"A Reset to New Realities:" Executive’s 2011 Budget Address

September 26, 2010

Summary

"To achieve these ends, to protect these values, the people of King County need a government that is restored to sound financial footing – not one lurching from crisis to crisis. It is a budget that calls not merely for muddling through another year of cuts, but for efficiencies that can be sustained over time, so that we can stabilize county finances and provide the services the people of King County need."

Story

Mr. Chair, Councilmembers, Elected Officials, valued employees, guests:

My parents were neither rich nor poor. They were teachers.

And they often found the teachable moment in a challenge. Around our dinner table, as at tables throughout this county every night— issues were discussed and priorities were set—what we could buy, and what we could not afford – how do we provide basic comforts while protecting our future prospects in difficult times? 

The budget process we are pursuing together reminds me of those dinner table conversations—how do we assure critical basic services without sacrificing the future of our communities or our children?  How do we cope with current realities without losing sight of our aspirations and our goals?  What can we learn about ourselves—and our values—even as we make painful cuts, in the hope that we are preparing King County for brighter days.

What is sensible? What is fair? What is right? We, the people of King County, nearly two million of us now, we need well-maintained roads to drive on, and affordable transit as an alternative to driving. We need wastewater treatment, solid waste disposal, surface water management, flood protection, clean air and water, and more, if this is to stay the great place that we all chose to make our home.

As we remember our good friend Roberto Maestas, we need to elevate equity and social justice, so that those among us who have the least have the opportunity to lift themselves up. To contribute. To succeed. And, we need the public health and safety protected.

To achieve these ends, to protect these values, the people of King County need a government that is restored to sound financial footing – not one lurching from crisis to crisis.

  It is a budget that calls not merely for muddling through another year of cuts, but for efficiencies that can be sustained over time, so that we can stabilize county finances and provide the services the people of King County need.

In March I said my blueprint for reform would include three things.

First, we would partner with our communities, cities and regional governments.

In May we reached a new jail agreement with cities so that many can avoid the cost of building their own municipal jail, and together we can plan together for the future.

In June we reached agreement with cities on a regional animal services consortium that every day is improving the care of our animals.

We are moving forward with a new one-day, over-the-counter building permit review process, and proposing in this budget a shift in the practice of billing by the hour to a customer-focused flat-fee approach, working closely with Councilmember Lambert.

Just two weeks ago I completed my official visits to each of King County’s 39 cities with a trip to our most remote community, the tiny town of Skykomish. Even through they face challenges, the people of Skykomish have big plans and high hopes for their little town. Wherever I traveled in King County, through these 39 cities and all the communities between them, I’ve seen that spirit.

Second, I said we would invest in transportation infrastructure.

I’ve advocated for 520, for the viaduct replacement, and for light rail expansion.

With commitments from many regional partners, we’ve put ourselves in good position for federal funding to complete a new South Park Bridge, and I want to thank Councilmember Drago for her hard work in pushing this important project forward – as well as for showing up at the wake for the old South Park Bridge … in a feather boa.

Our Regional Transit Task Force will report in November on a new model for how we fund and deliver bus service. Let me thank those regional leaders who have invested countless hours in pursuit of fairness, efficiency, and true regional consensus. Transportation Chair Phillips, who sponsored the legislation creating the Task Force, and I know the entire council, will carefully consider their findings.

Third, I said we would protect the most vulnerable in our communities, and maintain public safety and justice.

To do this will require a spirit of common mission and shared sacrifice… and a clear choice by the public. But this budget cannot assume that voters will approve new revenues in November.

To regain sound financial footing, we must continue to bring down the growth in the cost of doing business, and create the conditions for continuous improvement – delivering services better, faster and less expensively every year.

I have balanced this budget, as the law requires.

Though this budget is balanced, it is an imperfect budget. It is an unpleasant budget. It makes reductions in critical services that I do not want to make, but which must be made in order for the budget to be in balance.

I gave agencies a starting point of 12 percent reductions across the board. We asked that 3 percent be created through efficiencies. Three percent in efficiencies is equivalent to about $20 million dollars in costs.
The budget I propose today re-bases our expenses at a new, lower level, with both efficiencies and significant service reductions.

If you adopt this approach, we can expect, under current forecasts – and forecasts of course can change – but we can expect that next year’s additional General Fund shortfall will be about $20 million dollars.

Through a program of continuous improvement that increases our productivity by 3 percent every year, we can make up about $20 million dollars every year

If we stick to this plan, if we are focused and disciplined, we can indeed create a government that is sustainable over time and that lives within its means.

To create the kind of efficiencies we need, we are turning to the ingenuity and creativity of our employees.

• Election workers figured out how to save at least $30,000, every year, by changing just one step in their processing of paper ballots that can’t go through the machines.

