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To: Jim McMannis who wrote (509122)8/31/2009 6:52:14 AM
From: Road Walker  Read Replies (2) | Respond to of 1578965
 
After Century of Growth, Tide Turns in Florida
nytimes.com
By DAMIEN CAVE
HOLLYWOOD, Fla. — The smiling couple barreling ahead on the cover of Liberty magazine in 1926 knew exactly where to go. “Florida or Bust,” said the white paint on the car doors. “Four wheels, no brakes.”

So it has been for a century, as Florida welcomed thousands of newcomers every week, year after year, becoming the nation’s fourth-most-populous state with about 16 million people in 2000.

Imagine the shock, then, to discover that traffic is now heading the other way. That’s right, the Sunshine State is shrinking.

Choked by a record level of foreclosures and unemployment, along with a helping of disillusionment, the state’s population declined by 58,000 people from April 2008 to April 2009, according to the University of Florida’s Bureau of Economic and Business Research. Except for the years around World Wars I and II, it was the state’s first population loss since at least 1900.

“It’s dramatic,” said Stanley K. Smith, an economics professor at the University of Florida who compiled the report. “You have a state that was booming and has been a leader in population growth for the last 100 years that suddenly has seen a substantial shift.”

The loss is more than a data point. Growth gave Florida its notorious flip-flop and flower-print swagger. Life could be carefree under the sun because, as a famous state tourism advertisement put it in 1986, “The rules are different here.”

But what if they are not? Or if those Florida rules — an approach that made growth paramount in the state’s sales pitch, self-image and revenue structure — no longer apply?

“It’s got to be a real psychological blow,” said William H. Frey, a demographer at the Brookings Institution who predicted that census data in December would confirm the findings. “I don’t know if you can take a whole state to a psychiatrist, but the whole Florida economy was based on migration flows.”

Recall what once passed for normal. Florida grew from 2.8 million people in 1950 to 6.9 million in 1970, and by about three million people each decade after that. Even during stagflation in the ’70s, Florida added about 200,000 people a year. More recently, from 2004 to 2006, Florida added about 1,100 people a day, as housing construction’s proportion of the state economy grew to twice the national average.

Now consider Broward County in 2009. The county, between Miami and Palm Beach, was one of the first areas to shrink — losing 21,117 people from April 2007 to April 2009, according to University of Florida data — and its experience offers a glimpse of what could be on the way elsewhere.

Hollywood, in particular, embodies what the Sunshine State was and might become. It was founded in the 1920s as “the dream city of Florida” by a transplant from Washington State named Joseph Young who built ranch-style homes. After growing predictably — from 22,978 people in 1955 to 139,357 by 2000 — Hollywood has lost 1,562 people over the past year, according to the University of Florida count.

That amounts to only 1 percent, roughly in line with the rest of the county, but residents say their rhythms have already changed. Here and in other places adapting to the end of double-digit growth, the days include less noise, work and spontaneity, and more goodbyes, doubts and fears of the future. It is, by all accounts, a life lived under capacity.

Sandra Woodward, 25, grew up here, happy and proud. A secretary with dreams of working in education, she said eight houses on her block are in foreclosure. She knows 20 families who have left Florida in the last two years.

On Monday, she waited for her son to finish his first day of kindergarten at her alma mater, Hollywood Park Elementary. About 10 years ago, Ms. Woodward said, gesturing toward the parking lot, temporary trailers were needed, as the school was over-enrolled. This year, the principal counted 469 students registered — 124 fewer than the school can handle.

“I used to go up north to visit my family, and they all wanted to come here, to be part of this,” Ms. Woodward said. “Now I’m thinking about leaving, too. It’s scary.”

Some parents, like Kim Yager, 27, who has three children at the school, welcomed the drop-off. “It means smaller classes,” she said.

But as cities like Detroit well know, declines in population also compound downturns and hurt quality of life. Florida, in particular, was not built for emptying. Its government, since a 1924 constitutional amendment banned a state income tax, relies heavily on sales and property taxes, which are more closely linked with population growth.

Without it, and as housing prices and property tax revenues have fallen, municipalities have been forced to scramble. Broward County’s schools, which have been losing students for several years, opened Monday with 100 fewer teachers and a budget of $3.6 billion, down from about $5 billion in 2008.

