[thelist] Financial Situation

Matt Warden mwarden at gmail.com
Thu Dec 11 11:30:34 CST 2008

On Thu, Dec 11, 2008 at 12:01 PM, Conyers, Dwayne <dwayne.conyers at hp.com> wrote:
> Working on municipal, state, or federal projects is always a sure deal.

Bzzzt. They're protected, because they can always increase taxes,
borrow, and inflate (without any negative consequences, right?), but
at the end of the day these things have limits and these limits *are*
tied to the economy. Tax revenue falls double-time when the economy
declines, because there are fewer wages to tax and fewer funds in the
hands of citizens to spend (affects sales taxes). Plus property values
are (rightfully) falling, which means less property tax revenue
(eventually). Et cetera.

My client is a government agency, and they are seeing budget cuts. Of
course the first few rounds just cut the fluff and have no effect on
current headcount or projects, but eventually the later rounds of
budget cuts start resulting in the cancellation of projects. (As a
last resort, they will cut people, if labor agreements even allow.)

I am seeing increased attention from all levels on projects which
promise high ROI, and anything promising medium- and low-ROI in the
immediate future (even if long-term is much higher) is being dropped.

One thing to note, with governments the "wave" is usually a little
off-set from the rest of the economy. In other words, the decline in
revenue starts later and ends later, just by the nature of from where
that revenue comes.


Matt Warden
Cincinnati, OH, USA

This email proudly and graciously contributes to entropy.

More information about the thelist mailing list