Editorial: What do you want and what are you willing to pay?

By The Herald Editorial Board

Among a local government’s basic responsibilities the drafting and adoption of annual budgets attract the most public attention when those budget involve proposals for tax increases, significant cuts to employment and services or both.

This year some of that budget process for Snohomish County $3.22 billion dollar operating budget played out across The Herald’s Opinion pages in recent weeks with three of the five County Council members and the county executive advocating for different approaches as to how to use the county’s banked capacity of its allowed 1 percent property tax increases to maintain services and use resources responsibly.

County Executive Dave Somers proposed two back-to-back 4 percent increases to the county’s share of the property tax — which accounts for about 6 cents for every dollar paid by taxpayers in the county — and would have resulted in total property tax increase of about $12 to $15 each of the next two years for the average homeowner. County Council Member Megan Dunn backed the original budget proposal. County Council Member Nate Nehring advocated for no increase, while Council Member Jared Mead proposed a middle ground of two 2 percent increases.

Mead, in his commentary in The Herald, further called for a reexamination of hiring practices in the executive office that he said were highlighted as inefficiencies in a recent performance audit. Somers, in an interview last week said he was willing to consider some of the audit’s suggestions but said he saw most of the suggestions as different ways of accomplishing the same goals and wouldn’t necessarily mean a cost reduction. He also defended his hires over the years of former and current elected officials for specific tasks within the executive’s office as an accepted and efficient practice.

The council rejected Somers’ proposed budget and voted 3-2 to approve the basics of Mead’s proposal, leaving a decision to the executive to either sign or veto the budget adopted by the council. Somers has yet to announce a decision regarding the budget.

Meanwhile, the Everett City Council is scheduled to vote on Everett Mayor Cassie Franklin’s budget proposal at its meeting Wednesday evening. With Everett voters rejecting a ballot measure earlier this summer — which would have increased the tax bill for the average city homeowner by about $360 annually and the city facing an estimated $12.6 million general fund deficit — the proposed budget seeks elimination of some city positions and reduction of hours for others, voluntary buyouts of other positions, including in the city’s police department; and program cuts, including a significant reduction of hours for the city’s two library branches as part of its 12 percent cut to its budget.

For both the county and the city, and other local governments across the state, balancing budgets has been complicated by state law — instituted in 2007 following an initiative passed by voters that reduced the maximum increase from 6 percent each year to just 1 percent — coupled with persistent inflation over the last four years that only recently has cooled to near the federal target of 2 percent. Some of that structural deficit — caused by a reduction in revenue and the increased costs of providing similar levels of services — was offset in recent years thanks to federal funding in response to the covid pandemic, but much of that funding now is nearly fully distributed.

That’s left local governments to use what they can of banked levy capacity — if they have forgone even their 1 percent increases in past years — or to reduce expenditures through job and program cuts, as outlined in Franklin’s proposal.

But even those cuts for Everett may not be sufficient to make up the difference in nagging structural deficits in coming years, as pointed out by former city council member Scott Murphy, who also has announced his candidacy for the mayor’s office in next year’s election.

Murphy, in past comments during recent city council meetings has raised alarms that past budgets have eaten into the city’s reserves to make up the difference between revenue and spending, noting that the city had a ending fund balance in 2021 of $55 million, but now is projected to have an ending fund balance this year of $32.4 million, a reduction of about $23 million.

Murphy, further, has called for the council to reject the proposed budget, request a re-forecast of 2024 projections, make further job cuts and use what remains of federal covid funds to help balance the budget.

Franklin has countered that Murphy is comparing the apples of 2021’s actual fund balance against the oranges of the projected balance for 2024, and is not accounting for the increase in city coffers at the end of 2021 that followed federal pandemic grants. As well, of the approximately $4.5 million in covid funding that remains, much of that already has been allocated to programs that the council had already identified as priorities.

Franklin also defended what past budgets have provided in terms of preserving at least a 20 percent reserve of the city’s operating revenues; for the years since 2013 — and including 2024 and the 2025 budget — the city has maintained that 20 percent reserve, and at the same time has continued to “pre-fund” its pension obligations for certain police and fire department retirees. The actual ending fund balance has fluctuated each year since 2013 from a low of $32.6 million in 2016 to 2021’s high of $55 million; the budgeted fund balance for 2025 is estimated at $33.8 million, a $1.4 million increase over this year’s projected ending balance.

The battles over budgets — with local governments expected to maintain services at higher costs against constrained revenue — are likely to continue, especially in the run-up to local elections.

Voters have never been eager to increase their own taxes; witness the continual struggle of school districts and other local governments to pass levies and bonds. But many local governments are now having to cut employees and pare back services that taxpayers expect to be provided, including roads without potholes, reliable water and sewer service; libraries open at convenient hours; well-maintained parks; and first responders available when needed.

Taxpayers — and the voters who represent them — need to make clear to local officials what they are willing to pay, what services they expect and what they should do when available revenue doesn’t meet those expectations.