Facing a deficit of $109 million, the county’s commissioners have reduced hours at libraries and parks, while the sheriff agreed to cut at least 177 positions.

The mood is dismal. Jim Findlay, 66, head of the rare books section in Broward County’s main library, said he had noticed more competitiveness among his colleagues as they wait for expected layoffs. He said he missed the time when moving trucks meant arrivals, not departures.

“It weighs on me because there has always been this hope, this expansiveness, this welcome of the new, this welcome of the unusual and eccentric in Florida,” he said. “That seems to have come to a halt.”

Or stagnating. In downtown Hollywood, chefs now stand outside with their arms crossed at dinnertime waiting for customers that never come. There are 10 shuttered businesses in the two blocks of Hollywood Boulevard north of Young Circle, the city’s main shopping district.

Jack Smile, 54, a co-owner of the Jeweled Castle, “a new-age department store,” said that many of the closed stores had been opened by people who thought that anything would work because it is Florida, where new buyers are a constant.

He started out the same way 14 years ago after leaving New York. “I came down here to work less and make more money,” Mr. Smile said. “But the tables turned.”

He has survived by bargaining with customers, and by selling stress kits of incense and oils. Gary Mormino, a historian at the University of South Florida, St. Petersburg, said baby boomers may be the state’s best shot at another upswing. “The big question is will they choose the same type of retirement as their parents,” he said.

Already, the state’s hold on retirees is weakening, with thousands of disenchanted “halfbacks” moving to Georgia and the Carolinas in recent years. Mr. Smith at the University of Florida nonetheless predicts modest population increases when the economy picks up — growth of 150,000 to 200,000 people annually.

Even that would be a downward adjustment from recent history. Yet, for Mr. Smile, any increase would be an omen of hope.

“We’re holding onto the magic,” he said, standing behind a counter with $3 Fairy Dust and a Buddha promising prosperity. “The magic is here.”



To: Jim McMannis who wrote (509122)8/31/2009 7:14:11 AM
From: Road Walker  Respond to of 1578965
 
Recent home buyers in luck
By David DeCamp, Times Staff Writer

Published Sunday, August 30, 2009

--------------------------------------------------------------------------------

Call it a reversal of fortune.

As residents get their annual tax notices, many of those with the highest property tax burden — newer homeowners who bought at top-dollar prices — are happy to see a sharply lower bill.

At the same time, some longtime homeowners who enjoyed years of having tax bills capped thanks to the Save Our Homes constitutional amendment face rising taxes even though their property values plunged.

"It's the flip side," said Jim Flateau of Land O'Lakes, who is one of about 290,000 taxpayers in the Tampa Bay area who are benefitting from lower tax bills.

He owes more on his mortgage than his house is worth, but he stands to pay up to $500 less in taxes for 2009 after his home lost 20 percent of its value.

"The people that are going to see the biggest benefit are the ones that really suffered the biggest pain, because they bought at the height of the market," said Tim Wilmath, director of valuation for the Hillsborough County Property Appraiser's Office. Such property owners represent a third to a half of the taxpaying homeowners, depending on county.

Meanwhile, more longtime homeowners, used to paying taxes on far less value than their houses were worth, are becoming familiar with the recapture provision of Save Our Homes.

Save Our Homes caps the increase in the taxable value of homesteaded property at 3 percent a year. After many years, that can leave a sizable gap between the assessed value and market value of a home.

In those cases, even as property values decline, the state says taxable values can rise up to the cap regardless, letting local governments "recapture" some of the savings homesteaders have enjoyed.

This year, that means a 0.1 percent increase — enough to rile some longtime owners.

"What's going to happen is you'll have to force all the senior citizens out of their homes," said Patricia McKown of St. Petersburg, who saw her taxable value inch up while the market worth of her home dropped $30,000.

"When I saw that I said, 'Oh, no.' "

Homeowners like McKown have often been the envy of newer buyers because of the tax advantage they enjoyed, sometimes creating huge disparities on houses right next to each other. But this year's sharp drop in values will give many of the more recent homeowners the chance to reap their own benefits from Save Our Homes.

It will reset the clock, so to speak, and the Save Our Homes cap will prevent their taxable property values from spiking in a future boom.

