Slow growth crimping Wake tax revenue, county plans
Posted October 8, 2008
Raleigh, N.C. — Growth continues to be a problem for Wake County, only it's no longer rapid growth straining schools, roads and other infrastructure.
For the first time in years, a sudden slowdown in residential growth means county officials can't count on steadily increasing tax revenue to expand government services.
Through the first six months of the year, 3,227 permits for new homes were filed in Wake County, down 43 percent from the same period in 2007 and almost 50 percent from two years ago. The county is on pace for about 6,500 new permits in 2008 – the lowest total in more than 13 years.
"My anticipation is that those numbers will continue to decline even more than they are now," said Joe Bryan, chairman of the county Board of Commissioners.
The nationwide credit crunch has idled construction crews that had been working almost seven days a week in recent years to keep up with the demand for new homes in Wake County.
"Lenders are putting the freeze on money used for builders and home buyers," said Tim Minton, executive director of the Home Builders Association of Raleigh-Wake County. "It's going to have a severe impact on the economy and local government in terms of funds for the future."
County Manager David Cooke said Wednesday that he will freeze open positions in several departments. He declined to specify which areas would leave open positions unfilled.
"(The building slowdown) affects the tax base growth a year or two from now," he said. "We're going to do all the steps necessary that don't require a property tax increase."
Commissioners met Wednesday with school board members to discuss delaying some planned school construction projects since inactive bond markets have forced the county to cancel the proposed sale of about $450 million in bonds twice in recent weeks.
No decisions were made on which projects would be delayed, although renovations at Wake Forest-Rolesville High School were mentioned as a possibility. Officials said they would continue their discussions in the coming weeks.
Bryan predicted county services would also need to be cut in the coming months, noting commissioners will likely have $10 million to $15 million in new revenue for the 2009-10 county budget, down from about $40 million this year.
"This is not something we're just going to turn around immediately and be out of this economic situation," he said.