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2020 Budget Suggestions is Here!


July 29, 2019 by Toni Nelson
Category: Budgets and Budgeting

2020 Budget Suggestions is Here!

By Toni Nelson and Steve Hawley

Well, it’s that time of year again — budget season! To assist with your budgeting process, MRSC has just published our annual 2020 Budget Suggestions publication for cities and counties. This is the 76th anniversary of Budget Suggestions, and we’ve combed through state population and economic data, as well as the state operating budget and new legislation, in order to make your jobs a little bit easier.

Highlights

Here are some of the highlights of the 2020 edition.

Overview of the budget process

We’ve included key statutory deadlines for cities and counties, as well as information on budget hearings and key dates for getting voted revenue measures on the ballot. For instance, if you want a sales tax to take effect at any point during 2020, it must appear before voters no later than the February 2020 special election, which means you must file the resolution with the county auditor no later than December 13, 2019!

Analysis of new legislation

We’ve included information about a few recent bills that might impact your budgets, including:

  • Changes to the use of real estate excise tax (“REET 2”) revenues for homelessness and affordable housing;
  • A new 20-year affordable housing sales tax credit that requires cities and counties to act quickly;
  • Amendments to the pre-LEOFF fire pension levy for certain cities;
  • Temporary extension of the streamlined sales tax (SST) mitigation payments for those cities most impacted;
  • An increase in the county E-911 sales tax authority from 0.1% to 0.2%; and
  • An increase in the state minimum wage from $12.00 to $13.50 per hour.

Discussion of I-976 regarding vehicle license fees

I-976 is the only initiative on the ballot in November: If passed, it would have a major impact on local and state budgets. The initiative would limit motor vehicle license fees (car tabs) to $30 per year, repeal the authority of transportation benefit districts (TBDs) to impose vehicle license fees, and make other changes to the vehicle license fee system. According to our data, there are currently 60 cities that have established TBD vehicle license fees.

Economic and population data

This includes an overview of the state and national economies, as well as the current status of the Consumer Price Index and the Implicit Price Deflator (IPD). It appears the IPD is safely above 1% for 2019, which means local governments with a population of 10,000 or more should not need a resolution of substantial need this year — but we’ll let you know once the official number is calculated on September 25.

Per capita distribution estimates

For those revenues that are distributed on a strictly per capita (population) basis, we have provided per capita distribution estimates. Multiply these factors by your jurisdiction’s population to get your estimated distribution, or refer to our State Shared Revenue Estimator where we’ve done the work for you! However, please note that these are projections only. In particular, motor vehicle fuel taxes (MVFT) and liquor excise taxes depend upon gallons sold at the pump and actual liquor sales. Gasoline sales for 2019 have come in lower than we projected last year, in large part due to the February snowstorms that significantly impacted the most populous parts of the state.

Other Budgeting Resources

In addition to 2020 Budget Suggestions, we’ve got a lot of other budget-related materials on the MRSC website. In particular, see our:

  • City Revenue Guide and County Revenue Guide — Recently updated, expanded, and re-published, the guides contain detailed guidance on property taxes, sales taxes, and a wide variety of other revenue sources and options.
  • Financial Policies Tool Kit — Our online tool kit has expanded over the past two years to address financial policy areas such as fund balance, reserves, cost allocation, debt management, investments, and other policy areas that have a fiscal impact.
  • Tax and Population Data — The budget process is data-driven, and to that end we have expanded our population, property tax, and sales tax data to include historical data for each city and county going back to 2010, as well as local sales tax rates and components showing where your local sales taxes are going.

You can view all of our budget-related materials at mrsc.org/budgeting.

If you have any questions or feedback on Budget Suggestions or other financial topics, please let us know! You can contact our financial consultant, Toni Nelson, at tnelson@mrsc.org.


MRSC is a private nonprofit organization serving local governments in Washington State. Eligible government agencies in Washington State may use our free, one-on-one Ask MRSC service to get answers to legal, policy, or financial questions.

About Toni Nelson

Toni has over 24 years of experience with Local Government finance and budgeting. Toni's area of expertise include "Cash Basis" accounting and reporting, budgeting, audit prep and the financial issues impacting small local government.

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