Guest: Snohomish County’s finances – Fact or Fiction?

November 2015 is an important month for Snohomish County citizens.

First we have an election and November 3rd that will determine how we as a county move forward over the next 4 years.

And secondly, we have the 2016 proposed budget hearings. Both of these two items will determine our future and it is imperative that you educate yourself and be involved.
Hopefully by now you have marked your ballots and sent in your votes.

It is your duty to do so.

Critical is the election of the County Executive, for this office has been mired in controversy for over 6 years.

Most recently the controversy has been over the murky financial situation of the county.

You can search the internet and local newspapers for stories that seem to contradict themselves. Our current Executive Lovick has been on both sides – the budget is good, and then not good.

So which is it? How are we as citizens supposed to know? First and foremost you need a little government budget 101.
First, you need to understand that the county budget is not unlike most budgets. It’s a plan. It is a plan of how we will spend money for the coming year. It contains both revenues and expenditures. The revenues are in most cases projections – in some cases you can project pretty closely – property taxes are a good example of that.

In other cases, it is more difficult – number of building permits submitted would be an example. Revenues come from several sources – most of county government though is funded by taxes and put into the General Fund – aka fund 002. This fund is akin to the operating fund of the county. When the economy is good, people are buying homes, new homes are being built the revenue is good as taxes are being paid and increasing with the economy. When the economy goes down, so do taxes. Less taxes means less money to spend.

Now this is a simplistic explanation but the point is that there is a finite amount of money to be spent, and with the passage of a budget you need to realize that the projections of revenue in the budget may not come to fruition. And if it does not, what do we do?
We have obtained information that the county has, and may still be, using liquidity loans in order to meet payroll.

What is a liquidity loan? Well, if you do not have the money in the bank to pay your bills, then you need to get it from somewhere else.

In most cases you can wait until the revenues come in, but there are 2 times a month that there must be enough money to pay employees, and there is evidence that money has been borrowed from other funds in order to meet payroll.

Of concern is where these funds have been borrowed from, and the frequency of these loans. Also of concern is the reality that funding for government is dwindling and the overhead costs are climbing, with the biggest overhead cost being employees and benefits.
We will be digging into this further in the coming month and as the budget progresses through the process to final adoption.