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Tuesday, October 13, 2009

This year, Clark County officials have struggled to maintain basic county services amidst the deepest national recession since the 1930s. If I-1033 is enacted, spending on law and justice, public safety, and other essential county services would be frozen at 2009 levels. And in future years, Clark County would face rising revenue shortfalls, forcing deep cuts in these services.

Clark County would have lost more than $115 million had I-1033 been in place from 1995-2008, based on an analysis of historical general fund revenue data from the Clark County Office of Budget and Information Services. As the graph below illustrates, during the 2007-08 biennium the county would have lost about $30.3 million (11 percent of the general fund budget).

In the 2007-08 Clark County general fund budget, $30.3 million would have been equivalent to:

  • Nearly 60 percent of expenditures on the Sheriff’s Office ($51.5 million);

  • Eighty-seven percent of the budget for the county jail ($34.7 million);

  • More than the combined expenditures on parks and public works ($7.0 million), community corrections programs ($11.6 million), and indigent defense services ($9.6 million).

The national recession has caused severe budget deficits, impacting local governments throughout Washington. During the current crisis, Clark County officials have struggled to keep the county budget in balance without reducing essential services or laying-off scores of county government employees. So far, this has been accomplished through the use of across-the-board budget cuts and one-time measures -- such as extending the lives of county patrol cars and diverting revenues from the county road fund.

Yet even with these actions, Clark County continues to face a projected $12.7 million budget deficit for the remainder of the 2009-10 biennium.* With few remaining options, county officials may be forced to completely eliminate services in order to fill the current gap. Under I-1033, the 2009-10 budget would form the basis for all future budgets in Clark County and it would be virtually impossible to restore services even after the economy recovers.

Editor’s Note on Methodology: There has been much debate about which revenue sources would be subject to the population-growth-plus-inflation cap under I-1033. For this analysis, we assumed that general fund revenue -- including general fund tax revenues, revenues from permits and licenses, and revenues derived from charges for government services -- would have been subject to the I-1033 limit. It is important to note that expanding the scope of revenues subject to the I-1033 limit would substantially increase the estimates of annual revenue losses as well as expand the scope of county services negatively impacted under the initiative.

* Clark County Office of Budget, General Fund 2009-10 Projections, October, 2009.


KevinF said...

Is it still uncertain whether or not federal grants to cities and counties will count toward eligible revenue?

Andy Nicholas said...

The ballot language specifically exempts federal revenues from the state limit, but does not include similar language for counties and cities. Nor does it specifically exclude state revenues transferred to county or city general funds.

Our analysis assumed that only a narrow range of general fund revenues -- taxes, fees, and general government charges -- would fall under the county limit. We did not include any federal grants or state-shared revenues. If these sources were to be included, the effect of the limit would be much more severe.

Thanks for your comment.