Clallam: Lower taxes mean less money for county

from http://www.sequimgazette.com/News/CountyNews/Countyfacestightbudg010919.html

by Lucy Dukes, Sequim Gazette Staff Writer
       Clallam County, WA - Sept. 13, 2001 - Half the lights in Dan Engelbertson's office are turned off. Engelbertson is the county administrator, and making do with two light bulbs in every fluorescent fixture instead of four is just one way the county is trying to save money. Despite cost-cutting measures, however, the county's preliminary budget is still $1.8 million short.
       Expenses are rising.
       Energy costs more, Engelbertson said, but "you still have to turn on the lights and heat the building."
       Personnel costs more too. Even if the county tries to cut expenses by not filling some of its employee vacancies, other employees have cost-of-living raises. These are all built-in budget increases, Engelbertson said. They're expected.
       The trouble is, these expenditures must come out of revenues that have not increased as rapidly as expenses.
       "It does not appear that next year's anticipated revenues will cover our anticipated costs," Engelbertson said.
       He's not panicking though. The preliminary budget isn't even finished, he said.
       So far, every department has submitted a list of revenues and a list of expenses, including enhancement expenditures. Those lists are a kind of "wish list" called a preliminary budget.
       Even that isn't ready for public review though. Engelbertson will have the preliminary budget completed and available to the public for $5 per copy by the end of the week, he said.
       And even if the county is still short of funds in the preliminary budget, Engelbertson emphasized, "we've been short many other years, and county government will survive."
       In the end, the county will balance the budget, he said, and there are several ways to do that.
       The first way is to cut costs, he said. He doesn't yet know where the county would make those cuts. Engelbertson will be meeting with department heads and elected officials over the coming months to see what expenses can be cut. These cuts could be selective, he said, or they could be "across the board."
       "I expect we will be closer than we are now to balancing the budget in a few weeks," he said.
       What the county should not do, Engelbertson said, is delay projects that will cost more in the long run if neglected now. The county must preserve its infrastructure, he said, and that means maintaining what it already has.
       Besides cutting costs, another way to balance the budget is to increase revenue. One way to do that is to look for more grants, Engelbertson said, but warned that grants do not necessarily last and are therefore not a solution for a permanent expenditure.
       The county could increase revenue by increasing taxes, too, he said. Engelbertson already plans a 1-percent property tax increase, which is actually on the low end of the tax increase spectrum.
       This year, 11 out of 39 counties in Washington state raised taxes less than 1-percent.
       County officials want to respond to the public, he said, and "public sentiment out there is to keep those taxes down."
       Another problem with a tax increase is that for every 1 percent it raises taxes, the county only gets around $64,000. That's because the county only gets about 15 percent of the money raised by property taxes. Schools, libraries and other public works get a piece of the pie too, he said.
       Besides, the $64,000 the county could raise with a 1-percent increase would hardly dent the $1.8 million shortfall in the preliminary budget.
       Even more distasteful to Engelbertson than raising taxes is the third way of balancing the budget: use reserves.
       "The county has certain funds that we do not have allocated that are more of a savings account," he said, but using those funds for everyday county functioning is more than risky.
       "Once they're gone, they're gone," said Engelbertson. "What do you do after that?"
       "You have to be able to live within your current revenues," he said. "You adjust your services so they reflect what you can do with current revenues."
       Using the money to pay monthly electric bills or to pay employees, for example, would run the fund down into nothing, leaving nothing to pay for electricity and personnel next year. Reserves should be used more for capital expenses, he said, for patching a leaky roof, for example.
       That reserves will run out isn't the only problem.
       "When you use your reserves, you not only take that money, you take the interest off that money," he said. "That is also gone," and the county uses the interest in its budget, he added.
       Before he presents the budget in December, the public will have plenty of opportunity to suggest ideas for making the budget work.
       "The process involves public input at several stages," Engelbertson said.
       The county will have a budget forum in Sequim Sept. 25, one in Forks Sept. 26 and one in Port Angeles Sept. 27.
       Clallam County communities have another chance to comment on the budget in mid-November, when Engelbertson presents the balanced budget to the board, he said.
       The public has yet another chance to discuss the budget with county administration before its adoption at a Dec. 4 hearing.
       When the budget is finally approved and in place Jan. 1, Engelbertson hopes it will be one that anticipates the future. The economic downturn will probably continue, he said.
       "We need to plan for long-term impacts," said Engelbertson. If it was just a one-time thing, then the county could delay projects and make up for it later. The solutions must be more permanent, he said.

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