From the Edmonds Mayor: Oh yes, the budget

1403
13
Mayor Dave Earling

Here we are in the middle of July working on the 2020 budget that won’t be presented to council until the first part of October. So why are we starting so early? Well actually, staff has been working on their department budgets for some time now. It is important each year for departments to review expenditures, expenses and anticipated revenues yet to come so that they can build their 2020 budget with the best information our Finance Department can project.

Again, the departments have been working on their department budgets for some time. Also understand many of the departments are responsible for budgets in the millions of dollars. For example, our General Fund budget is in excess of $44 million and all of our budgets combined exceed $109 million. 

This past Monday was a key day as we gathered department directors and key staff together to lay out in general our current financial position, emphasize certain points, and stress the importance of meeting scheduled deadlines over the next several months.

On July 12 we will have another important meeting with the City Council to discuss their expectations regarding meeting certain deadlines and procedures. Of interest to staff are the priorities that individual council members may have and, hopefully compile a list of collective council priorities. We went through a similar process of prioritizing last year and staff was able to accommodate many of the council requests.

Over the coming three months our Finance Department has laid out a schedule which will keep us all very busy. The staff will have the preliminary budget pulled together after department priorities are made, followed by my approval, and then a preliminary budget presentation to the council on Oct 8. The council will then have until year’s end to make budget decisions. During that time there will two scheduled public hearings for citizens to share their thoughts on the 2020 preliminary budget.

On the revenue front, we are having another very strong year. Our sales tax revenues have grown dramatically with new businesses coming to all areas of Edmonds. Our restaurant and entertainment business continues to expand. Our automobile revenue continues to be strong, and our Planning and Engineering departments are extremely busy, although construction sales tax is trending down slightly.

Our city has been very successful in developing a reputation as a “Daytime Destination”, thus improving our financial position.

Of course, over time, our expenses are increasing. We are working hard and will be watching expenses carefully.

Finally, I know many of you are concerned about increasing taxes. We all are. In the graph below, please note that of your property tax bill, only 15.2% goes to the city.

I hope this brief overview provides you with an idea of how your city’s budget process works and the time and analysis we put into determining next year’s budget, while also providing you with a sense of our city’s financial improvement.

— By Edmonds Mayor Dave Earling

13 Replies to “From the Edmonds Mayor: Oh yes, the budget”

  1. Thank you very much for showing the tax chart. It lays out for all what many of us reading our tax statements have known.

    40.6% of the property tax bill goes to the ESD. Based on that number our portion is $3600 per year to ESD. A healthy number for Edmonds household and I would say we already support education in a substantial way. Some homeowners pay more some less with an excellent job supporting education as property owners.

    The concern is the rising uncertainty in upcoming levies and the rising bottom line on the tax statement. With a 40.6% share levy uncertainty, and ESD money management skills, in my opinion, this hurts taxpayer perception and the amount we would like to give to our city when the council discusses
    increases. This system hurts the city of Edmonds in my opinion.

    I believe affordability and staying in Edmonds starts right here with this chart.

    It would be productive if any candidates or candidates for school board would finally acknowledge the concerns and address them for the taxpayers.

    Ignored

    1. Mike, your comments are very thoughtful and timely. The cost of government is going up at a rate that is not sustainable without future levies for added funding. Some of the top city priorities have big price tags.
      1. Road repair needs about $2m per year to catch up and maintain our roads in a way to not cause added cost later.
      2. Civic Park need money for completion and Council is using our bonding authority to fund the $3.5m
      3. Marsh Restoral is estimated to be $13m and we have $1.3m scheduled.
      4. Day lighting the creek is $17m with no announced funding.
      Items 3 and 4 are needed to create the salmon run. Will it help the Orca and how long can we wait?
      The wish list in the Comp Plan is measures in the $100m plus needs. How do we prioritized these items and where will be get the money?
      Tough issues and we can all learn more at the Budget Retreat this Friday.

