Director of the Office of Management and Budget, Hyong Yi, briefed the Board on some key economic indicators. Here are the bullet points:
- County unemployment higher than national average
- County bankruptcy filings are decreasing
- Foreclosures declined from 2010 to 2011
- Residential building permits declined
- Commercial building permits trending positively
- Home sales increasing, but closing prices are lower
- Retail sales are increasing
Presentation and panel discussion by noted local economists Dr. John Connaughton of UNC-Charlotte and Dr. John Silvia of Wells Fargo.
Dr. John Connaughton – UNCC
We have a job problem in NC and Mecklenburg County. Jobs are critical. The upcoming election will probably be about the person who can create jobs. The numbers are masking the problem because many people have dropped out of the job market and don’t show up in the numbers. Gas prices are critical but we have no way of predicting where the price will peak. The extension of the payroll tax totals $150 billion and that should result in more consumer spending. However, when gas prices go up 50 cents it costs consumers $140 billion. A failure of several economies in Europe could result in another slowdown in America, perhaps to 2011 levels. Commissioner Clarke asked the question – What can a local government do to impact the recovery? There’s been a cultural shift in the last three decades as it regards our response to a national recession. This economic downturn will be with us another five or six years. Regarding the federal government bailout…if not for TARP, we would all be selling pencils and apples at Trade & Tryon. We have a horrible sales tax system in this state. The tax is too high. It becomes an incentive for more people to purchase via e-commerce and perhaps avoid the tax.
Dr. John Silvia
Education is a key to jobs. Housing sales are up but we’re basically clearing inventory, prices are low. It’s like the classic disaster movie. We have survived the disaster and now we’re at the day after and we’re digging out. This is the 21st century and it is expected that everyone will have basic computer skills. Unemployment among high school graduates and dropouts will continue to be high. We don’t have the same rebound in employment we had during and after previous downturns. Population growth in Mecklenburg County has slowed considerably from a high in 2006 & 2007. It’s now about 15,000 a year. Commissioner Clarke’s question - What can a local government do to impact the recovery? Do no harm, don’t make bad spending decisions. Take advantage of the Democratic National Convention. People can no longer walk into a job interview saying they have a strong back and will work hard. Those jobs were available in the 50s and 60s but in this economy people need college degrees and advanced degrees. People need to take stock of their skills and realize they’re in it for the long hall and do their best and get new skills. I would not focus on training for any particular job. Max your skills in many areas.
Taking Stock
Hyong Yi brought the Board up to date on what the County has been through over the past few years.
The County’s multi-year strategic path:
1. Reduce programs, services and personnel to match available funding
2. Maintain long‐term fiscal discipline
3. Redesign and reshape Mecklenburg County government
Ways the County has accomplished the goals associated with the strategy:
• Less revenue
• Fewer employees
• Increased consolidation, resource sharing
• Greater collaboration, enhanced planning
• More streamlined business processes
• Strong fiscal policies
• A multi‐year focus on change management
Community Service Grants
The Board discussed the County process for distributing grants to non-profits that provide a service more efficiently and less expensively than the County. This year, the County gave $3.1 million in grants. Grant applications must fit into four of the County’s critical success factors in order to be considered. They are:
- Train and place unemployed workers
- Improve the HS graduation rate
- Prevent health risks and disease
- Promote financial self-sufficiency
Capital Program Update
Finance Director Dena Diorio briefed the Board on the County’s Capital Building program. There are an estimated $130 million in projects projected to be approved by the Board in FY13, including $108 million for schools. Another $217 million in unranked projects. Next steps in the Capital process:
- Present options to address challenges
- Assess viability of ranked projects for FY13
- Present proposed capital process for FY14
- Present revisions to the Debt Management Policy
- Reconvene Citizen’s Capital Budget Advisory Committee
*Streaming video of the entire conference can be found here.
*All the conference supporting documents can be found here.
Filed under: Uncategorized
