Northwest NEWS

November 8, 1999

Local News

I-695 fallout begins with public job cuts

by Marshall Haley, staff reporter

   In the wake of last week's passage of I-695, Kitsap Transit has already announced that they have given pink slips to over 60 employees, effective in January, with 90 more job cuts possible.

   Also last Thursday, King County Executive Ron Sims announced that his revised budget will require a one-third cut in Metro bus service and commensurate cuts in Metro/King County staff positions and planned projects, such as road improvements.

   "I-695 eliminates one-third of our transportation revenues, so we are forced to make cuts to those areas," said Sims' spokesperson Elaine Kraft. "We had to choose staff reductions over wage freezes, because our employees are all members of collective bargaining units. I can't say that alternative will never happen, but it would depend on individual negotiations with each of those units." Kraft also denied reports that Sims wanted to raise bus fares, because "that would mostly hurt the people who can't afford cars."


   Cuts would noticeably affect Northshore cities, especially Kenmore and Woodinville, because they rely on County-supplied MVET revenues for road improvements, and for contracting police, fire, and emergency services. The prospects for the state's completion of improvements to State Route 522, affecting Woodinville, Bothell, and Kenmore traffic problems, are also under a dark cloud.


   Woodinville City Manager Pete Rose said annual MVET revenue losses to Woodinville would be around $180,000, but that the sales tax revenues from the city's strong commercial base should allow Woodinville to survive the cuts better than largely residential cities like Medina, Clyde Hill, and Kenmore, which have relatively little commercial revenue. He said he doesn't expect any staff cuts, but the City will have to prioritize road improvements more carefully.


   "This vote takes away our flexibility," said Kenmore's City Manager Steve Anderson. "Based on our 1999 and 2000 budgets, our $1.5 million annual MVET loss would represent 25 percent of our 1999 general fund revenue and 20 percent of our 2000 general fund revenue. That dampens, but will not dash, the dreams Kenmore citizens had of what our city will be. The City Council adopted a transportation plan counting on annual R-49 monies of $200,000 that the state planned to supply from the MVET. Now, WSDOT (State Dept. of Transportation) will not be able to fund that. We will continue to fund our Transportation Improvement Plan, but we'll have to fund future projects with our own money.

   "We have to respect the voters' wishes, and any cure for these losses will be up to their votes. We anticipate the state will come up with partial cures, but they will take care of state government before helping us (small cities) out. Our City Council will recommend to our state delegation that our $1.6 million MVET loss be made up in sales taxes."

   Kenmore's City Council would have rescinded the six percent utility tax increase they passed in September if I-695 had failed, which would have kept their original 1.5 percent increase intact, said Anderson.

   "The six percent increase will yield $600,000 for police and health services," he said. "But that won't replace any of the $1.5 million we lost, because it means we will still be at a 'rural service' level in police and health services, rather than the 'urban level' we expected to pay for as a new city. The revenue losses will mainly impact road improvements, such as sidewalks and parks and recreation improvements. We will maintain a priority on public safety and health services."


   Manny Ocampo, Bothell's Assistant City Manager, said Bothell is luckier than Kenmore, with a lost MVET revenue of around $285,000 in 2000.

   "We planned our 2000 budget in anticipation that I-695 would pass," said Ocampo. "But our loss for 2001 will be about $425,000. Our 2000 loss is less, because the first quarter's MVET revenue is collected from the last quarter of this year. We will definitely not be able to carry out some projects we could have done with the state-supplied revenue. The indirect impacts, like the one-third cuts in Metro bus service, will definitely hurt Bothell."

Broader impacts

   Before the election, I-695 proponents dismissed such projected cuts as "scare tactics" by politicians. Now they say any cuts will simply be examples of politicians "punishing" citizens for approving I-695. Initiative supporters were right about one thing: last week, Gov. Gary Locke said the legislature must now cut into the state's emergency fund to mitigate part of the public safety, health, and transportation revenue losses to local governments that relied on the Motor Vehicle Excise Tax (MVET).

   "What we told the public when discussing this measure is that there were limited reserves from which we could draw at the local level to continue providing service to our citizens, until the legislature provides solutions," said King County executive Ron Sims on Nov. 2.

   "This measure decimates critical services that were dependent on the MVET for funding, such as our transit system, public health services and criminal justice programs," Sims added. "As a result, there will be dramatic reductions in our transit services and routes to keep this system operating for the 80 million who board our buses each year. Public health programs will be reduced or eliminated. Administrative services and staff will be reduced, commensurate with service level reductions." Expected County layoffs could total 1,000 employees by June 2001, said spokesperson Kraft.

   Initial bus route cuts next February would affect the least productive routes, off-peak hours, and weekend runs. Downtown bus tunnel hours will be reduced to 5 a.m.-7 p.m. (was 11 p.m.) weekdays, with reduced Saturday hours and closure on Sundays.

   By June 2001, a total of 1.1 million annual bus service hours would be cut from the current 3.3 million annual hours. ACCESS service for the elderly and handicapped would be reduced to comply with minimum federal standards. Decreased farebox and grant revenues could affect other programs and projects.

   "Under the law, funds have a dedicated use and cannot be moved from one program to another to cover the loss of funds," said Sims. "That is why these three areas will be reduced: voters repealed the revenues that funded them."

   Sims said County staff had worked since July to prepare the alternative budget, in case I-695 passed. The revised budget includes use of sales tax reserves as a mitigation tool to blunt the first-year effects of the funding reductions, as well as ongoing long-range impacts.

   "While this could be accomplished by increasing property tax collections for 2000 to the allowable 106 percent growth level, I have not chosen to utilize that approach," said Sims. "I propose to hold the property tax to the same 103.5 percent level proposed last month, which would be effective on December 31, 1999."