It's the dot-com meltdown squared for places that had housing loot rolling in, and oh-so-wisely spent it. Now the tax revenues are falling off the cliff, and the cities and states are looking around wondering where all the free money went.
We'll see bankrupt banks, we'll see bankrupt builders and we'll see bankrupt lenders. But brace yourselves for bankrupt cities and states. You'll see services like police, fire, education, and infrastructure cut to the bone, and you'll see tax increases on everything - cigarettes, cars, houses, incomes and more.
Bubbles suck. They make people do stupid things, and they make government, who is run by really dumb people, do REALLY dumb things.
Here's the view from housing-crash-central Phoenix Arizona. Too bad they didn't read HP. And get used to potholes and dumb kids as spending gets slashed.
Maricopa County looks to cut spending
Facing a nasty revenue slump, the Maricopa County Board of Supervisors is expected to approve a plan today that would cut spending and squeeze more bang out of its $2.2 billion budget.
The spending plan is in reaction to a dark fiscal outlook that could darken considerably more over the next several months and even years. Today's plan is likely the first step to avoid multimillion-dollar budget shortfalls, layoffs and delays of high-profile projects, finance officials said.
"We budgeted with a worst-case scenario in mind," said Supervisor Andy Kunasek. "By the look of things, it appears we weren't as pessimistic as we should have been and revenue are much worse than expected. But we'll make the cuts we have to."
November 20, 2007
Get ready for the next big trend - huge budget shortfalls for housing bubble cities and states
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Another big trend coming to a neighborhood near you:
Cleveland's mortgage meltdown has sparked a crime wave in the nation's hardest hit area for troubled homeowners.
CLEVELAND (CNN) -- When homeowners moved away after a wave of foreclosures in Cleveland's working-class neighborhood of Slavic Village, crime took off.
The first thing that happened after owners moved out of foreclosed homes in Slavic Village was that squatters and looters moved in, according to Mark Wiseman, director of the Cuyahoga County Foreclosure Prevention Program. "In the inner city, it takes about 72 hours for a house to be looted after it is vacant," he said.
Long-time Slavic Village resident Joe Krasucki had celebrated his 78th birthday last spring, when, late in the evening, he heard some noise and went out for a look. Reports said he'd had run-ins with local gangs before. A neighbor's abandoned house had already been stripped of its aluminum siding and, according to Rokakis, Krasucki thought the looters were back, working on his home. Outside, he was attacked and badly beaten. He died some days later.
After stripping the siding, looters don't take long to make a vacant property nearly worthless.
"If someone takes the doors, moldings, appliances, it's bad enough," said Wiseman. "But once they pull the piping out, it's all over; they do it with a sledge hammer."
Talking about increase in taxes, Washington DC made the top 10 list of worst places to open a business. You should have your head checked if you choose to pay this absurd amount of taxes:
Washington D.C.
The nation's capital bottoms the Small Business & Entrepreneurship Council's list again, largely because of its steep corporate and personal income taxes, which are second and sixth in the country, respectively. Plus, the D.C. crime rate is the highest in the country, though that is generally restricted to the Southeast quadrant.
Taxes
Pers. income tax rate: 8.5%
Corp. income tax rate: 9.975%
Property tax: 3.69%
Energy
Elect. Utilities Cost: 1.29
Labor
Minimum wage: $7.00
I've been telling people for a year the next shoes to drop are government budgets and auto sales. These are nearly always harbingers of a recession, and the news on both fronts is getting tough to ignore.
If municipalities had just treated all the RE transfer tax revenue and the last few years of inflated RE prices as a windfall and put it in a rainy day fund then this would not be an issue. Unfortunately they treated it all as the new baseline for revenue and crafted budgets to spend every dime. Now that its going down hard they are still holding on to it as if it was baseline and will just up the rates to compensate. What they need to do is pass laws that put them in front of the banks for the tax liens against RE so they can insure they get paid first in any foreclosure proceeding and they need to levy special fees against the holders of REO (i.e. the banks) for the extra costs incurred in terms of gov't services consumed to deal with REO (see e.g. slavic village of Cleveland story/post). Hopefully they had the developers pay for all the infrastructure necessary to support all the sprawl the vomited during the bubble. If they did not, then no time like the present before the HBs go bankrupt, again making sure they are first in line to get the "debt" paid.
But I do not think they are that smart and in the end they will just jack up property, income and sales taxes and make the fiscally prudent citizenry pay for the fiscally incompetent, which includes the gov't.
The laziest and stupidest people are in government, especially local government. I will rejoice when the are laid-off/fired. There is no call that I know of for stupidity in the private sector where you need to actually do something profitable (most of the time)whih rules public servants out completely.