In 2005, Flateau, 59, a New York transplant, paid $312,8000 for a home in the Ballantrae neighborhood, west of Land O'Lakes in Pasco County. This year, the assessed value dropped more than $52,000 from 2008 to $194,490 — triggering the lower property tax payment.

He says he probably will use his savings to pay off debt.

"I think no one wants their market or assessed value to go down," Flateau said. "But … at this point, it's a paper loss except for those people who are in the process of selling their homes. Then it's a major, major problem."

Some of the steepest drops in property values occurred in places such as Pasco County, where more new homes went up.

More than 65,000 of Pasco's 127,000 homesteaded properties plunged so far in value that they weren't affected by the recapture rule. The typical such house would pay $121 less in taxes for this year, according to Property Appraiser Mike Wells' office. A typical owner affected by recapture stood to pay $47 more.

In Pinellas County, more than 90 percent of homeowners whose property values were capped between 2005 and 2007 now receive no benefit from Save Our Homes, according to Property Appraiser Pam Dubov's office.

Overall in Pinellas, a third of the 245,000 homesteaded owners saw their assessments drop. The other two-thirds fell under the recapture rule, and their values rose slightly.

In Hillsborough County, where the building boom was bigger, 121,000 of 263,000 homes had lower assessed values. In Hernando County, 21,000 of 52,000 homes fit the same bill.

But John Emerson, chief deputy property appraiser in Hernando, counts the downturn another way.

This month, appeals started coming in from people challenging their assessed value.

Unlike the boom days, only three had arrived.

David DeCamp can be reached at ddecamp@sptimes.com or (727) 445-4167.

A tale of two homeowners

Florida's Save Our Homes cap on increases in assessed property values has different effects this year, depending on when a home was bought. Here's a look at how two similar homes on the same St. Petersburg street are affected:

Homeowner A: Bought in 2005 when the house had a market value of $217,000. This year, his assessed value is $185,000, which is down 27 percent for 2009. With such a steep decline, his taxes will drop.

Homeowner B: Bought in 1992 when the home's market value was $87,000. By 2005, her market value had gone up to $209,000. The limit on taxable value increases held the assessed value lower, $124,500 for 2009. Yet a mandated taxable value increase means her assessed value rose 0.1 percent this year. Her taxes will go up.

Source: Pinellas County Property Appraiser.

fast facts

A tale of two homeowners

Florida's Save Our Homes cap on increases in assessed property values has different effects this year, depending on when a home was bought. Here's a look at how two similar homes on the same St. Petersburg street are affected:

Homeowner A: Bought in 2005 when the house had a market value of $217,000. This year, his assessed value is $185,000, which is down 27 percent for 2009. With such a steep decline, his taxes will drop.

Homeowner B: Bought in 1992 when the home's market value was $87,000. By 2005, her market value had gone up to $209,000. The limit on taxable value increases held the assessed value lower, $124,500 for 2009. Yet a mandated taxable value increase means her assessed value rose 0.1 percent this year. Her taxes will go up.

Source: Pinellas County Property Appraiser



To: Jim McMannis who wrote (509122)8/31/2009 10:49:58 AM
From: tejek  Read Replies (1) | Respond to of 1578965
 
And wait til the gov't starts cashing in its bank shares. That Obama is a genius!

As Big Banks Repay Bailout Money, U.S. Sees a Profit

By ZACHERY KOUWE
Published: August 30, 2009

Nearly a year after the federal rescue of the nation’s biggest banks, taxpayers have begun seeing profits from the hundreds of billions of dollars in aid that many critics thought might never be seen again.

The profits, collected from eight of the biggest banks that have fully repaid their obligations to the government, come to about $4 billion, or the equivalent of about 15 percent annually, according to calculations compiled for The New York Times.

These early returns are by no means a full accounting of the huge financial rescue undertaken by the federal government last year to stabilize teetering banks and other companies.

The government still faces potentially huge long-term losses from its bailouts of the insurance giant American International Group, the mortgage finance companies Fannie Mae and Freddie Mac, and the automakers General Motors and Chrysler. The Treasury Department could also take a hit from its guarantees on billions of dollars of toxic mortgages.

But the mere hint of bailout profits for the nearly year-old Troubled Asset Relief Program has been received as a welcome surprise. It has also spurred hopes that the government could soon get out of the banking business.

“The taxpayers want their money back and they want the government out of our banking system,” Representative Jeb Hensarling, a Texas Republican and a member of the Congressional Oversight Panel examining the relief program, said in an interview.

