1. Kitsap County Who We Are Where We Are… Where We’re Going… How We’ll Get There

2. Who We Are … Our Mission Kitsap County Government exists to protect and promote the safety, health and welfare of our citizens in an efficient, accessible and effective manner.

3. Our Vision A unique and growing community, widely known for:  Safe and Healthy Communities  Protected Natural Resources and Systems  Thriving Local Economy  Inclusive Government  Effective and Efficient County Services

4. Regional Functions Required By Law Jail (pretrial felony detention) District Court (small claims) Public Defender (felonies) Roads and Infrastructure Substance Abuse services Prosecutor (felonies) Land use planning Disability services County Commissioners Sheriff Superior Court Juvenile Justice Public Health Elections Licensing Treasurer Coroner Records Auditor Clerk (Superior Court

5. Local Services Required By Law Prosecuting/Public Defense (misdemeanors) District Court (misdemeanors) Jail (misdemeanors) Permitting Sheriff

6. Discretionary (Elective) Spending Economic Development (Regional) Animal Control (Regional) Parks (Regional and Local)

7. Frequently Asked Questions (FAQ) Interlaced in this presentation will be some frequently asked questions (FAQ). These questions deal with:  Accounting structures and restrictions on revenues and expenditures  Where the challenges are right now  Unrestricted taxes and assessed values

8. FAQ # 1 Q. Why is it so hard to cut a few million dollars when your budget is over $326 million? Surely it can’t be that hard to make a 1% cut? A. The answer lies in how our budget is formed. We have over 100 funds and most of the spending authority assigned to these funds is restricted. Consider each fund as a checkbook where checks cannot be written from one fund to another

9. A Little About County Fund Structure

10. FAQ # 2 Q.How can you build a new building, buy park or open space property at the same time you’re have a budget crisis? A.This relates to FAQ #1 and is a “color of money issue.” Special Revenue funds are so designated because the revenues received into them can only be spent on specific things. A.Conservation Futures Fund (a $0.04/$1,000 property tax) can only buy open space and park property B.Real Estate Excise Tax (a 1.78% excise tax on property sales) can only be spent on capital projects

11. FAQ # 3 Q. So where is the budget problem and why is it happening? A. Our current challenge lies in the county’s General Fund and we will have similar challenges in the Road fund in the near future. It’s happening primarily for two reasons; one is that certain revenue streams are limited in growth, and the other is that most of our expenditures are not restricted in their growth.

12. What is the General Fund? Finances ordinary operations of the county  Law & Justice  General Government  Community Services  Health & Human Services Main Revenue Sources  Taxes  Licenses & Permits  Intergovernmental  Charges for Services  Fines and Forfeits

13. Why we focus on the General Fund This is the fund that supports…  All elected functions.  All government functions that need subsidies from tax revenues except roads.  All functions, outside of Public Works, that the public thinks about when thinking of county services.  Single largest fund

14. The Challenge Revenues are increasing at an annual rate of about 4.0% Expenditures are increasing at an annual rate of about 6.0% Given the above; we must  Become more efficient  Reduce expenditures  Increase revenues

15. Revenue and expense trends and comparison

16. Difference Between Revenues and Expenditures

17. How we get our funding General Property Taxes Sales and Use Taxes Other Taxes Intergovernmental Revenues Charges for Services Fines and Forfeits Miscellaneous Other Sources

18. How We Get It

19. Property Tax to Sales Tax Ratio Kitsap County is 1.1 : 1 King County is 4.5 : 1 Snohomish County is 2.4 : 1 Pierce County is 2.6 : 1 Clark County is 1.9 : 1 Thruston is 2.6 : 1 State Average is 2.8 : 1 Kitsap County is highly dependent on Sales Tax and we have a weak property tax base because we have no taxed industrialized tax base... Our industrial tax base is exempt from taxes. Is this a Problem?

20. FAQ # 4 & 5 Q5 I send all my property taxes to the county, does the county get it all? A. No, these taxes are distributed between many different taxing districts including schools, fire and EMS, libraries, the state, and others Q4 The Assessor just sent me my new assessed value, why does the county keep increasing my property taxes? A. This is a recurring theme of letters to the editor but is it true? Just because the assessed value increased does not mean that taxes on existing property will increase.

21. Property Tax facts Our single largest source of revenue The tax base can increase by no more than 1.0% without voter approval (but how does that work?) Depending on where you live,  The County General Fund receives about 9% of your total property tax bill  More than 50% of your property taxes are dedicated to education  The state receives more than 20% of your property taxes (not true in most states)

22. Distribution of each Property Tax Dollar (Unincorporated Kitsap County) 10.3¢ County General 13.3¢ County Roads 24.6¢ State General (Education) 29.7¢ Local Schools 16.3¢ Fire/EMS 5.8¢ All Others* * All Others Includes: Port Districts Library Districts Parks Districts PUD/Water/Sewer Districts

23. Distribution of each Property Tax Dollar (Cities) 9.9¢ County General 19.6¢ City 23.6¢ State General (Education) 28.4¢ Local Schools 9.1¢ Fire/EMS 9.4¢ All Others* * All Others Includes: Port Districts Library Districts Parks Districts PUD/Water/Sewer Districts

24. Voter Approved Initiatives Initiative 747 and Referendum 47  Property tax initiatives overwhelmingly passed by the electorate Initiative 695 and Referendum 49  Motor vehicle excise tax overwhelmingly passed by the electorate

25. Effect of initiative 747 (Revenue Lost)

26. Effect of initiative 695 (Revenue Lost)

27. How I-747 works

28. Let’s say Kitsap County has only four (4) houses. A. B. C.D.

29. How I-747 works (Median value home in unincorporated area)

30. Are property taxes really going up? 15.5% Increase 2.3% Decrease

31. Are property taxes really going up? 17.7% Increase 7.8% Increase

32. Are property taxes really going up?

34. The Property Tax Bargain

35. Property Tax How much did the $4.5 billion revalued tax base in 2006 bring in to the Kitsap County General Fund in 2007?  Answer: 1.0% of 2006’s Levied Taxes  1.0% X $25,320,388 = $253,204  There are 113,483 tax parcels  Or about $2.23 increase per parcel

36. FAQ # 6 Q. How are General Fund monies spent? A. We can look at how we spend our funds in different ways A. By object of expenditure (Salaries, benefits, supplies, services, etc.) B. By program (Law & justice, community services, health & human services, general government) C. By function (Courts, law enforcement, planning, recreation, etc.)

37. How We Spend It (by Object) Salaries (50%) Benefits (18%) Supplies (3%) Services (15%) Intergovernmental (2%) Capital Outlay (2%) Interfund Payments (9%) Others (1%)

38. How We Spend It…

39. The Tax Subsidies (By Function) * Includes Kitsap County’s contribution to the Health District ($1.45 million)

40. The Court System

41. General Government

42. What We Are Doing… Streamlining Services  Combining Services (Where and When Applicable) Hiring Freeze Creating Enterprise Funding Opportunities Adjusting charges for services where appropriate Personnel Review  Pay Adjustments/Freezes – Where applicable  Reduced Staffing Levels Education campaign  Our employees  The public

43. FAQ # 7 Q. If you’re in a hiring freeze, why are you still advertising for positions? A. There are exceptions to the hiring freeze: 1. If the position is grant funded 2. If the position is funded through a contract 3. If the position is critical to public safety There are about 60 vacancies in the General Fund, we are advertising for about 15 of them.

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