Junior Taxing Districts first to lose with tax cuts, says speaker
Fire chief talks of income loss to North Mason Chamber of Commerce

Reported by Mary Swoboda

Mason County, WA - 10/24/01 - I attended the noon luncheon of the North Mason Chamber of Commerce on Wednesday, October 24. Chief Mike Green of Fire District 2 (FD2) spoke about the loss of income fire districts would receive starting next year because Mason County is budgeting for a potential reduction in tax revenues. Fire districts will be disproportionately affected because they are classified as Junior Taxing Districts. He wanted the audience to know up front that, "We are not here to demonize I-747."

Fire districts were set up by the State in the 1930s. Their purpose was much different then than now. Unfortunately, the law hasn't changed much since then to reflect the greater need for fire district services.

Junior Taxing Districts include hospitals, libraries, fire districts and cemetery districts, in that order. Senior Taxing Districts are county operations and roads. Senior Taxing Districts are like a first-born son and inheritor. Junior Taxing Districts are like younger siblings. Senior Taxing
Districts are guaranteed their tax dollars; what's left is divided by order of priority among the Junior Taxing Districts.

Junior Taxing Districts will take the brunt of the county's reduction in tax revenues. Chief Greene expects to lose up to one-third of his operating budget. Much of the cost of doing business is tied up in equipment and other fixed costs. That means Chief Greene will have to let some of his personnel go.

Reducing services to the community is not acceptable, especially when FD2 voters have consistently supported all levies to improve and expand services.

>From Chief Greene's point of view, there are four ways to solve the problem
of lost revenue:
 1) Ask county operations and roads to return the portion of levy dollars
they take from fire district levies to the fire districts.
 2) Hope for an economic turnaround that will raise real estate prices in
the county, which will increase tax revenue.
 3) Lobby the Legislature to change the law, giving fire districts senior
taxing status.
 4) Find alternative funding sources.

Herb Baze and Bob Holter from the County Commission attended the meeting.
According to them, Mason County has stayed under the 6% maximum budget
increase set by an earlier initiative, I-601, when increasing their budget
each year. However, the increase has been more than the 1% limit I-747 would
impose if passed by voters in November. Mr. Baze said the county is assuming
I-747 will pass. Therefore, next year's budget will reflect the 1% limit,
resulting in $2 million less revenue. "Until the election is over, we really
can't make any plans," Mr. Baze said.

Mr. Holter said most of the money in the budget is "dedicated funds" that
they have "no control" over. The only discretionary funds they can control
are the number and to some extent, salaries and benefits, of county
employees.

Mr. Baze said we should not expect the state to cut their expenses if I-747
passes. They will merely pass the revenue cuts down to local governments. In
his opinion, local government is "at the bottom of the food chain."

At that point, both Mr. Holter and Chief Richard Knight of Fire District 5
(who was in the audience) proceeded to lambaste I-747 for cutting all their
revenue. This was more than I could bear, so I interjected that I-747 does
not "cut" taxes; it merely limits the AUTOMATIC increase to 1% per year.
Taxing districts can ask voters for more than the automatic increase. Before
I could finish, Chief Knight, slightly annoyed, said running an election
would cost his fire district $10,000. I said I did not believe it would cost
that much if the levy was included with the general election in November.
Dr. Debbie Wing, Superintendent of the North Mason School District, assured
me that the $10,000 figure was quite true.

A verbal free-for-all ensued until Chief Greene got everyone settled down.
It was one of the liveliest chamber meetings I've attended.

Afterwards, I called the Mason County auditor and talked to Pat Sukora about
how much it costs for a taxing district (for example, a fire district) to
put a levy or bond issue on the November ballot. She said the State has
created a formula (a very complex one) based on the total cost of the
election divided by the number of registered voters in the taxing district.
There are approximately 28,000 registered voters in Mason County. Therefore,
the total cost to run an election in Mason County is between $80,000 and
$100,000. (The difference apparently depends on whether it is an
all-mail-in-ballot election or mail-in ballots plus open polls.) This
November there are 44 different issues on the ballot. The more issues and
candidates on the ballot, the lower the cost to each participating entity.

If a fire district (for example, FD2) were to run a candidate or issue on
the November ballot and there are about 4,700 registered voters in the
district, then, using the State's formula, the cost would be somewhere
around $3,000. Ms. Sukora said there were fewer registered voters in Fire
District 5, so their cost would be lower. However, if taxing districts that
cover all of Mason County run a candidate or issue, they have to contact the
entire county's registered voters, so their share of the total cost is
higher. The county bills each entity with a candidate or issue on the ballot
for reimbursement of its share of the total cost.

When Mason Transit ran their first levy (the one that failed by a few
votes), it was the only issue on the ballot, mailed to every registered
voter in Mason County. The cost? About $80,000. When Mason Transit brought
the issue to voters the second time, they lumped it with a school election.
The cost was less, but not as low as when issues are placed on the November
ballot because there are far less issues to share the cost in off-elections.

I suspect where Chief Knight got his $10,000 figure was by running a levy or
bond with a school district election. Since there aren't as many issues on
the ballot during an off-election, the cost is higher.

It seems to me that it makes good sense for taxpayer-supported public
entities to run their elections in November when many issues share the cost.
Voters know the "biggie" election is in November, with more of them willing
to fulfill their civic duty to vote.