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Posted: January 1, 2011 12:00 a.m.

What's next in 2011

Welcome to 2011.

There’s no doubt that 2010 was a tough year for Newton County, with unrelenting unemployment, home foreclosures and another round of budget cuts for local governments.

So, what can we expect in the new year, more of the same, or a bit of relief? We have no crystal ball to offer a prediction, but we can offer some perspectives. Here’s a sampling.

 Economy

Everyone wants to know when Newton County’s unemployed will be put to work, and the answer is probably not in 2011.

National economic forecasts predict the U.S. unemployment rate will drop from the current 9.8 percent rate to around 9 percent by the end of the year, a very modest improvement. The chief U.S. economist for Goldman Sachs, a New York-headquartered global investment banking and securities firm, predicted national unemployment would not return to its normal level of 5 to 6 percent for five to six more years.

Newton County’s recovery could lag behind, given the fact its unemployment rate reached 12.2 percent in November and more than 5,609 local workers remain out of work.

According to Kiplinger, a Washington, D.C.-based publisher of business forecasts, the U.S. lost 8.5 million jobs in 2008 and 2009, so despite adding 1 million this year, and a potential 2.5 million in 2011, unemployment will remain high.

Businesses up, housing still down

Hunter Hall, president of the Covington-Newton County Chamber of Commerce, said previously that the chamber views 2011 as a year to position itself for future growth, which he hoped would include the hiring of an economic development leader.

Newton County will see some job additions in 2011, headlined by SKC’s plans to hire workers in mid-2011 for its $100 million facility that will produce an ethylene vinyl acetate film to coat solar power cells. A handful of businesses are also expected to open in 2011, including the Save-A-Lot grocery store, and possibly Cracker Barrel.

Nationally, forecasters predict the nation’s gross domestic product, the amount of goods and services produced in a year, to grow more quickly in 2011. The GDP grew by 2.8 percent in 2010, after declining in 2009, and 2011 could see 3.5 percent growth. Kiplinger’s forecast noted a true recovery rate would be around 5 percent, but did say that the new set of corporate tax breaks passed by Congress erases the fear of a double-dip recession.

Housing sales are expected to remain anemic and commercial real estate will also remain low. Goldman Sachs predicted housing prices could decline by an additional 5 percent in 2011, largely because supply continues to greatly outweigh demand. Kiplinger predicted foreclosure numbers would increase by 200,000, for a total of 2 million in 2011.

More County Cuts?

No updated figures have been presented, but in October, Newton County’s governments were staring at the possibility of slashing budgets by another 12 percent to 15 percent in 2011, because of zero growth and a new state bill designed to have property tax assessment valuations reflect actual sales prices on homes.

Newton County Chief Tax Assessor Tommy Knight said previously that a natural decline in property values will account for about 5 percent of the drop. An additional 7 percent or 8 percent decline will be caused by S.B. 346, which requires local governments to appraise property at the price it was sold, including foreclosures and short sales.

If digest values don’t recover, Newton County would likely be staring at another millage rate increase in 2011, or a significant number of the county’s 600 employees being laid off. If the SPLOST fails, the county will have to absorb added costs, making budget decisions that much more drastic.

Will the SPLOST pass?

That’s one of the questions expected to dominate the local political scene in 2011. Elected officials and residents are split on the validity of the 2011 Special Purpose Local Option Sales Tax list, which passed by a 4-1 vote of the Board of Commissioners on Dec. 21.

Several residents have said they will vote against the $57.6 million list, because they feel it adds unnecessary expenses to taxpayers, something they won’t settle for during this economic climate. Commissioner Nancy Schulz opposed the list, but when it became clear the list would pass regardless, she voted in favor of it, saying the county needs the majority of the money on the list.

Schools

2011 will be a tough year for the Newton County School System. Superintendent Gary Mathews is set to release a list of tentative cuts to the 2011-2012 budget at 5 p.m. on Jan. 10. The cuts must be made because county schools will receive at least $9 million less from the state.

The budget cuts won’t effect projects funded through Special Purpose Local Option Sales Tax. SPLOST can only be used on construction of new facilities, renovation of existing facilities, lease of buses, technology, reduction in debt service and other building-related expenses. Newton schools are using SPLOST funding to replace several schools that needed extensive repairs.

The replacement school for Palmer-Stone Elementary will open on Airport Road in the 2011-2012 school year. Construction on the replacement school for Newton High School is scheduled to begin in the spring at an as yet undisclosed location.

Additionally, Fairview Theme School will revert to a regular elementary school and Ficquett Elementary will become home to the new theme school. Rezoning has been approved on elementary school zones and before the beginning of the next school year, it will be voted on for the 10-15 percent of middle school students the new district lines will affect.

Other Debates

Two final storylines could play out in 2011 that would affect the future of economic growth in Newton County: the formation of an airport authority and the revisiting of liquor by the drink in the county.

The Covington City Council is expected to meet early in 2011 to discuss whether it wants to appoint members to an airport authority or continue to have the city proper run the facility. Elected officials view the Covington Municipal Airport as a major economic driver, so the decision could significantly affect its growth.

The election of Lanier Sims as District 2 county commissioner also swings the balance of power on the Board of Commissioners in favor or supporting a public referendum on liquor by the drink sales in the unincorporated county.

On Aug.3, the board voted 3-2 against placing the issue on the Nov. 2 General Election ballot. Commissioners Tim Fleming and Nancy Schulz support having a referendum, and Sims staunchly expressed his support during this year’s election.

Education reporter Amber Pittman contributed to this story.

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