Sims wants three new taxes

King County Executive Ron Sims proposed three new taxes Monday, even as he warned that a slowdown in housing construction will strain the county's general fund during the next two years.

Sims said in his annual budget address to the Metropolitan King County Council that he told his staff to "go back to the drawing board" in September after financial advisers warned that a downturn in construction would hit the county hard. The revised budget, which also calls for higher bus fares, trimmed 2008 spending in order to soften an expected 2009 budget shortfall.

Under initial spending assumptions, the housing downturn would have nearly wiped out general-fund reserves in 2009 and created a shortfall of $30 million to $40 million.

Even after rewriting the budget to rein in spending, Sims said, the county will still have to draw down reserves by $25 million and deal with a $25 million shortfall in 2009. He said his proposed 2008 budget is balanced.

Construction downturns are particularly challenging for the county because property taxes are the biggest source of money for the general fund.

Sims proposed levying three new taxes to fund high-priority programs:

• A sales tax of 1 cent per $10 purchase to fund treatment and other services for people who are mentally ill or have drug or alcohol addictions. The tax is expected to cost the average household $25 a year;

• A property-tax levy amounting to $40 on a $400,000 house, or $10 per $100,000 value, to upgrade flood-control levees in suburban cities and rural areas; and

• A $20 tax on a $400,000 home to create a ferry district operating passenger-only ferries on Puget Sound and Lake Washington.

Sims said those taxes added together, if approved by the council, would cost "a lot less" than the three-county "Roads & Transit" tax measure he opposes. The measure, also known as Proposition 1, is on the Nov. 6 ballot.

Sims also asked the council to approve a 25-cent-per-trip increase in Metro Transit bus fares, citing a 37 percent increase in operating costs since fares were last raised in 2001.

Councilmember Bob Ferguson, D-Seattle, who will lead the council's budget deliberations, called Sims' last-minute budget rewrite "the golf equivalent of shouting, 'Fore!' after an errant shot." Ferguson said the council will have to look at the cumulative effect of the three tax proposals "to make sure we're not pricing people out of their homes."

Sims called his $4.8 billion budget "as tough as it is creative and dynamic." Comparing it to this year's $3.9 billion budget is misleading because the 2008 budget includes two years of Metro Transit spending, as the council moves from annual to biennial budgeting. The Metro spending accounts for most of the difference.

The 2008 budget would re-establish a sheriff's gang-suppression unit, hire 11 more Metro Transit police officers and create 32 jail-guard positions. Sims also proposes to begin renovating the Kent animal shelter and start other improvements recommended by a citizens advisory committee on animal care.

The County Council plans to adopt its version of the budget Nov. 20.

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