2013 BOCC Strategic Planning Conference – Day two AM session

Day two of the Board’s Strategic Planning Conference focuses on the economy, budget planning, a report on current revenues and expenses and a look at the proposed budget calendar.

To kick it off, Dr. John Connaughton of UNC-Charlotte and Dr. Michael Brown of Wells Fargo talked about economic conditions facing the County.

Dr. Connaughton asked the question “Did we avoid the fiscal cliff?” Connaughton says no. Cutting spending or raising taxes won’t fix the problem. We need a healthier growth rate, somewhere near 3.5 percent. Deficit problem won’t go away without healthier growth. During the recession economistsNorth Carolina lost 333,400 jobs during the recession and only gained back 46 percent of those during the recovery, though the six-county area around Mecklenburg recovered 77 percent of the lost jobs. Total income in Mecklenburg declined 15 percent since 2008 due to loss of jobs, especially in financial sector. North Carolina unemployment rate is fifth worst in the nation. North Carolina needs to focus on creating jobs as its number one job. Current negative economic indicators include consumer confidence, budget deficit, trade deficit and tax increases. There is potential things will get better in the second half of the year, perhaps 2.3 percent growth by the fourth quarter and an increase in the number of people buying homes. We should not be satisfied with 2 percent growth. Keys to watch are consumer confidence, consumer debt, excess reserves, job growth and gas prices. PowerPoint.

Dr. Brown agrees with Dr. Connaughton that we did not avoid the fiscal cliff. He says the new reality is that economic growth will remain at 2-2.5 percent for the foreseeable future. Education clearly makes a difference in whether a person is moving along with the new economic reality with college-educated workers suffering less unemployment and enjoying higher wages. A great many people have been unemployed so long that they have given up looking for work. We need better communication between employers and educational institutions so they are preparing students to become trained workers. He doesn’t feel that inflation is going to be a problem this year. Encouraging to see all job sectors growing in Charlotte with hospitality leading the way. Sees sub-par pace of economic growth nationally and in North Carolina. All indications are that improvement will happen in the 4th quarter of 2013 and first half of 2014. Brown’s full Presentation.

There was a brief follow-up to Wednesday’s discussion and working agreement between the Board and staff. Items provide guidelines for members to follow with no means of assuring everyone follows the guidelines. Lee Institute says the exercise was good and establishes a starting point for everyone to work better together.

View video of the first day of the conference here.

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