Agenda - 04-27-2017 - 1 - Consideration of the Final Draft Durham – Orange Light Rail Cost Sharing Agreement and Final Draft Orange County Transit Plan

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204 REVENUE OUTLOOK » Durham and Orange County Article 43 Tax Collections Chart 6: Durham County Scenarios Chart 7: Orange County Scenarios Article 43 collections,fiscal yr, mil Article 43 collections,fiscal yr, mil 30 8 -Low Baseline -High 7 - -Low Baseline -High 25 6 - 20 5 - 4 - ^� - 15 3 r 10 - - . 1 - 5 I I I I I I 0 I I I I I I 15 20F 25F 30F 35F 40F 45F 15 20F 25F 30F 35F 40F 45F Sources:GoTriangle,Moody's Analytics Sources:GoTriangle,Moody's Analytics upward trend.Orange County Article 43 collections will turn around this year.The aLso improve in Durham County, but a rela- collections underperformed through much past year's weak comparative base will drive tiveLy strong performance in fiscaL 2016 will of fiscaL 2016, but the economy's underlying especially strong gains for Orange County in deliver sLower,steadier gains in fiscaL 2017. strength and tight Labor market ensure that the coming year. Near-term collections will Longer term, however, Durham will be the stronger of the two.Over the coming decade Durham County tax collections will Table 1: Durham County Growth Forecast settle into an average of 4.1%year-to-year Article 43 distributable proceeds, %change yrago growth,while Orange County will Lag slightly at around 3.5%(see Tables 1 and 2). Drivers.Sales tax collections will be sup- Low Baseline High ported by a number of factors,with growth FY2017 5.0 6.2 6.8 underpinned by a strong Labor market.Dis- FY2018 5.0 6.2 6.8 posable personaL income has consistently proved to be a reliable driver of consumer FY2019 6.1 7.3 7.9 spending. Prospects are quite bright in both FY2020-FY2029 2.8 4.1 4.7 counties,with disposable personaL income FY2030-FY2039 3.1 4.3 4 expected to rise at well above the national pace(see Chart 8). Durham benefits from FY2040-FY2046 3.5 4.7 5.4 a number of dynamic industries,and the Research Triangle Park will propel high-wage Sources:GoTriangle,Moody's Analytics job growth.Wages will aLso pick up across industries,as the county's tightening Labor Table 2: Orange County Growth Forecast market Leads businesses to compete for workers.As consumers see their take-home Article 43 distributable proceeds, %change yrago pay rise,they will increase spending on retail, recreation and housing. Low Baseline High Income gains will be slightly sLower in FY2017 8.7 9.4 10.1 Orange County.The county will aLso benefit FY2018 3.9 4.6 5.3 from falling unemployment and rising wages, but the county's Large public sector,an- FY2019 5.0 5.7 6.4 chored by the University of North Carolina at FY2020-FY2029 2.8 3.5 4.2 Chapel HILL,will weigh on top-Line job growth FY2030-FY2039 3.0 3.7 4.4 (see Chart 9).The public sector tends to ex- pand more slowly in good times, but aLso will FY2040-FY2046 3.4 4.1 4.8 experience smaller declines during economic Sources:GoTriangle,Moody's Analytics downturns. However,the tax exempt status of the university and accompanying medical MOODY'S ANALYTICS / Copyright©2016 3