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11-9-07 Housing slump impacts taxes and water revenue in GA & Oconee County

……..Several (closing attorneys) said there was an over-supply of houses all over Metro-Atlanta. It is surprising that lenders let this happen. Some local real estate attorneys have told me in recent months that the market is really slow in Oconee. Houses sitting in Subdivisions graphically demonstrate this fact……

AVOC

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November 4, 2007

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Housing slump impacts taxes and water revenue in GA & Oconee County

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By Wendell Dawson, Editor, AVOC, Inc

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The housing slump is deeper and wider than many of us believe or acknowledge.

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In October I attended a residential seminar in Atlanta.   I talked to several lawyers in the Metro-Atlanta market who handle 4-500 closings a month.    The mortgage situation and slump was a troublesome topic.   Several said there was an over-supply of houses all over Metro-Atlanta.    It is surprising that lenders let this happen.   Some local real estate attorneys have told me in recent months that the market is really slow in Oconee.  Houses sitting in Subdivisions graphically demonstrate this fact.

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Yet, the Oconee County Government keeps rezoning and running water lines.   Who will buy the houses?   What will go in the new water lines? 

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As we conserve for the drought, water sales will also decline.   Yet large indebtedness -($ 66 Million for Oconee’s part of Hard Labor Creek) is based on continued growth of the customer base.    It just doesn’t add up!

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The Drought and Housing Slump could give us a chance to catch up on infrastructure.   The risk is that the current officials are “mortgaging our future” to fund their “Fast Growth Policies”!  

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Hopefully, citizens will become more aware and will help pull back the throttle on our “run away growth locomotive”!

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10-17-07 Oconee County has surplus of houses for sale- negative consequences down the road

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11-5-07 Hard Labor Creek Reservoir - little more than “Hope and Political Promise” for Oconee County - See Appeal in Bond case


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11-4-07 Oconee Building permits slow to trickle

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The Athens Banner-Herald

http://www.onlineathens.com/stories/110407/business_20071104036.shtml

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November 4, 2007                BUSINESS – PERMITS

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Permits issued in Oconee County during the week of Oct. 21 to 27, as reported in The Hunt Letter

Robert L. Coker, Jr., P.O. Box 390455, Snellville, GA 30039. Issued single-family permit: two-story, four-bedroom, four-and-a-half-bath, 3,372 square feet of heated area, 1,500-square-foot basement, 626-square-foot garage. Job site: 1801 Lane Creek Road, Bogart, GA 30622. Estimated cost: $ 350,000.

Walter Mitchell, 4810 Colham Ferry Road, Watkinsville, GA 30677. Issued permit to construct a 256-square-foot storage building. Job site: 4810 Colham Ferry Road, Watkinsville, GA 30677. Estimated cost: $ 15,600.

Gary Nasrallah, 305 Waterford Place, Athens, GA 30601. Issued permit to construct a screen porch. Job site: 1030 Buckeye Point, Watkinsville, GA 30677. Estimated cost: $ 10,000.


Oconee Sales Taxes down for July and August and Even for September

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November 4, 2007

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Figures provided by the Oconee County Finance Department show the following changes in sales tax collections since the Housing Slump:

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July SPLOST -1.86%

AugSPLOST -9.53%

July LOST -1.28%

Aug LOST -9.63%


11-4-07 State Budget hit by housing slump

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ATLANTA BUSINESS CHRONICLE

http://atlanta.bizjournals.com/atlanta/stories/2007/10/29/story8.html

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October 26, 2007

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Housing slump to hit state budget

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By Ryan Mahoney

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Even if the housing slump doesn't send Georgia's economy into a recession, economists predict the continuing downturn in the sector will take a toll on the next state budget.

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That means less money than previously anticipated to fund the rising costs of health care, education and transportation or to provide a cushion for comprehensive tax reform.

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Jeffrey Humphreys, director of the Selig Center for Economic Growth at The University of Georgia, expects state tax collections will grow only 4 percent to 5 percent in fiscal 2008, which began July 1 -- and potentially less in fiscal 2009.

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That's about half as much growth as in recent years, with gains of 7.5 percent in fiscal 2007, 9.3 percent in fiscal 2006, 8 percent in fiscal 2005 and 7.1 percent in fiscal 2004 -- an average increase of 8 percent.


