Between now and December, Kitsap County’s budget for 2010 will be drafted and then adopted in an environment that is not similar to years past.
The possibility of declining revenue for a third year in a row can’t be ignored, and stopgap measures to reduce spending while awaiting the economy’s recovery can only do so much.
Even an end to the recession probably won’t cause revenues to increase enough to allow the county to roll back the spending cuts quickly.
This is especially true if voters approve Initiative 1033 in November’s general election.
But even without I-1033’s limits on revenue increases, it seems probable that sales tax revenue won’t bounce back like it did after the last recession.
In 2004, the county’s sales tax revenue increased by more than 12 percent compared to the previous year — and significant increases followed each year until 2008.
Those steep increases occurred when the construction industry was booming, and the sales tax on material and services used in construction was a substantial part of the total increase.
Nothing in the foreseeable future seems likely to cause such an increase, since it would require a lot more borrowing and lending than consumers and lenders would tend to do after the bubble burst.
This year’s property tax revenue for the “current expense” fund increased by a lot less than had been typical during the boom in new construction. Rather than 4 percent or more, the levy went up 2.5 percent.
The county’s property tax revenue for 2010 may increase by even less than it did this year.
So, even though property tax revenue hasn’t declined due to the recession, the small increases when new construction activity is minimal don’t come close to offsetting the sales tax decline.
Unlike the previous recession, which did not cause sales tax revenues to fall, this recession has turned everything around.
A couple of years ago, the county’s leaders were looking for ways to explain why they couldn’t get by with the revenue growth that had been occurring since Initiative 747 limited property tax increases starting in 2001.
For almost two years, they have been trying to cope with declining revenue as the economy sank into a recession.
And, rather than trying to prepare the voters for a property tax “lid lift” to offset the effect of I-747, they have had to acknowledge that a tax increase would probably not be approved when many voters are uncertain about their own incomes.
It’s not that voters in our current situation won’t approve any property tax increase. South Kitsap School District and South Kitsap Fire and Rescue both got voter approval for increases in the coming year’s levies.
Since the fire district and school district have to go to the voters on a regular basis for levy approvals, they seem to have a reasonably good grasp of the need to justify what they propose.
It comes down to spelling out what is needed and what it costs.
Since the county’s many departments have to go through a budget process each year to gain the commissioners’ approval, one might think that they, too, would know how to spell out what the money is for.
If they do, now would be a good year to display that ability.
The commissioners have to be considering what is really required to perform each function, so that they know what spending reductions can be done and what cannot.
Meanwhile, the taxpayers need to begin learning more about the information that underlies the spending decisions.
Few ordinary citizens have the desire to spend lots of time on budget matters — that’s why we elect leaders and pay senior administrators to handle such things.
But if the information can be boiled down enough to make it possible for three commissioners to grasp, it can be put in a form that is suitable for curious citizens to peruse.
It’s a different world. Vying for a share of virtually automatic, significant revenue increases was the way it used to be, but those times may not be back soon.
Robert Meadows is a Port Orchard resident.