop the month before, according to a preliminary estimate by the U.S. Census Bureau.

Shipments of non-military aircraft fell 10 percent between October and November, and 10.8 percent the month before.

-- Dan Voorhis

KC developer disputes tax bill on property

KANSAS CITY, Mo. --The company that developed Kansas City's new downtown entertainment district finished its first full year of operations in the city with a lawsuit over tax assessments.

Taking advantage of low oil prices, the government is resuming purchases of crude oil for its emergency stockpile.

The Energy Department said Friday that it will seek contracts and make other arrangements for the delivery of nearly 20 million barrels of oil to the government's Strategic Petroleum Reserve in the coming months. The reserve, a system of caverns on the Louisiana-Texas coast, currently holds 702 million barrels of crude.

The department said it will buy 12 million barrels to replace the oil that was sold from the reserve in 2005 to meet shortages after Hurricane Katrina disrupted oil production in the Gulf of Mexico. Another 2.2 million barrels will be bought to make up for oil that didn't go into the reserve last year after Congress banned purchases because of high prices and tight supplies. The ban expired at the end of the year.

The government also is calling for the return of about 5.5 million barrels of oil that were loaned to refiners last year after hurricanes Gustav and Ike disrupted supplies.

These actions, along with purchases previously planned for 2009 of about 25,000 barrels a day, will bring the government reserve to its storage capacity of 727 million barrels by the end of the 2009, the department said in a statement. That's equal to about 70 days of oil imports.

Dow swings up more than 250 points

Wall Street started the new year with a big rally Friday, as investors -- brushing aside a disappointing report on manufacturing -- sent the Dow Jones industrials up more than 250 points and to their first close above 9,000 in two months.

All the major indexes shot up more than 6 percent for the week.

The Institute for Supply Management said its manufacturing activity index fell to the lowest level in 28 years in December. But the market held to its recent pattern of taking bad economic news in stride, a pattern that began to emerge after it touched multiyear lows on Nov. 20.

Investors tend to look anywhere from three to nine months into the future when they make their moves.

Jim Klein walked away this week from 53 years in the ultimate customer service profession: cutting hair. Or so he thinks. "The guy just thinks he's retiring," said Ford Duke, whose flattop has been trimmed weekly by Klein for the past 48 years, an estimated 2,500 haircuts.

"What he doesn't know is I'm going over to his house next week.

"But don't tell anyone."

Klein, 77, called it a career on Wednesday, turning over the barber shop -- officially called Barber Stylist -- at 1410 W. 21st St. to longtime partner Randle Ward.

"How do you do the same thing for 53 years? That's why I'm retiring," Klein said, laughing. "I ask myself the same question.

Shoppers won't be picking up ornate lamps from the Bombay Co. in the coming year. Or investing with Lehman Brothers and Bear Stearns. No flying to Hawaii on Aloha Airlines or buying ultra-cheap tickets on Skybus, either.

All those names vanished this past year, victims of the economy, the financial meltdown or other factors. Experts say 2009 could mark the end of even more well-known brands as the now-yearlong recession puts more struggling companies on life support.

"I think 2009 is going to be a bloodbath," said Scott Testa, a marketing professor at St. Joseph's University in Philadelphia. "I think it's going to be very, very ugly."

For some companies, 2008 was no beauty.

The woes of the nation's retailers began before the year even started. The Bombay Co., known for its home accessories and furnishings, filed for bankruptcy last fall and closed the last of its stores in January because of slow sales -- an ailment that hurt other companies as the economic downturn turned into a recession.

A recession doesn't mean the death of innovation in the consumer tech industry.

Consider 2001.

During that recession, Apple Inc. introduced the iPod, Microsoft Corp. rolled out its original Xbox video game console, broadband household penetration rates in the U.S. more than doubled from 2000, and Google Inc. was becoming an integral part of modern life.

The pace of innovation isn't likely to falter in this recession, either.

John Donovan, chief technology officer at Dallas-based AT&T Inc., said consumer technology changes so fast that any company that tries to pause is likely to be overrun by its competitors.

Digital music downloads reached a milestone in 2008, exceeding 1 billion songs bought online during the year, according to a new report from Nielsen SoundScan, which tracks music sales.

That represents a 27 percent rise over a year ago.

But the popularity of the download is not enough to offset continued declines in CD sales, which still account for the bulk of the music industry's revenue. Disc sales fell nearly 20 percent to 362.6 million, the seventh decline in eight years, according to SoundScan.

Overall album sales -- including CDs and the digital equivalent -- dropped 8.5 percent compared with 2007. Every musical genre reported across-the-board declines in album sales, and holiday sales were off by 19 percent.

In an effort to cope with changing technology and the threat of Internet piracy, the music industry has been exploring new sources of revenue. Royalties from satellite and Internet radio and "360" deals with artists -- in which the record label shares in concert ticket and merchandise sales -- contribute to the labels' bottom line. Video games also generate licensing fees.

KANSAS CITY, Mo. --A Missouri appeals court ruled that a Kansas payday lender can't prevent customers from filing class-action lawsuits over its lending practices.

