EVERETT — Top elected officials are scheduled to meet today to discuss the health of Snohomish County’s finances — and initial signals are that the news is grim.
Tax money is coming in at a trickle compared with last year. The taxes collected on home sales, for example, were down $5 million in February compared with the same time last year.
County planners, often the first employees to suffer in a weak economy, recently cut in half the number of building permits they expect to issue this year for single-family homes.
“The revenue sources from which we draw are down, and that’s not a surprise,” County Executive Aaron Reardon said. “I want to let the electeds know what numbers we have coming in so far.”
The county, like local governments elsewhere, is feeling the effects of a severe drop in consumer spending and a stalled housing market. This year’s general fund budget is about $200 million.
The executive has called two sessions, today and on Wednesday, that should last from noon to 2 p.m. Four topics are expected to come up: county finances, the economy, labor negotiations and how to the county needs to respond.
Officials were reluctant to say what sacrifices they may have to make, but budget problems generally spell more layoffs and fewer government services. Some said they are eager, if anxious, about what they would learn.
“I’m a little apprehensive about the meeting tomorrow just because the relationship between the county elected officials and the executive hasn’t always been the most positive relationship,” Auditor Carolyn Weikel said. “I certainly hope that we’ll be able to move forward.”
Among other issues, Weikel wondered why the county has been unable to strike a deal for unpaid furlough days with the union that represents the majority of county employees, the American Federation of State, County and Municipal Employees.
Furloughs are commonly viewed as one of the least painful ways to trim costs.
Staff at the county clerk’s office and the County Council, which are not part of the largest union, have reached furlough deals for a few dozen employees.
Prosecuting Attorney Janice Ellis welcomed the chance to get a better understanding of county revenues. Though Ellis tried to make cuts at the beginning of the year, she fears more may be necessary.
“The concern for me is that with (the current) budget, there is no wiggle room for any unanticipated costs,” she said.
County leaders have known for months that times would be tough. In November, they slimmed down the 2009 general fund budget by 9 percent and asked departments to find ways to save another 1 percent over the course of the year.
“The past couple of months, it’s gotten progressively worse,” Reardon said Monday.
How much worse is likely to become clearer in the coming week. The executive’s office was scheduled to make a presentation on finances to the council a week from today.
Two figures from the county treasurer’s office provide a glimpse of the situation.
February’s numbers for real estate excise tax shrank by threefold compared with last year — to $2.4 million from $7.6 million. The county does not keep all the excise money but later distributes portions of it to the state and local governments.
Sales tax revenue is falling, too.
The county collected about $600,000 less sales tax last month compared with February 2008. The drop to $3.1 million from $3.7 million means a decrease of 16.5 percent.
City governments are feeling similar pain.
Last week, Edmonds announced that it would close a city swimming pool and lay off staff because its expects to collect only half the sales tax it budgeted for 2009 — $3 million instead of $6 million. Sales taxes are Edmonds’ second largest source of revenue after property taxes.
Everett also has seen big declines. Its real estate excise tax plunged in February by a similar margin as in the county — to $64,396 this year from $177,608 during the same month in 2008. Everett’s sales tax, meanwhile, dipped about 20 percent for the month, to $2.25 million this year from $2.8 million in 2008.
County planners are sizing up the effect the stalled housing market will have on their operations. During an all-staff meeting Thursday, Planning Director Craig Ladiser broke the news that he expected to issue only 1,000 permits for single-family houses this year, half what was earlier projected. The county issued 1,533 such permits last year and 3,037 in 2007.
Ladiser said he needs to study what impact the drop-off in permits will have. His department also issues permits for subdivisions, multifamily housing and commercial buildings. Unlike single-family housing, he said, the other permit numbers are close to the projections.
The economic slowdown already has caused the county’s planning department to shed half the number of budgeted positions it had in 2007.
“We are a leading economic indicator,” Ladiser said. “What happens to us is just a pure reflection on the economy. The bad news is, when the building a permits start tapering off, we’re affected first.”
Noah Haglund: 425-339-3465, nhaglund@heraldnet.com.
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