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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

County sees deficit next year

Spokane County will have to tighten its belt next year.

Though revenues are projected to swell by as much as $4 million next year, payroll is expected to grow by $8 million.

“It looks like a $3 million-plus figure we have to make-up,” said County Commissioner Todd Mielke. “We’ll do it through a combination of service revisions and to a certain extent dipping into reserves.”

“We’re not out of balance. It’s illegal to be out of balance,” emphasized Spokane County CEO Marshall Farnell, who added that projections are still being updated.

Still he acknowledged that if spending continues to outpace tax revenue increases, something will have to give.

“It wouldn’t surprise me if we have to burn down some of our reserves,” Farnell said.

The county has a budget reserve of $14 million – about 12 percent of its $122 million 2005 budget.

“It’s excellent. Most counties and cities don’t even come close to that,” he said.

Farnell said he is unsure how much the county will have at the end of this year, but said the reserve should always be at least 10 percent of the county’s budget.

Spokane County conducts its budget process differently than the city of Spokane, Farnell explained.

Department heads are given target budgets to meet rather than told to submit a desired spending plan.

Those target budgets will be determined in September.

Increased payroll costs are a concern, Farnell said.

About $3.6 million of the projected payroll increase is due to rising medical costs and increased state requirements for retirement pension funding, Farnell said. The county also gave employees 2 percent pay raises.

Mielke noted that the city of Spokane gave its employees 5 percent raises.

The county has been spending more this year than it budgeted, said Commissioner Mark Richard, “primarily to patch holes in the jail.”

Commissioners added 14 new positions this year. Eight of those jobs went to the jail, where the overtime budget has been ballooning.

Sales tax revenue this year has outpaced projections, Farnell said. And new construction will boost the county’s property tax revenue, too.

But increased tax collections can’t keep pace with the ever-increasing costs of county business.

“We focus on how to decrease our expenditures. There’s never enough revenue,” said Farnell, who emphasized how tight a ship the county is.

“I answer my own phone calls. I don’t even have a secretary,” he said. “The rug on my floor came from the (old) TB hospital.”