Journal of the San Juan Islands


How are we doing? Better than one might think | Guest Column

March 1, 2013 · Updated 6:44 PM

San Juan County Auditor Milene Henley / Journal file photo

By F. Milene Henley, county audtior

I’ve often waited in Council Chambers while some room-filling discussion of land use or roads projects or open space programs finishes up. Then when I step up to talk about the county budget, the room clears like a bad wind had just passed through.

I’m pretty sure it’s not because no one cares about the budget. But listening to someone talk about the budget — where’s the drama in that?

2012 was not a dramatic year for San Juan County. Our unemployment did not go away, our housing inventory did not clear, and our county budget did not magically balance. But in several sectors, signs of recovery were apparent.

Interestingly, the sectors which are leading us out of recovery are the same ones that led us in. In April of 2009, when the county committed to a $1 million dollar budget reduction, the problem was that although the county’s largest sources of revenue – sales tax and property tax – appeared stable, what was referred to then as “the other third” of revenues were failing to perform.

At that time, property tax and sales tax each represented about one-third of the county’s general fund revenue, with the “other third” comprised of a variety of miscellaneous revenues, many of them service-based. Charges for goods and services, for example, as well as licenses and permits, fines and forfeits, and interest all fall into this category.

Later in 2009, sales tax went the way of the other third, ultimately dropping about 13 percent from the previous year, a dip from which it has yet to recover. Property taxes — our most reliable source of revenue — came in as usual, but most other revenue sources dipped, many to their lowest point in years.

Since 2009, county revenues have foundered. Except for voter-approved increases in property tax and sales tax, revenues have reflected the global and local economy, with loss of jobs, sharp drop in home sales and construction, and little economic growth, even after the recession officially ended in June of 2009.

2012, by comparison, brought welcome relief. Property tax collections continued strong, and sales taxes crept up a bit. But the real news was in the “other third.” It wasn’t all good news.

Interest income, with artificially low rates and less cash to invest, continued to drop, and fines and forfeits, always a small source of revenue, dropped again. But the revenue sources that suggest economic growth improved.

In particular, licenses, permits, and charges for goods and services in the Community Development and Planning Department bested last year’s results by almost 35 percent. In addition, intergovernmental revenue to the general fund hit its highest point ever.

Outside the general fund, some special revenue sources also showed significant improvements. Lodging taxes increased by 15 percent, and Land Bank real estate excise taxes by a staggering 60 percent. Now that’s drama!

Drama or not, 2012 ended on an upbeat, and I am cautiously optimistic that these trends will continue into 2013. So, if you ever have the chance to hear me talk about the budget, slow down and listen – it might be more interesting than you think.



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