What the E c onomists Say & What it Me ans to VB 2 Ge tting - - PowerPoint PPT Presentation

What the E c onomists Say & What it Me ans to VB

Ge tting Be tte r …

2

Slowly!!!!

Post- Re c e ssion Re a l GRP Growth

2.36 2.35 1.40 1.15 1.06 1.00 0.31 0.28 0.14

• 0.18
• 0.50

Bla c ksbur g - Christia nsburg - Ra dfor d, VA Cha rlotte sville , VA Winc he ste r , VA- WV King spor t- Br istol- Bristol, T N- VA Ric hmond, VA Wa shing ton- Ar ling ton- Ale xa ndr ia , DC- VA- MD- WV Virg inia Be a c h- Norfolk- Ne wport Ne ws, VA- NC ) Ha r risonburg , VA Sta unton- Wa yne sboro, VA Roa noke , VA L ync hburg , VA

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Source: Bureau of Economic Analysis and Old Dominion Economists

Housing Re c ove r y

Numbe r

• f E

xisting and Ne w Constr uc tion Home s Sold

Hampton Roads: 2002-2015*

Year Existing Homes Sold New Construction Homes Sold Percent New Construction

2002 19,869 4,969 20.0% 2003 21,421 4,757 18.2% 2004 23,548 4,587 16.3% 2005 24,755 4,379 15.0% 2006 22,405 4,327 16.2% 2007 19,154 3,912 17.0% 2008 15,046 3,178 17.4% 2009 15,851 2,673 14.4% 2010 14,703 2,265 13.4% 2011 15,818 2,366 13.0% 2012 16,856 2,664 13.6% 2013 18,791 2,878 13.3% 2014 18,700 2,485 11.7% 2015* 15,733 2,156 12.1%

Source: Real Estate Information Network and Old Dominion University Economic Forecasting Project. Information Deemed Reliable But not Guaranteed. Figures reported here represent only those properties listed through REIN by REIN members, may not represent all new construction activity in our region.

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3,224 1,592 500 1,000 1,500 2,000 2,500 3,000 3,500 Jun-08 Se p-08 De c -… Ma r-09 Jun-09 Se p-09 De c -… Ma r-10 Jun-10 Se p-10 De c -… Ma r-11 Jun-11 Se p-11 De c -… Ma r-12 Jun-12 Se p-12 De c -… Ma r-13 Jun-13 Se p-13 De c -… Ma r-14 Jun-14 Se p-14 De c -… Ma r-15 Jun-15 Se p-15

Number of Active Listing of Distressed Homes (REO & Short Sales)

Hampton Roads: June 2008 to September 2015

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Source: Real Estate Information Network (REIN) and the Old Dominion University Economic Forecasting Project.

September 2015: 1,592 Peak: 3,224 (November 2010)

Change in Asse sse d Value of Re al E state

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• 10%
• 5%

0% 5% 10% 15% 20% 25% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Percent nt C Chang nge Fi Fiscal Y Year

Residential Commercial Total

Projected

So urc e Re a l E sta te Asse sso r’ s Offic e

Consume r Confide nc e

Consume r Confide nc e Inde x

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0.0 20.0 40.0 60.0 80.0 100.0 120.0 140.0 Perc rcent Mont nth a and nd Y Year

So urc e : Co nsume r Co nfide nc e Bo a rd

90 50

Consume r Pr ic e Inde x

10

5.4%

• 1.5%

3.8% 0.2% 2.1% 2.4%

• 2.0%
• 1.0%

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

So urc e : U.S. Bure a u o f L a b o r Sta tistic s

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Household Net Worth

Percent of disposable personal income

Source: Federal Reserve, Richmond BA Z.1 Financial Accounts of the United States via Haver Analytics

• 4
• 3
• 2
• 1

1 2 3 4 5 6

• 4
• 3
• 2
• 1

1 2 3 4 5 6 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

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Disposable Personal Income & Expenditures

Source: Federal Reserve, Richmond VA Bureau

• f Economic Analysis via Haver Analytics

12 Month percentage change

Note: Real disposable personal Income was adjusted to remove tax-induced income shifting near end of 2012. June July August Income 0.2 0.4 0.3 Expenditures 0.1 0.3 0.4 Month over Month % Change

Me dian House hold Inc ome

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$65,776 $59,298 $61,626 $68,816 $40,000 $45,000 $50,000 $55,000 $60,000 $65,000 $70,000 $75,000 2006 2007 2008 2009 2010 2011 2012 2013 2014 T HOUSANDS YE ARS Vir ginia Be ac h Unite d State s

Source: U.S. Census Bureau American Community Survey

De fe nse

Caps on De fe nse Spe nding

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450 500 550 600 650 700 F Y12 F Y13 F Y14 F Y15 F Y16 F Y17 F Y18 F Y19 F Y20 F Y21 Billio ns BCA 2011 Se q ue stra tio n BBA 2013 BA 2015

Source: BCA2011, Budget Requests for FY14, CBO Sequestration Update Report and the Old Dominion University Economic Forecasting Project

Hampton Roads Gross Regional Product Attributable to DOD Spending

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49.5% 48.8% 32.8% 44.9% 40.3% 39.3% 0% 10% 20% 30% 40% 50%

1984-2015

So urc e : ODU Sta te o f the Re g io n Re po rt, 2015

E mployme nt

Unemployment Rate

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Percent Source: Federal Reserve, Richmond VA, Bureau of Labor Statistics & Board of Governors via Haver Analytics

FOMC projection is the median, range, and central tendency for the Q4 levels, from the September 2015

• meeting. Grey Boxes indicate

median projections

Une mployme nt Rate

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0.0 2.0 4.0 6.0 8.0 10.0 12.0

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 PE RCE NT YE AR

Vir ginia Be ac h Vir ginia U.S.

