Monroe wrestles with harsh budget realities

Published 9:48 pm Monday, December 1, 2008

MONROE — Everybody who works for the city from the janitor to the police chief may have to take five days of unpaid leave next year.

That’s one idea the City Council is considering to balance next year’s budget.

Here are a few others:

Nonunion employees, including department heads, may have to defer cost-of-­living increases next year.

A part-time clerk and two full-time employees could lose their jobs.

Five part-time seasonal parks jobs wouldn’t be filled next year. Five open positions and one half-time position would be frozen too, including a police officer position.

There may be a $100,000 less for road improvements.

The proposed 2009 budget also includes reductions in supplies, travel and equipment.

“We’re looking at all our options to cut expenses,” Mayor Donnetta Walser said. “We’ve overloaded some of our staff, we haven’t filled positions and services will struggle.”

The council plans to hold the final public hearing on the proposed 2009 budget at 7 tonight at City Hall, 806 W. Main St.

The downturn in the economy has put Monroe in a world of hurt.

“Our challenge is the same as any other city or agency in the state,” she said. “With the economic downturn, you just can’t predict as closely as we have in the past.”

The city has already pared its expenses, Walser said.

The proposed $65.1 million budget is $1.3 million less than the 2008 budget. The proposed general fund budget is $11.1 million, down $1 million from last year’s general fund budget of $12.1 million.

The city depends on sales tax for about a third of its general budget, which pays for basics such as employee salaries, city vehicles, training, supplies and equipment.

The city had expected $4.34 million in sales tax revenue this year. Now, the city expects to end the year with more than a half million less. Next year doesn’t look much better.

Monroe is not the only city in Snohomish County to see sales tax revenues drop. A survey of some of the cities around the county found that many expect lower amounts of sales tax revenues this year. And most expect to receive less this year than last year. Snohomish, for instance, is now predicting to bring in $100,00 less in sales tax than in 2007.

Sales tax has become a major source of revenue for the city since the Legislature limited property tax collection increases to 1 percent per year unless voters approve more. The City Council recently approved that increase, which amounts to about $18,000 more for the city, Walser said.

Money from building permits is also down. The city projected to collect $601,000 this year, but has collected only $325,000.

It’s not just reluctant shoppers and development that’s hurting the city’s finances. A new state law that may be siphoning sales tax away from Monroe may make a bleak situation worse, she said.

Washington state adopted the Streamlined Sales Tax and Use Tax Agreement, which shifts some sales tax collected from the location of the business to the hometown of the buyer. The law is supposed to simplify tax collection for Internet, mail order or phone-order companies. What it may do in towns like Monroe is funnel sales tax money out of town.

It’s unfair for cities such as Monroe that have worked to develop more industrial and commercial businesses, Mayor Walser said.

The state promised to reimburse cities for any lost sales tax, but Walser said it’s possible lawmakers grappling with the state’s multibillion-dollar budget problems won’t make good on the promise. Even if relief arrives, the money won’t come until Dec. 31 — too late for cities, which must balance their budgets by the first of the year.

“We’ve tried to do everything right,” she said. “This is a blow.”

The City Council also will consider a hike in water, sewer and garbage rates by 11.8 percent or $12.96 per month based on water and sewer consumption of 1,000 cubic feet and one 32-gallon can weekly for garbage.

Reporter Debra Smith: 425-339-3197 or dsmith@heraldnet.com.

Monroe revenue

SALES TAX

2006$3,837,739

2007$4,173,878

2008*$3,825,039

2009**$3,853,467

PROPERTY TAX

2006$2,716,246

2007$1,448,865

2008*$1,547,142

2009**$1,635,783

* estimated; ** projected

Property taxes

2006$2,716,246

2007$1,448,865

2008 estimate $1,497,142

2008 new estimate $1,547,142

2009 proposed $1,635,783

Sales tax

2006$3,837,739

2007$4,173,878

2008 estimate $4,345,377

2008 new estimate $3,825,039

2009 proposed $3,853,467