Friday, November 6, 2009

Albemarle County Is Fast Tracking Back To The 20th Century As Deficit Grows

And not in a good way.   Albemarle County faces a budget deficit of $5.7 Million, $1M more than was projected just in October, due to declines in real estate and sales tax revenues.

Albemarle County needs a new way to project future revenue, which takes into account the coming wave of Option ARM resets that will lead to short sales, foreclosures, and further drops in  home property values.  Combined with commercial real estate foreclosures due to lack of commercial tenants and current commercial RE "owners" unable to re-fi due to being underwater, Albemarle County is seting itself up for years of pain.  Toss in shoppers who are keeping their wallets closed?  Ouch.

Get a clue (or 5.7 million), Albemarle County.

From The DP:

Richard Wiggans, the county's finance director, said the county is seeing continued declines in sales and real estate tax revenue....

[O]fficials are considering axing funding for recycling and affordable housing, as well as a program designed to secure conservation easements....

Even if the county raises the real estate tax rate to 77.2 cents per $100 of assessed value, the county might have to practically eliminate any new infrastructure projects for the next five years -- in addition to millions of dollars in budget cuts[....]

The next part of the article would be good for a laugh if it weren't so thoroughly contradicted by local and national projections regarding real estate values.

The proposed 77.2-cent tax rate means the average homeowner would pay the same real estate taxes as this year for the next two years, officials say.  Assuming real estate values begin to pick up, there would be a slight increase in the third and fourth years, maxing out at a three percent increase in real estate taxes five years from now[....]

"Assuming real estate values begin to pick up" = Wishful Thinking, not financial planning.

bolding = ours
Related Reading:
When Will House Prices Regain Their Peaks?  
Commercial Real Estate in Cville Area  
Higher Priced Homes Sell At Snail's Pace  
VHDA Forecast For Area Home Prices

No comments: