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Kitsap County looks for another $4.7 million in cuts
Faced with declining revenues and a potential $4.7 million in budget cuts next year, the Kitsap County commissioners are grappling with the question of where the budget ax will swing next.
“The Board of Commissioners will ask that appointed departments and separately elected offices prepare and present their budget requests on a program basis,” said Commissioner Charlotte Garido. “This programmatic analysis will involve measuring a program’s effectiveness, overall value, alignment with the priorities of citizens, level of service provided, and response to constitutional mandates.
“The county’s general fund has seen a continual decline of revenues over the last several years,” she said, “and that, combined with the 1 percent property tax cap, has required substantial corresponding reductions.
“These reductions have been tough to make,” Garrido said, “though most have been one-time cuts or have taken place at the fringes and the county can no longer afford to make incremental changes.The board is faced with making reductions in service levels and perhaps eliminating some programs altogether based on an objective analysis of priorities.”
“This is the fourth consecutive year of cuts,” said Commissioner Steve Bauer. “The easy ones are past, and now we will have to look carefully at all options.”
In addition to the $4.7 million in potential budget cuts for 2011, the county has communicated a $610,000 budget deficit for this year. This raises the question of a balanced budget being achieved.
“These numbers represent an order of magnitude which may be difficult for citizens to grasp,” said Garrido. “Continued drops in revenue at this level require a significant effort on the part of departments and offices to reorganize and reduce services in a much more visible way in 2011.
“Past deficits have been absorbed through incremental reductions in programs,” she said, “while striving to continue at the same level of service with less staff and funding. A balanced budget for 2011 will be attainable only through major changes in programs and with service level reductions.”
“State law requires a balanced budget,” said Bauer. “The budget will be balanced, but the cost in services will likely be high.
“Both numbers are discouraging,” he said, “given all the cuts that have had to be made in the last three years.”
Decreased property tax revenues and their impact on the current and future budgets are in part being blamed for the budget deficit.
“Property taxes make up 34 percent of total anticipated revenues in the general fund ($28.3 million out of $82.5 million) for the 2010 budget,” said Garrido. “The preliminary estimates for 2011 are holding at the 34 percent of total budget mark as well ($27.5 million out of $79.5 million), but our staff forecasts a 2010 shortfall in property tax receipts (when compared to the budget) of $938,424, or a little more than 3 percent less than anticipated.
An additional $1 million in delinquencies has been included in the property tax revenue estimate for the 2011 budget-building process.
“Prior to enactment of the property tax limitation, the county managed its programs and had built a $14 million reserve fund,” said Bauer. “The last time the county approached the voters for a property tax for general operation purposes (other than 2002), was over 30 years ago.
“The current recession would still have hurt financially, but even before the recession the county was faced with an annual shortfall of $1.5 to $2 million per year,” he said. “For several years, the board balanced by spending reserves.
“In 2008,” Bauer said, “we balanced the budget without reserves for the first time in several years by making substantial cuts in programs. Once the recession is over, the county will still have to deal with the effects of the 1 percent limitation by either cutting programs or increasing revenues or both.
“The problem,” he said, “is a constant series of budget cuts. That’s not a way to sustain an organization or the services the public relies on.”
Discussions regarding possible solutions have compelled the county to take a hard look at cutting longevity pay, omitting benefit increases and potentially reducing them and getting prepared for another round of layoffs.
“Kitsap County has to take a hard look at all aspects of the budget,” Garrido said. “Longevity as a concept has been discussed by the board and the separately elected officials. However, the issue of reducing or eliminating longevity pay is a matter of collective bargaining and differs from one labor contract to the next.
“Through the collective bargaining process,” she said, “negotiators will be looking at all economic components of the contracts, including longevity pay and other benefits with the hopes of reaching an agreement with the labor unions that preserve jobs and compensation, while living within the confines of the revenues available.
“It is the goal of the board,” Garrido said, “to avoid balancing the budget solely on the backs of the employees, and they have pledged to do their part by pursuing various revenue enhancements. Even in the best of circumstances, though, it is likely that cuts of the magnitude required for 2011 will at least partially be implemented through some reduction in force.”
“The county has looked at all of these options,” Bauer said. “We have collective bargaining agreements and many of these options must be bargained with our unions.
“The unions have already made a number of concessions,” he said. “We’re also looking at ways to manage future compensation increases better to try to bring compensation growth closer to revenue growth. Even when that’s done, the county will still need to seek new revenues in order to preserve services.
“The other piece the county must consider,” Bauer said, “is future incorporations and annexations of areas we currently serve with the corresponding loss of revenues.”