To hear the mayors of South Sound’s largest cities talk, there’s a bad-news, worse-news scenario shaping up for local government. State lawmakers are racing to pass a budget into law by June 30, and if no budget is passed, a big share of state government could shut down July 1.
The bad news is that a shutdown would idle many of Thurston County’s roughly 20,000 state employees, and the outlook is pretty worrisome, says Lacey Mayor Andy Ryder, who along with mayors of Olympia and Tumwater met with our editorial board this week.
Ryder and his counterparts Stephen Buxbaum of Olympia and Pete Kmet of Tumwater shared concerns that furloughing workers cuts payrolls, which lowers spending in the three-city area.
The worse news is that the Legislature may pass a budget that does further damage to the finances of local governments.
Buxbaum said he’s as worried about a budget deal that harms cities as he is of a shutdown. And he worries that lawmakers, who are busy looking for ways to comply with court orders on funding K-12 schools, seem unable to engage in a larger debate about reforming the tax system to ensure long-term funding of state and local government services.
All three mayors say state support of cities and counties has been diminished in recent years as lawmakers made severe budget cuts during the Great Recession. Buxbaum described the past cuts as severing a partnership that dated to the 1930s.
This year budget writers in the House and Senate are split over how much liquor revenue the state should share with cities and counties. Local governments statewide once received about $50 million a year, but that was cut to zero during the Great Recession, according to the Association of Washington Cities; the funding was restored to about $25 million in the past budget cycle.
The GOP-controlled Senate isn’t cutting that $25 million liquor allocation, but it isn’t increasing it. By contrast, the Democrat-controlled House does bump up the shared revenues to about $50 million.
Without the restoration, this liquor-fund difference means that Lacey gets $198,000 less than it used to each biennium. Lacey officials are projecting a $1 million budget shortfall next year.
In Tumwater, the smaller share of liquor taxes means $82,000 less per biennium; the city expects to get about $542,000 in state aid overall if full liquor funding comes through, according to Kmet and AWC.
Olympia is hardest hit. The liquor funding level is almost $217,000 less per biennium than it used to be, according to AWC’s analysis. That’s enough for perhaps two police officers, for example. The city also stands to lose $207,313 in fire insurance premium tax that the other cities don’t receive; this money goes to 44 cities statewide to help with law enforcement pension benefit costs.
Another worry for cities and counties is that a transportation tax plan is hung up. The House prefers to first approve an operating budget that includes new taxes, and the Senate balks at raising taxes. The Senate also raids some funds from a public works trust account that the mayors say is vital for economic development.
Sympathetic lawmakers haven’t mustered support for other measures that might help local governments. For example, a bill to give elected city and county officials more flexibility in setting property tax rates died. The Legislature also failed to pass a bill that shares marijuana revenue with cities.
In their waning days of session, lawmakers should try to do better than this.