Monday, April 20, 2009

Amid economic storms, some daylight?

We just reviewed our revenue for the first quarter of 2009, and the tough economy continues to have a huge impact on our revenues (which we had already projected very conservatively in our 2009 budget). We will have to make adjustments--and the earlier we make them, the better.

No surprise, revenues associated with the housing market are the hardest hit. The real estate transfer tax (as it sounds, paid whenever real estate is sold), for example, is projected to bring in $5.3 million in 2009. That's off from $8.4 million in 2008, $11.5 million in 2007, $13 million in 2006, and a peak of $14.4 million in 2005. That's right, the revenue amount stands at just over one-third of where it stood only four years ago--a precipitous fall. (FYI -- our transfer tax rate is lower than most counties).

Still, our initial 2009 numbers also give some reason for hope that the worst may be behind us, and things might get better by the Fall. In April, sales tax was only off of April 2008 by 1.1% ($51,000). This substantially exceeded our projected decrease of 4%, and marked the best year-to-year sales tax results we've seen so far this year, by far.

While we are budgeting assuming the worst, let's hope these sales tax numbers continue in this direction. But more than just hoping, we'll soon be rolling out a series of steps to encourage as much economic activity as possible.

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