Pontiac – Oakland County Executive L. Brooks Patterson said Wednesday local property values will continue to erode for the next three years and property tax revenues may not return to 2007 levels for more than a decade.
The projection suggests that Oakland and surrounding counties will face severe budget pressures in the coming years.
Patterson said that property values could fall as much as 50 percent from their peak three years ago. For many property owners, that will mean loss of equity in their homes and the possibility of foreclosure. For local governments and schools, it will mean more cuts in staffs and services to balance strained budgets.
Even when the economy recovers and property values begin to increase again, Patterson said taxable values and tax revenue will not return to peak level for a very long time.
“Assuming a normal rate of inflation, it could take 10-15 years (circa 2022 or later) to rebound to the same level of tax revenue experienced in 2007-2008,” Patterson said. “This is why Oakland County must remain diligent by focusing on the long-term financial outlook and continue to make incremental budget adjustments for a long time to come until ultimately we can once again attain a sustainable and predictable level of revenue.”
The county’s $382.6 million budget for 2010-11, which begins Oct. 1, is down from $413.9 million last year. Declining property tax revenues, dwindling state revenue sharing dollars and increases in county health care costs are to blame.