Letter to San Jose requesting updated fiscal analysis
October 30, 2006
Re: Need for an accurate update of the Draft Fiscal Analysis
Dear Members of the CVSP Task Force:
The Committee for Green Foothills submitted several comments about the Draft Fiscal Analysis for
As you recall, the Draft assumes house prices and that are the basis for residential taxes will increase 3% over and above inflation every year for over 50 years, while assuming that costs of providing services will grow much more slowly. We already can see this is wrong in the short term – 2006 prices have not increased at the rate the analysis expected, and there is no reason for 2007 to be different. If the revised Draft does not update the house price information, it will begin analysis with information already known to be incorrect. Even in the nearly-impossible event that the long-term expectations of the Draft are correct for every year after 2007, the current price correction should lower housing revenue projections by around 5%. That should be reflected in the consultant analysis.
Furthermore, there is likely to be a significant time gap between the revised analysis and final City Council consideration of
As you may also recall, the Committee for Green Foothills did not consider the Draft’s revenue projections to be credible. New information over the last six months reinforces the idea that housing prices cannot forever increase faster than income, the underpinning of the Draft’s rosy scenario. We hope this problem will be addressed in the revision.
Please contact us if you have any questions.
Brian A. Schmidt