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California local governments revenue seen improving-economist
SAN FRANCISCO |
SAN FRANCISCO Oct 17 (Reuters) - Concerns about the finances of California cities may be rippling through the $3.7 trillion U.S. municipal debt market, but there are signs the state's gradual economic recovery will help fill the coffers of local governments.
Chapter 9 bankruptcy filings this year by Stockton and San Bernardino focused attention on local finances in California, triggering concerns that other local governments in the most populous U.S. state could follow the two cities into bankruptcy court.
But the state's local governments face brighter prospects than many analysts assume as retail sales improve and tourism and home sales pick up, economist Jordan Levine told an audience on Wednesday at a conference held by the Bond Buyer and the California Debt and Investment Advisory Commission.
"We will continue to move forward in 2012 and beyond," said Levine, director of economic research at Beacon Economics.
He noted consumer spending has rebounded by 25 percent in California since its recession low, taxable sales in the state are on the upswing and its unemployment rate is trending lower.
Each points to increasing confidence among consumers and more retail sales activity that provides local governments with revenue from retail sales taxes.
California's local governments should also see more revenue from hotel occupancy taxes as tourism improves and more revenue from property-transfer taxes as home sales gain momentum and from building-permit fees as construction activity increases, Levine said.
Sales tax revenue has been gradually improving in Riverside County in Southern California, said Theresia Trevino, chief financial officer of the Riverside County Transportation Commission. She said the gains are expected to continue: "We're cautiously optimistic."
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