Kitsap County

Who We AreWhere We Are…

Where We’re Going… How We’ll Get There

Who We Are … Our Mission

Kitsap County Government exists to protect and promote the safety, health and welfare of our citizens in an efficient, accessible and effective manner.

Our Vision

A unique and growing community, widely known for: Safe and Healthy Communities Protected Natural Resources and Systems Thriving Local Economy Inclusive Government Effective and Efficient County Services

Regional Functions Required By Law

Jail (pretrial felony detention)

District Court (small claims) Public Defender (felonies) Roads and Infrastructure Substance Abuse services Prosecutor (felonies) Land use planning Disability services County Commissioners Sheriff

Superior Court Juvenile Justice Public Health Elections Licensing Treasurer Coroner Records Auditor Clerk (Superior Court

Local Services Required By Law

Prosecuting/Public Defense (misdemeanors) District Court (misdemeanors) Jail (misdemeanors) Permitting Sheriff

Discretionary (Elective) Spending

Economic Development (Regional) Animal Control (Regional) Parks (Regional and Local)

Frequently Asked Questions (FAQ) Interlaced in this presentation will be some

frequently asked questions (FAQ). These questions deal with: Accounting structures and restrictions on

revenues and expenditures Where the challenges are right now Unrestricted taxes and assessed values

FAQ # 1

Q. Why is it so hard to cut a few million dollars when your budget is over $326 million? Surely it can’t be that hard to make a 1% cut?

A. The answer lies in how our budget is formed. We have over 100 funds and most of the spending authority assigned to these funds is restricted. Consider each fund as a checkbook where checks cannot be written from one fund to another

A Little About County Fund Structure

2007 Preliminary NumberFund Type Budget of Funds Examples

Special Revenue Funds 129,120,389$ 55 Roads, HealthDebt Service Funds 11,118,241 13 Re-Pay DebtCapital Project Funds 17,275,000 7 BuildingsEnterprise Funds 54,650,653 23 Bus. - SewerInternal Service Funds 22,077,602 3 Dept to DeptGeneral Fund 92,255,595 1 General Ops

326,497,480$ 102

FAQ # 2

Q. How can you build a new building, buy park or open space property at the same time you’re have a budget crisis?

A. This relates to FAQ #1 and is a “color of money issue.” Special Revenue funds are so designated because the revenues received into them can only be spent on specific things.

A. Conservation Futures Fund (a $0.04/$1,000 property tax) can only buy open space and park property

B. Real Estate Excise Tax (a 1.78% excise tax on property sales) can only be spent on capital projects

FAQ # 3

Q. So where is the budget problem and why is it happening?

A. Our current challenge lies in the county’s General Fund and we will have similar challenges in the Road fund in the near future. It’s happening primarily for two reasons; one is that certain revenue streams are limited in growth, and the other is that most of our expenditures are not restricted in their growth.

What is the General Fund?

Finances ordinary operations of the county Law & Justice General Government Community Services Health & Human Services

Main Revenue Sources Taxes Licenses & Permits Intergovernmental Charges for Services Fines and Forfeits

Why we focus on the General Fund This is the fund that supports…

All elected functions. All government functions that need subsidies from

tax revenues except roads. All functions, outside of Public Works, that the

public thinks about when thinking of county services.

Single largest fund

The Challenge

Revenues are increasing at an annual rate of about 4.0%

Expenditures are increasing at an annual rate of about 6.0%

Given the above; we must Become more efficient Reduce expenditures Increase revenues

Revenue and expense trends and comparison

$40.0

$50.0

$60.0

$70.0

$80.0

$90.0

$100.0

$110.0

$120.0

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Mill

ion

s

Difference Between Revenues and Expenditures

-$14.0

-$12.0

-$10.0

-$8.0

-$6.0

-$4.0

-$2.0

$0.0

$2.0

$4.0

$6.0

$8.0

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Millio

ns

How we get our funding

General Property Taxes Sales and Use Taxes Other Taxes Intergovernmental Revenues Charges for Services Fines and Forfeits Miscellaneous Other Sources

