Archive for the 'Sacramento Economy' Category
What Will Budget Cuts Mean To Sacramento Area Teachers, Cops and Firemen?
May 21st, 2009 Categories: Real Estate Trends, Sacramento Economy, Sacramento Politics, Sacramento Real Estate
SACRAMENTO-The most powerful lawmakers in the state of California met Wednesday afternoon in order to start a plan in dealing with the state’s $21.3 billion budget deficit. Imagine. That’s a lot of money… Where’s it all going to come from? California can no longer avoid deep cuts to schools and government services after The state’s voters rejected Tuesday’s special election budget proposals.
“I think the message was clear from the people: Go all out and make those cuts and live within your means,” Schwarzenegger said earlier Wednesday in Washington, D.C.
Gov. Arnold Schwarzenegger met with Assembly Speaker Karen Bass (D – L.A.), Senate President Pro Tem Darrell Steinberg (D – Sacramento) Assembly GOP Caucus leader Mike Villines of Clovis, and immediate past Senate Republican caucus leader Dave Cogdill of Modesto in his office at the State Capitol yesterday.
How will the upcoming payroll cuts affect our local Sacramento housing market? How many buyers will no longer be buyers when they lose their job? How many more homes will go on the market because people have to relocate?
Could get interesting…
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Special Election a Big Yawn While Sacramento Voters Defeat Budget Messures
May 20th, 2009 Categories: Sacramento Economy, Sacramento Politics
As expected, Sacramento area voter turnout Tuesday for the Special election was very slight. Many who did show up told posters the only reason they cast a ballot was to send a message to lawmakers.
The special-election ballot agenda crafted by Gov. Arnold Schwarzenegger and California legislative leaders that would have propped up the states budget was defeated soundly yesterday.
The defeat of the budget package will push the California State budget to a $21.3 billion deficit.
According to the Special Election Results From Twitter; so far at 4:29 this morning it shows: State proposition vote count update: 1A 34.1% yes, 1B 37.4% yes, 1C 35.4% yes, 1D 34.3% yes, 1E 33.6% yes, 1F 73.9% yes
Governor Schwarzenegger and other legislative leaders released these statements Tuesday night.
Governor Arnold Schwarzenegger:
“Tonight we have heard from the voters and I respect the will of the people who are frustrated with the dysfunction in our budget system. Now we must move forward from this point to begin to address our fiscal crisis with constructive solutions. We face a staggering $21.3 billion deficit and in order to prevent a fiscal disaster, Democrats and Republicans must collaborate and work together to address this shortfall. The longer we wait the worse the problem becomes and the more limited our choices will be. That is why tomorrow, we will come together to begin to develop a budget solution that gets our state back on track.
“We must also continue to fight for real, comprehensive budget reform that brings stability to California’s budget process and forces the state to save in the good times so that we do not face these kinds of deep deficits, devastating cuts and tax increases when the economy takes a downturn. I have been working to accomplish this kind of reform since I was elected in 2003 and I will keep working toward it because we cannot allow this harmful and out-of-control budget process to continue.”
Senate President Pro Tem Darrell Steinberg (D-Sacramento):
“The voters have spoken and they are telling us that government should do the best it can with the money it has. We will immediately and responsibly get to work to balance the budget and head off a cash crisis in July. Delay is not an option. The necessary decisions we must make will only get harder with time.”
Assembly Speaker Karen Bass:
“There are many difficult choices and a lot of hard work ahead of us. We now have to responsibly fill the budget hole that has been caused by the national recession and deepened by the failure of today’s ballot propositions. I hope the bipartisan cooperation between the Legislature and the Governor that went into this effort will continue as we move forward – the people of California clearly expect us to work together to get the job done. And we will. I do want to thank tonight the teachers, firefighters, business leaders and other Californians who worked in support of these propositions in hopes of warding off more devastating cuts to vital services. Their commitment to a better California should be appreciated by everyone on both sides of these initiatives.”
