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Washington
Executive Summary
In November 1997, 62% of King County voters passed Referendum 47, a tax relief measure that would hold increases in property tax collections to the rate of inflation, unless eight out of thirteen County Councilmembers find a "substantial need" not to do so. Shortly after this vote, King County declared it had a "substantial need" to increase property tax collections by 5.08% in order to pay for Medic One services after voters rejected a funding levy in the same election.
King County Executive Ron Sims has proposed a $426.5 million 1999 General Fund Budget, calling for an increase in property tax collections of 5.5% over the 1998 level. According to Referendum 47's inflation cap, however, any increase in 1999 property tax collections should be limited to 0.85%. Executive Sims' proposed budget would spend $8.7 million more than if King County followed Referendum 47's tax limitation.
An examination of the budget shows that the proposed increase in tax collections is unnecessary. The Washington Institute Foundation found at least $10.4 million of savings in the budget, more than enough to abide by Referendum 47, and even to avoid any increase in property tax collections in 1999.
The study first points out that the temporary increase in property tax collections to pay for Medic One in 1998 will be collected again in 1999, even though Medic One is now funded by its own separate levy. The report recommends that King County adjust the 1999 tax base to exclude the one-time 1998 tax increase, thus giving county taxpayers $8 million in tax relief next year.
The study then offers four practical ways King County can save at least $10.4 million in its General Fund Budget in 1999 while fully funding all other County services. These are fully described in the following report.
I. Introduction
King County elected officials face a crucial choice this fall. Should its leaders abide by the wishes of 62% of county voters who cast their ballots for Referendum 47, which would hold property tax increases to the rate of inflation? Or, should they declare they have a "substantial need" to increase tax collections beyond the rate of inflation for the second year in a row?
The Washington Institute Foundation believes that when Washington State voters direct elected officials to lower taxes, as they did by passing Referendum 47, those elected officials should heed that decision. The purpose of Referendum 47 is to limit the ability of local governments to raise property tax collections above the rate of inflation unless a supermajority of city or county council members vote to collect more because of a perceived "substantial need." Because King County is the largest county in the state (with over 1.6 million people) it is a bellwether for the rest of Washington on Referendum 47's viability.
The 1999 King County Budget will be the first real opportunity for the County to hold property taxes to the rate of inflation, instead of the traditional and often automatic 6% annual tax hike. Although King County faced the same choice for 1998's budget, it declared it had a "substantial need" to raise property tax collections to pay for Medic One services after voters rejected a funding levy in November, 1997. This need does not exist for 1999 - setting up a classic showdown between the reflexive impulse of government to grow regardless of "substantial need," and the taxpayer's desire to retain their earnings for substantial needs of their own.
King County Executive Ron Sims has proposed a $426.5 million 1999 General Fund Budget, calling for a property tax increase of 5.5%, up from the 5.08% increase imposed in 1998. According to Referendum 47's inflation cap, however, any 1999 property tax increase should be limited to 0.85%. The difference between Mr. Sims' proposed 1999 General Fund Budget and Referendum 47's benchmark inflation rate of 0.85% is 4.65%, or $8.7 million. Mr. Sims has said that not adding a further $8.7 million to the General Fund Budget would be "unconscionable" and that King County government is "not sitting here fat and sassy." Is he right?
"King County government is 'not sitting her fat and sassy.'" - King County Executive Ron Sims
An examination of current spending reveals areas where the County could find at least $10.4 million in savings, an amount necessary not only to meet its obligations under Referendum 47, but to not raise property taxes at all. We suggest four guiding principles for King County's consideration:
- Rebate any new "Found Money" in the budget back to taxpayers.
- Hold overhead growth to the inflation rate plus population growth.
- Respect taxpayers greater need for discretionary spending by eliminating marginal programs.
- Evaluate employee benefit packages for "gold-plating."
