Saturday, May 30, 2009

Prelude to Panic

That’s the headline from today’s Palm Beach Post: Prelude to panic: Tax rolls plummet.
Surprise, surprise? More antidotal evidence that the recession is indeed the “Great Recession” and local government is out to lunch “with countywide values lower than feared.” Where have they been during the past year while the clock was ticking towards the end of their June 30 fiscal year and the beginning of the new one? Foreclosures and rising unemployment should have spelled out reality. All one needs to do is to drive through many of the neighborhoods in Palm Beach County where “For Sale” signs are interspersed with euphemistic “For Rent” signs.

Here are some bullet points:

* Property Appraiser Gary Nikolits had been expecting “the quickest free fall since the Great Depression” but his estimate of a 12% decline has now been revised to 13.5%

* Taxable countywide property has declined to $138 billion from $159.6 billion last year with 38 cities, towns, and villages having larger percentage declines

* Given the 13.5% decline in values, county administrators proposed a 13.5% tax rate increase (as well as laying off 175 workers, an undisclosed percentage of total employees)!

When times were “good” (fictitiously good, that is), our town in PBC was eager to spend. $Millions went into the ”beautification” of a street which might have been more beautiful if some of the homes were updated, but as the municipality can not just hand out money to homeowners (only the federal government can do that), they constructed little islands in the middle of the road and planted vegetation. Much of this beautification is now gone but the islands remain, constricting traffic and leading to a reduction in the speed limit: so much for handing municipalities the “benefits” of inflation. Now, faced, with deflation, and rising unemployment, no problem, presto, a proposed tax increase.

Prelude to panic, perhaps, but they can’t tax this away from us....