The expected 400 million dollar state deficit will most likely grow significantly, and one of many factors is the housing-market downturn. The realty-transfer tax, based on the value of the home, provided 17 million dollars less to the state coffers this year. This is in addition to an overall economic slow down resulting in few sales and their accompanying taxes, fewer trips to casinos and their state revenue taxes, and few lottery ticket purchases by people who no longer are buying the “Give Your Dreams of Chance” slogan. Augustine Faucher, an economist at Moody’s, is reported in the Atlantic City press as saying “This will be the greatest downturn in housing prices since the Great Depression.”
Municipalities in NJ will be facing enormous challenges to balance municipal budgets as the State will most likely be seeking ways of further reducing the amount of taxes returned to local communities. Expenses will continue to rise, and towns will find revenue sources such as those provided by recycling contracts will likely go down. But the collective face of a town does not always carry the emotional impact the economy has on individuals in those communities.
The economic crisis is affecting families in Franklin Lakes, Oakland and Wyckoff on a daily basis. The most disturbing is the number of foreclosures that have occurred,and those scheduled for the coming months. Franklin Lakes, with approximately 3,400 homes has 127 houses listed for sale by brokered realtors; there has been 1 foreclosure in the last three months, and 5 more planned in the coming three. Oakland has approximately 4,350 homes with 88 listed for sale; there have been 3 foreclosures in the last three months, and 4 more facing foreclosure in the coming three. Wyckoff has approximately 5,640 homes and appears to be weathering the housing crisis slightly better then her FLOW neighbors. There are approximately 100 homes for sale; there has been 1 foreclosure in the last three months, and 2 more scheduled in the coming months.
The NJ Star Ledger is reporting on a Rutgers economic study which indicates there will be fewer jobs in New Jersey at the end of this decade than at the beginning. According to the report, a job loss of this nature over the course of a decade has not occurred in New Jersey since the Great Depression. The loss of jobs will add to the regional economic problems. The state’s unemployment fund fund dipped, for the first time in a decade, below the level allowed by law to keep it solvent. The State provided 260 million dollars to avert a tax hike, but they may not do it again. This burden will most likely fall on to employers who will be expected to make up the difference.
Most experts expect economic situation to continue worsening with improvements hopefully materializing in the year 2011. Below is a video discussing how the economic crisis is impacting the most vulnerable citizens at food kitchens faced with greater demands and lower donations.