II. King County and its Budget Process
King County is the financial, economic, and industrial center of Washington State and of the Northwest. It has the largest population of any county in the state, with 1,665,800 people. Over the last five years population has grown steadily at around 1% a year, with 66,300 more people added to the County's population. King County's rapid population growth increases the need for basic services like emergency medical services, sewage treatment and transit. However, a growing population also brings with it a growing tax base, increased further by revenues from new housing construction.
The County operates under a Council-Executive form of government, with 13 elected Council Members and an Executive serving full-time, four-year terms. These officials preside over a government that is organized on three financial levels:
Appropriation Unit - an entity authorized by the Council to spend tax dollars and to incur debts for "specific purposes." This most basic level of government includes agencies like Metro Transit, the Office of Records and Elections, and the County's airport, Boeing Field.
Department - a level of government which combines similar appropriation units together under one umbrella. The Department of Community and Health Services is a good example, overseeing the Community Services Division, Mental Health Division, Developmental Disabilities Division, and Public Defender's Office. There are 13 departments in the county government.
Program Area - a grouping of departments with similar functions. The County has six program areas: General Government; Health and Human Services; Physical Environment; Law, Safety and Justice; Debt Service; and Capital Improvement Projects. Law, Safety and Justice is by far the largest Program Area, accounting for 66% of General Fund spending in 1999.
The County's annual budget process for 1999 began only weeks after the Council adopted the final 1998 budget, right before Thanksgiving 1997. The annual budget process is described below.
King County's Annual Budget Process February-May: Identify Major Budget Issues/Impact Assessment - During this phase of the process major budget issues for the following year are raised, a long term review of financial and programmatic policies takes place, and finally, a short term review of financial and operational policies, in which each department determines its priorities and objectives for the year. January-July: Evaluate Service Needs - This phase evaluates existing County services and identifies priority service needs for the community. April-May: Establish Status Quo Budget and Preliminary Financial Forecast - In this step, the following year's estimated costs to provide programs at the current year's service levels (status quo) are established and compared to preliminary revenue forecasts, which enables the County to find out what it can afford to spend and what may need to be reduced. May-June: Formulate Operating Budget - This step involves planning for funding expanded programs for the following year. If revenues are forecasted to decrease, plans are made to reduce spending on programs to meet established financial targets. April-July: Formulate Capital Budget Requests - Each department is responsible for identifying and ranking, according to necessity, major construction or renovation projects and acquisitions of land for future capital projects. July-September: Balance Operating and Capital Budgets to Estimated Revenues October-December: Approve the Budget - In October, the County Executive submits his budget to the County Council, whereupon over a six-week process of hearings, public input, and final adjustments deemed necessary, the County adopts a new budget. |
The King County Budget and its supporting appendices is a five-inch thick, complex collection of separate types of funds and budgets. Examining in detail any particular section of the budget requires an appreciation of the whole. Executive Sims has proposed a $2.7 billion 1999 budget, the revenues for which come from six different types of funds:
1999 Proposed Budget by Revenue Category
1. General Fund: $423 million
15% of revenues
2. Special Revenue: $576 million
20% of revenues
3. Enterprise: $607 million
25% of revenues
4. Internal Service: $198 million
7% of revenues
5. Debt Service: $181 million
6% of revenues
6. Capital Improvement: $728 million
26% of revenues
Total: $2.7 billion
100% of revenues
Most of King County's revenues come from dedicated funding sources. Special Revenue Funds are revenues that King County receives from Federal and State grants, taxes, permits, and user fees, and are legally restricted for special purposes - the County Road fund, Emergency Medical Services, and Real Estate Excise Tax are three out of a total of 29 such funds. An Enterprise Fund is used to pay for County activities that are financed and operated like a business enterprise, receiving its revenues from fees, charges for services and contracts. King County has five Enterprise Funds: Solid Waste; King County Airport; Stadium; Public Transportation; and Water Quality. Capital Improvement Funds pay for large construction and land acquisition projects and receive their revenues from taxes, contributions from operating funds, bonds, and Federal and State Grants.