• The food buyer for our jail realized he could save more than $160,000 by rebidding his contracts for milk, bread and eggs.
  
• Superior Court staff are saving more than $300,000 by putting jurors on-call, rather than reimbursing them to troop down here and wait in the jury room for a call that often does not come.
  

And our new employee health care plan is creating benefit savings.

• In January we lowered the cost of generic drugs but doubled the co-pay for brand name drugs. The result: 1.5 million dollars saved in the first six months of the year.

To achieve cost savings, my staff and I are leading by example with reductions and personal sacrifice in our office. 

• In addition to cutting my own salary, I froze the salaries of my appointed staff. 

• The Executive’s office will be cut by another 12 percent.

• This comes on top of the major cuts to Executive office staffing and salaries I ordered upon taking office.

I am asking other County elected officials and our employees to share the sacrifice and help preserve services. Elected officials have joined me in freezing their pay and that of their appointed staff, and I thank them.

The council - under the leadership of Councilmember Hague – Chair of the Committee of the Whole - has adopted sweeping reforms of labor policy, with the participation of organized labor, that will help us work together to create more efficiencies.

And I have asked all employees to waive cost-of-living adjustments for next year. The first to step up was a wide cross-section of employees represented by the Washington State Council of County and City Employees – joined now by many others: jail captains; marine engineers, captains, and deckhands; and the Animal Control Officers Guild.

Just last week, our deputy prosecutors voted to forgo their COLA for 2011.

I thank all who have made, and those who will make, this sacrifice. By sharing a bit of the pain, you have made it possible to restore some cuts in your workplaces, preserving services to the public and sparing the jobs of some of your co-workers.

As other bargaining units consider this choice, I will return to the Budget Leadership team to discuss restoring those services.

We are shrinking our General Fund in real dollars, and that means cutting services and jobs. For the third year in a row, this General Fund of $613 million is smaller than the year before -- 2.3 percent less than last year and 5.6 percent less than in 2009.

This budget will eliminate 462 positions throughout County government that have provided service to the public – and that’s not counting reductions the Council will decide for the legislative branch, nor those through the transportation supplemental budget I will send to you next month.

And so the total will likely be more than 500 jobs eliminated.

Because of the hiring freeze that you and I enacted last year and carried forward this year, we can take at least half of those positions through attrition.

On top of that, however, we must still lay off 200 or more people.

Behind each number is a person – perhaps a family, a mortgage, or a child’s tuition. In this economy when one loses a job, finding another will be… a challenge.

Yet despite the tremendous progress we have made – and continue to make – with reforms to become more efficient; despite having great employees pulling together to sacrifice and innovate – for this coming year we still have a gap that can be closed only through tremendously painful cuts.

Knowing this, I convened a General Fund Cabinet, because I knew we all needed to work closely together to identify the cuts that would do the least harm.

Meeting as a group and with me individually, Council Chair Ferguson, Budget Chair Patterson, Assessor Hara, Elections Director Huff, and the four criminal justice officials – Sheriff Rahr, Prosecutor Satterberg, and Presiding Judges Hilyer and Linde – we have joined together in an unprecedented way as “One King County” – yet even these “least harmful” cuts that we have identified together will do harm. They will harm the quality of life for every resident of King County.

Once cut, these services are not coming back, unless the public restores the funding to pay for them. We are:

• Cutting 71 positions in the Sheriff’s department, including 28 of the most promising young deputies – a 20 percent reduction in patrol that will slow response to non-violent crimes and complaints in the unincorporated areas.

• Demoting 51 detectives and sergeants back to patrol means the loss of criminal intelligence, property crime investigation, regional drug task forces, regional gang task forces, and much more. 

 

• Eliminating 22 deputy prosecutors and 11 legal support staff necessarily means more, and less favorable, plea bargains, and fewer prosecutions of economic crimes, juvenile offenders and violent crimes.

• Eliminating 42 people in Superior Court and 22 in the Department of Judicial Administration will, for example, shut down three-fourths of Family Court Services, and cause families to come to court inadequately prepared.

• Eliminating 9 positions in District Court, including 6 probation officers, means drunk drivers and domestic violence offenders will go unsupervised in the community.

• Eliminating successful juvenile alternatives to incarceration will further burden public defenders, and put young offenders on home detention, on the street or, at great expense, in jail.

• Closing bookings at the Maleng Regional Justice Center will force police to spend their time as shuttle drivers, rather than as cops on the street. This will be troubling for many cities, and I know that Councilmember von Reichbauer, representing southwest King County cities, shares my concern about the impacts.

• Removing the last money for human services in the General Fund means dramatically less help for survivors of domestic violence, or victims of sexual assault. It is only with the deepest reluctance that we cut these services, which you and I worked to save last year, because they are simply not required by law.
  
