Albemarle BOS updated on economic outlook before FY22 budget process begins
The shape of Albemarle County’s budget for fiscal year became a little more clear with the announcement that property values are up at an average of 1.4 percent according to assessor Peter Lynch.
“Out of all of the properties in Albemarle County, we review twenty percent each year so we try to cover over a five-year period all of the properties to make sure our data is up to date,” Lynch said.
Part of the work of the Office of the Assessor is to validate properties that qualify for tax breaks due to agricultural use. Some properties convert to different uses, and when they do, the owners have to pay what they would have been charged under the new use for the past five years in what is known as a roll-back tax. This year, the assessor’s office was more productive in this area than in usual times.
“We worked 135 roll-backs for more than $975,000 in rollback, in tax dollars,” Lynch said. “In an average year, we would do 38 rollbacks so this is a huge improvement over that.”
The pandemic affected the overall assessment for 2021.
“The properties that were affected the most by the economic impacts of the COVID situation that we’re going through were hotels and shopping centers,” Lynch said. “And it’s reflected in their values. Those properties were in excess of twenty percent decreases on average for that property class.”
Lynch said hotels in Albemarle usually have an occupancy rate of 60 to 70 percent, but that number has been in the 20 to 30 percent range for much of the pandemic. He said office properties were also affected, but not to the same extent. For more details on this topic including a further breakdown in the numbers, go read Allison Wrabel’s story in the Daily Progress.
After the assessment discussion, Supervisors got an update on the county’s financial outlook. Steve Allshouse is with the county’s Department of Community Development.
“Economic forecasting in this era is very difficult mainly because last time we had a pandemic in the United States was in 1918 but at that time economic data was not being kept very carefully or was not in existence so economists today are being challenged by doing forecasting without really having a good historical context to look at,’ Allshouse said.
However, the forecast for Fiscal Year 22 is built off recent data, such as those assessment numbers we just heard about. Allshouse predicted a “bumpy” road ahead.
“The reason I say bumpy is that you’ll see lots of good news mixed with lots of bad news and that’s typical when we’re looking at recoveries so please expect that if you hear something negative in the media about the economy locally, you’re likely to hear things that are positive.”
Overall, the unemployment rate in Albemarle was 3.6% in November 2019. In April 2020, that jumped to 9 percent.
In Albemarle, in the past year there has been a 44 percent decline in the number of people employed in the food service and hospitality industry, or about 1,950 jobs lost. The arts, entertainment and recreation industry lost 962 jobs, and retail lost 712 jobs. Some sectors actually gained positions over the study period.
“Between the two period, spring of 2019 and spring of 2020, what we saw in construction was an increase of about 4 percent, or 98 jobs,” Allshouse said. “And also in the finance and insurance sector we saw a modest increase of about 1.2 percent or a total of about 12 jobs.”
Allshouse estimated that about 40 percent of the jobs initially lost have returned as the shutdown lifted, and he projects that at least 60 percent will come back by the end of this calendar year.
“That’s not a full recovery by the end of the first half of the next fiscal year but I do believe that we will see eventually the total number of jobs come back to where they were pre-pandemic but that’s going to take a while,” Allshouse said. “This is going to be a very slow process in my estimation.”
If the pandemic recedes, the tourism industry is one area that could come back quickly. However, adaptations to social distancing may have long-term effects on business travel.
“My concern is that some of what takes place in the motel and hotel industry reflects activity that is dependent on business travel and I think that is going to take a longer time to come back mainly because I think businesses have gotten used to having remote meetings,” Allshouse said.
County Executive Jeff Richardson will present a budget later sometime toward the end of February. It will be the first budget prepared under Nelsie Birch, who became Albemarle’s chief financial officer.
“We’re taking that information that Mr. Lynch, the county assessor, has provided, and Mr. Allshouse, and building that into our framework for what you all will be undertaking for the next few months,” Birch said.
Community Engagement. In fact, this particular installment comes from the January 22, 2021 edition of the program. To ensure this research can be sustained, please consider becoming a paid subscriber or contributing monthly through Patreon.