Reasons for Loudoun County Economic Woes, Budget Shortfalls
Many of you already know about the economic woes that Loudoun County is facing - a budget deficit of $176 million for 2010, the possibility of not being able to issue municipal bonds and running out of money for projects. But do you really know "why"?
Here's what Jack Brown, Economist for Loudoun County, had to say about "why" during his presentation yesterday at the Dulles Association of REALTORS Economic and Housing Forecast Summit:
- Loudoun building permit revenue down to $8.1M in 2008 from $14.9M in 2005
- 2009 residential property assessed values are estimated to be down 12.8 percent from 2008 (flat for commercial properties)
- Loudoun hotel revenue is up from 2007, but is expected to weaken in 2009
- Increase in international travelers made up for decrease in domestic travelers at Dulles Airport, but weakened over the last two months and is expected to weaken in 2009
- Auto registration way down from 2007
- Loudoun sales tax had significant growth from 2007 to 2008, but will be flat from 2008 to 2009
- Low home values good for buyers, but bad for county revenue
- Possibility that Loudoun will reduce workforce in 2009
- Loudoun did not qualify for money from Bush's Housing Recovery Act of 2008
- Loudoun "Alt-A" and "Option ARM" data and numbers have not been closely looked at
- Loudoun is working on getting grant money from Virginia, but it'll be tougher than expected
Is $176M on the low side?
The $176M budget shortfall estimate was back in the summer of this year, but many of the current numbers and statistics listed above are worse than what Loudoun County may have previously estimated and taken into account.
In addition, the concept of "Alt-A" and "Option ARM" loans resetting and bringing on future foreclosures, short-sales and downward pressure on home values was probably never factored into the equation. I say this because all three economists that spoke at the Economic and Housing Summit yesterday (including Jack Brown) couldn't comment on the topic because they hadn't thought much about it nor analyzed any such data.