PORT TOWNSEND — Jefferson County commissioners declared a financial emergency and decided to use banked capacity for the 2009 county general fund to dodge an additional $350,000 in program and service cuts next year.
“This is not trivial stuff,” said new County Administrator Philip Morley before the commissioners heard public comments during a budget hearing and expressed their positions.
“This downward slide could only be stopped with significant actions,” he said, recommending an additional $755,000 in cuts over the next five years.”
Already, the county has laid off six employees in the county Department of Community Development while cutting that department’s remaining staffers to 36-hour work weeks last week, but Morley said it is unlikely that more layoffs will be necessary, only additional cost cutbacks.
Morley said for 2009 the banked capacity will amount to $437,171, about $25.02 a year in additional property tax for the average home.
Since 1986, local taxing agencies, such as cities, in Washington have been allowed to save the unused portion of their limited 1 percent annual taxing authority increase from one year to the next.
The agencies can exceed the 1 percent increase because they did not collect the maximum property taxes allowed in years past, choosing to “bank” the increases instead.
Morley said the county commissioners have saved Jefferson property taxpayers $6 million in recent years by not using banked capacity.
Morley last week presented a sobering budget picture with county expenses escalating at a 4 percent annual pace, one that would be not be met by economic growth.
Dire economic times have resulted in declining sales taxes, real estate excise taxes and permit fees to the county.
County Commissioner David Sullivan, D-Cape George, Monday’s lone dissenting vote against declaring an emergency because he felt it was poorly defined in the county ordinance, said essential programs such as Women’s, Infants and Children, veterans services and 4-H would also be spared from the budget ax.
County Assessor Jack Westerman, who attended the meeting to advise the commissioners on setting ad valorem tax levies for the 2009 general fund, roads and conservation futures levies, said it was the first time since 1996 that the commissioners used banked capacity for the general fund.
Banked capacity will not be used for roads and conservation futures.
Citing that the road fund was spared because Secured Rural Schools funding came through, Westerman said: “So I guest things could be worse.”
He explained that every year the commissioners have chosen not to take banked capacity has meant a $700,000 savings to taxpayers.
Banked capacity can be “re-created” once the economy recovers, he added, saying Morley would be in the position next year to take “more systemic cuts” that do not involve layoffs.
Tax effects
The effect on the tax bill for an individual property depends on a number of factors, including the value of the property.
The amount of tax paid to the taxing agency using banked capacity may rise, but there could be corresponding reductions in the levies of other districts. This is because state law limits overall property tax rates applied to individual properties.
The amount of property tax that an owner pays depends on the value of his or her property in relationship to the total assessed value of property in the taxing district.
Those pleading before the commissioners Monday to spare programs included Delmer Sayer, Jefferson County Service Officers Association service officer, who asked that the commissioners levy the fund for veteran services in 2009.
“We have more vets coming back needing help,” Sayer said of those returning from wars in Iraq and Afghanistan.
Ruth Gordon, county clerk, said by taking the banked capacity it would help the county retain experienced employees, easing the cost of training in the future once the economy improves.
Two residents speaking against using the banked capacity were Chimacum farmer Roger Short and Joe D’Amico, Gardiner-based Security Services Northwest president.
County Auditor Donna Eldridge urged the commissioners to be “financially frugal,” saying she has cut 6.93 in expenses from her department.
“There’s nothing else to cut in my office,” Eldridge said.
Katherine Baril, Washington State University Port Hadlock extension executive director, said she had to cut the extension’s food and farm program.
Reacting to the vote Monday morning, County Commissioner Phil Johnson said: “We’re lucky to have our banked capacity. Many counties don’t.”
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Port Townsend-Jefferson County Editor Jeff Chew can be reached at 360-385-2335 or at jeff.chew@peninsuladailynews.com.
