Lake County revenues reflect housing slump

Would-be sellers aren't the only ones suffering in the slumping housing market.

The Lake County Recorder of Deeds office is grappling with a precipitous drop in revenue, in part because homes and other properties aren't trading hands nearly as briskly as last year. That means the tax that's paid when those transactions take place isn't being collected.

Though not to the point of taking corrective action, county finance officials are keenly aware of falling revenue in the Recorder of Deeds office.

For the four month period from the beginning of the county's fiscal year on Dec. 1 through March, the recorder's office has collected about $2.3 million. That compares with about $4.1 million for the same period last year - a drop of 44 percent.

"At this point, we're monitoring that along with several other taxes that are affected by the economy," said Gary Gordon, county finance director.

Much of the decrease occurred in what is known as Fund 101, which is where transaction taxes are directed.

In that fund, the county collected $1.3 million December through March, compared with $2.8 million last year. Preliminary figures for March show Fund 101 revenue of $652,000, about 36 percent lower than March 2008.

"The difference is there are far fewer sales," said Recorder of Deeds Mary Ellen Vanderventer. "A big part of the revenue is the transfer tax we collect on behalf of the state and the county."

Vanderventer explained that every property sale incurs the tax, which is included in the sheaf of paperwork filled out at closing. For every $1,000 in transaction value, the state gets $1 and the county 50 cents.

"It's a lot of money," Vanderventer said. "People are still recording things but it's not the records that produce the most revenue."

The number of transactions that triggered the tax dropped from 3,018 for the first four months of the fiscal year last year to 1,903 this year.

Lake County has the fourth-highest number of home sales among Illinois counties, but the figures are down substantially.

In 2008, 26 percent fewer homes were sold in Lake County than in 2007, according to the Illinois Association of Realtors. Sales in January and February have been worse, with 493 reported the first two months this year compared with 735 last year, a drop of about 33 percent.

Experts are hopeful that incentives, such as an $8,000 federal tax credit for first-time buyers coupled with lower housing prices, will spark home sales. But unemployment, economic uncertainty and availability of credit remain a barrier.

"It's difficult to know where that will end up," Gordon said.