Real estate values in Harford County appear to have stabilized with the most recent state re-assessment of the Route 40 corridor.
Though residential property values were down 10 percent compared to what they had been in the previous assessment, that valuation estimate was conducted just as the economy was beginning to tumble. An overall decline of 10 percent in assessed value, though a substantial decline, reflects an adjustment that is in keeping with the latter days of the real estate boom. Recall that property assessments were going up in the double digits with a degree of regularity in the middle of the first decade of the 21st century. So frequent were such increases that assessment caps were put in place to keep property tax bills from going up even faster.
Even as residential values were down in the first assessment of the Route 40 third of Harford County since the market has had a chance to bottom out, commercial assessments were up, almost as much as residential property assessments were down. They were up, to be exact, by 9.2 percent.
The jump is modest compared to the 23.4 percent increase in commercial assessments in the last round of re-assessments conducted three years ago, but it still reflects a reasonably healthy commercial real estate market. No doubt, growth fueled by government spending related to the BRAC expansion at Aberdeen Proving Ground is a key component of the relative health of the commercial real estate market on the eastern side of Harford County. Even so, the relative stabilization of the residential assessments combined with the modest increase in the commercial real estate assessments are ample reasons to be cautiously optimistic about the future of the local economy.
Similarly, there is reason for optimism about the state of county and municipal budgets, which had taken something of a hit when the economy went in the tank. It's easy to be critical of the government — county, state and federal — for the spending habits of the pre-2008 years. Those in office should have known, after all, that tax revenue from real estate and income was going up at an unsustainable rate.
Then again, the policy makers we elected were behaving an awful lot like many of us were behaving. Property values were going up, so why not cash in on some home equity by refinancing or taking out a second mortgage. Heck, incomes were going up, too, so eventually the higher mortgage payments could be made, and we'd all live a lot higher off the hog.
Well, not so much, as it turns out.
These days, as it appears the worst of the economy may be in the rear view mirror, it's worth stopping to reflect on our situation. Many a household have made substantial financial adjustments and come to terms with the reality that certain aspects of the high times did not have solid foundations. While there are expectations of good times to come, possibly we'll be less apt to pay for those good times on over-extended credit.
Similarly, our governments need to evaluate issues of revenue and spending. Unlike the federal government, which was cutting taxes and increasing spending right through the good times, the county government was simply spending all the extra money that was coming in as though the increases were perfectly reasonable.
Nationally, the debate has centered on continuing to cut taxes while not reducing services — a rhetorical back and forth wherein neither side seems to have firm footing in reality.
Locally, however, is an economic world that demands balanced budgets, year in and year out. With the apparent stabilization of the real estate market, it would be easy for local officials to breathe a sigh of relief and proceed while chanting the mantra "budgets are tight this year." Anyone who recalls sitting through the budget processes of five and 10 years ago, however, remembers hearing that same chant.
Though the county and three municipal governments in Harford County did a commendable job getting through the tough times with relatively little pain, it's worth remembering there were a few spending decisions made in the good times that remain in place and are worth revisiting.
On the public safety front, there's the matter of the county and municipalities footing the bill so every sworn police officer can have a take-home car. Though initially pitched as having the public benefit of having a lot of marked police cars in neighborhoods all over the place, it seems as though an awful lot of these cars are unmarked. More importantly, providing them is expensive. The argument has been that the towns have to do it because the county does it. The county has to do it because the state does it. The state has to do it because other states do it. At some point, the argument needs to be made that it is of substantial benefit to the taxpayers, or the practice should be stopped at all levels.
On the education front, a strange aspect of the Harford County Public Schools budgeting process over the past decade has been that staffing levels and spending have increased substantially, even as inflation and, more importantly, the enrollment numbers, have at best been largely static. It seems as though a lot of this extra spending has been for the hire of mid-level, non-teaching positions, and this is a practice that bears much closer scrutiny. Perhaps now that the school board has an elected component, this will come.
No doubt, there are plenty of places where the county and local governments can look to reconfigure their budgets. One thing they shouldn't do, however, is wait for assessments to go up like they did a decade ago.