      Ignored

    2. Hi Mike, Great observation on ESD and taxes. Data from the ESD shows the assessed valuation for the entire district is $32B. That includes Edmonds, MLT, Brier, Lynnwood, Woodway, and parts of unincorporated Sno County. Edmonds AV is $11B so we represent 33% of the taxes for the ESD. I could get the kid count but Edmonds but it is much lower than 33%.
      The state has done less than a complete job in defining and managing the funding for basic education under the McCleary decision. For example the work hard to define the cost of living in all 295 districts and create teacher salaries data base on their studies. Prior to this last round the state was funding $70k per teacher and ESD paid $77k, a 10% premium. Keep good teachers, reduce turnover and things like that was the rational. When the state did this last funding they gave ESD $77k for teachers but we added to that by more that the previous premium of 10%. I think the number floating around was a 19% increase. which would take above the 10% premium rate. I talked with two board members who mentioned the fear of a strike was one of the reasons for the large raises. Since their was a funding overlap for one year the amounts were basically given over just one cycle and that created the budget gap that lead to teacher layoffs.
      The state has put into place a strange system to deal with the largest union of state employees. Create central funding based on local cost of living estimates, but then allow that union to negotiate with 295 separate districts, and allow the threat of a strike to still be in play when it is against the law.

      ESD was not the only district to do this but by doing so these districts have just now created more problems for the state going forward to do funding for basic education. We still have to do things with local levy dollars like technology and replace and build new schools to handle the growth. That is also a complicated issue but some local citizens have worked on enrollment forecasting and identified the needs for buildings both new and remodeled. Time and space does not permit that discussion now but stay tuned, the ESD board will have to make some levy decisions for replacement levies and the public will be more completely informed as time goes by.

      Ignored

  2. Now this is what I would call a great communication from our Mayor – brief, concise and not promoting any specific actions or non actions by the Council except getting the budget done. The Mayor is a much better man than I have given him credit for in the past and I publicly apologize to him for some of my past comments toward him. He’s also invited to the Friday night gathering of “Discussing” old men at the Salish, if he chooses to take on the risk on being there for the “big one.”

    Ignored

  3. MEN carried an announcement for the Council’s Budget retreat: https://myedmondsnews.com/2019/07/edmonds-city-council-to-discuss-budget-policy-goals-during-friday-retreat/
    I have attended about 15 Council Retreat meeting over the last 20 years and they are always among the most informative Council meetings of the year. They typically were held in the first quarter and Council and Staff laid out the priorities for that years work. In past years public input was allowed.

    Last year Council held a June 9th budget meeting: The minutes were not posted on the city web site so I did a public records request and they are now posted:
    http://edmondswa.iqm2.com/Citizens/FileOpen.aspx?Type=15&ID=2363&Inline=True
    Take a look at the list of issues discussed on pages 4 and 5 to see the items discussed. There are some pretty interesting ideas and many have some major budget implications for funding.

    This years Budget retreat on Friday, 10 am, City Hall Bracket Room was not well announced until MEN did the positing above. No public input is scheduled and no video will be available for replay later so the best way to stay informed is go to the meeting and learn first hand what is being discussed.

    Council Retreats are among the best meetings of the year and we should all take the time to become informed. Public engagement is important and the public pointed that out in the Strategic Action Plan that was approved by Council in 2013 and again in 2015.

    Hopefully citizens will take the time to attend this very important Council meeting.

    Ignored

  4. Using the Mayor’s pie chart above my personal property taxes break out as follows:
    County Services – $577.50
    Edmonds School Dist. – $3,045.00 (Total Schools – $5122.50)
    State Schools – $2077.50
    Library & Other – $660.00
    City – $1140.00

    I attended Edmonds Public Schools 1961 to 1964. I have no children who have ever attended Edmonds Public Schools or any WA. State School system. It could be argued that the fact I have not fathered any children to be educated locally has saved WA. Public Schools thousands of dollars since my adulthood. Yet, at 73 years of age I’m paying the bulk of my property taxes to support public schools. I use City services a great deal, but I use the school system virtually not at all since 1964. I would much rather the bulk of my property taxes went to the city but that is not how the current system works. In short, I will vote for future city bond issues and I will not vote for future school bond issues, period. The tax system in WA. State, literally stinks at virtually all levels and is almost totally regressive in nature. Sales and property taxes tend to tax those least able to pay and reward those most able to pay with a low tax burden. This is not accidental; our tax laws are generally written by and for people of wealth, advantage and influence at all levels of our governments. That’s just how it is. Does tax favoring the wealthy make the economy produce jobs? That’s the theory. Looks good right now, until the next recession which will come sooner or later. When that happens, the regressive tax system doesn’t look so hot. (2008)

