"Era of deficits" over, Sims says

King County Executive Ron Sims, announcing "the era of deficits is over," yesterday proposed a $3.4 billion budget that spends the surplus on health care, the homeless, public safety and the environment.

Up for re-election Nov. 8, Sims said that to hold off deficits, "we must remain vigilant and keep controlling our costs. We must reject the temptation to live beyond our means, and this budget does just that."

Sims' optimistic tone was markedly different from four years ago, he pointed out, when the region lost more than 83,000 jobs and he proposed the most "fiscally conservative budget ever." He and the council subsequently eliminated $137 million from the budget over four years.

The rebound comes as the economy shows signs of improvement and, as Sims said, from lowered costs.

He announced yesterday that the bond-rating agency Fitch Ratings has upgraded the county to the highest possible rating, AAA. Two other agencies, Standard & Poor's and Moodys, already rate King County AAA.

Sims said the budget announcement had "nothing to do" with his re-election campaign against Republican County Councilman David Irons.

"It's OK to announce high performance and high success," Sims said.

In 2006, the county expects general-fund revenue to increase 7 percent from 2005 to $575 million, and Sims proposes to increase current expenses by 6.8 percent.

The bulk of the general-fund increase stems from an 11 percent increase in property taxes, followed by investment earnings, services charges and sales tax. Overall, the total proposed budget represents a 2.2 percent increase, to $3.4 billion.

In his budget, Sims plans to:

• Prepare for the threat of a flu pandemic. Spend $6 million to buy medication for 62,000 front-line responders such as doctors and police officers and for 57,000 people who could be hospitalized.

• Replace federal cuts in Medicaid with $4.7 million in county funds.

• Increase homelessness programs by 25 percent to $39 million. The money would be used to build a transitional home for 70 single mothers and their children, to create a challenge grant for cities and nonprofits to provide affordable housing, and to fund the Committee to End Homelessness.

• Create an auto-theft department and a cold-case unit in the King County Prosecuting Attorney's Office.

• Expand the sexual-offender unit in the King County Sheriff's office and create a regional jail system. Add 12 sheriff's deputies to security for transit.

• Spend $464 million on transit in 2006 that would include 18,000 new service hours and a park-and-ride in Issaquah, $45 million in road improvements and $1.2 million to retrofit bridges for earthquakes.

• Build a pipeline for a regional reclaimed-water system with $26 million.

• Spend $20 million to buy open spaces and build trails.

• Spend $850,000 for the Klahanie annexation to Issaquah and carry over the reserves for possible annexations in North Highline, West Hill, East Renton and Fairwood.

In his speech, Sims credited the budget surplus to the county's ability to hold down health-care costs, which previously had risen 11 percent a year. In the past nine months, Sims said, the costs increased 2.4 percent, which he attributed to a pilot program that rewards employees for good health-care decisions.

The county still faced challenges, Sims said, particularly with inflation driven by energy costs.

County Council members said they were cautiously optimistic about the budget.

Councilwoman Kathy Lambert, R-Woodinville, said the council needs to look over the spending package. "How did he do that? It didn't look possible from the last year's numbers."

Dow Constantine, vice chairman of the budget committee, said the council usually expects to finish the budget by the Monday before Thanksgiving.

Sharon Pian Chan: 206-464-2958 or schan@seattletimes.com