The County's $423 million General Fund is an exception to the funds mentioned above. Also known as the Current Expense Fund, it is the largest of King County's operating funds, and finances criminal justice programs, financial and administrative management, parks, arts, and community development planning. It also contributes to operating budgets of King County's public health services, human services, emergency medical services, developmental and environmental services, and job training. Finally, it supports particular Capital Improvement Projects when no other funding source is appropriate. The provisions of Referendum 47 only apply to expenditures from the Current Expense Fund.
The Current Expense Fund's revenues come mostly from property taxes and sales taxes. Executive Sims is proposing to collect almost $195 million in property taxes for the 1999 Current Expense Fund, up from $181 million in 1998. Below is a chart showing how the County proposes to spend Current Expense Fund revenues in 1999:
III. How Referendum 47 Works
The primary goal of Referendum 47 is to put forth the idea that government growth, and its consequent demands on taxpayers, should be restrained to the sum of inflation plus the growth in the tax base due to new construction. Barring unusual circumstances, this should be a fairer measure of the growth in government's needs. To achieve this goal, Referendum 47 attempts to limit to inflation plus new construction the amount of money local governments can generate from property taxes. Referendum 47 uses as its inflation benchmark the Implicit Price Deflator (IPD), adjusted in September 1998 to 0.85%, a decrease from the 1.9% inflation rate of September 1997. Only by stating a "substantial need" and through a vote of eight out of thirteen Councilmembers can King County raise property tax collections beyond the rate of inflation. While the state constitution permits counties to increase property tax collections by up to 6% per year, the voters in 1997 directed their local governments to restrain themselves to inflation.
Those urging a breach of the Referendum 47 tax limitation say a 5.5% property tax increase would impose only a small additional burden next year on King County households. The impact of such a policy over time, however, is enormous. Each year's tax increase becomes a permanent part of the tax rate for the following year, with that year's increase placed on top of that. The cumulative effect of compound annual tax increases rapidly swells to become a major part of each family's tax bill.
For the 1998 Budget, King County broke a long pattern of raising property tax collections by 6% every year by enacting a 5.08% increase. For 1999, Executive Sims proposes to boost that to a 5.5% increase. The top line of the chart on the next page illustrates the impact of yearly 5.5% increases on the overall property tax burden. At this rate the tax collected from property owners will double in slightly over 13 years, pushing a $1,000 tax bill to $2,000 (upper line on chart). If, however, tax increases were held to an assumed inflation rate of around 2%, property taxes would increase only 29% over that same period, meaning a $1,000 tax bill would rise to only $1,290 in 12 years (lower line on chart). Holding property tax increases to the rate of inflation meets the Referendum 47 standard enacted by the voters. Instead of seeing their property tax bill double in 13 years, Referendum 47 saves the property owner $710 in the twelfth year, and allows an accumulation of $4,315 in savings over the time period. This is a substantial savings for most taxpayers and the savings resulting from adhering to Referendum 47 will do much to preserve the affordability of housing in King County.
IV. King County's 1999 Budget: A Double Whammy for Taxpayers
King County Executive Ron Sims has said that "the County should be commended for bringing the property tax in below the legally authorized six percent level for the second year in a row." While it may seem like King County is doing taxpayers a favor by increasing their property taxes at 5.5% instead of the 6% constitutional ceiling, there is, of course, more to the story just below the surface. The whole story is that in effect, the County is double-dipping - increasing property taxes by over 10%, not just 5.5%. Here is how they're doing it:
In late November 1997, King County found itself facing unexpected expenses when county voters defeated the special levy to renew funding for Medic One service. In its resolution setting the regular property tax increase for 1998, the County Council cited funding for Medic One as the "substantial need" required under the Referendum 47 law to justify increasing taxes above that year's inflation rate of 1.9%. King County raised property tax collections by 5.08%, building into the 1999 tax base a one-time increase of approximately $8 million to pay for Medic One for the first half of 1998. Without this crisis, King County would have been within the 1998 Referendum 47 guidelines of 1.9% and would have a much lower tax base from which to calculate the 1999 budget.
