Mon 31 Jul 2006
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Citizens aren’t geese and, for most, the golden eggs they pay in taxes don’t come easy.
While I’ve been critical of both the county’s and town’s 2006-2007 budgets, it’s Chapel Hill’s efforts that have disappointed me the most.
Why? The advertised “balance” was based on reductions in fiscal responsibility, a “lucky” sales tax windfall and some other sleight-of-hand. Beyond that, last years political promises to directly include our saavy citizenry in improving the cost-effectiveness of services were not followed through on. Additional campaign-promised expenditures made it into the budget but not the concomitantly discussed reductions.
I believe that a realistic appraisal of our community’s financial future should start with our elected officials weening themselves off the idea that real-estate values in our community will constantly accelerate. Both Orange county’s and Chapel Hill’s 2006-2007 budgets forecast a continued growth in real-estate values – a projection that belies macro-economic events.
To wit. Gross (as in vulgar) national debt. Accelerating energy costs. Potential war-related chaos. Stagflation. And the very real possibility of the real-estate boom busting.
Today’s rant on locally short-sighted taxation trends comes via UNC Prof. Eric Muller (isThatLegal.org) who tipped me last week to another excellent local pool of talent – a group of UNC Law School folks ‘blogging on credit, debt and bankruptcy ( Credit Slips ).
From today’s post Deregulation Drags Down Economy
The NYT ran a story that connects two dots—the housing bust and a slowing economy. Because housing has been a big employer, as new home construction comes a standstill, the effects will reverberate through the economy. Thus comes the answer to a question I’ve heard many times: So long as I’m not strung out on some crazy mortgage, why should I care if the housing market implodes? Because it affects the whole economy.
Not just the whole economy but the whole financial infrastructure of our country. This, of course, includes our local ability to fund required programs, let alone “nice to haves” (intern programs, swimming centers, etc.).
A prudent step would be to evaluate local tax revenue against longer time frames and a broader, maybe a bit more negative, perspective.