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Report: Expenses exceed revenue

The cost of government in Nevada County is growing at a faster rate than the revenue it is generating, reconfirming a worrisome trend, according to a new report on the area’s economy.

In addition, most job growth is occurring in the lower-paying services business, with housing costs continuing to outpace income, according to the report by the Auburn-based Sierra Economic Development District. As a result, young families find it difficult to live here, and many are relocating.

“Is it worrisome? In general terms, yes,” SEDD President and chief executive Brent Smith said. “But these things tend to be self-governing. Something has to give.”



Nevada County supervisors will learn more about the Economic and Social Indicator Review 2007 at 11 a.m. today during their regularly scheduled meeting at the Eric W. Rood Administrative Center, 950 Maidu Ave., in Nevada City.

The report’s revenue information showed a 61-percent increase in property taxes paid to the county between 2003 and 2006 – with $19.25 million estimated to have been paid in the 2005-06 fiscal year. The prolonged slump in the housing market has raised concerns about future revenue growth from property taxes, however.




For all four governments in Nevada County – the county itself, Grass Valley, Nevada City and Truckee – total revenue has risen despite cuts in state assistance, the report said. But expenses are rising faster, the report warned.

“Unfortunately, city and county expenses have growing at a faster rate than revenue,” it concluded.

Look for incentives

Much of the report confirms what has been said previously, including a recent study by the Sierra Business Council, as well as comments by residents and business and public leaders.

“I don’t see how young families can find what they need here,” said Board of Supervisors Chairman John Spencer.

County leaders need to think about “what incentives can be given to develop affordable housing for these young families who will come in with that energy and with those children who will fill the schools,” Smith said.

In one worrisome finding, residents spend about $137 million outside the county each year, costing area governments a potential $10 million yearly in sales tax income, the report said.

The prospect of capturing more money in retail sales taxes should spark local leaders into action, according to Smith.

“They’ve got to pay some close attention to zoning of properties that are suitable to retail, commercial and industrial building … if the county’s going to stop this leakage,” he added.

The county’s population is growing at half the rate of the rest of the state.

“It’s not rampant growth,” Spencer said.

But the report also offered one bright spot: Although young families find it hard to live here, older parents with children represent a significant part of the growth.

“Rising numbers of 5-to-19-year-olds and 45-to-64-year-olds suggest … a significant part of the net in-migration may be families with school-age children,” the report states.

Those probably include people who have sold high-priced houses in the Bay Area to move to Nevada County, where housing prices are relatively lower, Smith said.

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To contact City Editor Trina Kleist, e-mail tkleist@the union.com or call 477-4230.

Economics for

Nevada County

The report titled Nevada County Economic and Social Indicator Review 2007 analyzes economic trends in Nevada County:

• People ages 20 to 24 are moving out of the county, but people ages 45 to 64 are moving in.

• Residents spend about 10 percent of their retail dollars outside the county – a loss of $137 million to local businesses and $10 million in local sales taxes.

• The annual growth rate in the county is about half that for all of California.

• The biggest job growth is in services, which pays lower than elsewhere in the state.

• The biggest income growth is in the information business, though the county has few jobs in this field.

• Crime has dropped since 2001.

• The number of people receiving food stamps – mostly young to middle-aged women – has risen 30 percent since 2003 to 4 percent of the county’s population.

– Source: Sierra Economic Development District


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