Boosting King County sales tax a hard sell despite public-safety shortfalls

King County Executive Dow Constantine knew some voters would think he was crying wolf when he promised deep cuts in the ranks of sheriff's deputies, prosecutors, jail guards and court workers unless voters boosted the sales tax.

Indeed, critics are asking why the county can't balance its budget and provide basic county services without taxpayers digging deeper into their pockets — especially in a painfully bad economy.

Opponents of King County Proposition 1, the sales-tax increase on the Nov. 2 ballot, say the county has let labor costs grow out of control and has sown the seeds of a taxpayer revolt by repeatedly raising taxes for purposes less crucial than public safety.

But elected criminal-justice officials and a majority of Metropolitan King County Council members note that Constantine has made progress in bringing down labor costs. Still, they say, the sales tax must be raised because existing tax sources haven't kept up with rising costs — a growing gap that has finally brought the county's ability to provide services to the breaking point.

Without a tax increase, officials say, there won't be any detectives left to investigate property crimes, and there will be fewer prosecutors to bring cases to trial, probation officers to supervise drunk drivers, and family-court staffers to advise judges on whether a child is safe with a troubled parent.

The point of the story about the boy who cried wolf, Constantine said, is that one day the wolf really did come and no one listened.

Money for now, later

Proposition 1 would raise the sales tax by two-tenths of a cent to 9.7 cents on a $1 purchase in most parts of the county. In restaurants and bars, the tax would rise to 10.2 cents.

The tax increase would cost the typical household about $45 a year, according to the state Department of Revenue.

After sharing 40 percent of the proceeds with cities, the county would use the remainder to maintain criminal-justice operations and build a $150 million replacement for the Youth Services Center courthouse in Seattle.

At least one-third of total proceeds, including the cities' share, must be used for criminal justice and fire protection.

Constantine proposed the tax at the request of Sheriff Sue Rahr, Prosecuting Attorney Dan Satterberg, Superior Court Presiding Judge Bruce Hilyer and District Court Presiding Judge Barbara Linde.

One-half of the new tax would expire in three years unless renewed by voters, the remainder in 20 years. A portion of the longer-term tax would finance construction of the youth courthouse, and the rest could be used for other criminal-justice purposes.

In 2012, the first full year of the tax, it would provide the county about $51 million. Maintaining current levels of public-safety services would cost more than $30 million, debt service on a new Youth Services Center courthouse roughly $13 million, and new justice-related computer systems about $5 million.

The tax ordinance also would redirect $9.5 million from the unincorporated-area levy to the Sheriff's Office for police services outside cities.

Selling the tax measure won't be easy.

"I think people have the general feeling that the basic services of government should be covered by the current property taxes and sales taxes that the county has," said political consultant Jamie Durkan, who is not working for either side. "Now you're asking for an additional specialized tax to fund criminal justice. It's hard to make the case for that in this environment."

Assessing labor costs

Opposition to higher taxes has been fueled in part by the perception that county workers get better pay and benefits than most taxpayers.

For years, most county labor contracts included a minimum 2 percent cost-of-living adjustment. Unions representing most employees have now agreed to no increase next year and to receive slightly less than the inflation rate in future years.

Sheriff's deputies haven't agreed to give up a 5 percent raise next year, and bus drivers are in contract talks.

County workers don't pay anything toward their health-insurance premiums, but this year they began paying higher deductibles and more for co-pays, name-brand drugs, and premiums for spouses. Those changes are expected to save the county $37 million over three years and boost employees' share of medical costs from 12.7 percent last year to 18 percent this year.

That's less than the 31 percent paid by Bellevue city workers or Seattle's 24.7 percent, but more than Port of Seattle, Everett and Pierce County employees.

One of every 10 full-time county employees earned more than $100,000 last year. Departments with the highest percentage of workers topping that mark are the sheriff's, prosecutor's, County Council and executive's offices.

A relatively small number of employees were paid less than $19 an hour, or about $39,520 a year.

County workers earned less than the Puget Sound regional average last year, but in the first three months of 2010 took home more pay — what would be $68,848 a year — than the $66,394 regional average, according to a County Council staff analysis.

