Items in the News
I realize that these are trying times for all of city staff. No one likes to lose income, but I guess I feel like I need to keep harping on what we have, and not what we don't have. A number of folks have asked me to try and put more positive news in the blog. I think the positive story is that even with the proposed reductions in salary, we are still in far better shape than the typical San Joaquin County resident.
For example, here is a link to a story in today's Stockton Record (click here) about the county's poverty rate, which has gone up markedly in the past year. Nearly one in four children in our county lives in a household with an income below the poverty line (22,000 per year). In another article (click here), UOP's Business Forecasting Center notes that domestic output in San Joaquin actually dropped last year. The article notes:
The Stockton metro area, essentially San Joaquin County, saw its constant dollar GDP fall 0.3 percent in 2008 to just under $16 billion, ranking it 264th in total economic growth.
And the area's long economic slide deepened this year, said Jeff Michael, director of the Business Forecasting Center at University of the Pacific.
"When you look at this number next year, in '08 to '09, Stockton ... will be more negative," he said Monday.
"What makes it a little bit painful for this area is we're coming off a couple of years of subpar growth in '06 and '07."
The article further reinforces why we shouldn't even considering borrowing funds to plug our budget deficit for this year. We are in the middle of a very deep recession further exacerbated by the fact that we are in the center of the mortgage meltdown. We rode the top of the crest during the housing bubble and we are now drowning in debt with the rest of the Central Valley.
The economic trends are certainly not pointing upward, and our hope that property tax and sales tax remain flat is best case and not near the worse case scenario. An article from yesterday discusses the current state of property tax collections in Calaveras County (click here). It describes the world of "negative supplementals" that we've been warning our employees about.
...Calaveras County since August has been sending out more in refunds than it is receiving in additional taxes for properties that get supplemental assessments midyear due to sales or new construction.
Supplemental assessments are in addition to regular property tax bills and are a way to either bill for the additional taxes or send a refund for the part of a year that a property is under new ownership or has newly completed construction. The supplemental is no longer necessary in subsequent years once a new base value is set for a property.
Acting Calaveras County Assessor Leslie Davis says that the negative revenue from supplemental assessments is an ominous sign that a significant drop in the county's property assessment roll and property tax revenue may be ahead.
While we've got a decent amount of new construction occurring in Manteca, we also have a lot of homes selling at less than their assessed value. This is why we've projected no increase in net property tax collections during the 2009-2010 budget year.
The Bulletin has a good article today (click here) as well about the need to be prudent. How can we possibly expect to borrow to plug our structural budget deficit. There is no way we can take on additional debt when all the economic forecasts clearly demonstrate that we won't have the money to pay back the funds in the future. I have no interest in behaving like the State of California and putting off the inevitable--and then paying a greater price for delaying the pain.
For example, here is a link to a story in today's Stockton Record (click here) about the county's poverty rate, which has gone up markedly in the past year. Nearly one in four children in our county lives in a household with an income below the poverty line (22,000 per year). In another article (click here), UOP's Business Forecasting Center notes that domestic output in San Joaquin actually dropped last year. The article notes:
The Stockton metro area, essentially San Joaquin County, saw its constant dollar GDP fall 0.3 percent in 2008 to just under $16 billion, ranking it 264th in total economic growth.
And the area's long economic slide deepened this year, said Jeff Michael, director of the Business Forecasting Center at University of the Pacific.
"When you look at this number next year, in '08 to '09, Stockton ... will be more negative," he said Monday.
"What makes it a little bit painful for this area is we're coming off a couple of years of subpar growth in '06 and '07."
The article further reinforces why we shouldn't even considering borrowing funds to plug our budget deficit for this year. We are in the middle of a very deep recession further exacerbated by the fact that we are in the center of the mortgage meltdown. We rode the top of the crest during the housing bubble and we are now drowning in debt with the rest of the Central Valley.
The economic trends are certainly not pointing upward, and our hope that property tax and sales tax remain flat is best case and not near the worse case scenario. An article from yesterday discusses the current state of property tax collections in Calaveras County (click here). It describes the world of "negative supplementals" that we've been warning our employees about.
...Calaveras County since August has been sending out more in refunds than it is receiving in additional taxes for properties that get supplemental assessments midyear due to sales or new construction.
Supplemental assessments are in addition to regular property tax bills and are a way to either bill for the additional taxes or send a refund for the part of a year that a property is under new ownership or has newly completed construction. The supplemental is no longer necessary in subsequent years once a new base value is set for a property.
Acting Calaveras County Assessor Leslie Davis says that the negative revenue from supplemental assessments is an ominous sign that a significant drop in the county's property assessment roll and property tax revenue may be ahead.
While we've got a decent amount of new construction occurring in Manteca, we also have a lot of homes selling at less than their assessed value. This is why we've projected no increase in net property tax collections during the 2009-2010 budget year.
The Bulletin has a good article today (click here) as well about the need to be prudent. How can we possibly expect to borrow to plug our structural budget deficit. There is no way we can take on additional debt when all the economic forecasts clearly demonstrate that we won't have the money to pay back the funds in the future. I have no interest in behaving like the State of California and putting off the inevitable--and then paying a greater price for delaying the pain.
posted by City Manager @ 5:32 AM
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