Die U Pigs. You've EARNED it.
I still have faith in the government to collect, especially from "rich people". Let's say your $750,000 townhouse drops to $500,000. Do you think you're going to pay one dime less in property tax? Not a chance. They'll lower your assessment and at the same time raise the tax rate per $1,000 of assessed value. As they say, "you can't fight city hall."
"By the look of things, it appears we weren't as pessimistic as we should have been"
NOW THATS THE TRUTH!
You mean everything isn't candycanes and rainbows anymore?
I live in the D.C. Metropolitan area. I'm already used to potholes and dumb kids.
Sounds like Detroit all over.
In the case of Detroit, the decline in the auto industry caused a cascade effect (with nearly 1/2 of all jobs related to the auto industry, when it suffers everyone suffers)
The loss of jobs caused a loss of tax revenue, which caused a drop in city services, which caused more companies to leave the city.
It’s a vicious cycle whose only solution is the jobs we’ve shipped off to China, Mexico and India.
Right now, $100k will buy you entire streets worth of houses (if you don’t mind the missing pipes, wiring, floors, stairs,….
I have a place to start cutting - in the gold plated and bloated pensions and benefits of city/county workers...
Marky Mark
If there are no police, can I take things from my neighbors?
When will people finally realize that the government is here to spend as much of your money as possible? They don't care how much of it is wasted because it's not their money. It's yours. If you were guaranteed to have $100 million delivered to your home each year, you would spend recklessly too.
Keith-
it sounds like you are talking about florida (not arizona) Can you talk more about the state which looks like a giant penis and is run by the most corrupt and retarded backwards people in the country?
2.2 Billion?!?! I live here and I would like to know where the hell all that money is going. Social programs for illegals?
I have an easy solution. take away the boomers pensions and access to medical care. That should easily solve all budget problems.
Plus once they've died off, the rest of us won't have to listen to their filty hippie shit about how morally superiour they are compared to the rest of us.
You need to see San Diego . . .our Zurich friends said, "the streets and sidewalks look worse than Warsaw!". . .SD has been broke for years because of pension problems and corruption (most of the previous administration is in jail or pending). . .but the new housing meltdown, and slowing sales tax revenue will make this place look like Tijuana North. . .actually, I spend time in TJ, and it is looking better all the time. . .Cabo was a construction boom, as Mexico has oil, and a decent budget for a change. . .Pesos anyone???
"you'll see tax increases on everything - cigarettes, cars, houses, incomes and more"
Seeing this in the Windy City right now. From the Chicago Tribune on November 13, "The package, which takes effect Jan. 1, includes the biggest property tax hike of Daley's 18-year tenure as well as higher taxes on beer, wine and liquor, a new 5-cent tax on bottled water and increased water and sewer fees... The most controversial item was the $86 million property tax increase, which passed on a vote of 29-21."
Watch the states and munis use the cops to boost their revenues. In Alabama the govenor is having a second "surge" in traffic stops. they call it "Taking back our roads" but those of us on the other end of the ticket book see things differently.
This will accellerate the revolt and cops will be seen as being predators instead of public servants who are there to "protect and serve".
Watch the states and munis use the cops to boost their revenues. In Alabama the govenor is having a second "surge" in traffic stops. they call it "Taking back our roads" but those of us on the other end of the ticket book see things differently.
This will accellerate the revolt and cops will be seen as being predators instead of public servants who are there to "protect and serve".
I've been singing the same old song in my local government agency for three years. The really smart people running this place are still hiring and spending like there's no tomorrow. I guess maybe there isn't. Anyway, off to interview for a new $50,000 position I don't want or need. Must fill vacancies.
Any idea how states will deal with reduced revenues?
The Washington State Supreme Court just rolled back the votor-approved initiative to limit annual property tax increases to 1% per year. (It was 6%.)
Coming soon, to a state near you!
Fight back! The next time you get a statement, try challenging the property tax assessment on the value of your house. Approx. 30% of the people who do so, are successful.
Keith, perhaps you can make a thread on this subject some time.
-Mammoth
westwest888 said...
I still have faith in the government to collect, especially from "rich people". Let's say your $750,000 townhouse drops to $500,000. Do you think you're going to pay one dime less in property tax? Not a chance. They'll lower your assessment and at the same time raise the tax rate per $1,000 of assessed value. As they say, "you can't fight city hall."
----------------------------
Here in Taxsylvania, the school property tax is the killer, and the powers that be (teacher's unions and administrators) live "high on the hog," spending to the last penny.
