The number of homes still heading into foreclosure is stunning,
and with the property tax base in a continued state of downward
flux, municipal leaders must make it a priority to plan ahead when
budgeting while constantly examining potential cuts and cost-saving
strategies such as intergovernmental consolidation.
Market due to affect tax bills
The number of homes still heading into foreclosure is stunning, and with the property tax base in a continued state of downward flux, municipal leaders must make it a priority to plan ahead when budgeting while constantly examining potential cuts and cost-saving strategies such as intergovernmental consolidation.
Never before in recent history has the economy’s chaotic stumble marked such a vast dent in local governments’ abilities to maintain public service levels, and it’s time for local leaders to reverse their reactionary ways and start treating taxpayer dollars just as a business would handle difficult circumstances, through visionary adaptation.
While local politicians throughout the country and here in Hollister seek risky, unproven strategies to combat the housing market’s ultra-cyclical downfall, leaders here, instead, should focus on anticipating potential impacts of this current economy two, five, 10 years down the road instead staying on the same path and reacting to problems that could have been prevented with better planning. Local governments, like businesses do, should maintain formal, long-term outlooks with flexibility for change when the economic forecast shifts.
Supervisors set to broach longer outlook
San Benito County has taken a first step, as supervisors are set to begin dialogue on establishing policies for longer-term budget planning, a goal this editorial board has continually stated must become reality, and soon. We encourage citizens to get involved in that process and push leaders to follow through on such ideas that could lead to bold, positive, cost-saving change.
The uncertain impact of San Benito County’s relatively disastrous housing market – we’re ranked fifth-worst in a state ranked second-worst in the country – should prompt, at the least, an examination of its potential effect on the property tax base, and on many families’ tax bills. It should involve, in particular, an open conversation with the assessor to gather what qualitative and quantitative data could help muster a more refined sense of the county’s financial future.
The numbers tell the story
Consider the drastic devaluation of many San Benito County properties – more than 500 homes in the second quarter of 2008 were in the foreclosure process and many properties are selling for half of what they went for just a few years back. The tidal wave has only grown. Values, astonishingly, continue dropping. More properties than ever are bank owned.
Add to the equation that San Benito County gets back a paltry 11 cents on the dollar in property tax revenues, while employees’ health care and other costs continue skyrocketing – and to go with the benefits, the county’s unions and management groups recently negotiated for pay increases in dire, uncertain economic times. Over at the city, meanwhile, where voters recently approved a sales-tax hike to help pump up the barebones service levels, especially in public safety departments, the council is set to award pay increases to existing employees that could amount, by City Manager Clint Quliter’s estimation, to about $400,000 in the 2008-09 fiscal year. That amount, to be pulled from the general fund reserve, comes to 29 percent of the dollars from Measure T – $1.4 million – slated for new services.
Questions remain unanswered
Consider it all, and local leaders need to ask the question: Where will we be in five years or 10 years? Eventually, local governments and other public districts will, like it or not, adapt by necessity. As the prime example, we believe the two law enforcement agencies in San Benito County should, and eventually will, merge into one department.
Where is the discussion on the housing market’s short- and long-term impact on the county’s tax base? Who’s willing to take the lead, and who’s prepared to push for the type of monumental change necessary to brace this county for long-term progress?
