Municipalities Tax Revenues Fall In Economic Downturn, Lay Offs, Pension Failure and Municipal Bankruptcy Risk Increase.
Despite the hype see ( http://www.timesargus.com/article/20090518/NEWS01/905180327/1002/NEWS01 )surrounding some recent White House comments that a ” bottom” in the economic downturn has been reached the facts indicate the opposite. Don’t be fooled by the recent positive Wall Street bullish trading uptick despite this false positive , our economy is in bad shape.
Florida has been especially hard hit as their economy had tremendous growth in real estate and tourism in the good times and now is falling fast and hard. http://www.palmbeachpost.com/news/content/shared/news/stories/2008/10/FLA_DECLINE05_PBP.html
It’s not just Florida, all through the nation State and local governments are about to collapse and some in California have actually declared bankruptcy and the precipice may be at hand. See http://seekingalpha.com/article/135193-municipalities-under-economic-stress-inside-the-muni-trading-mess and see http://www.nytimes.com/2009/04/08/business/economy/08muni.html
Disney is an illustrative example of the domino effect when the economy recedes. Disney has reported a decrease in attendance at Disney World, ( http://www.theonion.com/content/amvo/disney_fails_to_meet_expectations and as such local communities , business, hotels, restaurants, rental cars, airlines etc, are not not generating the revenue they made in the past, and as such the state and local treasury coffers are down. As they are not receiving the tax income they had previously obtained. Something has to give, and what is the most costly component of government expenditure, JOBS.
Some states such as New York has still not come to terms with the coming economic crisis. ( See http://www.nypost.com/seven/03092009/news/regionalnews/nyc_economic_downturn_will_be_deep__prot_158784.htm But have know doubts New York is not immune andin fact our correction will be worse than Florida or California, as we are overly dependent on Wall Street revenue. The predator real estate agents can hype the market all they want, their rain maker spouses in Albany and in the Banking Industry can’t help they this time. Dont belive me Professor Nouriel Roubini predicts another 20% drop in New York real estate values. See http://www.datamaxmarketingsystems.com/DMSNoteNewsletterApril.pdf All you have to do to bear ” factual witness ” is to observe all the empty store in New York City, who use to pay rent, hire employees, pay taxes and make N.Y. a chic place. See http://gothamist.com/2009/01/14/expect_more_empty_storefronts.php
How bad are municipalities they are hemorrhaging , instead of healing and treating the wound, we just give blood and its gushing out . Look at California , where the economic downturn will cripple the sate , and maybe cause pensions to fail. See http://www.globalresearch.ca/index.php?context=va&aid=12114nd
Cops Lay Offs And No More Christmas and Holiday Decorations.
This week the City of Orlando announced layoffs for approximately 10 % of their work force including Police and other emergency workers. Its so bad they won’t hang Holiday decorations. See http://www.orlandosentinel.com/orl-bk-orlando-firefighters-layoffs-051309,0,7171266.story( http://www.officer.com/web/online/Top-News-Stories/15-Orlando-Police-Officers-To-Be-Laid-Off/1$46706). In another region of Florida Palm Beach P.D. negotiated give backs and made concessions during contract negotiations, only to have personnel furloughed. See. http://www.wftv.com/video/19476171/index.html In Oakland over 150 cops will be laid off. http://www.policelink.com/news/articles/104860-oakland-mayor-proposes-layoffs-for-140-officers
The NYPD and New York civil servants are totally ignorant of the coming crisis. Because the city has lost nearly 36 million in annual revenue from wall street coupled with a decline in real estate transactions, valuation and the revenue it generates lay offs are inevitable. Its just a matter of when, and Mayor Bloomberg has hinted that up to 25% of the workforce may have to be cut. See http://www.reuters.com/article/newsOne/idUSTRE50Q6IH20090127
The current economic crisis is like a tsunami, the waters are receding and many are ignoring the plain facts and acting in a reckless manner. This is sad. Stitches, staples, surgery, pain and a prolonged recovery , slow steady therapy will help us. No infusion of “borrowed” money will get us out of this crisis. We are not the generation of WW2, who appreciate temporary aid and have the ole protestant work ethic. We are a nation caught up in our own hubris, selfishness and individual political agendas. Sad.