Assembly Republican Leader Mike Villines (R-Fresno):
“My goal in placing these initiatives on the ballot was to start to get our budget under control and help California begin to live within its means. Even though voters did not support our approach, I believe it is clear from this election that voters want the Governor and the legislature to achieve both those goals. The biggest mistake we could make in the aftermath of this election is not enacting serious reform.
“California has a big problem moving forward. We need a spending cap now more than ever, and only through spending reform and reductions will we be able to get California back on track. I believe California can emerge from this crisis fiscally sound and strong, but there is a long and difficult road ahead.”
Senator Dave Cogdill (R-Modesto):
“California voters may have sent state leaders back to the drawing board, but it’s not a mandate to abandon reform. Until we break this circle of dysfunction, California will be plagued with chronic budget deficits. Ensuring government lives within its means is the only way to prevent the boom-bust cycle that keeps repeating itself.”
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Sacramento Expects Few Voters for Tuesday’s Special Election
May 18th, 2009 Categories: Sacramento Economy, Sacramento Politics
California voters will vote on a package of budget measures in tomorrows special election. But it seems that most people are not going to even show up to vote. Sacramento State government professor Kim Nalder says voters should schedule a stop at the polls Tuesday.
“It’s incredibly important to the future of California, because we’re determining what budget priorities we have, which pots of money deserve to be switched around and which don’t. Their input is necessary,” Nadler says.
Governor Schwarzenegger has plans to sell the Cow Palace along with the Los Angeles Memorial Coliseum; San Quentin State Prison; Cal Expo; and several other state-owned fairgrounds to raise money.
Schwarzenegger said the state has no business holding onto “prime properties.”
According to reports, sales of the properties are estimated to raise $600 million to more than $1 billion.
The state is facing a $15.4 billion deficit in the next fiscal yearthat will climb to $21.3 billion, Schwarzenegger said, if Propositions 1A and 1B fail on Tuesday.
I read a great editorial the other day:
(Source: The Sacramento Bee)
May 17–Like many Californians, we are deeply dissatisfied with the Legislature’s mismanagement of this state’s finances. Years of dysfunction, discord and partisan polarization have led to perpetual deficits that have been an embarrassment to the state and an impediment to economic growth for most of this decade.
Members of the Legislature have demonstrated that they cannot restrain themselves when economic times are good, and they cannot manage the fallout when times are bad. That’s why we are supporting Proposition 1A.
Once the state digs itself out of this mess — and someday it will — the long-term spending reform in this measure will help prevent California from descending into such an abyss again.
Proposition 1A was written by Republicans and forced on the Democrats who control the Legislature, the price Republicans demanded in exchange for their support for temporary tax increases. The measure would extend those taxes for a maximum of four years and then put the voters’ stamp on the expiration date. And it would place a new spending limit in the state constitution, where only the voters, not the Legislature or the governor, could tinker with it.
This new provision would limit spending in good times, when California’s economy typically generates huge spikes in tax revenue. Any money beyond the average growth rate would go into a rainy-day reserve. The Legislature could spend that money only when the economy slows and revenue slumps.
We also support Propositions 1C, 1D and 1E to provide short-term relief in the budget while lawmakers and the governor work on solving the longer-term imbalance between the state’s revenues and its projected spending. We oppose 1B because it would require increased spending on the schools at a time when the state needs to set priorities that match the treasury’s ability to pay for them.
Lawmakers in February passed a budget that cut spending from $103 billion last year to $94 billion this year and put the state on a path to spend $92 billion next year. That is less than the state spent 10 years ago, after adjusting for population growth and inflation.
That budget reduced grants to welfare recipients, cut stipends to the disabled and elderly, and slashed education spending by several hundred dollars per student. Lawmakers reduced subsidies for public transit and cut university budgets, forcing families to pay higher fees and tuition.
But these cuts only scratched the surface of what must be done. Even if the ballot measures pass, the state is facing another $15 billion shortfall next year, and more once the tax increases expire.
Given how unpleasant most of the package is, some voters may want to vote “no” to send a message telling lawmakers and the governor to try again. But the more likely result would be a return to the partisan gridlock that led to this problem in the first place.
