Professors: Riverside County economy making comeback
Riverside County is regaining some of the economicvitality that existed before the housing bubble burst a few years ago, butthere’s a way to go before growth returns to pre-2008 levels, a pair ofeconomists told the Board of Supervisors today.
“We have some good news to report this time,” Cal State Fullertonprofessor Mira Farka said ahead of the presentation that she and colleagueAdrian Fleissig gave to the supervisors.
The two, research associates at the university’s Department ofEconomics, have been hired by the county Executive Office over the past fouryears to provide annual assessments of the regional, state and nationaleconomies.
Most of their previous forecasts were downbeat, but the outlook wasbrighter today.
“We’re coming here with tempered optimism,” Farka said. “The reasonwhy? No one outside of Washington, D.C., is waiting for the feds to fix theeconomy. It’s being transformed and reinvigorated by the private sector.”
According to the professor, changes taking place nationally and inCalifornia are having a ripple effect, adding to Riverside County’s economicstrength.
Farka said increased business investment in software and equipment,increased home construction and auto sales are pushing up the nation’s grossdomestic product, or GDP, which is expected to come in around 1.9 percent thisyear — below the 3 percent annual growth economists generally agree defines anexpansion.
“It’s below average, but is nonetheless very good news for the nationaleconomy,” she said.
The professor told the board that Europe’s recession, a slowdown in FarEast economic activity, as well as the United States’ own $16 trillion debtload, could weigh on the nation’s fiscal health. She also expressed worry thatthe Federal Reserve Bank would trigger a downturn when it begins hikinginterest rates, probably in 2015.
Fleissig focused exclusively on regional activity during his half of thepresentation. The professor said he was most impressed by how much the countyunemployment rate had fallen over the last year, going from 12.5 percent to10.5 percent as of March.
Fleissig predicted the rate would fall to about 10 percent before year-end but would continue its down-trend, eventually bottoming out at 6.7 percentin 2017.
According to the economist, the regional economy is beginning to humagain, and Riverside County “is obviously a beneficiary.”
He foresaw ongoing improvements in the housing market, fueling growth inproperty tax receipts — county government’s largest source of discretionaryincome, which has dropped 25 percent from 2008 levels.
Fleissig estimated property tax revenue growth of 3.2 percent next year,4.5 percent in 2015 and 7.1 percent by 2018.
Supervisor Jeff Stone questioned the figures, saying he was unconvincedthe region’s growth would hold because the state of California “is notbusiness friendly,” and as more businesses leave, so do the jobs and potentialtax base.
“There’s been a significant flight of entrepreneurs,” said Stone, abusiness owner and real estate investor. “We’re not going to get back to 6.7percent unemployment.”
