Property taxes, a large part of what drives county funding, might shrink due to housing slump, further reducing funding for the Parkway, which is already way under funded.
Housing slump will hit local governments in the wallet
By Jim Wasserman - Bee Staff WriterPublished 12:00 am PST Thursday, November 23, 2006
An unrelenting housing slump that has driven down the region's home values and sent sales into a tailspin is expected to strike local governments next year, curbing the record growth rates in tax collections that pushed some budgets into the black for the first time in years.
From downtown Sacramento to rural Amador County, financial officials and county assessors say they're watching a gathering storm that's initially expected to blow into their budgets during the 2007-2008 fiscal year beginning July 1.
They blame the slowdown on property tax receipts that aren't growing as quickly and, in some cases, on lower property tax bills for some homeowners who purchased within the past year.
No one knows how much the slowdown will cost local governments, and the decline in growth comes after years of climbing budgets propelled by a private- sector housing boom. But the slowdown clearly has financial experts worried.
In Sacramento County, for example, Assessor Kenneth Stieger expects that the 15 percent jump in taxable property values that fueled this fiscal year's budget could drop to as low as 6 percent growth in next year's budget. Such a decline could cut revenue projections for the general fund by as much as $18 million. Sacramento County's budget is about $2.2 billion.
"We will have perhaps the largest growth drop year to year we've seen in modern times," said Geoff Davey, the county's chief financial officer. "Looking at multiyear growth up and down, we couldn't find a single year where the rate of growth dropped by more than 4 percent over the last 20 years."
That means Sacramento County -- and others seeing their growth rates decline -- still will take in more money than last year but will have to scale back spending expectations.