Cities, Villages, Towns… You’re In Trouble
By now, everyone knows the economy is in trouble. If most of you are paying attention, you know that where you live is probably going to be in trouble as well. There are many reasons for this, and we might as well look at some of them because this isn’t going to be pretty.
Let’s start with taxes, since everything eventually is going to end up being about money. Most specifically, property taxes. Across the country, property taxes are going up, yet it’s not going to help most municipalities. Why, you ask? Because in those states where there has been a lot of foreclosures, or any other housing problems, most of those properties are either already being reassessed or those reassessments are coming, and those properties are going to be worth less than they are now.
How do I know this? Because almost every state in this country are at a negative margin as it pertains to their housing industry. I live in New York, most specifically the Syracuse area, and it’s the 2nd best housing industry in the country because it’s housing market is flat… as in 0%. If the second best is at 9%, that doesn’t bode well for almost anyone else. So, as property values drop, community income drops, and the only thing they can do is raise taxes just to stay even. Of course, it doesn’t help the homeowner, so the possibilities of defaulting because they can’t keep up with tax payments rises. That won’t help the cities either, especially since the housing market is less than flat; this means cities are in trouble.
Let’s more to money coming from the state. Most states are cutting funding to counties across the country, which means cities are getting less money. Where I live, the county executive decided to do a very remarkable thing and allow all country tax money to go directly to the major city, cutting out all the suburbs. Sure, the city needs the money the most, but all the communities need the money as well. So, property taxes go up and the county tax rates go up, and no one’s happy because the city still needs more money than it’s getting.
But the states don’t really have the money either. There are more distressed properties than the states or counties can deal with, and those distressed properties collect little or no taxes. The federal government is reducing the amount of money most states are getting because of the deficit we’re in, plus all the other things that have to be funded (health care, war, disasters, etc).
Oh yeah; unemployment is still pretty bad, still sitting at 9.6%, and the president of some financial institution (can’t remember which one) stated today on CNBC that he doesn’t see the unemployment rate dropping until next summer at the earliest; and that’s an optimistic view, and last month the country shed around 97,000 jobs. I’ve asked before in this space where are the jobs, and recently CEOs said they have no plans of creating new jobs because they don’t believe the economy is ever going back to what it was. No jobs, no collecting taxes of any kind, and therefore no funds for the community.
I’m still thinking it’s time for some drastic measures to take place across this country to at least try to get things moving in the right direction. If you remember, I wrote my plan for stimulating the economy, and whether one fully agrees with it or not, at least it could move things in a positive direction, because what’s happening now isn’t working.
I still have hopes for the economy to move in a really positive direction, instead of this slow crawl we’re all seeing, but I think we, the people, need something to believe in other than the stock market. What say you?