Land/home values here did not go up much (excluding the last 5 years) and have NEVER gone down before, so the powers that be, through their tightly controlled, spineless, clueless school boards, spent the new (within 5 years) revenue increases like there's no tomorrow and the tax money grows on trees.
Whenever they needed (translation: wanted) more money they simply brought in the county assessors for an "equalization assessment." They jacked everybody’s assessments up, and then cut the mileage (rate per thousand, 25 mil limit by law here in Taxsylvania) back to within 10% of the current year and started all over until the next "needed" assessment.
So if your house was "worth" $100,000 at 25mils(in other words, they topped out their mileage and couldn't go any higher), it’s now "worth" $200,000 at 13 mils (remember that 10% requirement, by law)
According to our local assessor, who's been on the job for as long as I can remember, combined assessments for our school district are going down for the first time in history, and unless the economy does a miraculous about face, are going to fall even more next year. Of course the powers that be will simply raise the
mileage to compensate for projected expenses AND give them their so "gotten used to" and "necessary" increased revenue.
I am very curious to see what happens when the 25-mil limit is reached again, and there's NO MORE MONEY, because property values are still dropping. The school board turned down a legal chance to switch to income tax a few years ago. However, seeing that the one's who control the school board (teacher's union & administrators) would be paying the most taxes under that proposal, it's no wonder that it failed.
God, I live for the day that the "tax and spenders" have to actually ASK for money from the suffering taxpayers and dare to drag out the old established lie: "After all, you want good education, DON"T YOU?"
God, this is gonna get ugly!
>> If there are no police, can I take things from my neighbors?
That wouldn't be very neighborly, now would it?
Ah, F'it! Pretty soon, it's going to be every man for himself (and his family). And you'll be forced to take things from your neighbor AFTER you've taken their life...
Here in Loudoun County, VA school board wants to float 1.2 billion in construction bonds. My little house has lost 100K in "value" in the last 18 months. My property taxes are 3.5 times what they were when I moved in 11 years ago. Think they are going down? These people spent money like jet fuel when times were good and fully expect to do so despite the fact that times are hard.
"What goes around, comes around".
Yup, all of you nitwits whom voted for Shrub + Shooter not one but twice are now getting bitten by fleas in your bed. But hey, you made your bed and now you've got to sleep in it.
Is that STUPID enough for you all, damn nitwits ???
>> This will accelerate the revolt and cops will be seen as being predators instead of public servants who are there to "protect and serve".
It will be known as "Collect & Serve"!
"Get ready for dumb kids"
Dude, Arizona is already full of dumb kids! While visiting this past weekend we couldn't believe how kids in restaurants act like animals and lazy Scottsdale parents just sit back and allow it.
This would explain the explosion in photo radar, it was bad when I left but upon visiting I saw them almost on every single corner and block along with newly reduced speed limits.
I guess since the property taxes are drying up, Scottsdale is out to extort more money in less-than-honest ways.
Not only is their tax proceeds going to be down, but they are losing their investments in SIV's and other instruments of financial wizardry.
http://tinyurl.com/yr8vzg
http://bloomberg.com/apps/news?pid=20601170&refer=home&sid=aYE0AghQ5IUA
Keith, that link that I just posted is a must-read. Some states/counties are going to be screwed:
"Montana entrusted $465 million, or 19 percent of its $2.5 billion investment pool, to SIVs."
Look at any government budget, and be shocked about how they spend your money. Isn't kind of naive to think that emergencey services will be cut when you consider the needless programs, fraud, and waste that will have to be cut first?
Of course, I might turn out to be the naive one when our entire society breaks down Mad Max style.
and our newest enterant to the no fly list badge of courage is nov 20 1:03 pm and the remnants left on that computer
anonymous said "Plus once they've died off, the rest of us won't have to listen to their filty hippie shit about how morally superiour they are compared to the rest of us."
You sound pretty morally superior yourself. What name do you prefer, pot or kettle?
And I'm assuming you're younger? So you're a child or grandchild of a boomer? Killing off your ancestors doesn't exactly make you the cream of humanity.
And when you're old and younger people don't want to listen to your morally superior filth, they'll just starve you out too, following the example you set with your own forefathers.
anonymous said ">> If there are no police, can I take things from my neighbors?
That wouldn't be very neighborly, now would it?
Ah, F'it! Pretty soon, it's going to be every man for himself (and his family). And you'll be forced to take things from your neighbor AFTER you've taken their life..."
And then ...
Another neighbor will come along and take it from you, and do you one up by raping your wife or daughter before he kills her. Brutality breeds more brutality.
Is that really the macho he-man lowest-common-denominator society we want to create? I swear, the average intelligence of the American population is more to be feared than anything else in this world.
