Wednesday, September 05, 2007

Housing Slump Strains Budgets Of States, Cities

Time to cut back or to issue lots more bonds. It should be no surprise that they have planned their budget as if the good times never end. Lets hope China & Co will finance this forward looking budget planning... Havn´t heard the word "contained" for a long time..... I find it hard to believe that there will be any surpluses down the road. Especially if the economy will be in a recession ( I see no way the US can avoid it) . Click on the headline to read the entire story.

Zeit den Gürtel enger zu schnallen oder aber haufenweise neue Anleihen zu begeben. Es ist wohl überflüssig zu erwähnen das die Haushalte größtenteils so geplant waren als wenn die Blase in alle Ewigkeit weiter existieren würde. Bleibt zu hoffen das China & Co diese "Weitsicht" weiter finanzieren.....Habe zudem das Wort "contained" lange nicht mehr von Expertenseite vernommen. Das war noch vor 6-8 Wochen in aller Munde und wurde bei jeder Gelegenheit von allen Notenbänkern und Verantwortlichen geradezu penetrant in jedes Mirko diktiert . Das mußte einfach raus! ;-)..... Ich finde es zudem extrem unwahrscheinlich das in absehbarer Zeit irgendwelche Überschüsse ausgewiesen werden. Ganz besonders dann nicht wenn wie nicht mehr zu verhindern ie USA in die Rezession abgleiten. Klickt bitte auf die Überschrift um den kompletten Bericht zu lesen.

Tremors from the housing market's slump are straining the budgets of state and local governments from coast to coast, sending officials scrambling to plug gaps.

Rising defaults on subprime home loans are boosting the inventory of unsold homes and driving sale prices lower. That's cutting into housing-related revenues from building-permit fees, taxes on contracting and recording property transfers, and even sales taxes.

As a result, legislators in Florida, which was at the forefront of the housing boom, plan a special session this month to consider deep budget cuts to offset a projected $1.5 billion funding gap. California forecasts a shortfall of at least $5 billion in next year's budget. And Chicago faces a $217 million gap in its $5.6 billion budget for 2008.

Their budget problems could worsen when property-tax assessments catch up with the rapid decline in housing prices over the past year or so, something that hasn't yet happened in most parts of the country

Even though some data show home prices are falling sharply, homeowners in most parts of the nation have yet to see their property taxes decline. In states like California and Indiana, some counties already are seeing a record number of homeowners protesting their assessments. Residents are upset that their property taxes are still rising as market prices decline.

> This forecast reminds me of this famous chart "The Triumph Of Hope Over Experience...." or maybe they have hired some other experts like these Realtor-watchers ......

> Diese Prognose erinner mich doch sehr an diesen berüchtigten Chart "The Triumph Of Hope Over Experience...." oder aber die haben für ihre Planung diese Experten konsultiert......

Lower assessments would cut into property-tax receipts, a crucial source of funding for local governments but which rarely account for more than 10% of state-level tax collections

Reduced assessments are already causing budget problems in some areas. In Virginia's Fairfax County, where almost 60% of county general-fund revenue comes from real-estate taxes

Some of the states facing the largest shortfalls are those that had the biggest housing booms over the past few years. In Florida, the $1.5 billion shortfall -- $400 million for the last fiscal year and $1.1 billion for this year -- is nearly all due to the weak housing market

Sales-tax revenues have also declined, a side effect of the housing slump that has blindsided many states and municipalities. States are collecting less in sales tax -- which can account for as much as 15% to 20% of their total revenue

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Anonymous Anonymous said...

It breaks my heart. Oh well, they can just raise the tax rates. The local gubbermints always get the best of everything. Have you every seen our courthouses, or fire department buildings, or police stations? They make the Taj Majal look like an outhouse. They have lots of money for corruption too. Everyone thinks that Russia copied the US, no, the US copied Russia.

10:16 AM  
Blogger jmf said...

Moin Edgar,

sounds depressing...

I´m not sure what our German politicians would have done if they had surpluses.

I know a few examples where they have spend like mad (10 years ago) for luxury items like marble sidewalks (no kidding!) etc.

Too bad that their biggest taxpayer ( don´t remember the company) went bust or just "optimised" their taxes

So i fear that this "next election" mentality is widespread around the globe.


3:53 AM  

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