According to an article in the Dallas Morning News, slumping sales-tax revenues are forcing Dallas-Fort Worth municipal officials to monitor their budgets and prepare for possible cuts.
The article said:
Dallas is preparing for a projected budget deficit of as much as $100 million for next fiscal year… The deficit projection in Dallas is based in part on declining sales-tax revenue and a stagnant property-tax base. Lagging sales taxes also are affecting transportation entities such as Dallas Area Rapid Transit.
Less spending equals less taxes and we’re not just talking about sales taxes either, property taxes are being hit very hard because of the foreclosure crisis. The reduction in tax revenues can have devastating effects on a city’s ability to provide the basic services necessary to make any city livable—water, sewage, police and fire protection, not to mention access to fully staffed and equipped schools. Let’s just look at California if we want an example of what happens when tax revenue declines and cities are faced with budget deficits.
This is why it is so important for us to get a handle on the foreclosure crisis facing us. For every foreclosure, there is a loss in tax revenue that may be greater than the initial loss in property tax revenue. Many homeowners who face foreclosure are forced to leave and live in other states with family or friends, causing further loss in tax revenue that would have been gained if they remained paying for products and services in the city. The bottom line is that everything is interconnected and the foreclosure crisis seems to be at the root of our current financial problems including the decrease in tax revenue.