Profits were hardly high on the list of government priorities last October, when a financial panic was in full swing and the Treasury Department started spending roughly $240 billion to buy preferred shares from hundreds of banks that were facing huge potential losses from troubled mortgages. Bank stocks began teetering after Lehman Brothers collapsed and the government rescued A.I.G., and fear gripped the financial industry around the world.

American taxpayers were told they would eventually make a modest return from these investments, including a 5 percent quarterly dividend on the banks’ preferred shares and warrants to buy stock in the banks at a set price over 10 years.

But critics at the time warned that taxpayers might not see any profits, and that it could take years for the banks to repay the loans.


As Congress debated the bailout bill last September that would authorize the Treasury Department to spend up to $700 billion to stem the financial crisis, Representative Mac Thornberry, Republican of Texas, said: “Seven hundred billion dollars of taxpayer money should not be used as a hopeful experiment.”

So far, that experiment is more than paying off. The government has taken profits of about $1.4 billion on its investment in Goldman Sachs, $1.3 billion on Morgan Stanley and $414 million on American Express. The five other banks that repaid the government — Northern Trust, Bank of New York Mellon, State Street, U.S. Bancorp and BB&T — each brought in $100 million to $334 million in profit.

The figure does not include the roughly $35 million the government has earned from 14 smaller banks that have paid back their loans.
The government bought shares in these and many other financial companies last fall, when sinking confidence among investors pushed down many bank stocks to just a few dollars a share. As the banks strengthened and became profitable, the government authorized them to pay back the preferred stock, which had been paying quarterly dividends since October.

But the real profit came as banks were permitted to buy back the so-called warrants, whose low fixed price provided a windfall for the government as the shares of the companies soared.

Despite the early proceeds from the bailout program, a debate remains over whether the government could have done even better with its bank investments.

If private investors had taken a stake in the banks last October on par with the government’s, they would have had profits three times as large — about $12 billion, or 44 percent if tallied on an annual basis, according to Linus Wilson, a finance professor at the University of Louisiana at Lafayette, who analyzed the data for The Times.

Why the discrepancy? Finance experts say the government overpaid for the bank assets it bought, because its chief priority was to stabilize the teetering financial system, not to maximize profit.

“Had these banks tried to raise money any other way, they probably would have had to pay quite a bit more than the government received,” said Espen Robak, head of Pluris Valuation Advisors, which analyzes the value of large financial institutions.

A Congressional oversight panel concluded in February that the Treasury paid an average of 34 percent more than the estimated fair value of the assets it received.

Of course, many finance experts suggest that the comparison is academic at best, because there is no way to know what might have become of the banks or the financial system as a whole had the government not acted.

“Taxpayers should heave a sigh of relief that the investment in the banks protected them from even more catastrophic losses from more bank failures,” said Aswath Damodaran, a finance professor at the Stern School of Business at New York University.

A more direct comparison of profits can be made with the investment performance of other governments that poured money into ailing banks last fall.

The Swiss government, for example, said last week that it had pulled in a handsome profit for taxpayers on a $5.6 billion bailout it gave to UBS, the troubled Swiss bank, at the height of the financial crisis in October. The government netted $1 billion on its investment, a gain equal to a 32 percent annual return.

“They are substantially in the money,” Guy de Blonay, a fund manager at Henderson New Star in London, said after the announcement.

American taxpayers could still collect additional profits on their investments in two other big banks that have repaid their preferred stock but not their warrants: JPMorgan Chase and Capital One. They are expected to yield over $3.1 billion in gains for the Treasury in the next month or so, although the full tally will depend on how much they will pay to buy back their warrants.

And the government is owed about $6.2 billion in interest payments from banks that have not yet repaid their federal money.

But all the profits taxpayers have won could still be wiped out by two deeply troubled institutions. Both Citigroup and Bank of America are still holding mortgages and other loans that were once worth billions of dollars but whose revised values are uncertain. If they prove “toxic” because they cannot attract buyers, they could leave large holes in the banks’ balance sheets.

Neither bank is ready to repay its bailout money anytime soon, even though the banks’ stock prices have surged in the last month, leaving the government sitting on paper profits of about $18 billion between them.

Eric Dash contributed reporting.

nytimes.com