How We Get It

Other Taxes6.6%

Sales Taxes27.4%

Property Taxes29.4%

All Other Revenues

36.6%

Property Tax to Sales Tax Ratio

• Kitsap County is 1.1 : 1

• King County is 4.5 : 1

• Snohomish County is 2.4 : 1

• Pierce County is 2.6 : 1

• Clark County is 1.9 : 1

• Thruston is 2.6 : 1

• State Average is 2.8 : 1

• Kitsap County is highly dependent on Sales Tax and we have a weak property tax base because we have no taxed industrialized tax base . . . Our industrial tax base is exempt from taxes.

Other Taxes6.6%

Sales Taxes27.4%

Property Taxes29.4%

All Other Revenues

36.6%

Is this a Problem?

FAQ # 4 & 5

Q5 I send all my property taxes to the county, does the county get it all?

A. No, these taxes are distributed between many different taxing districts including schools, fire and EMS, libraries, the state, and others

Q4 The Assessor just sent me my new assessed value, why does the county keep increasing my property taxes?

A. This is a recurring theme of letters to the editor but is it true? Just because the assessed value increased does not mean that taxes on existing property will increase.

Property Tax facts

Our single largest source of revenue The tax base can increase by no more than 1.0%

without voter approval (but how does that work?) Depending on where you live,

The County General Fund receives about 9% of your total property tax bill

More than 50% of your property taxes are dedicated to education

The state receives more than 20% of your property taxes (not true in most states)

Distribution of each Property Tax Dollar (Unincorporated Kitsap County)

10.3¢ County General

13.3¢ County Roads

24.6¢ State General (Education)

29.7¢ Local Schools

16.3¢ Fire/EMS

5.8¢ All Others*

*All Others Includes:

Port Districts

Library Districts

Parks Districts

PUD/Water/Sewer Districts

Distribution of each Property Tax Dollar (Cities)

9.9¢ County General

19.6¢ City

23.6¢ State General (Education)

28.4¢ Local Schools

9.1¢ Fire/EMS

9.4¢ All Others*

*All Others Includes:

Port Districts

Library Districts

Parks Districts

PUD/Water/Sewer Districts

Voter Approved Initiatives

Initiative 747 and Referendum 47 Property tax initiatives overwhelmingly passed

by the electorate Initiative 695 and Referendum 49

Motor vehicle excise tax overwhelmingly passed by the electorate

Effect of initiative 747 (Revenue Lost)

General RoadYear Fund Fund

2002 1,000,987$ 927,749$ 2003 2,242,489 1,956,921 2004 3,575,185 3,111,143 2005 5,046,236 4,440,081 2006 6,696,664 5,872,156

18,561,561$ 16,308,050$

This measure would require state and local governments to limit property tax levy increases to 1% per year, unless an

increase greater than this limit is approved by the voters at an election. (passed in November 2001 with 57.5% of vote)

Effect of initiative 695 (Revenue Lost)

GeneralYear Fund

2000 650,250$ 2001 723,291 2002 983,485 2003 1,067,943 2004 1,148,702 2005 1,236,846

5,810,518$

Shall voter approval be required for any tax increase, license tab fees be $30 per year for motor vehicles, and existing vehicle taxes be

repealed? (Passed November 1999, 56.2%)

How I-747 works

2006 Property Tax Levy 25,320,388$ 1.0% Increase 253,204

Allowed Taxes for 2007 25,573,592$

based on this year's taxes, not assessed value. Your assessedvalue determines the size of your share of the taxes.

Maximum Property Tax Calculation for2007 Taxes on Existing Properties

Plus an amount for New Construction to allow for Growth

The key point is that next year's taxes on existing properties is

How I-747 works

Let’s say Kitsap County has only four (4) houses.

A.

B.

