Housing bust lowers boom on state budget
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The Times reports that Gov. Arnold Schwarzenegger has warned all state departments that the budget ax will fall, thanks to the housing downturn. With fewer sales and declining prices, the state won’t rake in as much in property taxes compared with the recent boom years.
Here’s the nut of it:
‘The administration had been relying on increased property tax payments for an additional $1.3 billion in revenue. Experts warn that, at a time when home prices are dropping and homeowners are demanding reassessments of their property taxes, most of that money is unlikely to materialize.’
Reporter Evan Halper goes on to suggest that California got caught up in the housing run-up like so many of its residents who believed that their home would be a limitless ATM.
‘The state is being forced to confront the consequences of not saving money when times were better.’
Hindsight, as they say, is 20-20.
Thoughts? Comments?
-- Posted by guest blogger Annette Haddad