11-4-07 Housing slump impacts sales tax receipts in Georgia

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Mish’s Global Economic Trend Analysis

http://globaleconomicanalysis.blogspot.com/2007/10/grim-forecast-for-state-budgets.html

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October 16, 2007

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Grim Forecast for State Budgets

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Georgia

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October 12, 2007

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Housing slump affects sales tax collections

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Georgia's tax collections fell slightly last month, following a trend across the country where the housing slump has begun to affect state budgets and sparked talk of spending cuts for education and health care.
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Collections in Georgia were down $ 2.3 million in September, compared to the same period in 2006. Sales taxes dropped 10.6 percent. For the first quarter of the fiscal year, which began July 1, overall collections are up 5 percent, or $ 199 million. The state needs a growth rate of 5 percent or more for the rest of fiscal 2008 to meet its $0.2 billion budget.
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Income tax collections rose 5.1 percent last month. However, sales tax collections - which are tied to consumer spending - faltered, dropping $ 47.6 million over September 2006.
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States across the country, from California to Florida, are facing budget problems for the first time in years because of the slumping housing market and slow sales tax collections.


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The Atlanta Journal-Constitution

http://www.ajc.com/print/content/printedition/2007/10/13/taxes1013.html

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October 13, 2007

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Housing slump saws hole in tax revenue
Trends 'ought to be of concern'
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By James Salzer

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Georgia is starting to feel the pinch of the housing slump that has sparked talk of state budget cuts across the country.

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Overall tax collections in Georgia fell slightly —- $ 2.3 million, or less than 1 percent, in September —- compared with the same month the year before. Sales tax collections, which are tied to consumer spending, dropped $ 47.6 million, or more than 10 percent, from September 2006.

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"A big chunk of that is related to the housing downturn," said Kenneth Heaghney, the state's fiscal economist. "The lumber sector is down, building materials are down, and the home furnishing sector is down. That seems to be taking a chunk out of ... the sales tax numbers."

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Senate Appropriations Chairman Jack Hill (R-Reidsville) said while Georgia is in better condition than many other states, "There are trends that ought to be of concern to us."

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Month-to-month figures on collections fluctuate. However, collections have slowed over the past year. In fiscal 2006, which ended June 30, 2006, overall collections were up 9.3 percent. For fiscal 2007, it was 7.5 percent. For the first quarter of this fiscal year, which began July 1, overall collections are up 5 percent, or $ 199 million, propped up by high gas prices and steady income tax growth.

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Sales tax collections have been down this year in several categories, including apparel, automobiles and manufacturing, according to the Department of Revenue. That's in addition to the drop in housing-related sales taxes.

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States from California to Florida are facing budget problems for the first time in years because of the slumping housing market and slow sales tax collections.

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Earlier this decade, state governments went through their biggest fiscal downturn since the Great Depression, leading to spending cuts and tax increases. In Georgia, for instance, the state cut more than $ 1 billion in school funding. About 100 local school systems raised their property tax rates, many in response to the state funding cuts. Georgia also increased cigarette taxes to help fill the funding gap.

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However in the past two years, state budgets have been relatively flush, giving legislators more spending leeway. In Georgia, for instance, the General Assembly passed a $ 1 billion bond package for construction this year and backed a $ 19 million fishing tourism program supported by Gov. Sonny Perdue called "Go Fish Georgia."

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Hill said while lawmakers were more optimistic about the fiscal outlook at this time last year, Georgia is probably in better shape than such states as Florida.

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A few more months of slow sales tax collections could put a damper on House Speaker Glenn Richardson's proposal to eliminate property taxes and make up the lost revenue with a more all-encompassing sales tax. By taxing services and eliminating exemptions, Richardson argues the state could raise the same amount of money it does now from property taxes. Declining sales tax collections over the next few months may make that proposal a hard sell.

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Hill said the poor numbers for September "should translate into caution as we look at tax reform."

Not so, responded, Clelia Davis, spokeswoman for Richardson.

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"If sales tax revenues are declining, that means people are spending less money because they have less money," Davis said. "Why would the government continue to collect property taxes from them at the same rate when they don't have the money to pay them?

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"If the people have less money, government should scale back."


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