How Are We Doing?

Posted May 28, 2016 at 10:29 am by

A quar­ter­ly review of Coun­ty Finances by Coun­ty Audi­tor F. Milene Henley
First quar­ter 2016

If you’ve ever want­ed to be a plumber, now’s the time. Judg­ing from the num­ber of radio ads I’ve heard recent­ly for plumbers, HVAC tech­ni­cians, and oth­er trades­men, busi­ness is booming.

Construction Sales 2008-2015

Click to enlarge

That’s good news, and it’s evi­dent in retail sales activ­i­ty in San Juan Coun­ty. In the con­struc­tion sec­tor, sales in the coun­ty dropped 21% in 2009, and anoth­er 12% over the next two years. Recov­ery since has been slow and uneven, but has shown marked improve­ment in the last cou­ple of years.

Sim­i­lar­ly, both gen­er­al retail sales and retail sales of food and lodg­ing dropped in 2008 and 2009, though not near­ly so deeply as con­struc­tion dropped. Recov­ery in those two sec­tors has also been more con­sis­tent than in con­struc­tion, with steady increas­es in the last two years.

Click to enlarge

Click to enlarge

These improve­ments in the econ­o­my ben­e­fit Coun­ty gov­ern­ment in two ways: per­mit­ting and plan­ning fees, and sales tax rev­enue. Per­mit­ting and plan­ning are pre­cur­sors to build­ing. Like con­struc­tion sales, they fell sharply in 2008 and 2009, and their recov­ery has fol­lowed the same pat­tern: uneven, but with a def­i­nite upward trend. 2016 is look­ing espe­cial­ly good, with an esti­mat­ed increase of about 9% over 2015.

Sales and lodg­ing tax rev­enues have grown more con­sis­tent­ly, and con­tin­ue to exceed expec­ta­tions. Ear­ly pro­jec­tions show sales tax rev­enue to the Coun­ty increas­ing about 6% in 2016, and lodg­ing tax rev­enues by as much as 30%, over the pre­vi­ous year.

Click to enlarge

Click to enlarge

Out­side the gen­er­al fund, an active real estate mar­ket has result­ed in sig­nif­i­cant increas­es in real estate excise tax (REET) to the Land Bank and to the County’s Cap­i­tal Improve­ment Fund, both of which are fund­ed almost exclu­sive­ly by REET. Real estate sales dropped by almost two-thirds between 2007 and 2011. While not yet recov­ered to the 2007 point, REET rev­enues sur­passed the 2008 lev­el in 2014 and con­tin­ue to climb.

There’s a down­side to the uptick in the econ­o­my, and in real estate in par­tic­u­lar. More activ­i­ty puts more pres­sure on the Coun­ty and on pri­vate busi­ness. Com­mu­ni­ty Devel­op­ment has received 220 build­ing per­mit appli­ca­tions this year to date, as com­pared to 179 for the same peri­od last year, and has issued 181 per­mits this year, com­pared to 114 last year. Because of both work­load and staffing issues, per­mit pro­cess­ing time has crept up.

But the biggest prob­lem is in the avail­abil­i­ty of hous­ing. Employ­ers, includ­ing the Coun­ty, have a hard time recruit­ing, because peo­ple can’t move here for jobs if they can’t find hous­ing. The rea­sons for the short­age are many. The growth in the econ­o­my has cre­at­ed more jobs and more demand for hous­ing. Some home­own­ers con­vert­ed homes to rentals while they were unable to sell them; when the mar­ket picked up and the homes sold, those rentals were often removed from the rental mar­ket. And some of the decrease in year-round rentals may be caused by the con­ver­sion of year-round rentals to more prof­itable vaca­tion rentals. An effort is under­way, led by Health & Com­mu­ni­ty Ser­vices Mark Tomp­kins, to con­sid­er alter­na­tive ways to solve this crit­i­cal problem.

What­ev­er the cause, no hous­ing means no plumbers and no HVAC repair­per­sons. Which, look­ing on the bright side, cre­ates an oppor­tu­ni­ty. If this audit­ing gig doesn’t work out for me, I’m think­ing of becom­ing a plumber. I hear they’re hiring.

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Categories: Business, Community, Government

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