Source: U.S. Bureau of Labor & Statistics

Re ve nue s

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Ke y Assumptions

 No c ha ng e in ta x ra te s  No use o f fund b a la nc e  Re g io na l E

c o no mists indic a te a slo wly impro ving re g io na l e c o no my

 Give n F

e de ra l Budg e t, funding fo r sc ho o ls a nd c ity se rvic e s will b e minima lly impa c te d

Re ve nue Proje c tions

13.8% 9.4% 4.8%

• 0.1%

1.5%

• 2.0%

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 80-90 90-00 00-10 10-14 15-20

Ave r age Re ve nue Gr

• wth

Rate s by De c ade

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Re al E state T ax Re ve nue

$380 $400 $420 $440 $460 $480 $500 $520 $540 $560 $580

F Y 2012 F Y 2013 F Y 2014 F Y 2015 F Y 2016 F Y 2017 F Y 2018 F Y 2019 F Y 2020 F Y 2021

Millions

Budge t Ac tual Pr

• je c tion

2¢ 6¢

23

• 2¢

Each 1¢ increase = = $5.2 mil illio lion

Ge ne ra l F und o nly

Pe r sonal Pr

• pe r

ty T ax

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37% 42% 1% 18% 2%

Ve hic le s (PPT RA) Ve hic le s Public Se r vic e Busine ss E quipme nt Othe r

$100 $110 $120 $130 $140 $150 $160 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Millions

F isc al Ye ar

Budg e t Ac tua l Pro je c tio n

30¢

E ac h 10¢ inc r e ase on the ve hic le por tion of the pe r sonal pr

• pe r

ty tax = $3.6 million

Re staur ant Me als

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$0 $5 $10 $15 $20 $25 $30 $35 $40 $45 $50 $55 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Millions Fiscal Year

Budget Actual Projection

E ac h 1% r ate inc r e ase = $7 million

Ge ne ra l F und o nly

$45 $50 $55 $60 $65 $70 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Millions Fiscal Year

Genera ral S l Sales Tax

Budget Actual Projection

$60 $65 $70 $75 $80 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Millions Fiscal Year

St State Sh Shar ared Sal Sales T Tax ax

Budget Actual Projected

So urc e : Bud g e t a nd Ma na g e me nt Se rvic e s

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Sale s T axe s

Base Re ve nue * F

• r

e c ast

27

$1,394 $1,415 $1,437 $1,458 $1,485 $1,513 $1,350 $1,400 $1,450 $1,500 $1,550 $1,600 $1,650 $1,700 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 Millio ns F isc a l Ye a rs

* Ne t o f Sc ho o l T ra nsfe r

Sc hool Re ve nue s

$0 $100 $200 $300 $400 $500 2016 2017 2018 2019 2020 2021 Millio ns Sta te F unding City F unding

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E xpe nditur e s

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E xpe nditure Proje c tions

Ke y Assumptions

 No pa y inc re a se s  5% inc re a se in he a lth insura nc e

c o ntrib utio n

 VRS c o ntrib utio n inc re a se  Ope ra ting c o sts inc re a se b y infla tio n  De b t se rvic e b a se d o n Cha rte r De b t

c a pa c ity

De mand for Se r vic e s

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90 100 110 120 130 140 150 160 170 180 190 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 Fis iscal Y Year ars

If de mand was c onsiste nt, all bar s would be flat at the 2000 le ve l of 100

So urc e : Bud g e t a nd Ma na g e me nt Se rvic e s

Salar y and F r inge Be ne fits

32

$386 $390 $395 $399 $403 $615 $618 $622 $625 $629

$0 $100 $200 $300 $400 $500 $600 $700 F Y 2016-17 F Y 2017-18 F Y 2018-19 F Y 2019-20 F Y 2020-21 Millio ns F isc a l Ye a rs

City Sc ho o l

City and Sc hool E mploye r Contr ibution to He alth and Pe nsion

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$- $20 $40 $60 $80 $100 $120 $140

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Millions F isc a l Ye a rs

VRS He alth Insur anc e

Pr

• je c te d

City and Sc hool Ope r ating Costs*

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$291 $298 $304 $316 $324 $155 $154 $152 $155 $155

$- $100 $200 $300 $400 $500 F Y 2016-17 F Y 2017-18 F Y 2018-19 F Y 2019-20 F Y 2020-21 Millio ns F isc a l Ye a rs

