A Balanced Spending plan for our future

By Bill Barron

County Administrator

December 2004

I’m sure you may be aware that the Board of Clark County Commissioners has unanimously approved the budget for 2005-2006.But I thought that you might be interested in a bit more insight into the process and the final product.

The overall budget for all funds totals $786.9 million for two years, a 2.2 percent increase in the 2003-2004 budget. Of this, the general fund totals $233.6 million, a 3.7 percent increase over last biennium.

Working together

The 2005-2006 budget was a product of extensive collaboration with all county departments and elected officials. It is a balanced spending plan that is realistically lean, reflecting the structural, long-term erosion of the county’s revenue base. But it is also sustainable and includes some mandated and much-needed enhancements. (See list below.)

Enhancements in the

2005-2006 budget:

• A funded baseline budget for every department and elected official

• A new Superior Court Judge and support staff

• A new District Court Judge and support staff

• Increased funding for Indigent Defense

• A new federally mandated voting system

• $2.8 million in grants for expanded substance abuse and comprehensive

mental health services

• Two record specialists for the Sheriff’s Department and a single FTE each for the Treasurer and Assessor

• Expansion of the Salmon Creek Wastewater Treatment Plant

The approved budget is based upon a foundation of policies that the commissioners have mandated over the past six years. By following these policies we have been able to live within our means and stave off harsh, purposeful reductions to existing service levels. These policies have included:

• No new hires allowed without matching revenues

• Capped salary increases, controlled to long term revenue growth

• Capped health care benefits

• Investment in information technology

• Increased grant funding

• Administrative efficiencies

Responding to voter tax reduction initiatives

These policies were developed in direct response to reductions in county revenues imposed by the electorate:

• In 1998 citizens approved legislative Referendum 47, limiting property tax levy growth to less than two percent per year.

• In 1999 citizens demanded, and the legislature approved, cuts to the motor vehicle excise tax, reducing county revenues by more than $3 million annually.

• In the ensuing year, citizens’ Initiative 747 further limited property tax levies to one percent per year.

These changes have driven county revenues below the cost of current service levels. As a result, we are living in an ongoing structural deficit condition, where revenues cannot keep up with inflation and growth on an ongoing basis. Unprecedented growth and new construction have created revenue increases for 2005/2006. While these increases are not enough to cover all costs, they have softened the harshest impacts of the county’s revenue losses.

Funding needed infrastructure without new taxes

Infrastructure work from roads to water is adequately funded in this spending plan. During the 2003/2004 biennium, the county took advantage of changes in fiscal policies, healthier sales tax revenues, and continued growth in new construction to support the restructuring of debt and other infrastructure projects — most notably continued replacement of obsolete information systems and capital building projects.

Each of these projects was carefully conceived to lower the county’s long-term costs through lower lease payments, lower debt payments, and increased efficiencies. With the exception of the limited increases noted in the sidebar, primarily for law and justice services, this budget recommends increases only for mandated expenses such as existing contractual obligations and utility cost increases. There are no new taxes assumed in this budget.

Growth occurs, but property taxes are capped

So there you have it. It is a budget that is austere but sustainable. We can afford what is proposed in this spending plan into the future, but given current conditions, even if the nation’s economy continues to improve, most of the revenues that the county relies on are unlikely to improve along with it.

Growth continues to occur at record levels, and the single largest source of revenue for the county – property tax – is statutorily capped. In light of this reality and a future of certain but unforeseen citizen initiatives, a sustainable budget will remain a constant challenge.

Continued investment in our existing workforce, advances in technology, and innovative service delivery are the wisest choices we dare make.

Broadcasting our message

We will continue the implementation of our budget communications plan during the next two years. It is important that we continue to broadcast our message of “tough decisions ahead.” A broad-based understanding of what services are being provided and where tax dollars go is essential if you and the public are to be informed partners in those future decisions.

This budget has resulted from a highly collaborative effort involving all of our elected officials and department heads. I would like to express my sincere appreciation to them and to Glenn Olson, Jim Dickman, and the entire budget staff for their outstanding assistance in developing this budget and for their untiring dedication to public service