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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202 REVENUE OUTLOOK Durham and Orange County Article 43 Tax Collections Revenue Outlook: Durham and Orange County Article 43 Tax Collections By DAN vA"I ttAAMOONt..VAAII II II AND F MOON' II IAII lI::lII he following revenue outlook Links Durham and Orange County Article 43 sales tax coLLections to measures of underlying economic growth in an effort to better understand and anticipate future funding levels.A healthy Labor market and strong income growth wiLL fuel robust tax coLLections throughout the forecast. Collections wiLL grow more strongly in Durham County because of stronger private-sector job and population gains. Orange County's Large government presence wiLL drive slower job creation and consequent coLLections. tcgli utof e ul quti lation growth will spur above-average gains Bay Area and Northeast draw firms to the North Carolina's economic growth has in higher-paying employment.Though much RTP(see Chart 4).For example,Cohera cooled considerably after a strong start to of this will continue to come in professional Medical is moving its headquarters to Ra- the year,though job gains still best the U.S. services and—despite recent struggles— Leigh from Pittsburgh and Arbiom is setting average and track those of the South.Ser- finance,an increasing share will come up a new research and development center vice-providing payrolls are expanding at a from tech. in Durham. healthy pace,although performance across The Research Triangle Park will remain Thanks to still-low interest rates and industries is uneven. Professional/business the backbone of North Carolina's high- healthy risk appetite,venture capital is being services and trade/transportation/utilities tech industry,an important growth engine put to work in North Carolina and helping are increasing at an above-average rate, throughout the forecast. In 2015 the state firms such as Bivarus and Windsor Circle leisure/hospitality payrolls are contracting, ranked in the top 10 for growth in high tech, expand.North Carolina firms received more and financial service payrolls have leveled churning out net new jobs faster than Mas- than$700 million in venture capital over the off(see Charts 1 and 2).Less than half of in- sachusetts and Colorado and only slightly last four quarters,up 40%from the prior dustries are contributing to job growth, but more slowly than California.The Durham four-quarter period and 10th highest in the a tighter job market is still leading to wage and Raleigh metro areas,which together nation.Startup incubators and accelerators gains(see Chart 3). house the RTP,accounted for nearly half of such as the Hamner Institutes for Health Longer term,a generally good invest- the state's tech job gains last year.A large Sciences and the Triangle Startup Factory ment climate and faster than average popu- pool of talent and lower costs than in the bode well for growth. Chart 1: Professional/Business Services Lead Chart 2: Banking and Tourism Hit the Brakes Professional/business services employment, %change yr ago North Carolina employment,the 6 475 222 470 A' 220 m o, 465 — �A r 4 \ a 1 460 218 455 — 216 � �m d ®„ 450 214 2 445 — �, ., 212 440 -- —Leisure/hospitality(L) 1 210 North Carolina U.S. —All other NC industries 435 � � Financial activities(R) 0 1 1 1 1 1 1 1 1 1 1 1 1 1 1 430 1 I I 1 I 208 13 14 15 16 14 15 16 Sources:BLS,Moody'sAnalytics Sources:BLS,Moody'sAnalytics MC)ODY AMAIYIIC``.li / 1mmj-rM201h 1