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Times' series on spending
(June 2002)
· Part 1
· Part 2
· Part 3
· Part 4




Wednesday, June 19, 2002 - 12:00 a.m. Pacific

King County duties grow as tax base gets trimmed

By Peyton Whitely
Seattle Times staff reporter

 
By the numbers
A growing gap
King County's budget: a 10-year look
When Washington became a state in 1889, it set up two forms of government for two kinds of people: city folk and county folk.

But now city dwellers buy county dog licenses. City buses are mostly run by the county. A city person accused of a major crime ends up in a county court. City dishwashers drain into a county sewer system.

And county government's finances are stretched because while its obligations are ever-increasing, tax income has been capped. It has been cut by citizen initiatives, hit by the recession's effect on sales-tax revenue, and undermined by the formation of numerous cities throughout the county.

King County Executive Ron Sims says the "fundamental fund structure for traditional county services ... is broken." He fears someone will sue him personally when the county can't meet its legal obligations.

Already, the county is closing parks. It's considering completely ending human-services efforts by next year. Deep cuts are expected in jail operations, courts and the sheriff's department.

Sims blames state law, old and new.

Laws adopted when Washington became a state laid out basic services each county would have to provide, including sheriff's protection, a jail, a prosecutor, courts, election oversight and property assessment.

Now those functions are requiring an ever-larger share of the current-expense fund, which pays for day-to-day operations of the county.

Of the $497 million in the current-expense fund for 2002, law and justice expenses amount to $337 million, or about 67 percent. By 2009, they're projected to require all the current-expense money, unless something changes.

'Get tough' on the budget

New state crime policies are part of the reason for soaring law-and-justice costs. "Get-tough" laws enacted in the 1990s call for harsher penalties for people convicted of crimes including domestic violence, driving under the influence of drugs or alcohol, and other drug crimes. A "three-strikes" law mandating life sentences for people convicted of three serious felonies directly affected state prisons but created a trickle-down effect in county courts, where more defendants are going to trial to fight third convictions rather than striking plea bargains.

At the county jail, where prisoners are held before trial and to serve some full sentences on relatively minor crimes, the average length of stay rose by 50 percent, from 12 days in 1990 to 18 days in 2000. The effect? Sims says the county had to build a new jail in Kent, opening it in 1997.

Other jail operations are also affected. In 1986, the county had about 1,300 jail inmates every day. By 1997, the figure was 2,400; now, it's about 3,000. Jail budgets more than doubled; rising from $56 million in 1997 to $117 million now. Jail employment, in part to guard all those prisoners, rose from 514 in 1997 to 970 workers now.

County law-and-justice costs have gone from $187 million in 1991 to the current $337 million, an 80 percent jump. The most recent 2003 county budget outlook, prepared in May, notes that nearly 500 employees have been added to law-and-justice operations since 1997 to keep up with the increased legal demands.

Eroding tax base

The financial picture is complicated by the fact that the county has lost revenue to new cities formed when residents have voted to split off from unincorporated King County.

Those incorporations, along with annexations in which existing cities have taken over unincorporated areas, have diverted property taxes and sales taxes from the county into other treasuries. Eleven of the 39 cities in the county were created since 1990 — including Federal Way and Sea-Tac (1990), Burien and Woodinville (1993), Newcastle (1994) and Covington (1997).

In 1991, about 1 million people lived in incorporated areas of King County; the figure in 2000 was slightly over 1.3 million. Meanwhile, the number of residents in unincorporated King County fell from 532,000 to 359,000.

New cities have taken over some services, such as road maintenance and police protection (though some have paid the county to continue policing within their city limits). But all still rely on the county for the costly regional services.

The effect of annexations and incorporations shows through in patterns of property-tax collections throughout King County.

Between 1991 and 2001, the county's property-tax collections grew by 66 percent to $290 million. But over the same period, the cities' collections grew by 101 percent to $426 million. The cities had collected more than the county all along, but the spread more than tripled over the decade.

At the same time it was losing some of its tax base, the county undertook a huge organizational change: In 1994, it merged with the Municipality of Metropolitan Seattle, or Metro, the separate agency that treated wastewater and ran a countywide bus system.

