quote:

Originally posted by AguaFria:
It's happening in some places. And entities that depend on property tax for revenue are having a tough time balancing their budgets and paying their bills as a result.

Thank you, thank you, thank you.
I have been banging this drum for weeks, only to have our resident armchair economists tell us that the credit crisis, the housing slump, and declining home values will have absolutely no bearing on them personally.
Thanks for getting it!
I'd give you a gold star, but the price of gold is too high right now.

quote:

Originally posted by Local Hero:

quote:

Originally posted by AguaFria:
It's happening in some places. And entities that depend on property tax for revenue are having a tough time balancing their budgets and paying their bills as a result.

Thank you, thank you, thank you.
I have been banging this drum for weeks, only to have our resident armchair economists tell us that the credit crisis, the housing slump, and declining home values will have absolutely no bearing on them personally.
Thanks for getting it!
I'd give you a gold star, but the price of gold is too high right now.

Awwww, shucks. ::blushing:: I got it a long time ago.

I'll give you a real-life example from the company I work for. We have a customer who is a vendor to various government agencies - at various levels of government, from the feds to county (I don't think he's on a city level). The money he owes us is 25% of our total receivables. When we contact him for payment, his response is that the government agencies are not paying him so he can't pay us. He was told in December that the government has gone from a 30-day pay to 45 days. Now I don't know specifially which levels aren't paying, but I know we aren't seeing any money from him. As a result, we're having a tough time paying our vendors and every payroll is a scavenger hunt.

Of course, his money has to go to payroll first - or he won't be able to make and sell his product to get money to pay everyone else. Just like our money goes to payroll first and our vendors are getting cranky.

My home's assessed value has dropped, so my property taxes will drop as well. Sales tax revenues are down in my area as well. Cities are cutting budgets and laying off. Of course, none of this affects me personally. I just don't know where the money for my paycheck is going to come from. They've always managed to find the money, so far, but one day there just might not be any to find.

I didn't say it had ABSOLUTELY no bearing on me personally. I said I wasn't going to get my undies in a bunch over it!

I am not going to go around in fear of the future, I'll just join Dave with a speedo at the pool

quote:

Originally posted by I need a life!:
I didn't say it had ABSOLUTELY no bearing on me personally.

Really?
Posted January 30, 2008 10:23
What does the housing market slump really have to do with my everyday life? Nothing.
Posted January 30, 2008 11:41
KK is right. I am not getting a new loan, or buying a house or selling a house. It doesn't affect me in any way I can measure. (as I would guess is the situation with most of us)
Posted January 30, 2008 21:15
but the housing market doesn't affect our family's jobs and it doesn't affect our bottom line (as kk pointed out) directly

I can't help it, when I read your latest reply, all I could think of was Bill CLinton looking into the camera and saying "I did not have sexual relations with that young lady." lol

cute

none of those statements show a belief of ABSOLUTE unaffectedness of the situation on my life.

quote: only to have our resident armchair economists tell us that *snip* have absolutely no bearing on them personally

quote: It doesn't affect me in any way I can measure.

let me add to that, Right now. Perhaps it will, perhaps it won't, but I go back to my other statements you so conveniently ignored: I am not going to run around in fear about it, and it doesn't change my approach to my finances in the foreseeable future.

Property values go down, my home gets reassessed, my property taxes go down... that sounds good to me, and looks good for my pocket book.

quote:

Originally posted by I need a life!:
cute

none of those statements show a belief of ABSOLUTE unaffectedness of the situation on my life.

If you say so. Absolutely say so, that is.

quote:

Originally posted by I need a life!:
cute

none of those statements show a belief of ABSOLUTE unaffectedness of the situation on my life.

quote: only to have our resident armchair economists tell us that *snip* have absolutely no bearing on them personally

quote: It doesn't affect me in any way I can measure.

let me add to that, Right now. Perhaps it will, perhaps it won't, but I go back to my other statements you so conveniently ignored: I am not going to run around in fear about it, and it doesn't change my approach to my finances in the foreseeable future.

Property values go down, my home gets reassessed, my property taxes go down... that sounds good to me, and looks good for my pocket book.

I wish it was that easy.

The Assessor will soon be doing a comprehensive re-assessment of the entire city. The full effect of the slump in market values may not be felt until after the re-assessments are over.

