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Franklin County could be facing multi-million dollar budget crisis

February 8, 2024

By: Katherine Trowbridge

Franklin County is one of the fastest growing counties in the state and that comes with a price.

Clark Worth, a consultant with Consor, presented the results of their independent review of the county’s finances to commissioners this past week.

For over the past six months, Consor has been working with county department heads and elected leaders to take a hard look at Franklin County’s financial situation both now and into the future. The result was shared along with strategies for financial sustainability.

Worth stated bluntly, “The bottom line is Franklin County is running out of money. The gap, looking forward, is $3 to $7 million…” He went on to state that the gap the county experienced this budget cycle will continue into the future, becoming an annual issue.

So the question is why are we in this situation? Franklin County has been the fastest growing county in WA now for more than 20 years, with more than 2500 people added to the population each year, mostly in the urban areas. As the county grows it is shifting, according to Worth, from a more rural county to an urban center which brings with it a very different form of financing.

Worth said it is not a matter of staffing as Franklin County’s staffing level is lower than that of its peers and it’s not a matter of county management. In fact, Worth stated that the county has good financial management. The county has also been lucky to have a strong, sustained, resilient economy through the recession and pandemic with strong retail sales, and jobs proportionate to growth. Worth stated the economy paints a “sunny picture overall.”

However, looking at the financial forecast, expenses are growing at a quicker rate than revenues and that poses a chronic budget gap for the county. The county has been drawing from its general reserve funds and also been utilizing the road levy shift. By saving money on roads now, leads to higher costs later. Worth stated the current course is unsustainable adding the county can work its way out of this, but it will take strategies.

These strategies include several proposals including selling county real estate (HAPO $50 million, surrounding lands $30 million, and other misc. lands). Commissioner Didier expressed he was not in favor of selling the HAPO Center feeling it would bring revenue to the county now that it has better management.

Options of increased taxes (which would require voter approval) were also brought forth including a property tax lid lift and a 9-1-1 sales tax. The sales tax would provide $5.4 million a year in emergency services revenue removing some overhead costs from the budget but would not affect the bottom line much. The levy lid lift was explained to fund public safety in the county. However, commissioners Didier and Rocky Mullen expressed they would not be in favor of this additional tax. Didier did say he could get behind the 9-1-1 tax.

Other revenue sources could come through lobbying the state to cover unfunded mandates as well as seeking state and federal grants.

Increasing current revenue sources like enacting an annual 1% property tax increase (no vote needed) and adding franchise/impact fees for utilities along with 100% appraisal of new construction would also benefit the bottom line. Commissioner Stephen Bauman expressed he would like to hold further discussion regarding the franchise tax.

Cost saving measures were also reviewed and include strategic salary increases for key “at risk” positions rather than paying outside firms.

A key piece to the strategies was adoption of financial policies which would allow the county to seek loans and other funding along with providing long term continuity and a guide for the county.

Quarterly budget reviews with the commissioners and the consideration of a biennial budget would also promote accountability and a more long term way of thinking.

Worth also spoke of bi-county agreements and reviewing these to see if they still make sense for the county as a systematic look at these could provide cost savings where the county could do some of these for less.

A key piece of the presentation was hearing from the commissioners. Commissioner Mullen posed the question, “If the county is growing, why isn’t there additional revenue?” He went on to state, “The people are taxed to death. We need to look at services that can be cut. We’re obviously as lean as we can get.” All three commissioners concurred on road maintenance.

“The thing that Consor has really identified for me is that - We’re running as lean as anybody in the entire State of Washington per capita. I feel better about how we’re running and I also like the fact that they said we have been fiscally responsible. It’s not as if we have a deficit because we’re spending frivolously. I mean, this board has been running really lean and that’s been the message,” County Administrator Mike Gonzalez said, “We’re at the point where we have to shake all the trees for public safety and that’s what we do for county roads too. Commissioner Bauman and I went out on those county roads. A lot of them are maintained as good as we possibly can, but gosh, if we had a bit more money for some of those county roads to support a billion dollar industry, we would need to do it… We’re at this juxtaposition where we don’t want to tax the folks but there’s money out there that’s not being utilized correctly, in my opinion.”

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