King County facing drastic budget cuts despite booming economy

Despite the booming local economy, King County officials are warning the budget unveiled Monday by Executive Dow Constantine will feature drastic cuts that will cause significant pain across the region.

“A lot of the economic activity that you see doesn’t generate any revenue for the counties,” says
longtime King County Budget Director Dwight Dively.

It’s surprising news to many, especially in light of double-digit property valuations in the past several years. But Dively says most people don’t realize state law limits tax increases to one percent a year, and how little it actually pays for.

“So even if property values are going up by 10 or 11 or 12 percent like they are, the revenue that the county gets doesn’t go up by 10, 11 or 12 percent, it goes up by one percent,” he says. “That just isn’t enough to keep up with the costs from inflation and from our rapidly growing population here in King County.”

Along with property taxes, the county primarily relies on money contracting services such as police and sales tax proceeds to fund many of its programs. He says revenues from sales taxes have fallen significantly in recent years because of online shopping and an increasing number of goods exempted from the tax.

“It used to be when you have a strong economy like this one, you’d see sales tax revenue increasing 10 percent a year, 12 percent a year. Now, instead of that, you see five percent a year,” he says.

Dively says the biggest cuts will hit Metro Transit, public health, transportation and the general fund, which covers basic services, including law enforcement and criminal justice.

While he won’t disclose specifics, Dively says the cuts will include drastic service reductions and layoffs.

“This is the 30th budget I’ve worked on for either Seattle or King County. In many ways it’s the worst set of outcomes because of all these things coming together,” he says.

The county has been warning of drastic cuts to some departments throughout the year, including Metro.

Officials threatened to cut 550,000 hours of transit service if voters refused to approve a tax hike, which was soundly defeated in an April vote. But they announced Wednesday efficiencies, job cuts and other savings allowed them to limit cuts to 400,000 hours.

That’s prompted critics like KIRO Radio’s Dori Monson to accuse the county of crying wolf simply to raise taxes and avoid making difficult choices.

But Dively strongly disagrees, saying the county has always worked tirelessly to find efficiencies in all departments. And the less drastic cuts are still painful and significant.

“The current level of service before we make this cut isn’t adequate,” he says. “Our service model says that we should add 500,000 hours of service, not cut 400,000 hours so conceptually at the end of this we’re going to be 900,000 hours out of the service we should be providing to meet the need in our county.”

Dively says the biggest problem is a tax system that hasn’t fundamentally changed since the 1930s. For example, the county can only tax residents of unincorporated King County for roads, even though tens of thousands of non-residents use them every day.

He says unless voters are willing to approve some changes, the budget situation will continue to get worse each year regardless of how well the economy is doing or how much they try and improve through efficiencies.

“People don’t believe it, but if you look at the average amount of state and local taxes that you pay, you pay a lot less today than you did 20 years ago, as a share of income,” he says. “At some point, you cannot get yourself out of a broken tax system simply by trying to be efficient. You should always do that, but it isn’t going to be enough. Right now, I think we are to that point.”