"Do you think you're going to pay one dime less in property tax? Not a chance. They'll lower your assessment and at the same time raise the tax rate per $1,000 of assessed value."
I wouldn't say this; the housing bubble meant that taxes went up w/o a vote so politicians could claim that they were against taxes even though taxes were going up. Nobody complained because they wanted to keep their precious house.
If assessments go down, politicians will actually have to make a vote and stand behind the consequences at election time.
i.e. Rising assessents were a "political free lunch," as the say.
Anytime the government is "short" of money, they threaten to cut off emergency and educational funds first to scare the sheeple into accepting an increase in taxes. That's government 101 in its finest form. Meanwhile, half of city hall comes in at 10AM and goes home at 3PM with a 2 hour lunch in between. Then they get to retire at 55 with a lifetime guaranteed pension and healthcare.
Almost all big cities are run by Democrats. And all big cities are corrupt. Yet you idiots keep voting for them time after time. You get what you deserve.
>> Is that really the macho he-man lowest-common-denominator society we want to create?
Hell no, I don't want to live in anarchy, or some Mad Max scenario. But get your head out of your ass - that's exactly what's being foisted upon us. You and I, the average working Joe American, has NO say in the society that gets created. A global Hell is being created for us, and we're at the edge of a financial/societal abyss from which there will be no return. Sorry to be so damn negative...
If I end up as retarded as those who came before me then I expect next generation to take me out as a matter of principle. However so far I've been craftier than both.
Is that really the macho he-man lowest-common-denominator society we want to create? I swear, the average intelligence of the American population is more to be feared than anything else in this world.
Thank Bob there's still some sane Americans out there like levelheaded.
You'd think that in the (hopefully unlikely) event of a crisis situation the smart thing to do would be to form cooperative groups/communities - strength in numbers, working together towards the common goal of survival, keeping the gene pool as wide as possible and all that.
But every time a thread like this gets going, there are ALWAYS people talking about stockpiling weapons and killing off thier neighbours to take what they have, and such. Not so much keeping up with the Joneses then, but murdering them in cold blood, stripping thier corpses of anything of value and leaving them to rot. Or maybe eating them. Nice.
It baffles me that such a god-fearing country is also filled with such violent, non-tolerant people who would quite readily kill thier neighbours for no other reason but to take thier worldly goods. Ever heard of sharing?
Maybe all of the sane people could band together and eliminate the macho he-man types. Or they'll kill each other off and save everyone else the bother. The ones that did manage to survive wouldn't have any women to breed with anyway (having raped and killed them all), so they'd soon enough realise they had nothing of any value left to protect, apart from thier own sorry, lonely, murderous hides.
Talk about social Darwinism.
But Greg Swann said Phoenix was going to be fine!
cops will be seen as being predators instead of public servants who are there to "protect and serve".
Tax collectors with guns...
My god is this what you Ron Paul loons really think? I cannpot believe that crazy fool is getting close to 10% in the polls.This country is more fucked than I ever imagined.
Anon 11:52
Awesome. Few and far between here with your attitude!
I said this months ago when the town in which I live started complaining about money earlier this year, they predicted if they could not get the firefighters to renegotiate a new contract the city would have to file bankrupty because the city couldn't afford to pay exhorbatant payrolls.
I also now predict that everyone keep their hands on their money because all these houses sitting around empty will eventually be turned over to the county and or parishes for non payment of property tax and sold for back taxes, this is the only solution I see for these houses to move off the market, of course after the builders go bankrupt. The banks will just have to call them a loss and I am sure there are plans in the works for that, they will quit paying taxes for bank owned property. The houses will fall into disrepair and then they will be listed by the county as oweing back taxes and then sold. No more problem for county, state and banks. In the inner city they will be called HUD houses and sold for dollars just to get them out of the counties hands. If the houses that are already available and the amount is too much(remember the taxes on alot of the houses are 10's of thousands of dollars a year in california anyway)and if regular people can not secure a loan because others outbid them then the houses will go to speculators who will make a ton of money on the resale of the house. OH what a wicked web we weave when first we practice to deceive. Just a thought.
This would explain the explosion in photo radar, it was bad when I left but upon visiting I saw them almost on every single corner and block along with newly reduced speed limits.
Do like I do and spray your license plates with that special reflective coat that blurs photo radar pictures. Haven't gotten a ticket for years. Gotta know how to play the corrupt system, because we are in a class warfare against this corporate fascist regime.
Of course, I might turn out to be the naive one when our entire society breaks down Mad Max style.
I do look swell in a Mohawk.
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