|
203
<br /> REVENUE OUTLOOK Durham and Orange County Article 43 Tax Collections
<br /> Chart 3: Tightening Labor Market Boosts Wages Chart 4: Durham Positioned for Tech Growth
<br /> %
<br /> 10 4 -6 -1
<br /> olo uoomRisk of job loss,North Carolina(R)
<br /> 8 Hourly wage,change yr ago,North Carolina(L) p
<br /> 6 l o,,I Hourly wage,change yr ago,U.S.(L) 3 2
<br /> � d� °111110 1 10 —I z �� 3
<br /> 4 / ,` �f r°o 2 ' ? 12 .„„„„„„private sector hourly wage,diff btn �� 4
<br /> 0 fl ��
<br /> ����� I,, �� Durham and San Francisco metro
<br /> tll m um�P16��°,p� 1 -14 areas,$(L)
<br /> Iv
<br /> �����4��� mmm uuuu -5
<br /> �����������mimuuV ����������� ������������������������������������ �� 01111,1,111111111111111 odd ullll�����i���������� Iuuuu Corporate income tax,diff btn North
<br /> umuullll ��V IIV�� Carolina and California,ppts(R)
<br /> -4 .�.,��uuli �����uuuuulluu�������� ��muullllullll��������� 1ru�1uuuuulluu������Y um��uuuluul�i 0 -16 -6
<br /> 08 09 10 11 12 13 14 15 16 07 08 09 10 11 12 13 14 15 16
<br /> Sources:BLS,ETA,Moody's Analytics Sources:BLS,Tax Foundation,Moody'sAnalytics
<br /> North Carolina's banks,on the other more households are forming now that the as explanatory variables. Because of the
<br /> hand,will expand at a measured pace as tightening job market is generating faster delay between initial sales and distributable
<br /> improving household balance sheets and income growth.More people will be willing proceeds, both independent variables were
<br /> accelerating wage growth drive stronger de- and able to buy homes,and with supplies found to have the strongest explanatory
<br /> mand for consumer credit.Wells Fargo and tight and prices rising, builders will turn more power when lagged by one quarter.
<br /> Bank of America,which together account for aggressive and the recent lull in construc- Orange County collections display an er-
<br /> one-quarter of the state's finance and incur- tion employment will prove short-lived (see ratic seasonal pattern,with a tremendous
<br /> ance jobs,will benefit from stronger demand Chart 5). amount of volatility that is not always corre-
<br /> for home loans in the coming years despite In total, North Carolina economic growth Fated with underlying measures of economic
<br /> rising interest rates. will accelerate in the near term thanks to growth.This is likely due to the large tax-
<br /> This increased demand for housing thanks more spending by consumers and businesses, exempt presence in the county,which can
<br /> to strong demographics and even stronger which will benefit from bigger wage gains create distortions between what is occurring
<br /> income gains ahead will also manifest it- and declining costs,respectively. Longer in the economy and what ultimately comes
<br /> self in faster homebuilding.Construction is term,a diverse industrial structure, low in the door in the form of revenues.Durham
<br /> poised to take off and take the baton from costs,and educated workforce will attract County collections,by contrast,were found
<br /> manufacturing as the engine of growth in a wide range of capital and help the state to have a much more stable and consistent
<br /> goods-producing industries.Supply and to outperform the national average and seasonal pattern.
<br /> demand fundamentals are much improved its neighbors. Historical collections growth rates for
<br /> compared with this time last year,sug- Article 39 and Article 43 collections were
<br /> gesting a bigger boost from housing in Sales tax f r'ecast compared for both counties,and found to
<br /> the quarters ahead. Population growth is Methodology.With only three full years be extremely similar despite the inclusion
<br /> steadily ahead of the national average,and of data,Article 43 collections were impos- of food and medical purchases in one series
<br /> sible to forecast and not the other.After the determination
<br /> Chart 5: Housing Market Has Room to Grow directly,and the of an appropriate forecast for Article 39
<br /> Durham County,the more established collections,the results were then fitted to
<br /> 7 Article 39 collec- historical Article 43 values to provide the
<br /> 6 tions history was county-level forecasts.A Monte Carlo simu-
<br /> used as a proxy. Fation was then used to create optimistic and
<br /> 5 to Separate regres- pessimistic scenarios based on probabilities
<br /> lions were per- encompassing 85%of potential outcomes
<br /> ,m formed for each (see Charts 6 and 7).
<br /> 3 / county utilizing Forecast.Sales tax collections will grow
<br /> count level at a health pace in both Durham and Or-
<br /> I2 uuuuuHousing completions Y- Y P Net household creation personal dispos- ange counties.Although the short history
<br /> 1 able income and available for Article 43 collections demon-
<br /> 10 15 20F 25F 30F 35F metro area hour- strates considerable volatility,strong under-
<br /> Sources:Census Bureau,Moody'sAnalytics ing completions lying economic drivers will yield a consistent
<br /> mC)CCf";Y ,ANAIYIIC'i / Lol ryi'RI 11.(,)20 II(, 2
<br />
|