Friday, 11 September 2009 00:00
We’re in uncharted territory here. We’re way past Exit 73. No one knows what will happen next, really.
I know that we’re all being told that “the worst is behind us” and things are stabilizing or improving. I hope so. I want it to be so. But I don’t want to be delusional about it, as some of our decision makers seem to be. Anticipated bank failures, commercial real estate meltdowns, mounting household debt and falling personal income. Pick your most ominous signal. Collect them all.
Long Islanders need to pay attention to Mexico. Oil exports from Mexico, our county’s third largest supplier of oil, have dropped by a third and production there is seriously slipping (20 percent in one year). Last week, the price of oil surged to a 10-month high because of all the “feel good” economic talk. The price of oil supposedly dropped because of reduced demand in the bad economy, so wouldn’t a “recovery” bring higher gas and fuel prices for Long Island? Long Island and most of our local economic model was built around cheap gas. Swinging above the heads of Long Islanders, back and forth over crowded Route 110, is the price of oil.
The federal, state and county governments are all facing financial binds. Another big federal “stimulus” seems unlikely. The amount of money dedicated to solving our country’s water, sewer, road, bridge and other infrastructure needs was less than 1 percent of what civil engineers think America needs to spend just to fix the stuff that’s falling apart. For New York, the stimulus mostly helped stabilize revenue streams and put off the horror, but not for always.
California. That’s all you have to say. In Modesto, commuting distance from San Francisco and Sacramento, where they have a symphony orchestra and the annual American Graffiti festival, housing prices are down 70 percent. And the wave is moving. Arizona’s commercial real estate market is being called “a bloodbath,” and commercial lease rates have fallen 75 percent in some counties. In the latest quarter, New York State tax income is down 24 percent from a year ago, and what’s being leaked about mid-year reductions and budget adjustments that may be implemented this month already seem pie-in-the-sky hopeful. There are no more generous bailouts on the horizon for Nassau County.
Tax assessments are a fiasco all over again. The property tax as a revenue source, as an economic concept, is unresponsive to changing real estate values. Our system couldn’t deal with rising housing prices, so it will take advanced alien technology to detect any sense, reason, fairness or satisfaction with property tax bases in an unprecedented reduced market. Who even knows the value of their real estate in this environment, until they try to sell? It’s hard to tell if housing prices have really stabilized or risen a bit, or if this actually reflects the spread of defaults, foreclosures and desperate bargains into more expensive neighborhoods.
Enough. There’s more, but enough. My point isn’t that the sky is falling. My point is that we must prepare for it to fall, or maybe just a few pieces. Right now, there is a stunning lack of serious discussion or vision among leaders about the crises that may be rapidly moving toward us. The biggest, once-in-a-lifetime stimulus project in one town is a parking garage. Snap out of it. We are facing serious challenges to our ability to sustain what we have going, but none of this is reflected on our public agendas.
What little we do hear seems almost absurdly simplistic. If “tax cap” is really the big plan, we may end up facing a public calamity. Some people would kind of like to see some schools close in the middle of the year or beaches and parks padlocked. Others realize that the schools and the other things we’ve built are our biggest assets as a region and a potential destination for families.
Even if there are tough times ahead, this doesn’t have to be the end of Long Island. But we need emergency plans, just as if it was a hurricane bearing down on us. Because, in a way, it is.
Michael Miller is a freelance writer, designer and strategic consultant who has worked in state and local government. He lives in New Hyde Park.
Michael Miller is a freelance writer, designer and strategic consultant who has worked in state and local government. Email: email@example.com