Inflation, $50M budget gap has King County Public Health predicting deep cuts

(The Center Square) – King County Public Health is expecting its budget to have the largest reduction among county departments as an annual $50 million budget gap looms.

King County Budget Director Dwight Dively presented an update on the department’s budget to the King County Board of Health, revealing that Washington state’s limit on property tax revenue growth is causing the county to make budget cuts.

The state limits property tax revenue growth to 1% per year, but cost growth has exceeded this in recent years. Inflation was 6.3% in 2021, 9.5% in 2022, and is projected to be 5.5% in 2023, according to Dively.

“Essentially, your largest revenue source, by far, can grow about 2-2.5% per year, and when inflation was low, that was sort of manageable,” Dively said at the Board of Health meeting on July 20.

Dively added that the county warned the Washington State Legislature that if the property tax revenue growth limits weren’t adjusted, major budget reductions would result.

King County’s annual general fund budget is about $1.2 billion. Out of the total budget, approximately $400 million is from other governments to provide services on their behalf, such as the Sheriff’s Office serving as the police department for a suburban city. Another $400 million goes towards services mandated by the state, including jails, public defense, elections, courts, prosecution and property assessment.

The remaining $400 million in the county’s general fund goes towards discretionary spending. Thus, $50 million in annual budget reductions will stem from this part of the budget.

King County Public Health has the largest amount of discretionary general fund money, which Dively said results in the department likely facing the largest budget reductions.

“At the end of the day, many of the programs that are going to be slated for reductions are things that are very consistent with our values that we don’t want to have to cut, but because the Legislature has given us no choices, those are the things that are going to have to be reduced,” Dively said.

Washington State law also precludes King County from asking voters to approve additional property tax revenue to offset these reductions. According to Dively, King County is the only government in the state subject to this limitation.

Approximately 85% of the county’s budget is considered to be financially strong, but these funds cannot be diverted to offset General Fund shortfalls.

King County Executive Dow Constantine is planning to make budget reductions in two phases. The first phase will see a reduction announced this fall and be phased in the summer of 2024. The second phase will be for reductions in the 2025 budget. That is set to be announced in September 2024.

As of this publication, Constantine has not decided how much of the $50 million will occur in each phase.