FISCAL MATTERS

The county current expense fund (general fund) is stressed in many counties by the increasing demands of the criminal justice system. Criminal justice accounts for more than half of county current expense expenditures, climbing to more than 70% in some counties. Other county departments funded by current expense, such as parks and human services, have experienced significant cuts, or are having trouble keeping up with rising demand for services as a result of population growth.

The county current expense revenue base is highly dependent upon property and sales taxes. Counties do not have the authority to impose a local utility tax nor a business and occupation tax. The property tax is highly unpopular and the voters limited annual increases to 1%, well below historic rates of inflation. In some counties, county sales tax revenues have declined because of poor economic conditions. In other counties, the tax base is shrinking because of annexations and incorporations, loss of sales tax equalization, and private land acquisition by the federal government. Counties lose 85% of their sales tax revenues from retail establishments in the newly incorporated areas, yet they still retain responsibility for countywide services, such as the district and superior courts, juvenile court and detention, public health, property tax assessment and collection, and a variety of administrative services performed on behalf of the state, cities, or special districts.

In addition, all counties have lost critical revenues for law and justice, public health, roads and transit, and have suffered secondary impacts on their local economies due to transportation cutbacks resulting from the elimination of the Motor Vehicle Excise Tax, first by the voters, and subsequently by the Legislature. The replacement funding provided by the Legislature has been nearly eliminated.
Initiatives to reduce local revenue capacity have become an annual feature on November ballots. The Legislature to date has not seriously addressed the ongoing erosion of county finances.

WSAC Policy: Over the long term, county financial structure must meet the needs of modern county governments. Whether it takes place in the context of changes produced by the GMA, as mentioned in the section on Intergovernmental Relations, or in another forum, examination of county finances must include the financing of regional services and the effect of annexations and incorporations, loss of sales tax equalization, reduction of county revenue capacity by ballot measure or legislation, and private land acquisition by the state and federal government on county tax bases. In the short term, counties must resist any attempts by the Legislature to define them only in terms of the unincorporated area for funding formula purposes. Counties will work to ensure all legislative mandates are accompanied by appropriate funding. Counties will continue to seek full replacement funding for the MVET revenues previously provided for support of law and justice, public health, and basic county services.