Kirkland homebuilder Mike Nykreim, whose company has slashed its payroll from 47 employees to two during the real-estate crash, pleaded with the council this month to cut wages and health benefits. "This is serious. This is an emergency. We need to deal with it now," he said.

Constantine last spring set a goal of reducing spending increases to the rate of inflation plus population growth, partly by trimming 3 percent a year — or about $20 million — through more efficient operations.

Most of those savings are expected to come through efforts such as consolidating office space and computer-network servers rather than through lower labor costs, said Deputy Executive Fred Jarrett. "We're starting to demonstrate we can make the changes," Jarrett said.

The new efficiencies will allow the county to balance future budgets without service cuts, Jarrett said, but the Proposition 1 vote will determine whether those budgets will sustain current service levels or significantly reduce criminal-justice workers.

As for the size of the county payroll, between 2000 and 2010, the number of workers increased from 13,102 to 13,587, mostly funded by voter-approved increases in the transit tax.

Constantine's 2011 budget would lay off at least 200 employees and cut more than 262 other positions.

Most cuts would be in public safety as that's where most jobs are. Criminal-justice agencies' share of general-fund dollars has risen from 64 percent in 2000 to 77 percent in the 2011 budget. That means less money can be shifted to police and courts from the executive, council, assessor, budget office, elections and public health.

"It's inescapable," Constantine said. "If we're facing a third year of massive cuts, we're going to have to make cuts in criminal justice."

Revenue in decline

The county began struggling to balance its budget after 2001, when Initiative 747 clamped a lower lid on increases in the property tax, the primary revenue source for the general fund.

The initiative and a subsequent state law capped the amount of money that can be collected without a public vote from a 6 percent-a-year increase to 1 percent, plus tax on new construction.

In years with lots of construction, the county was able to pay its bills, set aside a rainy-day fund and spend more on human services and public health.

But when the construction industry collapsed, so did a significant part of county revenue. The value of construction added to the tax rolls is projected to drop from $8 billion in 2009 to $2.4 billion by 2011.

Sales-tax collections, the county's second-largest tax source, dropped by 3.7 percent in 2008, by 14 percent in 2009, and are projected to fall another 2.7 percent this year. Unlike cities, the county cannot collect utility or business-and-occupation taxes.

Other funding ideas

County Councilmember Kathy Lambert, who opposed putting a sales-tax boost on the ballot without an offsetting cut in property taxes, said Constantine isn't engaging in scare tactics.

"The fact is that we are paying for criminal justice first. We are paying for it first, second and third," Lambert said.

The general fund represents only $613 million out of a $5 billion county budget. It is not possible, generally speaking, to shift money from other accounts, as those other funds are legally dedicated to purposes such as roads, parks, public health or persons with developmental disabilities.

Transit fares may be used only for transit, and wastewater fees can pay only for sewage treatment.

The council was able to soften the blow of two previous years of budget shortfalls by spending down reserves. If officials dip deeper into those funds, the county's credit rating and its ability to respond to emergencies could be jeopardized, according to budget analysts.

Before the sales-tax proposal, other ideas were on the table. A failed Democratic proposal in May would have asked voters to approve a criminal-justice property tax while eliminating King Conservation District funding and reducing taxes for flood control, automated fingerprint identification, parks expansion, open-space acquisition and road maintenance.

Republicans killed the measure, largely because the offsets weren't as large as the proposed new tax.

Council members Lambert and Reagan Dunn subsequently offered several proposals to balance a public-safety tax with tax cuts of equal size, in one version eliminating the parks-expansion levy and reducing the transit tax. Those ideas went nowhere with Democrats.

"That proposal of Reagan's immediately created a very solid, powerful number of interest groups that would have worked their hardest to defeat the proposal," said Budget Chairwoman Julia Patterson, a Democrat.

"Democrats took the easy route," Dunn said. "The easy route is to say I'm not going to battle with any of those constituencies, we're going to use the last revenue source — which is the sales tax — and maybe we'll get lucky."

Staff reporter Justin Mayo contributed to this report.

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