The Medic One funding crisis has now passed. Voters approved a special levy to pay for this vital emergency service in February, 1998, which, beginning in 1999, will raise $130 million to fully fund Medic One for three years. This means King County will not have to pay for this service out of 1999's Current Expense Fund Budget, as it did in 1998. But the taxpayers, of course, will still be paying for Medic One out of additional property taxes. Executive Sims' proposed 1999 budget ignores this reality by incorporating 1998's $8 million increase in property tax collections into the 1999 base. In other words, King County plans to collect $8 million again in 1999, but not spend any of it on Medic One services.
Effectively this is double taxation: raise regular property taxes in 1998 to pay for the November 1997 Medic One levy failure; then raise property taxes in 1999 through the second successful Medic One levy, all the while retaining the 1998 increase in the tax base. Offered the choice of having their cake, or eating it, King County wants both. If King County were fair with its taxpayers it would not write the 1999 budget with a tax base that is higher than it should be. Instead, it would admit that the one-time emergency of 1998 is over and would adjust the 1998 tax base, from which the 1999 increase is calculated, by subtracting the amount of property taxes now designated to Medic One by the special levy.
Recommendation: King County should adjust its tax base to exclude the one-time 1998, emergency tax increase, because Medic One now has its own dedicated funding source.
The prospect of King County revising its tax base downward on behalf of taxpayers is nil. In fact, the Executive's proposed budget seeks to increase the tax base again by raising property taxes in the 1999 budget by 5.5%, far past the Referendum 47 level of 0.85%. Properly calculated, there is a 10.85% increase in property tax collections over two years, instead of the 2.7% increase as Referendum 47 directed.
The Executive's proposed tax increase is unnecessary. Examination of the budget reveals at least four general areas where savings can be found to hold down property tax collections. Raising taxes should be government's last resort, used only when other options have been exhausted, not the first choice to resolve budget issues.
V. Principal #1 -- Rebate "Found Money"
Any new revenues (anticipated or not) found by King County in the budget process should not automatically be used for more government spending, but rather returned to taxpayers in the form of lower property taxes, as they directed by passing Referendum 47. Below are recommendations on what the County should do with its "found money":
A. New Referendum 49 Criminal Justice Funds Offset.
In his 1999 budget submission, Executive Sims states, "Should it [Referendum 49] pass, it will increase revenues in support of criminal justice services by about $1.0 million beginning July 1, 1999." How did Referendum 49, a measure put before state voters to fund transportation priorities, also end up funding King County's criminal justice efforts? In order to make-up for the deficit in local criminal justice funding left by the shift of Motor Vehicle Excise Tax revenues to pay for transportation projects, Referendum 49 will allow a one-time transfer of surplus General Fund revenues. This will result in a net increase for local criminal justice of $14.2 million in 1999-2001 biennium, of which King County, like all counties in the state, will receive a share.
Like passage of the Medic One special levy, passage of Referendum 49 has added new funds to the County's budget, in this case to help pay for important criminal justice services. That means King County is relieved from having to collect $1 million from taxpayers to maintain these basic services as planned for in the Current Expense budget. The additional $1 million should be used toward holding the 1999 property tax increase to the inflation limit required by the Referendum 47 law.
If the County does not use these funds to reduce the proposed property tax increases, it means County property owners will pay for these services twice, once through the state grant of $1 million, and again through their regular property tax bills.
Recommendation: Use funds in the Current Expense Fund budget freed up by new Referendum 49 criminal justice grant to hold down increases in the regular property tax, rather than fund additional spending.
Savings: $1 million.
