The massive financial losses Anne Arundel suffered the past two years from the burst of the housing bubble appears to be easing as taxes tied to real estate sales are slowly improving, officials said.
“We were sweating over what the September numbers could be, but the fact that the figures are almost flat is a very good sign to see,” said John Hammond, Anne Arundel’s budget officer.
Transfer and recordation taxes, so called real estate taxes, stem from property and home sales, and are usually a good indicator of the county’s housing market.
The county lost only $300,000 this September compared with the previous year.
Between July and August, the county lost nearly $8 million in real estate taxes compared with 2007.
Anne Arundel in 2007 was down $10 million from 2006, as the housing market slumped following years of wealth for the county.
“We have to look at what will happen over the remainder of the calendar year, but the stabilization in September is good to see,” Hammond said.
Real estate tax revenue contribute a small percentage to the county’s income. But given Anne Arundel’s cap on the main money-maker of property taxes and the tax-adverse nature of county constituents, any drop in revenue can be disastrous for the county.
The county had to implement new fees, including one for using county ambulances, as well as increase other service fees and make budget cuts to make up for the losses in 2007.
A fiscal committee reported this year that if the county didn’t find new revenue streams, Anne Arundel could see a $250 million deficit in the next few years.
In response to the summer’s declining real estate revenues, County Executive John R. Leopold instituted his third hiring freeze, which he hoped would save $2.5 million.
Officials said it’s too early to tell if the rebound equates to the county finally getting out of the red in its real estate tax collection.
“Until this current financial crisis hit, things were picking up a bit,” said Tom Quattlebaum, chief executive officer of the Anne Arundel Association of Realtors.
“We’ve been below last year’s sales numbers, but things were leveling off.”
Quattlebaum said Friday’s federal approval of the $700 billion bailout plan will “hopefully improve confidence level and the housing market activity can improve.”
BY THE NUMBERS
Transfer and recordation tax revenue:
July
2007: $8.1 million
2008: $5.8 million
August
2007: $10.3 million
2008: $5 million
September
2007: $6.7 million
2008: $6.4 million
Source: Anne Arundel Budget Office
