Local News

<< Previous   of   Next >>   ADVERTISEMENT   The county’s financial picture “The national economy is in, or close to, a recession. The Puget Sound area and Snohomish County are impacted by elements of the national economy, but continue to show evidence of overall economic strength. The national real estate market slowdown and real estate banking problems are the primary drivers of any issues in the Snohomish County economy.” --Snohomish County quarterly financial report PLUNGING REVENUE Snohomish County general fund Used for: Salaries and program costs for police, courts, parks and general services. 2008 budget: About $207.5 million. New estimate: $203.8 million, which is $3.7 million lower. Reserves budgeted: $31.2 million. After reallocation: $27.5 million. Real estate taxes fund Used for: capital projects and debt payments. Budgeted 2008: $23.2 million. New projection: $18.3 million, down about $4.9 million. SHORTFALL ESTIMATES $2 million less in interest income from investments. $781,000 less in jail revenues because of lower demand for jail beds. $590,000 less in recording fees for legal documents. $440,000 less in sales taxes. $480,000 less in real estate taxes. $300,000 less in gambling fees. $155,000 less in parking and space rentals. ($1 million in other miscellaneous revenues are higher than expected.)   CONTACT THE HERALD Robert Frank, City Editor frank@heraldnet.com   Published: Wednesday, May 7, 2008 Snohomish County's coffers run low for cops, roads By Jeff Switzer Herald Writer Snohomish County's tax revenue is plunging this year, forcing officials to consider tapping reserves and take a stronger hand in controlling spending. Based on the first three months of the year, the county is estimating it will have nearly $8.6 million less money than budgeted by the end of December, finance officials announced Tuesday. That's a small fraction of the county's roughly $720 million budget; however, the shortfalls are in two accounts that cover cops, courts and park services and major construction projects such as roads and parks. County Executive Aaron Reardon is recommending stronger spending controls and using reserves to cover the shortfalls, county finance director Roger Neumaier said. The problem is manageable, and the real estate crunch is "90 percent" to blame, he said. "The shortfall is primarily driven by reductions in real estate related fees and taxes," Neumaier said. Also, interest rate cuts by the Federal Reserve hurt county investments. By year's end, revenue is expected to be about $3.7 million less in the county's roughly $207 million general fund, which pays for cops, courts and park services. Real estate taxes that pay for construction projects are expected to be $4.9 million lower than the $23.2 million budgeted. "We will not see the dramatic growth that we have seen over the past few years," Neumaier said. "We are hopeful we will have stability over the next few years." The new report comes a few weeks after the county announced a $4.4 million shortfall in permit fees. To handle the decrease, 20 vacant building department positions were cut and about 30 employees are expected to be transferred to Public Works projects. On Tuesday, officials announced that the county's investment interest is expected to be $2 million less this year because of interest rate cuts by the Federal Reserve. The county's return on investments is closer to 2 percent to 2.5 percent, not the 5.75 percent predicted in the 2008 budget, county Treasurer Kirke Sievers said. "I think that many of us at the end of August did not anticipate the severity of the real estate crisis," Neumaier said. The drop in mortgages and home sales is expected to slice about a half-million dollars from the budget this year because fewer people are paying fees collected for filing legal documents. "Talking to some folks in the development community, we're looking at another 18 months possibly before we see much of a turnaround," County Councilman John Koster said. Also, jail revenues are down $781,000 because cities and the state need fewer jail beds. Sales taxes also are down, but by less than 1 percent, or $400,000 of the $43.7 million expected this year. That's a signal the outlook isn't all bad, Neumaier said. Thanks to Boeing jobs and low unemployment in Snohomish County, "we are enjoying one of the strongest economies in the country today," Neumaier said. Based on the strength of the local economy, County Council members said they are cautious but optimistic. "It's doable, not a disaster," County Council chairman Dave Somers said. Somers said he isn't against using reserves to cover salary and program costs, but also wants to look at possible places to control costs. The council asked for a report on pending road capital projects to consider which ones might appropriately face delays. "I'd rather not start them than start them and not finish them," Koster said.

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