King County budget shortfall rises to $90 million

King County's 2009 projected budget shortfall for next year — pegged until this week at $86.5 million — has now grown to $90 million, County Executive Ron Sims has announced.

Sims chose an unusual place to release the news, through Twitter, an online social-networking service that allows people to instantly post short messages in blog style.

"Just revised King County's budget shortfall from 86 to 90 million dollars. Inflation and a sluggish economy are reducing revenue growth," he wrote at 11:16 p.m. Tuesday.

When the projected shortfall passed $86 million last month, Sims' budget office told department heads to prepare to cut spending 11 or 44 percent below the amount required to maintain current service levels, depending on whether the department's work is mandated by state law.

The cuts are expected to mean fewer sheriff's deputies to investigate crimes, possible health-clinic closures, and scaled-back services for Family Court, youth, seniors and domestic-violence victims.

Prosecuting Attorney Dan Satterberg said Thursday his office will meet its $5 million cost-cutting target by filing property crimes under $1,000 in losses as misdemeanors and by filing most drug-possession cases and property crimes up to $5,000 as gross misdemeanors rather than felonies.

By taking those steps, Satterberg said, his lawyers won't have to cut back on higher-priority cases such as murders, sex crimes, domestic violence and auto thefts.

In other financial news, Fitch Ratings this week dropped a warning that it might lower King County's top-of-the-line AAA ratings on its unlimited general-obligation bonds. Higher ratings allow the county to sell bonds at a lower interest rate.

Fitch put a "rating watch negative" on county bonds last October because of possible losses on four mortgage-backed investments held by the King County Investment Pool. After the investment pool received $62 million in July for two investments with a total face value of $100 million, Fitch concluded the county general fund could absorb future losses on two other mortgage-backed investments that have defaulted.

However, county Finance Director Ken Guy said Thursday the market might pay only 40 to 50 percent of those two "commercial paper" holdings originally valued at $107 million. King County is the largest investor in the $4 billion in the county-managed investment pool, which also handles cash for school districts and other local tax districts.

Sims will present his budget proposal Oct. 13.

Keith Ervin: 206-464-2105 or kervin@seattletimes.com