When local governments, who depend on property taxes figure their budgets, (and the State does not rely on property taxes, so they just push the costs of their legislation down to local government) those local officials are often bound by state-mandated formulas. I'm thinking local school districts here. Factor in the state formula that takes 90% of the control over local rates away from your local elected officials, and the formulas will result in huge tax rate increases. Your property values may well go down, but the tax rates will rise to offset it, so the total dollars out of pocket will not fall. In fact, under current recessionary pressures, the actual dollar increases will skyrocket, absent severe and devasting cuts in local services.

quote:

Originally posted by Aviator:

quote:

Originally posted by I need a life!:
cute

none of those statements show a belief of ABSOLUTE unaffectedness of the situation on my life.

quote: only to have our resident armchair economists tell us that *snip* have absolutely no bearing on them personally

quote: It doesn't affect me in any way I can measure.

let me add to that, Right now. Perhaps it will, perhaps it won't, but I go back to my other statements you so conveniently ignored: I am not going to run around in fear about it, and it doesn't change my approach to my finances in the foreseeable future.

Property values go down, my home gets reassessed, my property taxes go down... that sounds good to me, and looks good for my pocket book.

I wish it was that easy.

The Assessor will soon be doing a comprehensive re-assessment of the entire city. The full effect of the slump in market values may not be felt until after the re-assessments are over.

But let's assume for purposes of this discussion that your local property values go down because of the housing market crunch. When local governments, who depend on property taxes, figure their budgets (and the State does not rely on property taxes, so they just push the costs of their legislation down to local government) our local officials are often bound by state-mandated formulas. I'm thinking local school districts here. Factor in the state formula that takes 90% of the control over local rates away from your local elected officials, and the formulas will result in huge tax rate increases. Your property values may well go down, but the tax rates will rise to offset it, so the total dollars out of pocket will not fall. In fact, under current recessionary pressures, the actual dollar increases will skyrocket, absent severe and devasting cuts in local services.

In short, the only way a reduction in property value lowers your taxes is when you are one of a few who get a cut in value. When everyone's value goes down, everyone's rates go up.

Conversely, the best way to truly lower your tax bill (the dollars you actually pay) is to do those things that encourage and promote growth in the total taxable value in your community. Example: What did Maquoketa offer to get the Wisconsin private business to invest there and promise 200 jobs? Was $1.2-million county-owned building, sold to them for $300,000 maybe a part of it? What other incentives, rebates, etc. can we maybe learn about later? (Was)(Is) it worth it to increase total values to lower your tax bills?

This message has been edited. Last edited by: Aviator,

Sheesh, Les... Do you HAVE to rain on my parade???

I knew that, too, I was just waiting for Mr. Hero's response

One of the key points that everybody seems to be missing here is the simple fact that the current Clinton Assessor will NEVER lower anybodys assessed value, housing slump or not.
So, not only will you be hit with a higher taxable rate, but those who live in the confines of Clinton Iowa will also be hammered at the higher value!

Market News


Home prices fall a record 10.7% in past year; Of 20 cities, only Charlotte holds on to meager appreciation

By Rex Nutting, WASHINGTON MarketWatch -- Home prices in 20 major U.S. metro areas have plunged a record 10.7% in the past year as prices continued to decelerate, Standard & Poor's said Tuesday.

The 20-city Case-Shiller home price index fell a record 2.4% from December to January, the 18th consecutive decline in prices. For 10 major cities, prices fell 2.3% in January and 11.4% for the past 12 months.

"No markets seem to be completely immune from the housing crisis,' said David Blitzer, chairman of the index committee at S&P.


March consumer confidence down, outlook grim

By Ruth Mantell, WASHINGTON MarketWatch -- U.S. consumer confidence fell in March, while expectations hit a 35-year low on pessimistic views of the business climate, job market and personal income, the Conference Board reported Tuesday.

Interesting article on the problems with the financial markets.

quote:

Originally posted by King Kong:
Interesting article on the problems with the financial markets.

Market News
Yes sir, very interesting.
Here are a few very relevant passages everyone should take the time to read:

...And before you ask: It's irrelevant whether or not we're in a recession, which National Bureau of Economic Research experts define as "a significant decline in economic activity spread across the economy, lasting more than a few months." What matters is that we're in a dangerous and messy situation that has produced an economic slowdown unlike those we're used to seeing.

How is this slowdown different from other slowdowns? Normally the economy goes bad first, creating financial problems. In this slowdown the markets are dragging down the economy - a crucial distinction, because markets are harder to fix than the economy.

A leading political economist, Allan Meltzer of Carnegie Mellon, calls it "an unusual situation, but not unprecedented." When was the last time it happened in the U.S.? "In 1929," he says. And it touched off the Great Depression.