The merger brought the biggest change county government had seen in its 150-year history (the county was formed before the state, as part of the Oregon Territory, in 1852).

County employment went from 7,257 in 1993 to 12,688 in 1994. The total county budget doubled from $1 billion in 1993 to $2 billion in 1996, when the phased-in Metro merger was completed. It's $2.9 billion this year.

Though it's unclear how the merger has affected the county's bottom line — the county inherited Metro's revenue base along with the responsibilities — some say it was supposed to save money by creating efficiencies that have not come to pass.

Questions about the merger only last week sparked a debate between two County Council members, Kent Pullen and Larry Phillips.

Pullen said the merger cost hundreds of millions of dollars and cited examples such as a botched $38 million computer system, which was abandoned two years ago after problems arose installing it. It was supposed to replace separate systems used by the agencies before they merged.

Phillips shot back that the merger in fact has saved hundreds of millions of dollars in such large-scale undertakings as wastewater treatment.

A $41 million shortfall

A system of taxes, fees and other income more or less kept all those operations running — until November 2001, when state voters passed Initiative 747, which limited nonvoted property-tax increases to 1 percent. The county's income suddenly had a fiscal lid. A national and local recession then cut the rate of sales-tax collections.

King County found itself $41 million short in its 2002 current-expense fund, a shortfall it's coping with by closing some parks, freezing hiring and taking other measures. But the slide won't stop after this year. If expenses continue at a pace necessary to maintain existing services, the fund will be an estimated $50 million out of balance in 2003 and an additional $30 million short in each of the following two years — for a total cumulative shortfall of $150 million by 2005.

Before I-747, an earlier blip had been caused by passage of another citizen measure, I-695, the so-called $30 car tax, which cut motor-vehicle-excise-tax collections. But that cut affected only certain functions, such as Metro transit operations, and didn't have the impact of I-747, which capped all government property-tax collections.

While the county's current-expense fund is hurting, most of its 121 accounts are in good financial condition. They generally operate with "dedicated funds," meaning they have specific money sources such as bus fares for Metro Transit and sewer bills for wastewater treatment.

But the viability of those accounts doesn't benefit others in trouble. It's illegal to transfer money from dedicated accounts to other accounts.

Money voters approved for Medic 1, for example, can't be used to run district courts. Local sales taxes approved by voters to subsidize Metro buses can't pay for police.

Because the current-expense fund is the one in the most trouble, and because law-and-justice costs are the biggest share of that fund, that is where many fingers are pointing.

Some county officials have argued that wages and benefits are too high, especially for law-and-justice employees and corrections officers in particular.

A county budget-office analysis shows nearly 500 employees have been added to law-and-justice operations since 1997, with salaries and benefit costs rising 4.3 percent a year. But those salaries and benefits are negotiated through dozens of individual labor agreements, and unions argue that county employees, like everyone else, face rising medical and housing costs that make the increases necessary.

General wage and benefit costs, throughout county government, have risen 51 percent since the 1994 Metro merger. Annually, the increases have ranged from 2 percent to nearly 12 percent.

Where to cut?

Where the fiscal pain will lead for the current-expense fund is unknown. Sims is to lay out a proposed 2003 budget in the fall.

Many changes already are being proposed. Studies are under way to radically change the way district courts operate, and an ordinance was adopted last week to redistribute the number of courts from nine districts to three divisions in January, with the ultimate effect of possibly reducing the number of operating courts.

A Metropolitan Parks Task Force also issued a series of recommendations last week that call for basic changes in the way the parks system operates, including turning over many parks to cities, adding such services as restaurants or proposing higher property taxes.

County officials at a May budget forum at Seattle Center discussed another possible way to balance the budget: cutting all functions in human services, parks, arts and housing, all services the county is not required to provide by state law. The officials also talked about 4 percent cuts in the jail, sheriff, prosecutor, superior and district courts and public-defender operations.

What still remains is a series of questions, and that's how the May budget forum ended.

"What programs will be downsized or cut entirely?" the budget staff asked.

The question, for now, was a rhetorical one.

Peyton Whitely can be reached at 206-464-2259 or at pwhitely@seattletimes.com.




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