Citing an increasingly difficult financial situation in coming years, the Clark County council voted 4-1 on Tuesday night to readopt its two-year budget. The decision included a 1 percent increase of a key levy that’s expected to raise the median property tax bill by a few dollars.
In December of last year, the county council adopted its $946.9 million 2017-2018 budget, which funds county operations and includes the $323.2 million general fund. State law requires the council to readopt its budget midway through to account for new revenue or expenses, make technical adjustments or corrections as well as approve one-time payments.
The budget was written and passed last year with the assumption that the county would raise the property tax levy in 2018 to support the general fund by 1 percent (the maximum increase allowed under state law) but still required the council to sign off on the increase.
The general fund levy appears on every Clark County property tax bill. The increase raises the total tax levy and the impact on individual property owners will vary. However, the decision is expected to raise the median household’s 2018 property tax bill by $3.46, according to numbers presented by Budget Director Adriana Prata at the meeting.
Councilor Eileen Quiring, who wasn’t on the council when the budget was passed last year, said she was uncomfortable with the increase because property taxes are already expected to rise as the result of a school funding package passed by the Legislature earlier this year.
“I personally don’t want to burden (taxpayers) any more because we will still have a balance left in our general fund even if we go with zero percent increase,” she said.
County policy requires a minimum balance of $23 million in the general fund. Prata presented numbers showing that the fund would have a balance of $25.9 million at the beginning of the 2019-2020 budget cycle that would dip to $21 million by the next cycle. She also stated that other sources of revenue for the county are expected to decline and that the county is expecting a legal settlement next year that will bring another “significant” cost to the budget.
The county’s “structural deficit” was referenced repeatedly during the meeting to justify the levy increase. Currently, two-thirds of the general fund is dedicated to labor costs. Expenses associated with employee wages and benefits, such as state-mandated retirement contribution rates, as well as other costs are outpacing county revenue.
Councilor Julie Olson said that personnel costs rise by 3 to 5 percent a year while county revenue increases 1 to 3 percent a year.
“It doesn’t take much to figure out that we’re always going to be under pressure,” she said.
Council Chair Marc Boldt said that the county’s ongoing fiscal problems will be compounded with the need for a new jail, costs from the sheriff’s office and other large expenses.
“We are going to have to do a lot of soul-searching in this community, even with 1 percent, to figure this out,” he said.
Boldt also noted that it’s difficult to convince legislators to direct additional funding to the county when it doesn’t opt for its 1 percent increase.
Councilor Jeanne Stewart said that although taxes are a “finite resource” she would reluctantly approve the increase. Councilor John Blom added that the citizens value law enforcement, which he said comes with a cost.
The county manager, under Clark County’s Home Rule Charter, is responsible for proposing the budget, which can be amended by the county council before giving it final approval. Clark County Interim Manager Jim Rumpeltes received 123 funding requests totaling $21.5 million from county offices, which would come from the county general fund. However, Rumpeltes only recommended $2.7 million of the expenses, $1.4 million of which are one-time costs.
The new expenses included staffing additions as well as various capital or infrastructure projects.
The county begins preparing its 2019-2020 budget next year. When it came time to vote, Blom asked Quiring what she would cut out of the budget to make it balance. She responded, “I guess we will have to have that discussion another time.”