How many students were in your graduating class? Most likely, there were more students in your graduating class than there are currently in the entire Greeley County High School. In 2012, about 50 students were attending high school in Greeley, and the total county population was 1,298.  Since 1997, the population of Greeley County has declined 28%, illustrating what the Wall Street Journal calls the “prairie problem”.

greeley graphic

As shown above, Greeley County has seen a slight population increase of 4% since 2010, possibly due to both state and county initiatives geared toward luring young people to the area. Greeley County is a designated Kansas Rural Opportunity Zone, meaning that people who move to Greeley are eligible for both income tax waivers and student loan repayment (up to $15,000). Beyond becoming a ROZ, the county has tried consolidating government, overhauling the local school, and mobilizing volunteers to keep the movie theater open, among other strategies, to draw new residents to the county and retain current residents.

While Greeley’s population declined almost a quarter between 1997 and 2007 before rising in 2012, government spending increased at a higher rate than inflation.

greeley spnd

Similarly, Greeley’s revenue increased by 80% over the same time period.  A higher proportion of revenue came from taxes in 2007 (84%) than in 1997 (78%), while proportions of revenue from transportation and interest declined.

greeley rev

While Greeley County’s “prairie problem” is far from resolved, the recent population gains and steady rise in spending in Greeley provide other struggling rural communities with hope for a sustainable future.

The name of Michigan’s largest city has been on the minds of many leaders over the past few weeks. CGR’s own Chief Economist, Kent Gardner Ph.D., examined what killed Detroit in a recent blog post.  Govistics data also help tell the story of Detroit’s tumultuous struggle to regain fiscal stability over the decade—a story we know led to current headlines on bankruptcy.

Both revenue and spending have been below the inflation benchmark since 2005.

 Detroit rev

Detroit spending

Fifteen Years of Detroit Revenue and Spending

detroit chart

The above chart (created using Govistics excel downloads) shows that while Detroit’s problems began before 1997, the city’s most recent downward turn began in earnest between 2005 and 2006, when spending and revenue dropped 43% and 38% respectively.  Total revenue plummeted in 2009 due to losses in insurance revenue before recovering slightly in 2010 and 2011.

Can Detroit recover? Stay tuned!

Every year around this time, it seems like everyone is hitting the beach!  In past years, vacationers flocked to the family-friendly beaches of New Jersey, but losses from Hurricane Sandy have caused some tourists to forego the Jersey Shore despite the state’s prodigious efforts to rebuild.  Some of the hardest hit communities are also the most reliant on recreation revenue, including the Boroughs of Seaside Heights and Belmar.

Seaside Heights 2

Seaside Heights, pre-Sandy

Parks and Recreation revenue accounts for 8% of Seaside Heights’ total revenue and 44% of department revenue, amounting to over $1 million.

Seaside Heights

The pier in the Borough of Belmar was destroyed in the storm, impacting one of Belmar’s largest revenue streams.  Belmar collected over $5 million in Parks and Recreation revenue in 2007, representing over 30% of the borough’s total revenue and 81% of departmental revenue.

Belmar

So when planning your vacation this summer, consider contributed to a recovering community by soaking up some New Jersey rays!

Tax collection revenue in states across the country are down, especially in the larger states, including New York, New Jersey, California, Florida and Washington State.

An article published recently by the New York Times titled “Warning by States as Tax Revenues Fail to Rebound” put a spotlight on the issue with a sobering reckoning from the State of Washington’s chief economist, Arun Raha:

“We are in the fragile aftermath of the Great Recession, where a return to normalcy seems like a mirage in the desert — the closer we get to it, the further it moves away.”

Washington State will likely take in $2 billion less than originally projected this fiscal year, and Governor Christine Gregoire has reacted by calling a special legislative session to deliberate additional budget cuts, even after the state slashed $10 billion in spending since the dawn of the current recession.

CGR Govistics often touts its access to municipal and school district budget data, but the database also includes snapshots of the fifty states. Looking at Washington’s revenue trend line over the course of several years is illuminating. See how Washington’s tax collections did move along at a healthy pace up through 2007, when they leveled off:

But drill down further into the “Property Taxes” category (the overall “Taxes” category covers all tax revenue from licenses, sales taxes, income taxes, property and other taxes). Remember the effect that increased foreclosures and high joblessness can have on home ownership:

A precipitous decline in Washington State property tax collections happened not just in 2008, when the Great Recession made its big debut, but between 1999 and 2000, just before the early 2000s recession. It’s important to remember that state budget crunches are not a new issue; the seeds for the monumental problems states are facing today were planted many years ago.

Take a look at some of the other states profiled in the same New York Times article, and note the following:

  • California property tax revenue also took a huge slide prior to the year 2000, and continues to stay well below the inflation benchmark.
  • New York’s total revenue took an approximately $31 billion dip from 2007 to 2008;
  • New Jersey’s property tax collections were relatively erratic through the last decade, diving $1.5 million in 1999 before spiking above the inflation benchmark again, then dipping from about $4 million to $3 million just before the onset of the current recession:
  • And in Florida, where foreclosure “gloom and doom” has become a widely-discussed identifier, property tax collections from 1997 through 2008 take on the appearance of the only ski slope in the Sunshine State:

When big states face big crises – and react with big job/program cuts or big tax hikes –  it can mean big changes in your community. It could mean your local police force shrinks. Or that your child can no longer attend P.E. class at school. Your local library or community center could shut down. Or, you might notice that your trash collection services are being trimmed back.

The words of Washington State’s chief economist – “a return to normalcy seems like a mirage in the desert” – are haunting. Get ready to witness a tough road ahead for school districts, police departments, local libraries, neighborhoods, and everywhere else that is touched by state and local government services.