Island County budget projection dismal

The future of Island County finances is uncertain at best.

In reality, it’s bleak.

Here are the basics, laid out by Elaine Marlow, the county’s finance director:

Existing sources of revenue are not generating enough money to continue funding current levels of service. The county is looking at a $1 million deficit going in to 2011, cash flow problems by 2012, and a contingency fund that will be sucked dry by 2014.

That is hard to face. In 2006, the county had nearly a $2 million surplus. That dropped some in 2007 before abruptly plummeting to a $3 million deficit in 2008.

Since then, the county had been on the defense, slashing more than $4 million from the budget.

They cut more than 50 full time employees, suspended cost of living increases, changed medical plans, and reduced hours.

Still, it has not been enough.

Marlow said there are really only two options left —reduce spending or increase revenue.

The county has reduced spending, adopting a very lean budget in 2010. Not lean enough for some, but Marlow’s numbers clearly show that the few thousand dollars that could be saved by cutting a couple “nonmandated” programs is not nearly enough to keep this ship afloat.

Which leaves the county searching for revenue sources. One possibility is restructuring fees to recoup the cost of providing services, Marlow said, but there are actually few opportunities to do this, and many fees are set at the state level and are out of the county’s control.

Another option Marlow presented is a criminal justice sales tax. The county could ask voters to consider an increase of up to threetenths of 1 percent. It could be placed on the August primary or November general elections and would need a simple majority to pass.

There are a couple restrictions, though. At least one-third of the money collected must be used solely for criminal justice purposes, and the money must be split with cities. The county would get 60 percent.

Property tax increases are another place the county can look for funding. Currently, Island County has the lowest property tax rate in the state, at $.51 per $1,000 of assessed value, a full 9 cents behind San Juan County, the next lowest.

Marlow explained that an increase must be approved by a simple majority of voters, and the current rate must be less than the statutory maximum. An increase can be permanent or temporary.

A basic property tax levy lid lift is an annual increase of 1 percent, for any purpose and length of time. It can be voted on in the primary and general elections, as well as a special election.

A multi-year lift is a specified annual increase for any purpose, up to six years in duration. This increase can only be voted on in primary or general elections.

A final option is shifting revenue capacity from county road levy to current expense levy, so long as the total levies don’t exceed $4.05, Marlow said. This option only requires approval by the Island County Board of Commissioners.

Budget talks are scheduled to continue as the county prioritizes needs, develops figures and pursues revenue options.

Staff Reporter Jeremiah O’Hagan: 629-8066 ext. 125 or ohagan@scnews.com.