Extracted text (via pymupdf)
6132 characters
www.roundsconsulting.com ROUNDS CONSULTING GROUP Maricopa County – Economic and Policy Update August 2024 Jim Rounds Rounds Consulting Group What we will cover… ROUNDS CONSULTING GROUP www.roundsconsulting.com • Brief update on budget situations. • Brief update on select macroeconomic issues. • Brief housing update. Reminder: Budget Comparisons • Over 10 years the MC GF budget grew by an average of just over 5%. • The state’s GF budget grew 7%. • If the state utilized MC’s conservative approach to budgeting, AZ’s budget would be over $2B less and there would be no fiscal deficit. • MC was also the lone government entity that formally planned for the one-time revenues coming from the heightened federal stimulus spending. • This proved to be fiscally beneficial in the hundreds of millions of dollars. ROUNDS CONSULTING GROUP www.roundsconsulting.com Reminder: Budgeted FTE’s *Recommended Budget Staff to Pop Ratio 3.52 3.47 3.45 3.37 3.39 3.41 3.41 3.40 3.30 3.22 3.19 3.18 3.13 3.18 3.17 3.11 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025* 10,000 11,000 12,000 13,000 14,000 15,000 16,000 5,000,000 4,500,000 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 - 13,471 13,348 13,387 13,277 13,572 13,896 14,157 14,339 14,151 14,077 14,131 14,323 14,348 14,827 15,076 15,062 www.roundsconsulting.com ROUNDS CONSULTING GROUP State Budget Situation ROUNDS CONSULTING GROUP www.roundsconsulting.com U.S. Employment Percent Change Annually, 2000 – 2024* Source: Arizona Office of Economic Opportunity 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Recession Period ROUNDS CONSULTING GROUP www.roundsconsulting.com Goal = 100k - 200k/mo July = 114k *Year-to-Date through July 2024 National debt: Borrowing from the future? ROUNDS CONSULTING GROUP www.roundsconsulting.com $10 Trillion!!!! Consumer Price Index All Items CPI, Non-Seasonally Adjusted; YoY Percent Growth, 2010 - 2024* Source: U.S. Bureau of Labor Statistics Recession Period www.roundsconsulting.com *Through June 2024 Remember, 0% means prices aren’t going up or down, not that they are going down. Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 Jan-21 Jan-22 Jan-23 Jan-24 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% -1.0% CPI ROUNDS CONSULTING GROUP www.roundsconsulting.com Producer Price Index – The Forgotten Costs ROUNDS CONSULTING GROUP www.roundsconsulting.com Labor Costs - Construction Why does this matter? ROUNDS CONSULTING GROUP www.roundsconsulting.com • There’s been money in all revenue bases that was artificially propped up. • High costs aren’t going away. • “Golden Handcuffs” on homes. Golden Handcuffs Math ROUNDS CONSULTING GROUP www.roundsconsulting.com • $500k home w/3% mortgage = $2,100/mo. • $600k home w/6% mortgage = $3,300/mo. • Adding 20% to your desired home value now costs 50% more in terms of monthly payment. • Why would anybody move? This is a PROBLEM! U.S. and Arizona Home Median Sales Price Seasonally Adjusted; Monthly, April 2012-2024* Source: Zillow Recession Period *Through June 2024 ROUNDS CONSULTING GROUP www.roundsconsulting.com Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 Apr-19 Jul-19 Oct-19 Jan-20 Apr-20 Jul-20 Oct-20 Jan-21 Apr-21 Jul-21 Oct-21 Jan-22 Apr-22 Jul-22 Oct-22 Jan-23 Apr-23 Jul-23 Oct-23 Jan-24 Apr-24 $ - $ 50,000 $ 100,000 $ 150,000 $ 200,000 $ 250,000 $ 300,000 $ 350,000 $ 400,000 $ 450,000 $ 500,000 United States Arizona 2004 Q1 2004 Q3 2005 Q1 2005 Q3 2006 Q1 2006 Q3 2007 Q1 2007 Q3 2008 Q1 2008 Q3 2009 Q1 2009 Q3 2010 Q1 2010 Q3 2011 Q1 2011 Q3 2012 Q1 2012 Q3 2013 Q1 2013 Q3 2014 Q1 2014 Q3 2015 Q1 2015 Q3 2016 Q1 2016 Q3 2017 Q1 2017 Q3 2018 Q1 2018 Q3 2019 Q1 2019 Q3 2020 Q1 2020 Q3 2021 Q1 2021 Q3 2022 Q1 2022 Q3 2023 Q1 2023 Q3 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% Phoenix MSA Tucson MSA Flagstaff MSA Housing Affordability – Phoenix, Tucson & Flagstaff Share of Homes Sold Affordable to Families Earning the Median Income; Quarterly, 2004 - 2023* Source: NAHB Housing Opportunity Index *Through the available data up to Q4 2023. HOI has now been replaced by the Cost of Housing Index. ROUNDS CONSULTING GROUP www.roundsconsulting.com Annual Household Expenditures Arizona Average Source: U.S. Bureau of Labor Statistics ROUNDS CONSULTING GROUP www.roundsconsulting.com Category 2005 % of Annual Expenditures 2010 % of Annual Expenditures 2022 % of Annual Expenditures Housing 30.0% 33.6% 34.3% Transportation 21.5% 16.3% 23.0% Food 13.1% 13.4% 10.5% Healthcare 5.9% 6.1% 7.7% Entertainment 4.8% 6.3% 3.8% Apparel 3.8% 4.9% 2.4% Education 1.5% 0.6% 1.4% Other 19.4% 18.8% 16.9% Annual Household Expenditures For Households Making Less Than $50K Source: U.S. Bureau of Labor Statistics ROUNDS CONSULTING GROUP www.roundsconsulting.com Category 2005 % of Annual Expenditures 2010 % of Annual Expenditures 2022 % of Annual Expenditures Housing 41.4% 42.8% 44.3% Transportation 20.6% 18.4% 18.7% Food 15.7% 16.3% 16.3% Healthcare 8.6% 9.0% 10.9% Entertainment 5.4% 5.4% 4.5% Apparel 4.6% 4.1% 2.2% Education 1.7% 2.0% 1.4% Other 2.0% 2.0% 1.7% Current housing issues aren’t just social/welfare problems… …they are economic development problems! ROUNDS CONSULTING GROUP www.roundsconsulting.com - Tax Rates - Econ Development Programs - Workforce (quality/avail/cost) - Transportation Infrastructure - Marketing - Responsible Regulations - Balanced Budget - Reliable/Cost Effective Energy - Water - Housing Affordability - Economic Diversity ROUNDS CONSULTING GROUP www.roundsconsulting.com Policy Choices: What Matters in Growing the Economy? ROUNDS CONSULTING GROUP www.roundsconsulting.com Going Forward - Different Types of Leadership It will vary by task… Questions? ROUNDS CONSULTING GROUP www.roundsconsulting.com