The nation is in the worst economic downturn since the Depression. The days ahead are going to be tough enough without a renewal of ideological warfare inside the Capitol.
A “yes” vote on 1A, 1C, 1D, 1E and 1F will reward pragmatism and encourage lawmakers to work together as they begin the next phase of what can best be described as fiscal triage.
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“A Palpable Mistrust of Sacramento”
May 16th, 2009 Categories: Sacramento Economy, Sacramento Politics
Sacramento– Gov. Schwarzenegger unveiled a plan showing which California programs will suffer from deep cuts if the special election ballot measures fail next Tuesday. He also proposed selling San Quentin State Prison, the Cow Palace in Daly City, as well as the LA Coliseum, if voters don’t approve his tax increases and saving plan, according to the Los Angeles Times.
Eric Beach of Californians Against New Taxes said there is no need to hike taxes.
At Redwood High School, teacher William Crabtree says he plans on voting for the measures, but thinks most in his community won’t.
“I think there’s kind of a palpable mistrust of Sacramento,” Crabtree said.
Californians will have a say in how the state handles the huge budget shortfall, but most people haven’t even looked at the propositions and studied the choices, or even plan on voting.
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Sacramento Area Affordability Index at 80%! But People Still Scrimping
May 15th, 2009 Categories: Real Estate News, Real Estate Trends, Sacramento Economy, Sacramento RE Stats, Sacramento Real Estate
Sacramento real estate has never been more affordable!
Sacramento County, According to the California Association of Realtors First Time Buyer Housing Affordability Index now at 80, up from 65 in the year-ago quarter.
C.A.R.’s First Time Buyer Housing Affordability Index measures the percentage of California households that can afford to purchase an entry-level home in here in the state.
Statewide, the percentage of households that could afford to buy an entry-level home in California stood at 69 percent for the first quarter of 2009, compared with 46 percent for the same period in 2008.
-A sacramento Couple was Featured in a Erie Times from Erie, PA today. It’s a great piece that talks about how the economy will be effected long term, by the paradigm shift that the recession has brought…
SACRAMENTO, Calif. — Sara and David Dunham won’t apologize for scrimping when they can, even if it means taking precious dollars out of the economy.
The Fair Oaks, Calif., couple figure they’re saving up to $200 a week on clothing, food and other expenses. It’s been so long since the Dunhams have been to their favorite restaurant, they have trouble remembering the name. They dipped into savings to buy a used car recently but have chipped away at other costs, even cutting by $5 the weekly allowance they send their oldest daughter at San Jose State.
“Let somebody else beef up the economy,” Sara Dunham said. “I need to look at what my expenses and budget are.”
The Dunhams’ behavior demonstrates what’s known as the “paradox of thrift,” a phrase coined by 20th century economist John Maynard Keynes. The argument goes like this: Saving money might be a sound strategy for a family, but it can harm an already weak economy if everybody does it. As the economy deteriorates, everyone’s nest egg suffers — hence the paradox.
“It’s definitely for real,” said Howard Roth, chief economist at the California Department of Finance. “They’re cutting their spending, which from the individual’s point of view makes sense, but if you add it all up for the nation, it makes the recession worse.”
The numbers are starting to add up.
Though Americans’ confidence in the economy is rebounding, as evidenced by a recent Reuters/University of Michigan survey, pocketbooks remain snapped shut. Consumer spending, which accounts for about two-thirds of all economic activity, fell 0.2 percent in March, reversing two straight monthly gains. In California, taxable retail sales have fallen 12 percent since the fiscal year began last July, although the figure partly reflects the drop in gas prices.
Layoffs and furloughs have hurt household incomes, while savings have fallen considerably despite recent gains in the stock market.
And what money Americans do have, they’re socking away. They’re saving about 4 cents of every dollar of disposable income. That isn’t much by historical standards, but it’s a lot more than the housing boom era, when Americans saved little, spent heavily and lived large off their home equity and credit cards.
About $216 million in new deposits poured into The Golden 1 Credit Union in Sacramento during the first quarter, nearly double the volume from a year ago. The money’s staying put; Golden 1 members are writing fewer checks than in years past, said Chief Executive Teresa Halleck.
