Editorial: The tide turns and we need different thinking
According to the University of Florida’s Bureau of Economic and Business Research, from 1975 to 2000 the average Florida house value, measured in constant 2005 dollars, increased steadily from $110,000 to $169,000, a 54 percent gain; pretty incredible.
However, in just the next six years, 2000 to 2006, that value took off like a rocket, nearly doubling to $341,000.
Then, in 2006, the artificially inflated property values — “corrected”. That means, the bottom fell out of the housing market, and property values returned to where they were around 2000.
That property boom produced a tsunami of tax revenues for local governments that swiftly turned them into additional spending. But, when the market crashed, revenues plummeted. The effect on local governments was akin to Wile E. Coyote suddenly finding himself suspended in mid-air — It was a long way down, and a painful reminder that fiscal gravity cannot be defied forever.
St Johns County government, and the local governments in St Augustine, St Augustine Beach, and the Town of Hastings, should be cautious not to exhibit the kind of irrational exuberance toward tax dollars as investors, homeowners and developers did with their money during the real estate bubbles over the last 20 years.
Now that the tide is turning, we need different thinking. Historic City News would like to hear more government financial leaders saying, “We might be able to reduce the millage just a little bit.”
Even allowing that there is some ground to be made up from the spending cuts forced by the Great Recession, taking a sip rather than a gulp might keep governments from again becoming intoxicated on fresh revenues.