Last week, the King County Executive, along with the Sheriff, Prosecuting Attorney, and judges from around the county, revealed that King County is facing a budget crisis of great magnitude. This year alone, we may have to cut $20 million from the $660 million general fund. An additional deficit between $40 million and $70 million is predicted in 2009.
How will services be affected by the budget crisis?
King County government provides both regional and local services. Regional services include: public health functions like restaurant inspections, disease control, and water sanitation; criminal justice services such as the courts, jails, and sheriff’s office; Metro bus service; management and tabulation of elections; animal care and control functions; emergency management and emergency planning services; human services; acquisition and maintenance of trails, parks and open space; and wastewater management. Local services for unincorporated areas (those areas not included in city limits) throughout the county include: roads; zoning and land use; and police services.
Many of the most critical services provided by King County, such as health, human services and public safety, do not have dedicated funding sources, like a federal grant or a tax levy, to support them. Therefore, it is these regional services that will be most at risk for budget cuts. This is deeply concerning to me and to many of our city leaders because the impacts of fewer sheriff deputies, diminished ability to fight the spread of disease, overcrowded jails, and less assistance for children and families in need will be felt by all of us, countywide.
What happened to cause this budget crisis?
The answer to this question lies in how King County takes in revenues, which is via two sources – property taxes and sales taxes. Because there are only two sources, it limits the county’s ability to manage the effects of a downturn in either property or sales tax. Similar to owning a business, if you had only two clients and one significantly reduced the size of their order, it would have a drastic effect on your revenues for that month.
King County first began to experience a downturn in revenues when Initiative 747 passed in 2001, limiting the county’s property tax collection rate to 1% per year. The inflation rate varies between 2% and 4% each year, with next year predicted to be even higher than 5%. With that revenue stream restricted, the county cannot afford the many increases in expenses, creating a ‘structural gap’ in income versus expenses. Gas for sheriff deputy cars and metro buses, health care costs, cost of living increases, and many other expenses are increasing at far higher percentage rates than the revenues King County has to support them. In addition, the downturn in the economy resulted in reduced interest earnings on county investments, reduced sales tax revenues and, because of the housing slump we’re encountering, reduced property taxes.
What is King County doing to alleviate this problem?
In the short term, every department will have to take cuts. As we weather the budget storm we’ll face over the next few years, I will work to ensure that we do as little harm to our most critical services as possible.
We are also closely examining our operations to determine if we can achieve further efficiencies and become as lean and highly functional as possible. Over the course of the next few years, the King County Council and Executive will work together to develop a sustainable long-term strategy to relieve the pressure the current structural gap has placed on our budget.
Although we face difficult budget decisions in the coming years, I believe we will create solutions that maintain core government services, while continuing to sustain our high quality of life in King County.