Myth vs. reality in the county budget
MYTH: King County hasn’t cut its budget sufficiently.
During the past decade, King County has cut its General Fund budget by $384 million. Of this amount, $233 million was cut over the past five years. This reduced funding means lower levels of service available to county residents, with cost reductions in many departments, including fewer Sheriff’s deputies and deputy prosecuting attorneys, reduced support for Public Health and parks & open spaces, and little support for human services. Revenues for the unincorporated area roads fund have declined by one-fifth due to annexations, declining property values, and lower gas tax revenues, resulting in Road Services Division losing more than 100 employees, with further employee reductions expected in 2013.
MYTH: In the past, King County has threatened to cut public safety and criminal justice funds, when these should be the last to be cut.
King County already has cut nearly every expense from the General Fund that is not mandated by state law. Public safety and criminal justice expenses now make up 73 percent of the General Fund, not because we are spending more on them, but because everything else has been cut first. In the year 2000, criminal justice costs were just 61 percent of the General Fund.
Other services that are not mandated are funded by special levies approved by public vote—such as the Parks Levy, Roads Levy, and the Veterans & Human Services Levy—and by law cannot be used for other purposes.
MYTH: King County is not living within its means.
Cities have more revenue sources than counties. Cities can levy utility and business taxes, while King County’s “means” or revenue sources are limited to these:
- Property taxes, originally restricted by Initiative 747 and then by the State Legislature to increases of no more than 1 percent per year plus new construction, without voter approval. Previously, governing bodies were able to implement property tax levy increases up to 6 percent per year without voter approval. This 1-percent restriction does not cover the cost of inflation.
- Sales taxes, which are restricted by state law and decline significantly during an economic recession.
Because of the limits on revenue sources, special tax levies are the only other way to make up the difference when revenue does not support the costs of providing services.
Beyond limitation in revenue sources, the County faces a significant challenge from the 1 percent cap on property tax increases, because the cost of maintaining the same level of services to residents rises each year at a higher rate. It is as if your salary increases very slightly, while inflation drives up the cost of rent, food, and clothing at a greater rate. As this keeps happening year after year, your ability to pay for necessities becomes less and less. This gap between the rising cost of providing services and capped revenue is called the structural gap and negatively affects all counties in Washington State.
By law, King County must have a balanced budget. As with a household, if you lose your job, you still have to pay your mortgage and utility bills. You can cut back on discretionary spending, but you still have to pay for necessities. Without adequate revenue, the county must balance its budget by reducing expenses.
King County has been able to adopt balanced budgets that include service cuts while also maintaining its AAA bond rating, which is the highest credit rating by Moody’s, providing the County the lowest financing costs. Such responsible money management has kept King County solvent during the worst financial crisis in the county’s and our country’s history.
MYTH: Government should be run like a business.
If government were run like a business, then it would be able to choose its customers and refuse non-profitable requests. It would be able to exclude people who cannot pay for the services they receive, such as criminals, children, and the poor. Government must serve all residents equally, no matter how much they cost instead of contribute.
Government must follow laws that don’t apply to private business and make operations more costly. Examples are complying with public records requests that consume much staff time and energy, and making proceedings open to the public. For instance, two people who serve on a three-member council or committee cannot talk about any public policy issue outside of an official, announced public meeting. These practices may not be the cheapest way of doing business, but they are required by law.
At the same time, King County is incorporating business practices in its operations, using the Lean principles to streamline operations, avoid duplication, increase efficiency, reduce costs, and improve customer service.