No, Meltzer isn't saying that a Great Depression - 25% unemployment, social unrest, mass hunger, millions of people's savings wiped out in bank collapses - is upon us. Nor, for that matter, am I. But the precedent is unsettling, to say the least. You can only imagine how unsettling it is to Federal Reserve chairman Ben Bernanke, a former economics professor who made his academic bones writing about the Great Depression...

...How you'll pay
Still with me? Good. Now let me show you how we taxpayers are picking up the tab for much of this rescue mission to the markets - even though Uncle Sam isn't sending checks to Wall Street. Here's the math. Say the Fed extends $500 billion of emergency loans to firms in need of short-term money. They're paying around 2.5% interest to Uncle Ben (or Uncle Sam, if you prefer). That rate is way below what they'd pay to borrow in the open market, if they could borrow. The difference between the open-market price and 2.5% is a gift from us, the taxpayers.

I think that's better than letting the world financial system collapse - but it's a serious subsidy to outfits that made a lot of money on the way up and that are now whining about losses. You gotta love it - private profits, socialized losses...

...It's going to get harder and harder to finance our country's trade and federal budget deficits, with our seemingly ever-falling dollar carrying such low interest rates. The dollar has been the world's preeminent reserve currency - but I think those days are drawing to a close. Don't be surprised if in the not distant future the U.S. is forced by its lenders to borrow in currencies other than its own. It could get really ugly.

Our financial institutions will emerge from this episode weakened, compared with those in the rest of the world. It's going to take years to work out our country's excess borrowings, with lenders and borrowers - and quite likely American taxpayers all bearing the cost...

Now that the all money and profits have been squeezed from the market, and the losses have been guaranteed by the taxpayer, the Gov decides to step in

Paulson calls for total regulatory revamp
By Michael Kitchen & Greg Robb,

NEW YORK MarketWatch
-- U.S. Treasury Secretary Henry Paulson is calling for extensive, wide-ranging reforms to the way the government regulates financial markets, including proposals to give the Federal Reserve more power and create new bodies to monitor mortgages and other transactions.

Paulson is slated to formally present the Treasury Department's new plan in a speech scheduled for Monday morning.
Among the many items in the plan is a proposal to make the Fed "responsible for overall issues of financial market stability," according to the executive summary.

Paulson's recommendations come on the heels of the Fed and Treasury's dramatic bailout of Bear Stearns Cos (BSC)
In addition to the Fed's current powers to provide liquidity through its monetary policy tools, the central bank "should be provided with a different, yet critically important regulatory role and broad powers focusing on the overall financial system," the executive summary said.

The new role for the central bank would include "the responsibility and authority to gather appropriate information, disclose information, collaborate with the other regulators on rule writing, and take corrective actions when necessary in the interest of overall financial market stability," it said, adding that this was a "long-term" component of the plan.

A Fed spokesman welcomed the blueprint.


I wonder why there's never such a quick response to bailing out struggling american working families or upside down homeowners?

and...

Fear is the culprit

So why hasn't the cure worked? The problem is that vital markets that most people never see - the constant borrowing and lending and trading among huge institutions - have been paralyzed by losses, fear, and uncertainty. And you can't get rid of losses, fear, and uncertainty by cutting rates.


Do you really need to wonder about why struggling families are not abiled out? In 1979 the government helped Chrysler while hundreds if not thousands of small businesses went under.
Where the big money is always gets the help. If a family loses their home, that family has problems. If a major Wall Street firm goes under, millions will suffer.
The needs of the many outweight the needs of the few.

quote:

Originally posted by King Kong:
and...

Fear is the culprit

So why hasn't the cure worked? The problem is that vital markets that most people never see - the constant borrowing and lending and trading among huge institutions - have been paralyzed by losses, fear, and uncertainty. And you can't get rid of losses, fear, and uncertainty by cutting rates.

I do remember you claiming that sour financial news articles in February, caused the housing market to decline last year, and that people reading them would be shocked into spending freezes, making the recession deepen.
Leaving aside the fact that financial pages get less attention than sports pages or the latest drugged out child star, I'm encouraged that you finally read something actually relevant to market fluctuations.
Yes, the markets are a bit like the mega herds stampeding across a great plain.
Fear can spook them in one direction, but the resources are what they are actually continually seeking.
The underlying takeaway from this downturn is that greed and deregulation depleted all the resources, now fear has spooked the financial market into the direction of a taxpayer bailout.