MRSC's 90th Anniversary Celebration: How Local Governments, Partners Helped MRSC Through Challenging Times

This is the second blog in our 90th anniversary content series, which discusses milestones in MRSC’s nine-decade history. Note that this blog has been updated since it was first published to better reflect how MRSC is funded via Washington State’s liquor taxation and revenue structures.

In 2017, just seven years into her tenure as the Executive Director for Municipal Research and Services Center (MRSC), Tracy Burrows had a nasty surprise when the Washington State Senate supplemental budget proposed zeroing out MRSC’s funding.

“I really had to start making a plan A and a plan B,” said Tracy, noting that, at the time, 80% of the budget came from a single state contract. “If we get no money from the legislature, what will MRSC look like? And it wasn't very pretty.”

It might come as a surprise to some that MRSC has, several times, weathered severe threats to its very existence. In the second of our series celebrating MRSC’s 90th anniversary, this blog takes a look at the funding crisis that have hit MRSC, how local governments and institutional partners stepped up to help when called, and how we are in a stronger position than ever as we move forward.

MRSC Funding Cut Through Tax Abolishment

Twice, MRSC’s funding source has been collateral damage, caught up in the sweeping change of citizens’ initiatives. But, to understand how that happened, it helps to know how it has been historically funded.

In 1969, MRSC (formerly the University of Washington Bureau of Governmental Services) became an independent nonprofit, tasked with providing research and services to cities and towns and funded via city/town motor vehicle excise tax (MVET) proceeds.

This era of steady funding continued until 1999, when the voters passed Initiative 695 (I-695), abolishing the MVET tax and the revenue stream that went along with it. Although I-695 was later found unconstitutional, the legislature repealed the tax and replaced it with a $30 license fee.

Overnight, MRSC’s budget was in tatters.

“There were some very difficult days. I was very concerned [about having a job to come to],” says Paul Sullivan, who worked as a legal consultant from 1999 to 2019.

MRSC used every channel it could to encourage its advocates to lobby their state legislators in support of a joint MRSC/Washington City-County Management Association proposal that would replace lost MVET funding with a portion of the distribution of liquor sales profits to cities/towns. Many organizations formally supported such an effort, including the state chapter of The American Public Works Association, the Washington State Association of Municipal Attorneys, and the Association of Washington Cities, to name a few.

Rich Yukubousky, executive director from 1991 to 2011, remembers the pivotal role local governments played in this effort. He recalls one meeting with a legislator who had a reputation for being tough on organizations and agencies that were facing budget cuts. As he headed for Olympia, he was dreading the meeting.

“I went into her office, and I started to give my spiel, and she said, ‘Stop. I've got 16 cities and towns in my district, and every one of them contacted me. You got my vote,’” Rich said with a laugh.

With the help of supporters, SB 6357 passed in 2000, which diverted a small share of liquor profits distributed annually to cities, towns, and counties to fund MRSC’s services. Liquor sales profits “may seem to be an odd way to fund [MRSC], but it was chosen because it was considered to be a local source of revenue,” notes Rich.

MRSC Funding Indirectly Impacted a Second Time

For the first decade of the new millennium, MRSC moved forward with this funding source while also making serious investments in a digital future. The organization moved library resources and the inquiry database online and built an ambitious website devoted to covering all aspects of Washington local government.

However, a new shadow passed over MRSC in 2010 when two initiatives tied to liquor privatization were introduced but ultimately failed at the ballot box. A short article in the 2010 Fall/Winter issue of Municipal Research News breathes this sigh of relief:

We received many calls and emails expressing concerns about the future of MRSC and its staff if one or both of these initiatives passed. It seems clear that the programs and services we offer are valued by local government officials and staffs.

But liquor privatization reappeared in 2011 with I-1183, and this time the initiative passed. The state’s liquor taxation and revenue structures changed as a result, but ultimately MRSC’s portion of liquor funding was preserved.

Still there was an unseen benefit to be found; namely, that when faced with a crisis, MRSC can muster supporters from across the state. Lynn Nordby, a management consultant who worked at MRSC from 2008 to 2018, shared the story of a state legislator with no local government experience and who didn't know what MRSC was, propose that it be defunded.

“Of course,” says Lynn, “municipalities around the state rose up in support, and that particular legislator was given kind of a schooling on the benefit that [MRSC] provided.”

Learning from Adversity

After decades of depending on a sole source of funding, it became clear that MRSC needed to diversify its income stream. In 2007, a small appropriation from the state legislature opened up MRSC’s research program to special purpose districts (SPDs), but funding to support this effort was cut in 2009. Rather than not serve SPDs at all, MRSC contracted directly with SPD affinity groups, developing small but reliable funding streams.

MRSC also investigated ways to earn money. In 2007, it took over a small works rosters program from the city of Lynnwood and slowly built it over time. Today, MRSC Rosters is used by 743 Washington public agencies, includes 6,646 registered businesses, and has become the new official statewide small works roster.

Further, MRSC began building a training program as early as 2010. At first, the focus was on in-person training, primarily directed at specific public works or legal topics, but it began to branch out into webinars as early as 2013.

“We were on the cutting edge in the webinar field, doing maybe two or three a year. And then, within three years we had a webinar training program going,” said Tracy. Webinar content was considered valuable enough that when MRSC began to charge a nominal fee for attendance, "most were happy to pay," she continued.

Our training program has since become a huge success, attracting over 7,800 attendees and generating $232,095 in fiscal year 2023-24.

Another Threat but MRSC Was Ready...

While MRSC was steadily diversifying its revenue sources and rolling out new services, the final scare came in 2016, when the Washington State Senate’s supplemental budget proposed eliminating MRSC’s funding. As with 2007 and 2011, MRSC’s supporters got busy.

“As soon as people heard that this [funding cut] was potentially happening, the legislators really got inundated with calls, visits, and so on,” said Tracy.

MRSC called for testimonials to present to the legislature, collecting more than 2,000 heartfelt responses. This one, from Tom Trulove, formerly the Mayor of Cheney, sums up much of what other respondents said:

Without MRSC, our legal bill would probably triple. Our success in dealing with state rules would greatly diminish, we would be unable to forecast next year's budget features, like state shared revenues, and we would not be kept up to date on changes in laws and what we need to do to comply.

On Solid Footing

Today, MRSC employes 30 full-time staff from across the state and offers a suite of services, including Ask MRSC; our ‘government Google’ website; robust online, in-person, and on-demand trainings; the small works rosters, and administrative support services. By introducing new services that help local government be more efficient — such as the electronic bidding program — we’ve further diversified our revenue stream, making us far less reliant on a single source of income.

As MRSC gears up to help local governments tackle today’s challenges, like artificial intelligence, or long-time concerns, like homelessness, we are heartened to receive testimonials like the one from Mike Rizzitiello, City Administrator of College Place, which lets us know we are still meeting the goal set out way back in 1934:

“MRSC provides great bang for the tax dollar from the state and is critical for small jurisdictions that don’t have the staff to do research. … As far as I am concerned, the state should pass a constitutional amendment to never stop funding MRSC,” he said.