2009 King County budget FAQs

2009 King County Budget

I recently sent out a newsletter (PDF, 380KB), regarding the 2009 King County budget.  Below are some frequently asked questions regarding the budget that there was not enough space for in the newsletter.  As always, please feel free to contact me if you have additional questions.

How can citizens be heard during the budget process?

The council will hold six public hearings on the proposed budget. The dates, times and locations of the hearings can be found here. You may also testify online.

All meetings and public hearings will be cablecast on King County Television.

Why is there a budget shortfall?

The budget shortfall stems from a structural problem in the way county revenues are limited by state law. Counties have only two principal tax revenue sources – the property tax and the sales tax.

State law limits the growth in the amount of property taxes levied by counties to one percent per year, plus the revenues from new construction and building improvements. The one percent limit on annual property tax increases applies to the total amount of property taxes collected by a taxing district, such as King County. For example, if $100 million was collected from King County property owners in 2008, only $101 million can be collected in 2009, plus any taxes on new construction.

Established by Initiative 747 and subsequently passed into law by the state legislature, this tax cap means that county revenues have grown by only two to three percent a year, largely buoyed by the region’s recent construction boom. However, due to the rising costs of doing business, expenditures needed to maintain the same level of services have risen by four to five percent a year. This difference between expenditure and revenue growth represents a “structural gap,” and counties throughout Washington are faced with this challenge.

For 2009, this “structural gap” is exacerbated by current economic conditions. The recent slowdown in new construction will depress property tax collections, and as consumers cut back spending, sales tax revenue is declining.

If property taxes are capped, why do taxes go up by more than one percent a year?

The one percent cap does not limit the amount that can be levied on each individual property.

Individual tax bills do increase by more than one percent, primarily through voter-approved levies for schools, parks, roads, and other public projects. These levies are not subject to the one percent cap, and in 2008, 40 percent of the average tax bill in King County was attributed to voter-approved levies. For example, 83 percent of county voters approved the Medic One Emergency Medical Services levy in November 2007. This levy increased the 2008 property tax bill on a $400,000 home by $120.

Property values have risen significantly in King County in recent years. Why hasn’t the tax roll benefited?

Property values do not affect the amount of tax revenue collected by the county.

The property tax rate for each property is calculated by dividing the total pool of allowable revenue by the total value of all property in the jurisdiction. Using the example above, if $101 million is the maximum allowable revenue in 2009 and the total value of all property in King County is $100 billion, the property tax rate will be $1.01 per $1,000 of assessed value. If the total property value rose to $200 billion, the tax rate would actually decline to $0.505 per $1,000 of assessed value. In short, whether the total value of the property is $100, $200, or $500 billion, the county receives the same $101 million in revenue.

Who should be contacted with questions about the assessed value of your home or property?

If you have questions about your assessment, please contact the King County Assessor’s Office. The Assessor’s website contains helpful information about common assessment questions and value disputes.

Recently, the Seattle Times ran an article with helpful explanations regarding home and property assessments.

How can the budget gap be fixed?

In the short run, the county must make tough decisions to close the general fund gap and balance the budget. Over the past few months, the executive has directed all general fund agencies to trim their expenditures for 2009 by 8 to 12 percent. On October 13, the executive will send his proposed budget to the council for review. My colleagues and I will then carefully examine all proposed reductions, explore ways for additional savings and efficiencies, and work to ensure that core public services are adequately funded.

The council recently identified 12 things the county can act upon now to cut expenses and narrow the budget shortfall.

In the long run, the “structural gap” must be addressed. In the upcoming legislative session, the county will be working closely with the state to identify funding solutions and generate new opportunities for savings that can help counties throughout Washington remedy the structural problem.

Additional resources for your questions:

Q&A | Dissecting King County's general-fund shortfall - Seattle Times

2009 King County Budget - King County Council