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County budget depends on gas prices, sales taxes
While this budget reflects months of cost-cutting and compromise, the bottom line was still $848,000 more than the budget approved earlier this month.
Administrative Services Director Shaun Gabriel presented the revised budget at a special meeting in the morning, with additional presentation in the afternoon at the regular business meeting.
“Although the 2009 budget year may present some challenges, it’s important that we continue to show due diligence as we operate under tight fiscal constraints,” Gabriel said. “County staff should be commended for their hard work, dedication and fortitude in continuing to offer the quality services that residents want and deserve.”
Gabriel said much of the revenue decline we face in 2009 can be attributed to the extraordinary financial situation. Some of the expenditure reductions identified are onetime savings to help weather the downturn.
Amid much fanfare, the county balanced its 2008 budget without dipping into reserves.
This was not the case for 2009, necessitating the use of reserves in the amount of $1,172,537 “as an anti-recessionary measure to balance the general fund budget shortfall and supplement the Department of Community Development’s shortfall in building permit revenue,” according to a budget document.
Central Kitsap Commissioner Josh Brown said he regretted dipping into the reserves, but said “if we had used the reserves last year, it would have made balancing this year’s budget more difficult.”
Property taxes represent about 67 percent of all revenues, translating into about $28 million. The second largest, sales taes, is harder to pin down.
Using projections based on a decade’s worth of data, the county expects sales taxes to decrease by $2.8 million (12.2 percent) over current revenue expectations in 2008.
Total sales taxes (including the 0.1 percent criminal justice sales tax) will be about $20.2 million.
Depending on retail levels, it could be more.
Or it could be less.
Another unpredictable area is the cost of fuel. The original budget calculated a $3 per-gallon level.
Prices have fallen considerably, and changing projections can compensate for the expected shortfall.
Reducing the projections to $2.50 per gallon would save $96,000, while $2.25 would save $141,000.
Brown said he was more comfortable with the higher figure, as it left more wiggle room.
After discussion, he went along with North Kitsap Commissioner Steve Bauer and South Kitsap Commissioner Jan Angel to approve the $2.25 projection.
But like many budget projections, in or out of government, the numbers are theoretical.
Actual numbers can be quite different than what you expect. If gas goes too much over the $2.50 level (this past summer it was well north of $4) the county would need to impose conservation measures and absolute fuel consumption limits, according to Gabriel.
The commissioners also restored $151,000 to County Clerk Dave Peterson’s budget.
In his initial request, Peterson cut more than was mandated, and was quite proud of that accomplishment.
The preliminary budget imposed further cuts on Peterson, who complained that he was being penalized for doing a good job.
After an e-mail campaign by Peterson, the commissioners corrected the situation.
At the morning briefing, Gabriel said all departments had made all the necessary cuts except District Court. “They are the only department that has not proposed a substantial reduction,” Gabriel said. “They only suggested that they close the Poulsbo Court.”
The commissioners instructed Gabriel to go back to the court and request further cuts.
Later, District Court Administrator Maury Baker said, “I don’t know what they’re talking about. We made all of the cuts they requested.”
The new budget has a trickle-down effect, since outside agencies are receiving less than expected which in turn impacts their services.
One of these is the Kitsap County Health District, which has been gutted by the cuts.
The commissioners expect to meet regularly with the agency’s director, Dr. Scott Lindquist, to monitor the situation.
Other agencies are not so life-dependent but nonetheless dependent on the county.
The Kitsap County Historical Society had requested $30,000 but was awarded half that — which was $10,000 less than last year’s allocation.
This money will be better than nothing at all, officials said, and will provide seed money for grant requests.
At the study session, Bauer said any reserves used should be immediately replenished, a process that is done in normal times but has not occurred recently.
Budget numbers, which color every county decision, are expected to be further addressed at a commissioners’ retreat in January.