C. D.

How I-747 works (Median value home in unincorporated area)2007 2007 2008 Value 2008 Tax %

Value Taxes Value % Inc. Taxes Inc/Dec

A. 450,000$ 4,208$ 540,000$ 20% 4,251$ 1.0%

B. 360,000$ 3,366$ 406,800$ 13% 3,202$ -4.9%

C. 250,000$ 2,338$ 325,000$ 30% 2,558$ 9.4%

D. 175,000$ 1,636$ 210,000$ 20% 1,653$ 1.0%

1,235,000$ 11,549$ 1,481,800$ 20% 11,664$ 1.0%

Taxes Increase 1.0%

Houses

The tax rate drops from $9.35 to about $8.16 per $1,000

Are property taxes really going up?

15.5% Increase

2.3% Decrease

Are property taxes really going up?

17.7% Increase

7.8% Increase

Are property taxes really going up?

Are property taxes really going up?

2004 2005 2006 2007 4-Year Δ

Value 207,540$ 227,330$ 242,630$ 285,580$ 37.6%

TaxesCurrent Expense 293.30$ 297.47$ 274.44$ 274.87$ -6.3%Roads 388.71 390.57 357.79 356.09 -8.4%State (Schools) 639.17 673.13 630.62 655.62 2.6%Schools 1,045.37 1,042.10 920.71 969.68 -7.2%Fire EMS* 382.19 398.40 356.01 493.36 29.1%Others 173.66 176.49 158.89 161.14 -7.2%

Grand Total 2,922.38$ 2,978.16$ 2,698.46$ 2,910.76$ -0.4%

* Voted Lid Lift in 2006 for 2007

The Property Tax Bargain

Taxes paid by median value home $2,634.26

Taxes paid to County Current Expense 271.14Number of days in a year 365

Cost of County General Government per day $0.74

Property Tax

How much did the $4.5 billion revalued tax base in 2006 bring in to the Kitsap County General Fund in 2007? Answer: 1.0% of 2006’s Levied Taxes 1.0% X $25,320,388 = $253,204 There are 113,483 tax parcels Or about $2.23 increase per parcel

FAQ # 6

Q. How are General Fund monies spent?

A. We can look at how we spend our funds in different ways

A. By object of expenditure (Salaries, benefits, supplies, services, etc.)

B. By program (Law & justice, community services, health & human services, general government)

C. By function (Courts, law enforcement, planning, recreation, etc.)

How We Spend It (by Object)

Salaries (50%) Benefits (18%) Supplies (3%) Services (15%) Intergovernmental (2%) Capital Outlay (2%) Interfund Payments (9%) Others (1%)

How We Spend It…

Supplies &

Services18%

All Others15%

People Costs67%

$2.0

$2.6

$1.5

$9.0

$2.0

$7.8

$17.5

$17.8

$- $5.0 $10.0 $15.0 $20.0 $25.0 $30.0

Millions

Others

Health & Human Services*

Parks and Recreation

Planning and Environment

General Government

Other L&J

Jail

Sheriff

Courts

Tax Supported Expenses Other Revenue Supported Expenses

The Tax Subsidies (By Function)

* Includes Kitsap County’s contribution to the Health District ($1.45 million)

The Court System

Public Defense,

$3,577,921

Clerk, $2,897,514

Prosecutor, $7,763,389

District Courts,

$2,903,804

Superior Courts,

$2,985,681 Juvenile, $7,537,971

General Government

Personnel $1,118,223

Facilities Maintenance

$2,014,249

General Admin. & Operations

$6,396,291

Assessor $2,494,987

County Commissioners

$1,297,447

Treasurer $904,596

Administrative Services $950,642

Auditor $3,686,381

What We Are Doing… Streamlining Services

Combining Services (Where and When Applicable)

Hiring Freeze Creating Enterprise Funding Opportunities Adjusting charges for services where appropriate Personnel Review

Pay Adjustments/Freezes – Where applicable Reduced Staffing Levels

Education campaign Our employees The public

FAQ # 7

Q. If you’re in a hiring freeze, why are you still advertising for positions?

A. There are exceptions to the hiring freeze:1. If the position is grant funded

2. If the position is funded through a contract

3. If the position is critical to public safety

There are about 60 vacancies in the General Fund, we are advertising for about 15 of them.

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