City Sc ho o l

*Ne t o f Sc ho o l T

ra nsfe r fro m the Ge ne ra l F und

Ave r age Pr ic e Pe r Gallon

(Ble nde d r ate for gasoline and die se l)

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2.02 2.67 2.08 2.06 2.61 61 3.06 3.05 2.97 97 2.24 24 2.84 3.30 2.41 41 2.84 3.58 3.68 3.58 3.44 1.5 2 2.5 3 3.5 4 2007 2008 2009 2010 2011 2012 2013 2014 2015 Doll llar ars Calen enda dar Years

Cit City Nat ational al

So urc e : U.S. E ne rg y I nfo rma tio n Administra tio n a nd the Virg inia Be a c h City Ga ra g e

De bt Se r vic e

36

$45 $45 $48 $45 $48 $50 $54 $58 $62 $66 $66 $44 $45 $45 $43 $46 $45 $46 $45 $43 $44 $42 $0 $10 $20 $30 $40 $50 $60 $70 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Millions F isc al Ye ar s

City Sc hools

Base E xpe nditur e * F

• r

e c ast

37

$1,394 $1,446 $1,460 $1,474 $1,496 $1,513 $1,350 $1,400 $1,450 $1,500 $1,550 $1,600 $1,650 $1,700 2015- 16 2016- 17 2017- 18 2018- 19 2019- 20 2020- 21 Millions F isc al Ye ar s * Ne t o f Sc ho o l T ra nsfe r

Pe r Ca pita E xpe nditur e Compa r isons

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3.1 .13 3.28 3.29 3.39 3.28 1.66 1.89 1.43 1.61 1.56 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 Virginia ia Bea each Chesap apeak ake Norfolk Po Portsmouth Su Suffolk Thousa usands

City ity Scho hools

So urc e : Sta te Audito r o f Pub lic Ac c o unts, Co mpa riso n o f L

• c a litie s

Putting it all T

• ge the r

39

40

$947.5 $990.9 $985.3 $1,012.5 $1,047.5 $1,085.7 $1,103.8 $1,121.5 $1,144.2 $1,163.6 $1,070.7 $1,086.0 $1,101.7 $1,123.1 $1,145.1 $900.0 $1,000.0 $1,100.0 $1,200.0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Millio ns

City Base F

• r

e c ast

$729.0 $751.3 $749.9 $769.8 $771.7 $775.2 $781.4 $785.9 $704.3 $728.0 $753.6 $767.2 $779.3 $791.6 $804.3 $680 $730 $780 $830 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Millio ns

Sc hools Base F

• r

e c ast

E xpe nd iture s Re ve nue

Base F

• r

e c ast

41

$1,350 $1,400 $1,450 $1,500 $1,550 $1,600 $1,650 $1,700 2015- 16 2016- 17 2017- 18 2018- 19 2019- 20 2020- 21 Millions F isc al Ye ar s Base E xpe nditur e s Base Re ve nue s Pr

• je c te d de fic it for

F Y 2017 is $31.3 million Bo th Re ve nue s a nd E xpe nditure s a re ne t o f Sc ho o l T ra nsfe r

F lat Re ve nue Gr

• wth

42

$1,350 $1,400 $1,450 $1,500 $1,550 $1,600 $1,650 $1,700

2015- 16 2016- 17 2017- 18 2018- 19 2019- 20 2020- 21 Millions F isc a l Ye a rs

Base E xpe nditur e s Base Re ve nue s F lat R e ve nue s

F lat Re ve nue gr

• wth would

inc r e ase the de fic it by $21.6 million to $53.1 million

Bo th Re ve nue s a nd E xpe nditure s a re ne t o f Sc ho o l T ra nsfe r

Highe r Re ve nue Gr

• wth

43

$1,350 $1,400 $1,450 $1,500 $1,550 $1,600 $1,650 $1,700 2015- 16 2016- 17 2017- 18 2018- 19 2019- 20 2020- 21 Millions F isc al Ye ar

Base E xpe nditur e s Base Re ve nue s High Re ve nue s

At a gr

• wth of 3.5% in

r e ve nue the de fic it would e sse ntially be e liminate d

Bo th Re ve nue s a nd E xpe nditure s a re ne t o f Sc ho o l T ra nsfe r

E xpe nditur e s with Pay Inc r e ase

44

$1,350 $1,400 $1,450 $1,500 $1,550 $1,600 $1,650 $1,700 2015- 16 2016- 17 2017- 18 2018- 19 2019- 20 2020- 21 Millions F isc al Ye ar 1.66% Pay Inc r e ase Base E xpe nditur e s Base Re ve nue s

A 1.66% pay inc r e ase e ac h ye ar would c ost an additional $15 million in F Y 17 and would inc r e ase the de fic it to $46.3 million

Bo th Re ve nue s a nd E xpe nditure s a re ne t o f Sc ho o l T ra nsfe r

Conc lusion

 Budg e t will be ba la nc e d whe n pre se nte d to

the City Counc il a nd Sc hool Boa rd

 We ha ve ma na g e d throug h g re a te r de fic its

during the re c e ssion

 T

he e c onomy is g e tting be tte r… slowly

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