Thoughts, essays, and writings on Liberty. Written by the heirs of Patrick Henry.

“The said constitution shall never be construed to authorize congress to prevent the people of the United States who are peaceable citizens from keeping their own arms.”     Samuel Adams

June 6, 2009

California Department Of Real Estate Trust Fund Nearing Deficit!

by Brad Warbiany

The California Department Of Real Estate oversees and administers the state’s real estate agent and broker licensing program. During the big housing boom, the fees generated by the high level of real estate activity (and the agents/brokers who were licensed to enable that activity) has caused them to build up some a nice Trust Fund. But activity is down, and there may be trouble ahead:

DRE, as the department is called, gets all its money for its 344-person department from license fees, license exam fees and subdivision fees (which are going up, too). But all those things are down because fewer people are taking the license test or getting licenses. And development fees? Well, homebuilding has been all but mothballed.

All these things have taken a $13.7 million bite out of the department’s $44 million budget.

For example, license exams have dropped from around 22,000 in March 2005 to just under 2,900 this past March. And the number of licensees dropped in March for a 14th straight month.

But don’t worry! They’ve got a trust fund! They’ve lent their reserves to the state of California, so all is well!

To make matters worse, the state Legislature and the Govenator have borrowed about $10.9 million from DRE reserves. If the state doesn’t repay that loan, and if the fees don’t go up, DRE projects its reserves will dry up and it’ll run out of money next year. In just over four years, DRE would be almost $88 million in the hole.

Wait… How could that make matters “worse”? How can they just suggest that the state might not pay back that loan — or worse, the implicit notion that they might do so out of higher taxes on the rest of Californians? If they’ve loaned the money to the state of CA, what could possibly go wrong? After all, the State of CA and the California DRE have two different revenue streams, so loaning from one pocket to the other is not in any way a fiscal end-around!

If it’s such a bad thing for the state of CA to borrow money from the CA DRE reserves, why is it a good thing that the US Federal Government is borrowing the surplus generated by Social Security payroll taxes?

TrackBack URI: http://www.thelibertypapers.org/2009/06/06/california-department-of-real-estate-trust-fund-nearing-deficit/trackback/
Read more posts from
• • •

3 Comments

  1. Or they could … cut spending! Wow, took a flash of genius to think of that.

    Comment by Peter — June 6, 2009 @ 4:48 pm
  2. [...] post:  The Liberty Papers »Blog Archive » California Department Of Real … This entry is filed under Real Estate. You can follow any responses to this entry through the RSS [...]

    Pingback by The Liberty Papers »Blog Archive » California Department Of Real … | 2Dinternational.com — June 6, 2009 @ 7:40 pm
  3. CUT SPENDING?

    OMG, Peter, how could you even THINK such a horrible thing?

    Comment by Merf — June 6, 2009 @ 8:31 pm

Comments RSS

Subscribe without commenting

Sorry, the comment form is closed at this time.

Powered by: WordPress • Template by: Eric • Banner #1, #3, #4 by Stephen Macklin • Banner #2 by Mark RaynerXML