Households just saw $1.8 trillion in wealth vanish as stocks fall
Now what will the Council do about the proposed city budget?
You may have seen headlines to describe the market carnage like a trillion dollar’s worth of wealth wiped away in a single day. But it’s worth noting just how much is held by Americans in the stock market in the first place.
As of March 31, households and nonprofits held $24.1 trillion in stocks. That’s both directly, and through mutual funds, pension funds and the like. That also includes the holdings of U.S.-based hedge funds, though you’d have to think that most hedge funds are held by households.
Using the Dow Jones Total Stock Market index DWCF, -3.94% through midmorning trade, that number had dropped to $22.32 trillion.
In other words, a cool $1.8 trillion has been lost between now and the first quarter — and overwhelmingly, those losses occurred in the last few days. This will probably be the worst quarter for stock-market destruction since the third quarter of 2011, when $2.8 trillion was wiped away.
You ask “now what will the Council do about the proposed city budget?”
Ironically, the huge stock market losses will exert even MORE pressure on Council to keep the budget bloated. Our defined-benefit pension plans, with their extreme amount of debt, depend on gains in the stock market to keep afloat, so when the stock market tanks Council sticks its hands deeper into the taxpayers pockets to make up the difference.
This is just one of the many reasons that defined-benefit pension plans are virtually nonexistent today outside of government settings. No one else can afford them because no one else has the ability to raise money by force.
Council could, I suppose begin to wean the City off our existing pension plans and to institute predictable and sustainable defined-contribution plans but that would require them to make hard choices they don’t seem willing to make. It’s too easy to butter their own political bread with tax dollars.
I thought the city did start to change pension plans for new employees. Has the stock market not made a huge improvement over the last several years since the crash, and doubled in size? Have I been reading the blogs right and seen that some people want the city to lower there taxes more and more even when the homes have went up in value? These questions are honest questions, I am not a accountant and just was wondering that if the market lost money one day but has doubled over the last several years since the crash why we should only plan the budget on one day and not over what has happened over a longer period of time.
Tax rates are how your property tax is determined, as the value of the property goes up the “roll back rate” is the rate that produces the same revenue. The council can lower the rate to roll back and still produce more revenue because of new construction. Anything above rollback is considered a tax increase, so lowering the rate can still result in a tax increase if it is not put to rollback.
The current proposed rate increases the current rate and is 7% above roll back.
City revenue has risen even at roll back because of increases in taxable value and new construction.
I reviewed my proosed property taxes. 29 percent of my taxes go to SCHOOL. And yet, the Spruce Creek H.S. coach came before the Port Orange city council for financial help, which included lights for the parking field?
The Port Orange Storm Water tax comes to $99 a year.
With all the homes and businesess in Port Orange the total number of dollars raised on the storm water tax must come to a lot of money. Is this the tax revenue which has not been accounted for, with suspicion as to where this storm water tax money has gone?
The electric company has asked to reduce rates again, so where are we with the other necessary utility?
Water sewer trash. Two are intensive on electric so much that we had the energy charge. Electric has come down and still they needed to raise rates. we have trash that depends on driving fuel sucking trucks, that fuel is at record lows like the electric.
We need to increase rates, to make up for the reduced cost of energy.