County looks to cut costs
Pierce County might soon trim spending to address a multimillion-dollar revenue shortfall brought on by the real estate slump.
County Executive John Ladenburg has directed department leaders to recommend spending cuts of 1.5 percent this year and 3 percent in 2009.
The County Council is not expected to raise taxes to address the shortfall in the $863 million budget. And some high-priority departments – like those affecting public safety – might be spared the worst cuts.
But after years of steady revenue growth, the county could be facing lean budgets for years to come.
County budget director Patrick Kenney outlined the county’s position in an April 18 memo to department heads and the County Council. According to the memo:
• Planning and Land Services Department revenue from building permits is projected to be $4.5 million short this year.
• Pierce County expects to lose $9 million in interest income because of lower interest rates.
• After years of solid growth, sales tax revenue for the first quarter was flat compared to last year.
• The county is experiencing significant decreases in recording fees, real estate excise taxes and administrative fees.
The bottom line: Though the county budgeted a 7 percent increase in general fund revenue this year, it’s possible there will be no revenue growth, according to Kenney. He said that hasn’t happened in at least 25 years.
The budget director attributed much of the shortfall to the real estate slump. With fewer homes being built and sold, the county is collecting less in fees and taxes.
Last month the county used $3.6 million in reserve funds to help balance its budget. But Kenney said last week the county still faces a revenue shortfall of $6 million to $7 million. So spending cuts are likely.
“There’s no way around having to spend less money than was originally budgeted in 2008,” he said.
Though recommended cuts still are coming in from the departments, Kenney said they include trimming travel expenses, leaving staff vacancies unfilled and spending less on equipment.
Some departments warn of more dire consequences. Sheriff Paul Pastor said cuts in his department could jeopardize public safety. A 1.5 percent cut this year means spending about $781,000 less on law enforcement and $728,000 less on corrections.
The sheriff said he will resist cuts because his department already is understaffed and underfunded.
“The people of this county should reject any attempt to degrade public safety,” Pastor said. “We need to do public safety right. The safety of lives and property must always be our top priority.”
Ladenburg said prosecutors, public defenders and judges make the same argument. He doesn’t expect every department to take the same hit. He said some, like the planning department, might take a bigger cut, while others, like the Sheriff’s Department, may be cut less.
Ladenburg expects to take a specific proposal to the County Council in early May.
“When the recession hits you, you’ve got to do something about it,” Ladenburg said. “I’m not in a panic or anything. We’ll make it.”
Any cuts this year may be a prelude to an even tougher 2009. In his memo, Kenney said that without major new revenue sources, tight budgets will be a reality for years.
County Council Chairman Terry Lee, R-Gig Harbor, said it’s unlikely the council will consider tax increases or new taxes to address the revenue shortfall. Instead, he expects the council to weigh spending cuts at a budget retreat May 22.
Lee said he believes the council can trim spending this year without resorting to layoffs. But he’s not sure about 2009.
“We’re going to do what we can to make sure there’s not” a reduction in force, Lee said. But with a 3 percent spending cut possible next year, “you’re into considering that.”
“That’s going to affect our ability to provide public services,” he said.
David Wickert: 253-274-7341
blogs.thenewstribune.com/politics
PIERCE COUNTY SPENDING
A look at Pierce County’s $863 million budget for 2008.
categoryPercent
Transportation20.1
Public safety19.7
Mental/physical health13.5
Utilities12.6
Legal/judicial10
Physical environment6.9
Cultural/recreational5.9
General government5.6
Economic environment4.6
Debt service1.1
