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Government expenditures on capital projects slow as city budgets tighten. By Teresa Burney

FOR THE FIRST TIME IN 50 years of record-keeping—and possibly even since the great Florida land bust of the 1920s— the value of property in Lee County, Fla.’s tax rolls dropped by a historic 12 percent this year. “You’d have to go back to the Depression to see the last time values fell like this,” Lee County property appriaser Kenneth Wilkinson told the Naples Daily News. And now that Lee County is leading the country in home foreclosures, it seems inevitable that property values also will fall next year. The resulting lower property tax revenue is just the beginning of trouble for the county. Add to the mix lower property transfer fees due to slow home sales, lower impact fee revenue because developers aren’t building as much, decreased gas tax revenues because people are driving less, and lower sales tax proceeds because residents are tightening belts, and you have a recipe for governmental fiscal disaster. Lee County—smack dab in the middle of one of the most depressed housing markets in the nation and one of the earliest hit—clearly is a worst-case example of how the housing market’s slowdown is adversely impacting the rest of the country. But the Florida county is not alone. Just as a hurricane spins off bands of wind and rain hundreds of miles from its eye, the housing market’s turmoil is throwing off squalls of financial shortfalls to governments both large and small. As a result, government expenditures on public capital investment projects, including roads and bridges as well as parks and libraries, are likely to slow or even stall in the next few years. “In the past two years, we cut $100 million in capital proj-

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Government expenditures on capital projects slow as city bud- gets tighten.

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