October 30, 2015 by Toni Nelson
Budgets and Budgeting
The recent MRSC webinar, The Budget Process: Strategies for Success, reviewed the statutory requirements for budgeting by local government entities across the state. This webinar spurred numerous inquiries here at MRSC, and the one question asked by a variety of jurisdictions was, “how many public hearings are required for the budget process?” The answer depends on government type, and below is a brief guide to help you understand the requirements for your particular jurisdiction.
Public Hearing for Setting Property Tax Levy
The one common denominator for all local governments that impose regular property tax levies is that you will be required to hold a public hearing on the setting of your levy (RCW 84.55.120). This is, technically, not a hearing on the budget, but it directly relates to budgetary matters.
This hearing must consider, for purposes of the coming year’s budget, revenue sources, including possible increases in property tax revenues. Local governments may choose to pass at the same meeting an ordinance or resolution authorizing a property tax increase in terms of dollars and percent, to comply with Referendum 47. Keep in mind that the deadline for adoption of a property tax levy and certification to the county assessor is November 30.
Public Hearings for Budgets
City and Town Requirements
The statutes governing budgets for cities and towns (RCW 35.33.057; 35.34.090(2); 35A.33.055; 35A.34.090(2)) require that they must hold public hearings on the preliminary budget prior to the hearing on the final budget.
Prior to the final hearing on the budget, the legislative body or a committee thereof shall schedule hearings on the budget or parts thereof, and may require the presence of department heads to give information regarding estimates and programs. [Emphasis added, note plural.]
The statutes do not specify a specific number of hearings that must be held but it has long been the opinion of MRSC that because the statute refers to “hearings” in the plural that it implies there should be more than one. The statute additionally states that the hearings shall be “on the budget or parts thereof,” which allows cities and towns to use the property tax hearing to fulfill one of the preliminary hearing requirements. With the utilization of the property tax hearing as one of the preliminary hearings, there would be one remaining preliminary hearing to meet the intent of the statute. Typically, these preliminary budget hearings are held sometime during the month of November.
Additionally, the city or town clerk must publish notice that the preliminary budget has been filed, and publish a notice of public hearing on the final budget once a week for two consecutive weeks in the jurisdiction’s official newspaper (RCW 35.33.061; 35.34.100; 35A.33.060; 35A.34.100).
The public hearing for the final budget must take place on or before the first Monday in December. That date is December 7th this year (RCW 35.33.071; 35.34.110; 35A.33.070; 35A.34.110). The final hearing may be continued from day-to-day, but not to go beyond the 25th day prior to next fiscal year. Interestingly, the date that the first Monday falls on this year is also the same date as the final budget hearing continuation deadline. For those of you who feel that your budget hearing may run longer than one day, you should start your final budget hearing prior to December 7th.
County and Port District Requirements
The statutes governing budgets for counties (RCW 36.40.060) and port districts (RCW 53.35.020) state that the commissioners must publish notice that the preliminary budget has been prepared, filed, and is available to the public, but you will note that there is no requirement to hold a public hearing on the preliminary budget.
RCW 36.40.060 requires that counties publish the notice of public hearing on the final budget once a week for two consecutive weeks in the county’s official newspaper, and RCW 53.35.020 requires that port districts publish that notice in a legal newspaper of the district, although if there is none, in any newspaper of general circulation in the county. The first publication to not to be less than nine days nor more than 20 days prior to the date of the hearing.
For counties, the public hearing for the final budget must be held by on or before the first Monday in October (RCW 36.40.070) or, alternatively, on the first Monday in December (RCW 36.40.071). It should be noted that counties may continue the final budget hearing day-to-day, however they cannot exceed five days.
For port districts, the public hearing for the final budget must be held not earlier than September 15th and not later than the first Tuesday following the first Monday in October (RCW 53.35.030) or, alternatively, prior to the first Monday in December (RCW 53.35.045).
Special Purpose Districts Requirements (Other than Port Districts)
Some special purpose districts, such as hospital districts (RCW 70.44.060(6)) and public utility districts (RCW 54.16.080), must hold a public hearing on the proposed budget, but not on the “final” budget. Prior to the hearing (set within the times specified in those statutes), notice of the proposed budget must be published at least once a week for two consecutive weeks in a newspaper of general circulation within the county in which the district is located. After conclusion of the hearing, the district must adopt the final budget.
Though a public hearing is not required for a majority of special districts in the state, MRSC recommends that all special districts hold at least one hearing on their budget.