Levy Lid Lift on property taxes to be discussed July 22

By Stan Matthews
County Communications Program Manager

The San Juan County Council has scheduled a special council session for Wednesday July 22 to consider putting a proposal to increase the County’s property tax on the November, 2009 ballot. Currently, under state law, the County must win voter approval for a “lid lift” if the levy is set so that total revenues from taxes on existing properties increase by more than one percent.

With government costs increasing at rate of approximately 4 percent per year over the past several years, though partially offset by taxes from new properties coming onto the tax rolls, the financial condition of the County government has been on what County Administrator Pete Rose has called a “controlled descent.”

At the July 14 Council session, County Auditor Milene Henley characterized the County revenue picture at the end of the 2^nd quarter as “a little worse than it was three months ago,” and she reiterated her projection that revenues for the year would end up about $1 million under the original 2009 budget’s projections. This was good news to the extent that it was on the low end of the $1 million to $2 million shortfall she had projected based on first quarter data.

The Council has already reduced the County’s operating budget for the second half of the year by nearly 15% and last week it was announced that the position of Community Development and Planning  Director was being eliminated and several functions of the Department would be absorbed by other departments.

The Council is looking forward to another round of cuts in September and County Administrator Pete Rose warned the Council Tuesday that if new revenue is not found, some very popular programs would likely have to be cut drastically.

“We are running out of areas to drop service levels. For discretionary spending on local services we are probably down to Senior Services and [agricultural] Extension programs, including 4-H.” He added, “As a whole, the core administrative and financial services . . . departments are probably already at or below the level of sustainability.”

The Council faces a fast-approaching deadline for a deciding whether to ask voters for a levy lid-lift in November. State law requires a public hearing and final action to place a ballot measure to be held no less than 84 days before the election, so the deadline for a decision to put the issue on the November election ballot is August 11, and legal advertising for a public hearing would have to be placed before the end of next week.

Council Member Myhr expressed concerned about the political and economic climate. “Given the current economic climate, how excited are people going to be about something like this?” Myhr asked.

Rose point to the question of community values, “It would probably take in the neighborhood of $440,000 to restore just Parks and Health and Community Services to the level you had them in 2008. The question is, do you value that enough to take the risk?”

Council Member Richard Fralick urged his fellow Council Members to move forward, so they at least had the option of deciding whether to place a lid-lift on the ballot. But he warned, “The track record in Washington State has been that very few levy lid-lift measures have passed first crack out of the box.”

The Council Members agreed to hold the special July 22^nd session to preview the next round of budget cuts and at how a 2010 budget would look with and without a levy increase and decide whether to call a public hearing on the lid-lift.

If the Council does decide to ask voters for a tax increase, Administrator Rose said, “You will need to have a an idea of what services you would promise to restore or continue . . .  and you would need enough of the 2010 budget to know what would not be done if a lid lift would fail.”