Remember that slowdown in state revenues that we were warned about by our state’s chief economist ChangMook Sohn last year? Well guess what? It’s here!
Washington’s construction industry continues to expand, but real estate tax collections are $18 million below expected levels.
The state Revenue Forecast Council says taxable real estate activity in the past month was nearly 26 percent lower than a year ago, the sharpest decline in 12 years.
In related news, despite the fact that King County government (and Ron Sims specifically) have seen the revenue slowdown coming for nearly two years now, we’re now being faced with new taxes to cover the real estate shortfall.
King County Executive Ron Sims proposed three new taxes Monday, even as he warned that a slowdown in housing construction will strain the county’s general fund during the next two years.
Sims said in his annual budget address to the Metropolitan King County Council that he told his staff to “go back to the drawing board” in September after financial advisers warned that a downturn in construction would hit the county hard. The revised budget, which also calls for higher bus fares, trimmed 2008 spending in order to soften an expected 2009 budget shortfall.
Construction downturns are particularly challenging for the county because property taxes are the biggest source of money for the general fund.
Too bad nobody in King County government thought to restrain spending during the times when real estate was flying high and money was flowing in. Not that this is anything other than government business as usual, but it’s still annoying.