  
• We are not doing right by the most vulnerable, but we are in a position where the things we know we should do are being sacrificed to preserve the things we’re required to do.

These kinds of cuts don’t make us more efficient. Many will cost us more in the long run, by shrinking the capacity of our criminal justice system, and terminating successful programs that keep our streets safer and our jail populations lower – threatening to undo years of groundbreaking work by our criminal justice officials, Councilmember Gossett, and others.

I said in March that we would not make draconian cuts like these without first asking the people: “Are you willing to forgo these services?”

To maintain just the current level of public safety, the Legislature provided counties with only one viable tool -- a sales tax for criminal justice. The public can choose in November to maintain just the current level of criminal justice services by raising revenues.

If voters approve, we can restore the public safety services that are cut here. Or, the public can choose the sharply reduced level of public safety reflected in this budget. 

Some have doubts, and I understand that. I was at a meeting at the Hobart Community Church last month. A man stood up and said, “Just cut the fluff, and fund the sheriff. Just prioritize. Problem solved.”

• We have scoured this budget line by line. This budget cuts nearly everything from the General Fund except services that are required by law, including core criminal justice services, elections, and assessments. And that’s on top of $149 million of deficits we closed in the General Fund over the past two years.

• The Strategic Plan we developed together sets clear priorities. Other services have been cut far more than public safety. Over the past decade General Fund support for Parks is down from $25 million to virtually nothing. General Fund support for human services is down from $21 million to zero.

But some have doubts. It’s easy to look at the 5-billion dollar budget and say, “Surely, somewhere in there you must be able to find money for cops.”

• What they don’t acknowledge is that in this 5-billion dollar budget, 4.4 billion is money that can’t be shifted into general operations. The fees people pay for sewage treatment can’t be used to pay for jails.
  

The biggest doubters say, “You’re just crying wolf, you have big pots of money hidden away,” and I would be grateful to anyone who can show me where those pots of money are hidden.

• The cupboards are quite bare. Most of the reserves have been used up.
  
• As I said, over the past two years the County has closed $149 million of deficits in the General Fund. So why haven’t we seen the kind of massive service cuts we face today?

• Because past councils and executives went to extraordinary lengths to keep day-to-day operations going; to protect the services on which King County residents rely every day.

• We did it by drawing down our reserves. We raided the piggy-bank. The one-time savings were identified. The low-hanging fruit was picked.

• Of any reserves of substance, you will find only two pools of money – the 6 percent unreserved fund balance, and the rainy-day emergency fund that you and I set up a few years ago.

• These reserves are what assure the triple-A bond ratings that you have helped the county earn, and that save on the cost of borrowed money.  Spending these last reserves now would only increase our costs and – importantly – would stave off these cuts only until next year. 

• No. The era of easy fixes is over.

• But you don’t have to take my word for it. Today we are launching an “open data” project through which we are not only putting this budget online, we are posting all the detailed data behind it, the same data in the same format the council uses in its deliberations. I would like to thank Councilmember Dunn for sponsoring this ordinance.

As for “crying wolf,” remember that the point of that parable is that one day the wolf did come … but no one listened.

As I said, we can re-base our budget – but it will be at a level that does not sustain the infrastructure to protect our quality of life. That is why here on the council you have put a clear choice before the public:

• If voters do not approve the sales tax, these drastic reductions in public safety will become permanent. 

• If voters say yes, we can establish a base that is sustainable at a level that preserves many of these services. We can fund the “unseen” health and safety infrastructure that we know protects quality of life and keeps the costs of services down over time.

It is often said that the budget you adopt is a statement of the values of our community. It’s a place where we can have an important conversation about our priorities and our aspirations. What do we want this place to be for our children and our grandchildren?

We need to make investments in people, infrastructure, and the institutions that keep this the kind of place that attracts business and new investment. This is a place that has given birth to Boeing, Costco, Starbucks, Microsoft and thousands of other successful companies. They were created not only from grit and drive and determination, but from the creativity and the intellectual capital that has grown up around the University of Washington and our other great institutions.

This is a diverse place, one that is more international than many in the United States, and we benefit from that tremendous energy coming to us from around the world.

We all want the same things. We all want a place that is healthy and safe, where kids can have an opportunity, regardless of the circumstances of their birth – to succeed based on their merit, and drive, and determination.

But to have that we must maintain our basic infrastructure – not only our physical infrastructure like roads and bridges – but the human infrastructure that informs our quality of life, including public health and safety.

Just as my family did around the dinner table, when faced with tough times, we made a plan to protect our basic needs and our future prospects.

We face more tough times, but with all of us pulling together as One King County, we can emerge from this recession in a position of national and global leadership.

We can come out ahead, with our best days still before us. Healthier. Safer. More prosperous.

My best wishes to you as you take on the difficult tasks ahead, and thank you for inviting me back here today.