Taking measure of revenue gains
Recovery. The regional economy is showing fundamental recovery, with a capital R. How that translates to the nonprofit sector is likely to be a story with a Grand Rapids dateline, given the city’s continued top rank for charitable giving, but it will be marked by the lessons and evolution that has occurred as a result of the recession.
The city is seeing a remarkable, quick start for new development, marked by a rapid increase in building permits and project reviews. Lou Canfield, the city’s development center coordinator, believes he is seeing projects that were pent up by the recession, now creating a significant blast of city permitting work.
Both the city and county are actively pursuing bids, too, for riverfront properties long held as governmental “storage” areas or parking lots. The increase in activity and inquiries about Grand Rapids area properties from investors in the Chicago area lends optimism for near-term opportunities and a renewed call from the cranes.
Chase Private Clients economist Anthony Chan noted in an interview with the Business Journal the massive loss of wealth during the financial crisis.
“We lost close to $16 trillion in housing and equity values during the financial crisis. But as of the fourth quarter of last year, the Federal Reserve said we had gotten everything back but $1.3 trillion.”
Chan estimates that the increase of value in the equity market and housing prices from January through March of this year was enough to gain another $3 trillion.
“So I think it is fair to say we got it all back. And that’s one of the reasons why the savings rate has come down, why people are buying cars and consumer spending has held up,” he said.
The regional nonprofit sector has yet to feel the full extent of that recovery love. As new investments create the economic domino, the nonprofit community may be able to begin to address its unmet needs, now exacerbated by the losses in public sector funding.
The state of Michigan treasurer last week noted in the tax revenue forecast the state would have an additional $483 million in revenues. The immediate feeding frenzy that followed for such a comparatively minor amount did not include human services or health care funding issues, but roads, schools and debt service.
It is not necessarily parenthetical that the state’s estimated gain is attributed, according to Associated Press reports, to people selling stocks during the New Year as a result of federal “fiscal cliff” debates that included federal tax increases.
It is, however, likely the state treasurer will see real, sustained gains again as the economy continues a recovery exemplified by the Business Journal.
All in all, it changes the discussion — and the prospects — on both the state and federal levels.