 |
|
MRSC has joined with Carl Neu, Director of the Center for the Future of Local Governance, P. Stephen DiJulio, Attorney, Foster Pepper PLLC, Ann Macfarlane, Professional Registered Parliamentarian, Jurassic Parliament, and George Raiter, Cowlitz County Commissioner, to bring you the "Council/Commission Advisor." The Council/Commission Advisor will feature a new article each month with timely information and advice you can use.*
Local Government Response to Revenue Shortfall
February 2010
By George Raiter
Cowlitz County Commissioner
Without a doubt, the citizens of Washington dodged a bullet when they defeated I-1033, Tim Eyeman’s latest anti-government voter initiative. If passed, the result would have required local and state governments to reduce property taxes every time government revenue exceeded by more than 1% (or the CPI) the base year of 2009 – the worst economic down year in our nation since the Great Depression.
Although the ballot title sounded somewhat reasonable the majority of voters saw it for the disaster that it was – thanks largely to the combined opposition of labor unions and big business (Microsoft, etc).
Flawed Reasoning
The flaw in the reasoning behind this initiative and others from the same source is that they attempt to utilize a cookie-cutter formula to determine future public revenue (hence policy) for all conceivable scenario’s. Although government is relatively slow and inefficient by design, elected officials do have some ability to respond to local and national economic conditions. Using mathematical formulas to determine tax revenue robs future elected officials, and thus their constituents, of the right to make their own situational decisions that may clearly be for the betterment of government, society and economic conditions.
As a 30-year participant in the private sector prior to serving the past 9 years as a county commissioner, I struggle to understand the ongoing appeal of these initiatives. I realize a segment of our society believes the best government is the least government. And all of us are at times frustrated and dismayed at the actions of some individual politicians or governing bodies that make headlines. This is usually vocalized offhandedly as “throw all the bums out.”
Then after getting these statements off our chests, we typically give careful thought to the issues that we actually vote for – and we do listen to those whose views represent institutions or personal experience that we respect. But we know that Mr. Eyeman will be back. He will be bringing forth another tax/government reducing initiative that will receive serious consideration by the voters. It is what he gets paid to do and he clearly enjoys his job.
The I-747 Freight Train
The irony here is that most voters may not realize that we already have a very restrictive law on the books: I-747 the 1% cap on property tax growth. The bullet we dodged with I-1033 has not negated the slower moving, but just as impactful, I-747 freight train that’s coming through the tunnel. The now defunct economic boom triggered by housing and other new construction delayed the impact of this 1% limitation. But it is only a delay and it’s now starting to kick in - and it will have a dramatic impact going forward as the economy continues to improve.
In 2010 – 2011 Cowlitz County will receive about 46% of its general fund revenue from property tax. The property tax share of our revenue has been increasing - up from 40% with the increase in valuation compared to the limited sales tax the county collects. Another growth number is the cost of our law and justice system. It now consumes 74% of the general fund revenue. These two numbers are going to “crash” into each other soon. Most, if not all, of the criminal justice expenditures are mandated by state law. We cannot reduce them. Normal inflationary increases on our cost, especially medical, greatly exceed the weighted average of our other tax sources combined with the 1% property tax revenue cap.
As we continue to meet the growing mandated needs of the law and justice system with the shrinking revenue available we will do so by cutting the non-mandated services that our citizens expect and need. These include parks, recreation, museums, programs for children and most all other long-term prevention programs.
When it becomes clear to the public that their quality of life is being jeopardized, not enhanced by our insistence on tough criminal responses in lieu of other public necessities and amenities, there may be backtracking. But it will take years to accomplish a recovery and we will likely never close the gap with those who stayed the course.
Cowlitz County’s Local Government Summit
Cowlitz County's Commissioners recognized this in January of 2009 when they called for a local government summit as part of the “State of the County Address.” Last month the county commissioners along with the mayors and councils of their cities held their fourth “Local Government Summit” conference. The purpose of these meetings is to explore ways that additional collaboration and combining of services can benefit the citizens of Cowlitz County. We are exploring three broad objectives:
- Equal or improved service for less cost;
- Improved service delivery for the same cost; and
- Separate funding for discretionary services that enhance the community quality of life but are the first to suffer cuts or curtailments when revenue declines.
There has been full participation and support by all entities involved. But we have now reached the hard part. As elected officials we have been able to focus on significant areas where duplication or overlap of services causes unneeded cost to the citizen. However to implement successful change we inevitably began to threaten someone’s turf. The obstacles can become permanent barriers if the task teams do not acknowledge and figure ways to mitigate the impact on individual jobs.
One issue that had continually been debated was a merger of the Cities of Longview and Kelso. Their combined population would approach 50% of the total county. After years of off-and-on debate, an advisory vote was placed on the November 2009 ballot. It was defeated by both cities. Although it may have paved the way for more effectively reducing the cost of local government, a majority of the voters did not want their councils to further explore the possibility.
We have made progress evaluating the following areas for improved collaboration:
- Fleet management
- Health care insurance
- Purchasing
- Permitting
- Parks
- Libraries
The task teams looking at parks and at libraries point out that when the over-all governmental revenue drops by 10%, parks and libraries can get cut up to 50% or in some cases closed. Their recommendations will likely be asking voters to set up special district with separate tax authority.
The Spirit of Collaboration
The spirit of collaboration in these areas is strong. The collaborative approach in Cowlitz County was reinforced last winter when severe flooding from our Mount St. Helens silt-clogged river system was forecast. The county commissioners and city mayors formed a county-wide incident command structure designating our District #2 Fire Chief as incident commander and formally delegating to him all necessary operational and financial authority. This was a first for the State of Washington and perhaps nationwide.
We are making solid progress in some areas. We anticipate implementing changes from some of our successes-to-date soon. The challenges of developing “services without regard to boundaries” would have been more difficult, perhaps insurmountable, if I-1033 had passed last fall.
As government revenue continues to lag the expected and mandated services, it will take the same vision and dedication we adopted during our winter flood crises to accomplish our goals.
P. Stephen DiJulio, a partner at Foster Pepper & Shefelman PLLC, focuses on litigation involving state and local governments, and land use and environmental law. Particular experience includes representation of jurisdictions on eminent domain, utilities (water, wastewater, storm water, solid waste systems), local improvement districts, facility siting and contractor litigation. More.
Carl Neu, author and consultant, is recognized nationally as an authority on, and an experienced practitioner of, the theory and application of governance and leadership to city councils and county boards, local government managers, and community leaders. More.
Ann G. Macfarlane is a Professional Registered Parliamentarian. She created Jurassic Parliament to make parliamentary procedure easy to learn and memorable. She provides training on leadership, meeting management, parliamentary procedure and organizational development across the U.S.
George Raiter has been a Cowlitz County Commissioner since January 2001. He has held various positions in the community, including Longview City Council from 1978 - 1986, City of Longview Mayor, Cowlitz Planning Commission from 1996-1998 and the State Legislature from 1989 - 1991. In addition to his public service, George has worked in private industry for Weyerhaeuser Company 1987-91 (Regional Environmental Manager) And Reynolds Alumunim 1972-87 (Quality Manager, Plant Manager)
*The Articles appearing in the "Council/Commission" column represent the opinions of the authors and do not necessarily reflect those of the Municipal Research & Services Center.