Friday, December 23, 2011

Alameda County's Economy Showing Glimmer Of Hope, But Don't Get Too Excited

Dec. 22, 2011 | Is the sluggish economy in Alameda County finally on the rebound? Over the past few years, county officials have detailed bedeviling fits and starts (mostly fits) for the local economy only to see the bottom drop further.

As the county gears up for another year of locating budget cuts to reconcile another year of diminished revenues, the initial outlook is showing signs of tangible, although muted recovery.

In past budget cycles, the presence of negative growth within the county's tax assessment rolls has been a harbinger of bad news. As far as records of its tax rolls had been kept, the county had never seen it drop below zero as it has over the past two years ago.

A tax assessment roll is a database compiled by the county assessor to identify and evaluate market rate for every taxable piece of real estate in the county. Since property tax revenue in the county has dropped precipitously over the last few years followed by an explosive housing bubble, it is not surprising its tax rolls have suffered so greatly.

This week, Alameda County Administrator Susan Muranishi reported a slight rise in the tax rolls, if not a symbolic cause for optimism. While the tax rolls inched above water at 0.37 percent, it still represents the third worst figure in county history, said Muranishi. The modest gains in property tax will not offset rising costs and demand for county services, although Muranishi noted recent growth in sales tax that may also indicate an economy ready to hum in the coming year.

For perspective, the county's tax rolls peaked in 1971 at over 16 percent and have stayed relatively consistent at around 8 percent annually.

In what may be an indicator of trouble for President Obama's campaign for re-election next year, the last time the county's tax rolls were this low was 1979 when it hovered around 1 percent amid President Jimmy Carter's era of economic "malaise." The governor of California, at the time? Jerry Brown.

In another sign of a burgeoning robust local economy, the county's unemployment figures fell to nearly a three year low at 9.6 percent in November. The rate has fallen from 11 percent just four months ago. It's still a far cry from December 2007 when unemployment was only 4.9 percent.

How long the good news lasts may be shorted lived, though. Gov. Jerry Brown is scheduled to release new state budget findings in early January. This month, Brown announced "trigger cuts" amounting to over $2 billion in additional cuts. Brown's previous tax realignment plan, in particular, the decision to move some inmates to county jails, will also add uncertainty to the budget, said Muranishi.

The plan will add on average 267 more inmates per day under the auspices of the county along with 848 inmates discharged to post-release community supervisor over the next three years, said Muranishi. Since October, 162 prisoners have already been released with 2 returning to the system after committing new criminal offenses.

The county is scheduled to announce a budget shortfall sometime in April, according to its timetable. Last year, the board of supervisors balanced the budget after cutting $137 million in programs and services.


The system needs to be assessed. They need to come up with ideal solutions.

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