The Missouri Court of Appeals for the Eastern District in St. Louis upheld a lower court's ruling, saying QC Financial Services Inc.' s practice forcing arbitration and barring customers from participating in class actions was "unconscionable."

Overland Park-based QC Financial is a subsidiary of QC Holdings Inc. and does business in Missouri as Quik Cash.

The case was filed in 2007 by DeQuae Woods of Florissant, Mo., who claims the company violated state payday lending laws by charging her $1,800 interest on an initial loan of $450.

The company is considering an appeal.

Wichita rides in the last car of the economic roller coaster, feeling the head-snapping ups and downs later than those up front.

There's no question that Wichita will share in the deepening national and international pain in 2009, say economists.

The only question is how much.

The national outlook, said Donna Ginther, an economist at the University of Kansas, isn't pretty.

"In one word: grim," she said.

The last trading day of 2008 on Wall Street provided a merciful end to an abysmal year -- the worst since the Great Depression, wiping out $6.9 trillion in stock market wealth.

Six years of stock gains disappeared as the economy crumbled and markets crashed around the globe, shaking the confidence of professional and individual investors alike.

But the year's chaos went far beyond the stock market. Credit markets that drive lending became paralyzed, plunging the country further into recession and touching off an unprecedented rush for the safety of Treasury bills, notes and bonds.

Commodities markets, usually ignored by most investors, soared on speculative buying and then collapsed when it became clear that the world economy was in trouble and that record high prices -- including oil's peak above $147 a barrel -- were unjustified.

"It was a feeling of flailing," said Jerry Webman, chief economist at Oppenheimer Funds Inc. "People couldn't get a grasp because there were not obvious historical precedents."

David Reece has opened San Tatsu Ryu Jiu Jitsu at 236 S. Maize Road. The phone number is 316-644-9606.

Bob Arnold has opened Hardware Pro at 125 S. West St., Suite 113. The phone number is 316-558-3332

Charity

Fidelity Bank of Wichita donated $29,250 to the Kansas Food Bank. The donation is part of Fidelity Bank's Holidelity Days promotion. For every new free checking account opened at Fidelity Bank between Nov. 28 and Dec. 21, a $25 donation was made to the Kansas Food Bank. Fidelity Bank is the second-largest locally owned financial institution in Wichita and has 20 retail locations in the Wichita area.

Auto Craft Collision Repair donated a car to Catholic Charities Harbor House, which gave it to one of its clients. Auto Craft has four locations in Wichita. The Steve Pickard Agency will provide insurance coverage on the vehicle until May 30.

Oil prices jumped 14 percent on New Year's Eve, capping a year that saw prices soar to unprecedented heights only to give up four years of gains in just five months.

Energy prices began to collapse in July as the world's biggest economies began to falter.

Gasoline prices are less than half of their above-$4 summer peaks, giving consumers some relief, but at the cost of millions of jobs and industrywide cutbacks. Not even gas at $1.35 per gallon in some parts of the country has been enough to spur demand as Americans ride out what could become the worst economic downturn since World War II.

True to a year that has been volatile from the start, crude prices spiked on the final day of 2008, although nowhere close to wiping away the most severe price declines since crude started trading on the New York Mercantile Exchange in 1983.

Light, sweet crude for February delivery rose $5.57 to settle at $44.60 a barrel on Nymex with trading volumes low.

It's a point many Wichita Realtors hammer home as 2008 winds down: Wichita's housing market is in better shape than many nationally.

That claim got another boost Tuesday with the third-quarter release of the Standard & Poor's/Case-Shiller Home Price Indices, which indicate that housing prices haven't bottomed out in many large metropolitan areas.

While Wichita home prices -- driven by upscale homes -- are appreciating, prices in 20 higher-cost metro areas surveyed by Case-Shiller continue to plummet, down 18 percent from the third quarter of 2007.

Meanwhile, Wichita home prices are appreciating over the same period, anywhere from 0.8 percent, according to the U.S. Office of Federal Housing Enterprise Oversight, to 5.5 percent, according to the National Association of Realtors.

"What shows up in the 20 metro areas we cover is that the areas with the biggest price run-ups are seeing the biggest price falloffs now," said David Blitzer, chairman of the index committee at Standard & Poor's.

Consumer confidence hit an all-time low in December -- dropping further in the face of rising layoffs -- in yet another sign that consumer spending is unlikely to pull the U.S. out of a yearlong recession any time soon.

Consumers have been nervous about spending for months -- putting off big-ticket purchases, forgoing new clothes and choosing store brands at the grocery store -- all of which may make this the worst holiday season for retailers in decades.

The Consumer Confidence Index measured by the Conference Board, a private research group, fell to 38 in December from a revised 44.7 in November. That is its lowest point since the group began compiling the index in 1967, and below the previous low of 38.8 in October.

Economists surveyed by Thomson Reuters had expected the index to rise incrementally to 45.

"Deepening job insecurity and falling asset prices are outweighing any optimism consumers may have derived from falling gas prices," said Dana Saporta, U.S. economist at investment bank Dresdner Kleinwort.