B. Unanticipated Revenues from New Construction Taxes
Each year the County collects property taxes on the value of any new construction that has occurred since the previous year. Generally, this adds about 2% to the amount the County collects through the regular property tax on existing homes and buildings. This year the County has discovered it will collect $914,000 more in net taxes on new construction and real estate fees than it expected. That means the County is relieved from having to collect a like amount from homeowners through the regular property tax. The unexpected $914,000 in tax collections should be used to hold down increases in property taxes in 1999. This would help the County stay within the Referendum 47 tax limit enacted by the voters.
Recommendation: Use unanticipated new construction and real estate revenues to hold down increases in the regular property tax rate, rather than fund additional spending.
Savings: $914,000.
"I don't know why it (new construction revenues) shouldn't go to the taxpayers, it's their money." - King County Council Member Rob McKenna
In the weeks before he submitted his 1999 budget proposal, Executive Sims said he was reducing spending on human services programs by $1.9 million, a decision which he described as personally painful. The day of his budget address however, he signaled the County Council that revenues from taxes on new construction might be higher than expected, and if so, then they should use those new revenues to restore the human services reductions he proposed earlier.
One point should be clear: the "found money" can clearly be spent on county programs. There is an inexhaustible supply of programs and agencies which are desirous of county funding.
But, Executive Sims has already made it clear that no "substantial need" for any such new program funding exists. Were a program essential, he would have included it within his budget proposal. That he did not demonstrates that he did not consider any of the new programs he might now suggest to be sufficiently critical to support the legally required finding of "substantial need."
VI. Principle #2 - Hold Overhead Growth to Inflation Plus Population Growth
King County government's overhead costs have doubled in just 5 years. A more sensible growth rate would be inflation plus growth in population. While unusual circumstances like King County's settlement of the Logan/Knox lawsuit (explained below) may inflate overhead costs temporarily, any growth in overhead beyond these factors is a growth in the size of government.
According to a June 1998 study by the County Council's Budget and Financial Management Committee staff, the cost of overhead in the Current Expense (CX) Fund Budget has been rising sharply since 1994, when King County merged with Metro. Overhead can be defined simply as the amount of money an agency is charged for the services of another agency. The study showed that the 10 largest CX Fund agencies have been experiencing very sharp growth in overhead. The chart below shows how spending on overhead has increased between 1994 and 1998.
The chart shows that the Current Expense funded budgets for the agencies in the study grew by 37% between 1994 and 1998, while their overhead costs during the same period rose by a rate of 103%. Overhead as a component of agency spending in 1994 was an average of just 8%. By 1998, overhead as a component grew by more than half, to an average of 12%. Although the selected CX agencies' total spending grew by 7.4% each year between 1994 and 1998, those same agencies' overhead costs grew annually at an average of 20% during the same period. In dollar terms overhead costs for the selected CX agencies went from $18 million in 1994 to $37 million in 1998.
Comparing these figures with the growth of inflation over the same time demonstrates overhead's rapid growth. One can give the County the benefit of the doubt and use the Consumer Price Index (CPI), a more generous measure of inflation which King County uses to calculate cost-of-living adjustments for its employees. For the years 1994 to 1997, the CPI for the Seattle Metropolitan area grew at an average of 3.3% per year. Overhead for the ten largest CX agencies grew an average of 20% a year - more than six times faster than the CPI. Comparing overhead growth with the Implicit Price Deflator (IPD), Referendum 47's inflation benchmark, for the years 1994 to 1998, reveals an even greater difference - overhead spending growing approximately nine times faster than the average IPD of 2.3%.
In 1999, King County government will employ 13,228 full-time equivalent workers (FTEs), making it one of the County's top ten largest employers. In 1999 the County will hire an equivalent of 623 full-time employees, an increase of 4.9% in a single year. In addition, in 1998, King County settled the Logan/Knox lawsuit which forced it to make some temporary and part-time positions full time. The Logan/Knox settlement required a payment of $24 million, $15 million of which is from the Current Expense Fund, and will cost King County $2.6 million to $3.6 million a year to pay for the costs of adding full-time benefit packages for part-time and temporary employees.