    Ignored

    1. Hi Clint,
      This link goes to a State of Washington blue ribbon committee headed by Bill Gates Sr back in 2002 talking about tax structures in WA and how to make them more fair.
      https://dor.wa.gov/about/statistics-reports/tax-structure-final-report

      The tables show how easy it would be to use the income tax system approved by the State Supreme Court back in the 1930’s. I asked Rob Ferguson when he made a public presentation to about the legal aspects of adding an income tax system in WA and his office has confirmed that the Court decision of the 30’s is still correct and his office verified that while Slade Gordon was AG he rendered a follow up opinion saying the same things. When asked the current AG office said that still it the position of the AG office.
      I asked the Gene Balk, the Seattle Times FYI guy about doing a report on income taxes in WA and he provided this link to a story he did a couple of years ago:
      https://www.seattletimes.com/seattle-news/data/washington-state-ranks-nearly-last-in-new-tax-transparency-index/

      Dick Conway a member of the Blue Ribbon committee has a statement in the Times article that says:
      “Conway’s dream tax system for Washington would be a 10.5 percent personal income tax, and the elimination of all other taxes — no more property, sales or business taxes.

      The tables in the first report show various alternatives to add an income tax on a revenue neutral basis and how we can reduce sales taxes and property taxes.

      I asked two local state senators and several local state representatives and about the Court decision and the AG decision and both Senators say I am wrong and the state reps will not answer my emails. I think I will choose to believe our current AG, and the Bill Gates SR committee.

      Clint, you are right, we can do better with a tax system that is more fair but our elected folks seem unwilling proceed.

      Ignored

  5. Clinton Wright, you certainly pay more than your fair share in taxes. We might want to begin to look at the big picture 50 years from now. My thoughts go to the fact that we have doubled the population of Washington State since 1972. Growth always seems to be the answer to collecting more taxes, like in Edmonds. Our population is growing fast. When will we reach the time when parents pay for the education of their children after they have two? Also the federal deduction for children stops after your second child. In our little world in Edmonds we could just not be concerned about our population, and have unlimited growth by doing away with the height limites for building altogether.

    Ignored

  6. People will not vote for a state income tax because they fear the pol.s (both major parties) will want to keep all the other taxes as well which is probably what would happen. Bill Gates Sr.’s income tax proposal really made sense when such taxes were deductible from Fed. taxes, but the recent Trump/Republican Fed. tax give away to the insanely wealthy pretty much makes that incentive for a state income tax history. I’m not sure there is any real answer to all this as the extremely wealthy tend to figure out ways to hoard their wealth in pretty much all societies, not just ours. There are a few enlightened members of the extremely wealthy class who realize hoarding wealth is basically a disease similar to people who engage in other forms of hoarding. I regard my neighbor, Rick Steves, as a welcome exception to that mentality. At a personal level, I can only use my vote to try to mitigate some of the unfairness as it relates to me and people like me.

    Ignored

    1. If we did the income tax that is allowed by our state constitution and we did it as a revenue neutral basis then we would lower property and or sales taxes at the same time. Then the issue is to place some controls on how this and other taxes can raise over time. Given revenue neutral and manage growth most of the public would see a total tax decrease as the income tax would shift taxes to those who make more income. It would be much more fair, less volatile, and create a system for disciplined revenue growth.

      Ignored

  7. I totally agree, Darrol, about the income tax (ecusively) being the way to go but I doubt about the ability of our lobbied up politicians (both parties) to resist the desire of their donors to keep the status quo. If the income tax is ever voted in we will have all three forms of taxation, ever increasing, before you know it. Revenue neutral is a great pipe dream but will never happen I suspect. Just as soon not give the pol.s another source.

    Ignored

Leave a Reply

Your email address will not be published. Required fields are marked *