In a clear example of how a President’s words can have immediate impact, Maya Srikrishnan reports on how Donald Trump’s rhetoric on tax policy is already making it harder to get some affordable housing built in San Diego. As the federal government mulls corporate tax rates and “tax reform” efforts, banks are clutching their money until they can have more certainty about the risks they face.
Groups building government subsidized housing often use federal tax credits. They sell the credits to investors, who then apply the credits to reduce their own tax bill. “If the cuts materialize at the rates floated by Trump and Republicans in Congress, buying the tax credits now would end up as a loss,” Srikrishnan writes. Even groups that already have tax credits are finding them worth less on the investor market than they recently were. “Before the election, the tax credits were worth more than a dollar each. Now they’re worth around 90-95 cents,” Srikrishan reports.
• While we’re on the topic of checks written by the Presidential mouth, Reuters reports on estimates inside the Department of Homeland Security pinning the costs of President’s border wall at $21.6 billion, including 26 miles of new structure near San Diego in the earliest phase.
Market Is Up, Governments Are Broke
Unemployment is down, the stock market has reached all time highs; you might think the economy is in pretty good shape. But here in San Diego we’ve got gloom and doom on the horizon when it comes to our local government budgets. The city budget, the schools budget, and even the historically strong county budget — all are predicting shortfalls, Ashly McGlone reports.
At the city of San Diego and at San Diego Unified, it’s partly due to a familiar tune: pension costs. Those costs fluctuate on a variety of factors and make long-term predictions difficult. Voters have recently placed some restrictions on how the City’s tax revenues can be spent, and there’s less of those revenues to spend in general, McGlone notes. Over at San Diego Unified, the district has promised to “cut from the top first.”
The county, on the other hand, is bracing for politicians in Washington to eliminate the Affordable Care Act, placing a huge healthcare cost back onto the books. The county also has to shoulder big state cuts to healthcare funding, too.