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WPCNR QUILL & EYESHADE. Analysis & Commentary By John F. Bailey. September 1, 2023:
The July sales tax figures are in for White Plains New York USA, but frankly, I’m puzzled.
They should be soaring. But they are flat.
The city started its 2023-24 fiscal year in July sales tax dollars up 2 % the first month.
The inflation was 8% through all of 2022. The first 7 months of 2023, the inflation rate (adding to the prices of 2022, not diminishing the prices, but growing prices), is 4.6.
Why is our sales taxes not doing better is my bewilderment.
Corporations killed us by raising prices (blamed on shortages) and made layoffs to boost profitability. The bottom line counts in business, always. Not you.
If you note how prices soared in 2022 and continued to soar in the first 7 months of 2023 you would think White Plains would start OFF in July with at least a 10% to 12% gain.
Is this a red flag that people are not spending like they usually do? Has business greed created a lack of demand? That is a real question.
The Department of NY State Taxation and Finance in July reported White Plains received $32,369,358 compared to $31,847,884 last July.
That is a gain of only 2% and inflation is running 12.6% over the last 19 months.
Westchester County however is down 3% the first 7 months of this fiscal year starting in January earning $500.1 million compared to 504.8 million after 7 months of 2022. that is down 1%.
The county has to be panicked. Where is all the revenue from all that nasty inflation. Good question, isn’t it?
At this point the county should make about 1 billion in sales taxes, but still with earnings reports from companies glowing from Wall Street,where is the consumer spending lift for towns, cities and counties in the market place where it counts? Has that dried up?
Is it being under reported by businesses? That would not surprise me.
Are Westchester consumers who are buying paying 12% more but spending less?
I reckon consumers have cut their spending on food, gasoline, vacations, travel, entertainment by at least 12%. Because as prices go up, your wages do not automatically follow.
Corporations cry poverty. Make layoffs and continue to wallow in long term debt to expand their businesses. Airlines are a great example of that. So are oil companies. Auto companies. Entertainment companies. Pharmaceutical companies. Health Businesses.
The inflation index shows you how much expenses go up. When was the last time inflation reduced prices? But lack of demand does. The Great Depression of the 1930s did that.
We do not see what consumers are actually spending of their income month to month, let alone what that income has been reduced in purchasing power. The state data I have looked at the last 23 years in reporting sales tax revenues as barometers of the city economy do not allow White Plains to find out what businesses are down or up. This has long been the lament of previous White Plains Budget Directors.
Real estate the bellwether of the Westchester economy and White Plains economy is in the doldrums. There is no easy fix.
That is because of the Federal Reserve obsession on lowering inflation to 2% that has produced 7% mortgages, killing the housing market capital available (savings for a home of your own).
Banks those “benefactors” of the public have become very picky. If you want to buy a home at a price the bank feels is above market value they may turn down your mortgage.
This has created a stagnant market and a liquidity squeeze on homebuyers and sellers. Real estate has no ability to restart itself if there is no willing and able to buy new home seekers out there.
Nesteggs counted on as being there for retirement, (thanks to a sale of one’s home) could turn out to be very underestimated and vulnerable because of being forced to sell.
The long mortgages at 7% you face, (as a new buyer) the loss of your home if your ability to pay the mortgage disappears. You lose everything thanks to the cruelty of foreclosure.
Meanwhile the federal reserve is still vowing higher interest rates to tamp inflation down to 2%.
It is too early to tell whether the county makes their budget or not or has created another deficit by being as usual way overly optimistic.
Where is consumer confidence? I think the 2% increase in White Plains is very disappointing.
I don’t see it when 12% inflation over the year hardly moves your economic sales tax revenues only 2% or 1% less for the County.
The city finance department has to watch the fall numbers.
So does Westchester County. And do not count that billion dollar surplus yet. And pay attention to crafting the 2024 budget to you do not depend on revenue you aren’t going to have.