"Housing Slump" Not So Scary After All?

Sunday's lead story by Abby Goodnough, "Housing Slump Pinches States in Pocketbook," certainly began ominously enough:

"State tax revenues around the country are growing far more slowly this year and in some cases falling below projections, a result of the housing market slowdown that has curbed voracious spending on real estate, building materials, furniture and other items.

Nowhere is the downturn more apparent than in Florida, where tax revenue is projected to drop this year for the first time since the energy crisis of the 1970s.

"But other states, especially those where housing prices soared in recent years, are also seeing their collections slow, especially in the sales and real estate transfer tax categories. While the economy remains generally strong and it is too early to predict whether the housing slump will have long-term effects, some states will have to adjust their wish lists.

"For example, New Jersey could face a $2.5 billion shortfall by mid-2008, Gov. Jon S. Corzine has said, and may lease its turnpike or its lottery to a private company to raise money. In California, where income tax receipts in January were $1 billion less than forecast, a nonpartisan legislative analyst has urged budget cuts and warned that the state could have about $2 billion less in revenue this year and next than Gov. Arnold Schwarzenegger has projected.

"'It's the year of the housing hangover,' said Sean M. Snaith, director of the Institute for Economic Competitiveness at the University of Central Florida.

"New home sales nationally fell in February to the lowest rate in seven years, and homeowners who tapped into plentiful home equity and spent extravagantly during the real estate boom have started to cut back."

That opening dovetails nicely with the mainstream media's obsession over the alleged housing "bubble."

Times Watch now turns the critique over to Slate's "Today's Papers" column, writtenthis Sunday by Roger McShane:

"The NYT confidently headlines its lead, 'Housing Slump Pinches States in Pocketbook.' It's a shame, then, that we have to wait till the 29th paragraph to find out that 'it is still too early to know how most states' fiscal years will end.' (Of course, having not paid my taxes yet, I probably could've figured that out.) But the Times is certain that Florida, which has no income tax, is indeed being pinched. Lower-than-expected tax revenues mean it 'has $303 million less than anticipated for its $70 billion budget.' Looks like it may have to cut back its spending by less than half of 1 percent."

Indeed, that rather major caveat didn't appear until the second-to-last paragraph of the entire story.