Bruigville Tax Receipt Troubles Deepen
Last wek Chrysler and GM reduced their property assessment by millions of dollars in bruigville to reflect, what they believe, is the actual value of their property. The net effect to city and county government, as well a two schools, is a $20M decline in property tax receipts. This news stunned local government and they are negotiating with both companies.
The news is troubling on several accounts. Firstly, this re-assessment means that both companies see less value of their plants and equipment which suggests that both will be reducing or eliminating operations locally. In the case of Chrysler, plants and equipment will be permanently idled, reducing employment significantly. GM will probably shutdown all operations and demolish their plant due to their inability to sell what soon could be a environmental Superfund site. This means that all employment will be terminated in the next couple of years.
So property tax receipts from both companies will continue to decline while income tax receipts from employees of both firms will also decline. Additionally, sales tax receipts will fall as employees become unemployed. Eventually, terminated employees will migrate away from the community causing further tax receipt losses.
This spiral will cause a crisis for both government and schools which will destroy the community eventually.
Secondly, both Chrysler and GM sought and obtained tax abatement for their facility and equipment over the past 30 years. These abatement's lowered property taxes for five years which slowly returned to normal rates. In essence, the government hoped that the abatement's would be an investment that would pay off in the long run through increased employment and tax revenue. Instead, the local government was suckered out of much needed cash then left with nothing once services and infrastructure was added to support these companies.
Now the city, county and schools will have to drastically reduce services and shed employees. There is no way this revenue can be increased through increased taxes because the job base will not support it. There is no more money to be had unless the government wants to drive every city resident into poverty through taxes.
Laying off city and county workers, as well as teachers, will only make the city's 13% unemployment rate higher. More small businesses will shed workers or go out of business as local incomes drop yet again. The tax base will decline more and government will have to shed more jobs. The vicious circle goes round and round.
I don't know where all this is leading but it doesn't look encouraging for bruigville. I have watched cities die here in this region and it is not pretty. I never thought I'd see my hometown die. With high tech electronics, powertrain and advanced alloy manufacturing employers, I thought the city would thrive for the rest of my life. But high tech electonics is now a commodity that is fleeing to offshore manufacturers and US automotive powertrain jobs have dwindled as Japanese robotic equipment has reduced the number of employees required to do the work. Alloy manufacturing is stable but is a small employer in the city. All of the other manufacturing firms have died or left the city years ago and with them all of the tool and die shops, suppliers and trucking firms. There is nothing on the horizon to backfill these lost jobs.
What remains of Delphi remains in the city for awhile but most of it's employees live in other counties and cities. Bruigville sees little tax revenue from this engineering facility or it's employees. They drive in to work then leave. With all of their manufacturing facilities offshore, there is little reason for Delphi to remain here. I expect them to shutdown and move within the next few years.
So, 130 years of manufacturing excellence will disappear, never to return. And with it the middle class incomes and lifestyles. Bruigville will dwindle from 50,000 residents making middle class wages to perhaps half that making poverty wages. Medical facilities and nursing homes will thrive for a couple of decades servicing UAW retirees. Once the boomers die off the city will collapse to become a small farming community with a small retail base to support it.
And that's the optimistic scenario. If the depression deepens or if pensions, social security and medicare fail then Bruigville becomes an abandoned graveyard, a monument to the folly of mankind.
The news is troubling on several accounts. Firstly, this re-assessment means that both companies see less value of their plants and equipment which suggests that both will be reducing or eliminating operations locally. In the case of Chrysler, plants and equipment will be permanently idled, reducing employment significantly. GM will probably shutdown all operations and demolish their plant due to their inability to sell what soon could be a environmental Superfund site. This means that all employment will be terminated in the next couple of years.
So property tax receipts from both companies will continue to decline while income tax receipts from employees of both firms will also decline. Additionally, sales tax receipts will fall as employees become unemployed. Eventually, terminated employees will migrate away from the community causing further tax receipt losses.
This spiral will cause a crisis for both government and schools which will destroy the community eventually.
Secondly, both Chrysler and GM sought and obtained tax abatement for their facility and equipment over the past 30 years. These abatement's lowered property taxes for five years which slowly returned to normal rates. In essence, the government hoped that the abatement's would be an investment that would pay off in the long run through increased employment and tax revenue. Instead, the local government was suckered out of much needed cash then left with nothing once services and infrastructure was added to support these companies.
Now the city, county and schools will have to drastically reduce services and shed employees. There is no way this revenue can be increased through increased taxes because the job base will not support it. There is no more money to be had unless the government wants to drive every city resident into poverty through taxes.
Laying off city and county workers, as well as teachers, will only make the city's 13% unemployment rate higher. More small businesses will shed workers or go out of business as local incomes drop yet again. The tax base will decline more and government will have to shed more jobs. The vicious circle goes round and round.
I don't know where all this is leading but it doesn't look encouraging for bruigville. I have watched cities die here in this region and it is not pretty. I never thought I'd see my hometown die. With high tech electronics, powertrain and advanced alloy manufacturing employers, I thought the city would thrive for the rest of my life. But high tech electonics is now a commodity that is fleeing to offshore manufacturers and US automotive powertrain jobs have dwindled as Japanese robotic equipment has reduced the number of employees required to do the work. Alloy manufacturing is stable but is a small employer in the city. All of the other manufacturing firms have died or left the city years ago and with them all of the tool and die shops, suppliers and trucking firms. There is nothing on the horizon to backfill these lost jobs.
What remains of Delphi remains in the city for awhile but most of it's employees live in other counties and cities. Bruigville sees little tax revenue from this engineering facility or it's employees. They drive in to work then leave. With all of their manufacturing facilities offshore, there is little reason for Delphi to remain here. I expect them to shutdown and move within the next few years.
So, 130 years of manufacturing excellence will disappear, never to return. And with it the middle class incomes and lifestyles. Bruigville will dwindle from 50,000 residents making middle class wages to perhaps half that making poverty wages. Medical facilities and nursing homes will thrive for a couple of decades servicing UAW retirees. Once the boomers die off the city will collapse to become a small farming community with a small retail base to support it.
And that's the optimistic scenario. If the depression deepens or if pensions, social security and medicare fail then Bruigville becomes an abandoned graveyard, a monument to the folly of mankind.
posted by lugh lampfhota at 11:53 AM
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