Expenses outpace revenue

Greetings from the courthouse!

As I'm sure most of you have heard, we had a very difficult time balancing the 2016 budget. I feel that it is extremely important to share with you, the taxpayers, the struggles that your local governments are facing. I will speak to Lincoln County's situation (current expense, not public works) but these same issues affect your towns, fire districts, hospital districts, schools and any junior taxing district in the state of Washington.

There are several contributing factors to recent budget problems, but as I stated in my last column back in September, the underlying cause of struggling local governments is Tim Eyman's Initiative 747 that limits property tax growth to one percent above the amount collected the previous year, while expenses grow at around five percent. As each year passes, the negative effects become more pronounced. Periodic adjustments must be made in the way we conduct business in order to balance budgets. Historically, large cuts have been able to carry the county for several years. Big cuts typically equate to a bigger ending cash balance during that budget cycle, which can then be used to maintain the level of service – for a finite period of time. You can only rely on excess cash for so long. Corrections (read, cuts) are made, cash balance goes up, and then back down the slippery slope we go. As this trend continues, with no end in sight, the time between large cuts become less. The effect of those cuts inflating the cash balance becomes less, and the ability to provide an adequate level of service becomes less. In the past, Lincoln County has done an outstanding job of doing more with less. Recently, we have been struggling to just maintain adequate service with little or no impact to the general public. We are at the point now that the public will begin to feel the effect and that feeling will intensify over time.

As we started the budget process for 2016, the requests came in at $1,300,000 above our projected revenues of 6.5 million, which, by the way, were almost $100,000 less than they were in 2011. Sales tax and revenue from divorce filings, the second and third biggest revenue sources, continue to decline, as does state shared revenues for things such as criminal justice and indigent defense.

During the budget meetings with all of the department heads, with their help, we cut virtually everything we could, except people, on the first run-through, but it was not nearly enough. Some of the most significant and unfortunate things that occurred on top of the previous cuts were the retirement of four people, the laying off of five people, two sheriff's deputies leaving in 2015 and diverting $500,000 in property taxes from the county road fund for traffic policing. Over the last several years, we have only needed to divert $250,000 but the figure was $920,000 when the county was in this same boat in 2009. Also, because of the extra diversion, three of the four vacant positions at public works will most likely not be filled in 2016. There were also property tax shifts from public health and the county fair to current expense to boost revenues. The county fair, as well as a portion of WSU Cooperative Extension, will be funded with Economic Development Council money that is generated by .09 percent sales tax, which is a separate fund.

We also asked for various concessions, including 0 percent cost of living adjustments, from all four unions for one year. The courthouse union voted "No" on a proposal of a zero percent adjustment and 10 percent reduction in work hours for one year, so in order to treat all employees equally, two percent adjustments will be given countywide. All four union contracts have a two percent minimum or the consumer price index, whichever is greater, up to a 4.5 percent maximum built into their contracts and require agreements from the union membership to deviate from those numbers.

Again, this has been an extremely difficult year to balance the budget. With expenses growing at around five percent per year and the limitation of a one percent increase in property taxes, it is not hard to see that the road ahead is not a very pretty scenario. Around six years ago when we were in a similar situation, all of the cuts that were made bought us several years of stability. It is my sincere hope and belief that all of these budgetary efforts this year will put us in a much better cash position at the end of 2016 and buy us several more years. But, make no mistake, the one percent limitation on property tax is not sustainable into the future for small governments that cannot offset that loss with increases in other revenues such as sales tax.

The result of all these cuts to balance the budget is that we are now below minimum staffing levels in virtually every department. We will meet again with department heads soon to discuss ways that staff will be able to get their daily work accomplished. In all likelihood, the courthouse will be open fewer hours to the public. We will keep you updated on that.

In the sheriff's office, the two deputies who resigned in 2015 will likely not be replaced anytime soon. In the future, as we continue down this spiral path, well, we will see... The level of public safety will decline, but there are options to improve that. However, they require voter approval. There has been recent discussion about putting on the ballot a measure to increase the sales tax in Lincoln County for the sole purpose of providing public safety.

The law allows for collection of up to 3/10 of one percent sales tax for public safety. This sales tax would be collected countywide and would be split between the towns and the county. The county would receive 60 percent of the revenue, with the balance split between the towns, based on population. As an example, the county would receive approximately $200,000 per year while the towns would receive anywhere from $30,000 (Davenport) to $6,000 (Almira).

Keep in mind that this revenue can only be used for public safety. As Sheriff Magers stated in his report last week, there will be significant shortfalls in service. The lack of deputies will have an effect on our ability to provide adequate public safety. This additional sales tax revenue could replace two deputies in the county and help offset the law enforcement costs in our towns, but the choice is ultimately up to you, the voters. Nobody likes new taxes, but the reality is that most small governments just can't afford to keep providing the same level of service on less revenue. My job as an elected official is to make the public aware of our situation, provide possible solutions and let you have a say in how your tax money is spent.

I would love to hear your thoughts and ideas on this or any topic! Please, call (509-641-0099), email (rcoffman@co.lincoln.wa.us), stop by or facebook me any time.