“It could be a great thing for people to get back in the habit of saving, going back to the old ways,” she said. “Part of the problem with the meltdown was things just got out of balance — just living off the equity in homes, assuming things were always going to go up.”
But here’s the problem, as some see it: Too much saving can hurt retailers, restaurants, car dealers and everyone else who relies on consumers. That harms the economy.
Sales of new cars, for instance, are down 43 percent in California. More than a dozen dealerships have folded in greater Sacramento in the past year.
Peter Welch, head of the California New Car Dealers Association, said consumers aren’t replacing their cars unless they absolutely have to.
“Unless it’s just flat worn-out or you’ve been in an accident, they’re discretionary purchases,” he said.
The ripple effects are obvious. At Il Forno Classico, the Dunhams’ favorite restaurant, business is noticeably slower. Eight jobs have disappeared because of attrition.
“We’re down, but we’re surviving,” said owner Scott Litteral. “We used to be fantastic.”
Saving can be good for the economy, Roth said, because it creates dollars that society can use for investment in infrastructure and other needs. Nearly everyone agrees Americans didn’t save nearly enough during the housing boom. The national savings rate actually went into negative territory for a while in 2005, according to the Bureau of Economic Analysis.
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SACRAMENTO – The state budget deficit has nearly doubled in the past two months
May 12th, 2009 Categories: Real Estate News, Sacramento Economy
SACRAMENTO – The state budget deficit has nearly doubled in the past sixty days, Gov. Arnold Schwarzenegger disclosed Monday.
California faces a state budget shortfall of $21.3 billion if voters reject budget-related ballot measures during the state’s May 19 election, Gov. Arnold Schwarzenegger said on Monday.
“Absent swift action, the state will be facing a very serious cash crisis,” Schwarzenegger said in his letter, provided by email to Reuters.
“We now face the leanest of times,” Schwarzenegger said. “California, for the first time since 1938, faces a decline in personal income.”
The recession has hit California hard, state leaders expect California’s money troubles will carry over into next fiscal year, which beginning in July.
Schwarzenegger said. “These changes in the state’s economic and revenue pictures have caused a significant new budget problem to emerge.”
A Schwarzenegger aide said the California governor will release two budget plans on May 14, one that will balance the books should voters approve the ballot measures, there is another in case they reject the measures.
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Sacramento County proposes massive cuts to law enforcement
May 11th, 2009 Categories: Sacramento Economy
Sacramento County Sheriff’s Department may cut more than 500 people – including many deputies
Public safety cuts may prove politically difficult for Sacramento County officials.
The severity of the Sacramento budgets projected $180 million general fund shortfall for the fiscal year that starts July 1 is starting to hit home; ”I don’t know where else the board is going to go to get that kind of money,” said Jim Hunt, acting head of the Countywide Services Agency. “The easy cuts have been made.”
In a move that underscores just how bad things are getting; the county executive’s office is proposing almost 22 percent less general purpose money in 09–10, for the Sheriff’s Department. Sheriff John McGinness said he would need to cut more than 500 people – including many deputies – if he’s forced to close a $74 million shortfall.
Even though they have set public safety as priority number one;t he Sacramento County Board of Supervisors, say cuts to the Sheriffs Department, Correctional Health Services, the District Attorney’s Office and the Probation Department are all slated. That means less Cops, less Jailers,
Directors of other county departments, said they’ve already cut deep into their own budgets and it’s time to look elsewhere to balance the books.
See the sacbee.com story by Robert Lewis
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California Declares State of Emergency; Actual Unemployment at 20%
April 29th, 2009 Categories: Sacramento Economy, Sacramento Politics
With job losses mounting and social pressures growing, California Gov. Arnold Schwarzenegger declared a state of emergency on April 17.
“I find that conditions of extreme peril to the safety of persons and property exist in California caused by the current and continuing economic downturn and resulting unemployment in California,” Governor Schwarzenegger said in his “Unemployment Proclamation.” He added that the magnitude of the economic downturn and resulting unemployment were out of the control of the services, personnel, equipment and facilities of any single city and/or county and required the combined forces of an entire region or regions to combat.
