Clallam commissioners tackle structural budget deficit; considering tax proposal

PORT ANGELES — Clallam County commissioners are looking for ways to boost revenue to resolve a long-term structural budget deficit, which could result in a tax proposal.

The three commissioners Monday directed County Administrator Jim Jones to prepare an analysis of potential public safety and juvenile justice sales tax increases for a discussion in April.

Commissioners will then decide whether to place a proposed tax measure on the November ballot.

“If we’re going to ask for the public to increase what they give us in taxes, I personally think that should be by the vote of the people,” Commissioner Bill Peach said in a board work session.

“I personally don’t like the idea, but I totally accept [it] if that was the will of the people. I’ll execute without hesitation on what the voters say that we should do.”

A sales tax increase for law and justice services or juvenile justice facilities would be more palatable to voters than other options at the county’s disposal, Jones said.

Other options

Other options include a property tax levy lid lift or a $10 annual increase on license plate tab renewals to form a transportation benefit district.

Clallam County commissioners have eschewed new taxes in recent years.

County officials are now considering all options as the general fund reserve moves perilously close to the minimum balance required by policy.

In 2017, Clallam County budgeted to spend $2.29 million in general fund reserves. That would leave a year-end reserve of $8.31 million, just $363,796 more than minimum required by policy.

Thanks in part to retirements and better-than-expected revenue, the draw on general fund reserves is now projected to be less than originally budgeted.

Looking ahead, commissioners have endeavored to correct the structural budget deficit through a combination of long-term cost cutting and new revenue.

Commissioners sought feedback from senior leadership on how to increase revenue. Revised fee structures, updated franchise agreements and taxes were among the suggestions.

Board Chairman Mark Ozias said a tax proposal would require support from other elected officials and a well-executed strategy.

“Whatever tax we might decide to advocate for, if that were something that we believe was the right thing to do and we take that to the voters, then the only chance that we would have of success would be if we’re all on the same page,” Ozias said.

“Some of the other pieces, like the franchises or like reviewing our fee schedules, those are perhaps a little more straightforward.”

Commissioner Randy Johnson agreed that the board should evaluate fees and franchise agreements as part of the normal course of business.

“As far as the second part,” Johnson said, “we do need to go out to the citizens if we’re going to ask for a new tax.”

In order to place a tax measure on the November general election ballot, commissioners must vote on ballot language by early August.

“We need to do that work starting in the end of June, and have it ready to go to the prosecutor by the second week of July,” Jones said.

Jones identified four potential taxes for the board to consider:

• A property tax levy lid lift.

“It has the potential to raise the most amount of money and also, in my judgment, the least amount of success,” Jones said.

“You could use it any legal way that you spend general fund money. I’m just not aware of any counties that have had much success on that in the last six to 10 years of doing a levy lid lift.”

• A public safety sales tax increase. The increase could be up to three-tenths of 1 percent.

Clallam County would use the revenue to pay for law and justice services, including future cost of living raises.

Under current law, it could not be use to supplant existing expense, Jones said.

The cities of Port Angeles, Sequim and Forks would receive 40 percent of the revenue and the county would collect 60 percent if the countywide tax is approved by a simple majority.

“Nine or 10 counties have implemented it,” Jones said. “It would give us a lot of flexibility.”

• A one-tenth of 1 percent countywide sales tax increase for juvenile justice facilities.

Dedicated funds

The dedicated funds could be used for capital improvements or maintenance and operations for the Clallam County Juvenile and Family Services facility in west Port Angeles, Jones said.

“That would raise today on average between $1 million and $1.2 million,” Jones said.

• A transportation benefit district.

Counties can add, without a vote of the people, up to $10 on annual license plate renewal fees, Jones said.

The $10 increase would raise about $480,000 in new revenue for transportation improvements like sidewalks, road widening and sight distance projects, Jones said.

Jones recommended the public safety sales tax and juvenile facilities sales tax as the two best options.

Law and justice costs, once half of county’s total expense, have escalated at a “much higher rate than inflation” and now account for nearly 72 percent of total cost, Jones said.

The increased law and justice costs are due to requirements imposed on all counties by the state legislature and state Supreme Court, he added.

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Reporter Rob Ollikainen can be reached at 360-452-2345, ext. 56450, or at [email protected].

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