Saturday, March 22, 2008
As the housing bust expands, it's effects are spilling over into other aspects of the economy. On the streets you can see the signs every where. Furniture stores closing, half empty shopping malls and fewer cars driving around with dealer plates. Do you remember that last car you saw with dealer plates? Now the governments are starting to feel the pinch. The property tax collected is starting to drop. Some of that is people just not paying it but now the counties are starting to drop the assessments as the property values drop. The property tax is not the only source of income for the government that has fallen. As the economy has worsened consumers are spending less. This has reduced the sales tax revenue collected. Combine all this and the government is facing the perfect storm. They have escalating costs due to inflation, higher energy (gas/fuel) costs and a real need to staff up in some areas but they have a huge reduction in revenue (14 to 16 billion short last I read). I'm sure you've heard by now that they are cutting back, laying off employees and raising "fees" (that's politcal talk for taxes).
What's the point of this post? I want to see if any readers are affected by this. Do you know anyone that has been affected. On Friday night we went out for our weekly sushi dinner. 2 couples sat at the table next to ours and the conversation was all about their fear of an impending layoff. The two gals were both new school teachers and both seemed sure they were going to get the pink slip any day. I have several friends in construction and even have one mortgage broker buddy. As you can imagine they aren't very optimistic at the moment.