House Finance Committee meets in Olympia on Tuesday.
On Tuesday there were a couple of important meetings. The Governor’s Carbon Emissions Reduction Taskforce met in Seattle to continue its work on a cap and trade emissions plan for Washington State. CERT is expected to have a preferred policy design for its next meeting on July 29.
Meanwhile, the House Finance Committee met in Olympia to hear from the Washington State counties on their financial challenges. Chair Reuven Carlyle, having already held a work session on challenges for cities, is seeking to have the committee develop a more comprehensive understanding of the structural issues driving local government finances.
In an interesting twist the counties selected former Republican legislator Todd Mielke, and now Spokane County Commissioner, to make the case for (1) Revenue Diversification, (2) Greater Revenue Flexibility, and (3) Cost Containment. The bottom line was encapsulated in his PowerPoint, “Current Revenue Structure Is Inadequate.” The cost of providing services is out pacing revenue due to a number of factors such as the 1% annual limit on property tax increases.
Todd described how the revenue mix for counties is not even as broad as the cities mix, and how the incorporation of new cities, annexations by existing cities, or designations of public lands, disproportionately reduce county finances. He noted three events that have changed the structure of county revenues, (1) Growth Management, (2) Tax Initiatives, and (3) The Economy.
Rep. Ed Orcutt questioned whether any of the limitations were a “structural or local problem” since even the property tax limits can be exceeded with a vote of the people. On the other hand Rep. Chris Reykdal argued that county commissioners should be able to do their job and have the ability to manage population and inflation increases in existing services, without the need to constantly go back to the voters.
Todd did note that employee compensation was the big cost driver, including obvious drivers like health care costs but also more unique drivers like interest arbitration bargaining units. He also acknowledged that overtime costs have increased.
But again it was a work session and other perspectives on county/city finances were not invited.
Chair Carlyle concluded the meeting by asking both the cities and counties to come back in September with the specific structural changes they are requesting. He alluded to the cost containment issue by cautioning them not to come back with just revenue enhancements.
Copies of all PowerPoints presented at the meeting can be found at https://app.leg.wa.gov/CMD/agenda.aspx?mid=20191
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