The latest unemployment figures show that conditions in California are much worse than in the rest of the country. As of March, the official unemployment rate stood at 11.2 percent—the highest for the state since statistics have been collected—and far above the official national average of 8.5 percent. Tens of thousands of workers lost their jobs in March, which caused the unemployment rate to surge.
But the actual unemployment rate paints an even darker picture. If you include those people who have given up looking for work and those who work only part-time because they cannot find full-time work, the California unemployment rate doubles to about 20 percent.
Economists expect unemployment rates to continue to rise at least through the end of summer, when President Barack Obama’s stimulus packages filter down to the local economies. But economists worry that once this one-time spending is gone, job losses may rise again.
California’s bleak economic condition is an omen for the rest of the country.
California has been plagued by a host of curses over the past few years: a housing bubble, massive budget issues, widespread and uncontrolled illegal immigration, major droughts, and wildfires. In February, Governor Schwarzenegger was forced to issue a state of emergency over drought conditions.
Since the state is responsible for approximately 13 percent of the nation’s gross domestic product, as long as California continues to deteriorate, it will exert a disproportionate drag on the rest of the country. And the drag looks like it will only get heavier.
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Is Sacramento Area Real Estate close to the bottom? …That Depends…
April 3rd, 2009 Categories: Pre Foreclosures, Real Estate News, Real Estate Trends, Sacramento Economy, Sacramento RE Stats, Sacramento Real Estate, Sacramento Sellers
Multiple offers, great loan programs, excited buyers, well priced homes, phones ringing off the wall, hundreds of buyer inquiries per week, referrals from past clients… There is plenty of activity in our Sacramento area real estate market lately!
I have taken twelve new listings in the last 30 days and my partners all have multiple offers out on multiple properties with multiple buyers. This time of year is always the busiest, and this year will be no different, but there is also a sense of urgency in buyers that we haven’t seen for a long time.
With home prices in our Sacramento Metro area declining for forty months straight now, many people just can’t wait any more.
Have we hit bottom? Many people are saying ‘Close Enough!’
There are some neighborhoods and price ranges of the Sacramento Metro area that will actually increase from current prices! If someone GAVE you the lot and a truckload of lumber, you couldn’t build a home for what they are selling for right now!
But then there are some area and price ranges that still have a long way to go! And the economy is not helping…
The Sacramento area, currently posting a 10.8 percent unemployment rate, is projected to increase above 12 percent in early 2010.
The Alt-A, and Pick-a-Pay, Pay option ARM loans that have just started resetting will continue to burdon our market at those homes will have to be dealt with somehow.
The moratoriums on foreclosures may have just postponed our recovery, by prolonging the inevitable. And it seems that loan modifications have not gone far enough in reducing principle to todays values, so most modifications don’t work. Banks are, for some reason, more interested in paying realtor fees to sell the home for far less than what the original homeowner might be willing to pay in a short refinance.
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Green Governator unveils California’s ‘Astronauts of the Green Revolution’
March 17th, 2009 Categories: My Stories, Sacramento Economy
Just yesterday, Arnold Schwarzenegger launched the California Green Corps; that will place at-risk young adults aged 16 to 24 into jobs in California’s emerging green economy.
Governor Schwarzenegger said “The Green Corps will help underprivileged young people learn job skills while we create a well-trained workforce for clean technology and for the green economy. I’ve been pushing for this program for a long time, because it kind of combines my passion for the environment, for protecting the economy, creating jobs, career-tech education and helping underprivileged kids and of course, service.”
A $20 million project, It consists of a combination of $10 million in federal economic stimulus funding (U.S. Department of Labor) and $10 million from public-private partnerships. The first phase of the California Green Corps will consist of a 20-month pilot program reaching at least 1,000 of California’s at-risk young adults.
In their presidential campaign, Obama had promised to create a Green Jobs Corps to engage disadvantaged youth in energy efficiency opportunities to strengthen their communities, while providing them with practical skills in this high-growth career field.
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