If the cost of overhead for the 10 largest CX agencies continued growing at its current pace of 20% a year, it would cost $44 million in 1999, up from $37 million in 1998. At that rate, the cost of overhead will double from $37 million to $76 million in just three and a half years. King County government's appetite is growing and is reflected by the growth of overhead. The County has options other than higher taxes to solve this problem. There are at least three ways the County can bring its overhead costs under control.
Recommendation #1: Limit overhead to the average growth in the CPI, plus population, a rate of about 4.5% for 1999.
Savings: $5.8 million
Recommendation #2: Keep the cost of overhead for 1999 at the 1998 level of $37 million.
Savings: $7.4 million
Recommendation #3: Recognizing that 103% overhead growth in Current Expense agencies over the last five years leaves King County government bloated, reduce the current level of overhead by a modest 2%, from $37 million to $36.2 million.
Savings: $7.8 million
VII. Principal #3 - Respect Taxpayers Greater Need for Discretionary Spending by Eliminating Marginal Programs
Special Programs and Projects
1998 Adopted CX Budget
$1.607 million
1999 Executive Proposed Budget
$1.609 million
Percent Increase
0%
In 1999, all 13 members of the King County Council will be budgeted $100,000 each for an item called Special Programs. Councilmembers distribute this $1.3 million throughout the rest of the budget at their individual discretion. In 1998, Special Programs dollars paid for nearly $100,000 in arts programs, and $1.2 million for the Community Services Division to contract with 120 separate organizations like the Boys & Girls Clubs of Federal Way ($50,000), the Northwest Labor & Employment Law Office ($65,000), and Forward Focus Community Programming ($75,000).
Added to these appropriations is an amount for the County Executive to spend - in 1999 approximately $609,000. The Executive typically uses this money to pay for King County's membership dues in associations like the Association of Washington Counties and Washington Association of County Officials.
Essentially, Special Programs allows the King County Council to freely spend $1.3 million, without public scrutiny or regard for the competitive bidding process normally used for contracting with private agencies. Councilmembers do not have to identify which projects they are contributing to or explain why they believe those projects are worthy of public funds. Furthermore, it would be almost unthinkable for a Councilmember to oppose the use of public dollars for other Councilmembers' pet projects when they want the same Councilmembers to approve the use of public dollars for their own pet projects.
Many of the organizations on the receiving end of Special Programs dollars are worthy of public support. The Boys and Girls Clubs, senior centers, and food banks funded in part by Special Programs dollars are performing vital services for the people of King County. However, they should stand the test of public scrutiny, as other programs do, in the normal process of setting budget priorities.
Recommendation: End Special Programs expenditures for King County Council and put appropriations to non-profit arts and human services groups through the regular budget process.
Savings: $1.3 million
VIII. Principle #4 - Evaluate Employee Benefit Packages for "Gold Plating"
King County should not add a heavier burden on property taxpayers by making them fully subsidize unnecessary and extravagant employee benefit packages. Free Bus Passes for County Employees
1998 Adopted Budget
$1.05 million
1999 Executive Proposed Budget
$1.4 million
Percent Increase
33%
In 1998, King County expanded its fully subsidized bus pass program to almost all county employees, giving them the best bus pass Metro offers: an annual, two-zone peak trip pass that costs private citizens $693.00. County employees simply are given the passes, regardless of whether they asked for them or not. Previously, only Metro employees were given free bus passes by the county. The expansion of this program cost King County a little over $1 million in 1998, and has increased in Sims' proposed 1999 budget by over $400,000.
We believe that adding another cost of government by giving free bus passes to all county employees is not good public policy. First, it is questionable how effective giving out bus passes to every employee can be when many employees are unable to use the bus because of the time and distance between their homes and workplaces. We understand King County's desire to have an attractive employment compensation package and that they are trying to set an example for the rest of the community by encouraging their employees to commute on public transit. But, is it fair for King County to give their own employees a free ride, while simultaneously raising fares for regular Metro riders? That is exactly what happened in 1998, when bus fares for Metro riders increased by 15%.
We believe this is fundamentally unfair and are offering two recommendations to alleviate this situation:
Recommendation #1: King County reverse the action taken last year and eliminate the extension of free bus passes to all county employees. If the county feels it important enough to subsidize bus passes for all its employees, then it should find a funding source other than property taxes from the Current Expense Fund.
Savings: $1.4 million
Recommendation #2: King County only offer bus passes to those employees who will use it on a regular basis. Instead of handing out passes to every employee regardless of usage, require employees to sign up for passes.
Savings: It is beyond the scope of this study to estimate how much
King County could save with this option.
IX. Summary of Savings
Principle #1 - Rebate "Found Money"
Additional Referendum 49 revenues: $1.0 million
New Construction revenues: $0.9 million
Principle #2 - Hold Overhead Growth to Inflation
Restrain overhead growth to 3.5% a year, rather than 20% a year: $5.8 million
Principle #3 -- Eliminate Marginal Programs
End Special Programs for County Council: $1.3 million
Principle #4 - Evaluate Gold-Plated Employment Benefits Reverse expansion of free bus passes to all County employees: $1.4 million
or, Provide free bus passes based on usage by employees: UnknownTotal Savings: $10.4 million
X. King County Must Seek a Change in its Budgetary Culture
There are limits to what an outside review of a budget can do. And there are limits to what even a Council review can achieve in the final weeks before enactment of a budget. This analysis has, of necessity, attempted to focus on a few large potential areas of savings, yet the real driver of budgetary increases is not one or two large areas, but the small, pervasive program increases. Every program, every office and agency in King County, can make a claim for "modest" increases to further its mission. Since each increase, by itself, is small, it seems petty to challenge it, for the impact on the total budget would be minuscule. But, across the County, they add up.
Each program has its legitimate supporters. Each program was designed to achieve a positive good for the County. But every budget is constrained by available resources and priorities must be established. That is, ultimately, the concept that must be understood: budget discipline does not only involve eliminating bad programs or waste; it involves restraining the appetites of the good programs whose expansion, year after year, can overwhelm the equally good needs of the taxpayer for the disposal of the fruit of his own labor.
What is required, what the voters who enacted Referendum 47 attempted to instill, is a change in culture in King County government, from a presumption that spending will rise by 6% each year to a presumption that spending will increase no more rapidly than inflation.
This year, the King County Council can scale back the outsized demands represented by the proposed budget by adopting the suggestions incorporated in this paper. However, they should do more: now, as the budgetary cycle for the year 2000 commences, the Council should resolve that Referendum 47 compliance should be the basis of the budgetary planning. Only by beginning the budget process with a clear understanding of the amount of revenues available to be spent can the Executive make the necessary trade-offs, program by program, as the year-long budgetary process occurs.
Recommendation: King County resolve to make compliance with Referendum 47 the basis of its budgetary process.
XI. Conclusion
In 1997, 62% of King County voters directed their local elected officials to restrain the annual growth of property tax collections by passing Referendum 47. Now, the burden is on King County Executive Ron Sims and the County Council to follow the will of the voters. The principles and recommendations set out in this report make clear that not only can enough money be saved to comply with Referendum 47, but to not raise property tax collections at all.
Our proposals are intended to assist King County's elected officials meet their obligations to voters. We wish them luck in that task.
About the Author
Dennis Lisk is Research Analyst at the Washington Institute Foundation, where he works on issues like transportation, privatization, and state and local tax and budget matters. He is the author of "Competing for Highway Maintenance: Lessons for Washington State" published earlier this year by the Foundation. A native of Washington State, he has been with the Washington Institute since graduating from the University of Washington in 1993, with a Bachelors Degree in History. He and his wife live in Redmond, Washington.