Following publication of a story July 5 on a proposed property tax levy to aid Kitsap’s veterans and non-veteran homeless, I heard from Abby Burlingame, who challenged Kitsap County’s actions related to its Veterans Assistance Fund over the past two years.
Burlingame, who ran against incumbent Commissioner Josh Brown in 2010, said, “During the campaign I raised concerns that the county was borrowing money from that fund to balance their budget. I would like to know if they paid it back. Was that question asked during your interview? If that question was not asked, I would like to know why not.”
I did not ask that question as I interviewed Brown for the recent article. But in response to Burlingame’s questions, I called Brown last week and a got a few answers to some questions she raised.
First, a little background. The county under state law collects and distributes money on behalf of indigent veterans. In the grand scheme of things, it’s not much, 1 and 1/8 cents per $1,000 of assessed value. But before 2006, the county didn’t have a systematic way of getting the money to veterans. That was done informally, through the local Veterans of Foreign Wars.
“By 2005, over $1 million had accrued in the fund because it had been spending less than what it had been taking in,” said Leif Bentsen, who works for the county part-time coordinating the Veterans Assistance Program.
The fund was then handled by the auditor’s office. In 2006 the board of county commissions assumed authority of the fund and turned the administration over to the department of personnel & human services. In December 2006, under the same state law, the Kitsap County Veterans Advisory Board was created.
“When my department took it over,” said Bentsen, “we realized that 1) having the money sitting in the bank wasn’t helping veterans; and 2) many vets-in-need were slipping through cracks under the previous system. Part of the problem was that the majority of veterans didn’t know that it even existed, including myself until I was given the responsibility of overseeing it and organizing the new board.”
By 2009, as the recession was raging full blast, the veteran’s fund still was underspent. It had a balance of $900,000 and the program that year had a projected budget of about half that amount. The county technically didn’t “borrow” money from the fund, but state law allows local governments to lower the amount collected when the balance in the fund exceeds the total amount that could be collected, in this case, $320,000 in 2009.
“It allows us to take that $320,000 and apply it to our general fund program, 70 percent of which is criminal justice,” Brown said at the time. “If we didn’t dip into these reserves this one time, we would need to cut another $320,000 from the general fund.”
That’s because the county is limited as to how much it can raise taxes in any given year to 1 percent over the previous year (not counting new construction). The net effect, as Burlingame points out, was $320,000 less for the veterans fund and $320,000 more for the general fund.
This February, Brown backed proposed legislation that would have separated the veterans fund levy from the general fund levy. The effect, said Brown and legislators who supported the bill, would be to eliminate competition between the two funds. With the veterans fund tax as a stand-alone, there would be no more of the push-me-pull-you syndrome. Money for veterans could be collected and the county could collect the equivalent $320,000, or whatever it would be in that year, for the general fund. And if you said that amounts to a tax increase, you are correct.
Burlingame wanted to know why, if the veterans fund was so flush that the county could tap it in 2009, there is now a proposal on the table to implement a separate levy specifically for homeless vets and other homeless people. Revenue from the levy would be split 50/50 between vets and non-vets. Advisory boards for each group would make recommendations about allocation of funds.
She also wanted to know, now that the veterans are apparently in such dire need, if the county intends to replenish the $320,000.
“The reason I mention this is not to have any kind of vindication on the issue, it is because our budget is in serious jeopardy,” Burlingame wrote to me in an email. “Our county commissioners continually make contradictory statements regarding the condition of our budget and The Sun allows them to gloss over the ramifications of those choices. While reporters may recognize these transfers of money when they happen, they never address how those previous decisions end up affecting people like the veterans in the future. They never attach responsibility to the politicians who made the decision and said everything would be fine.”
So here are the questions I asked Brown, with his responses.
– In 2009 the board eliminated collections to the
Veterans Assistance Fund for one year. Do you feel any sense of
responsibility for the fact that the county’s veterans assistance
program expenses now exceed revenues?
“I guess I don’t look at it that way,” said Brown, who elaborated at length about the context in which that decision was made.
In the first place, said Brown, the Veterans Assistance Fund was being underutilized when he took office in 2007. Informal distribution through the VFW worked in previous years, but as new generations of soldiers returned home from service, they did not so much connect with that organization. The goal of county officials when Brown arrived was to get the funds out into circulation on behalf of vets. Brown didn’t claim credit for the effort, but he did support it. His own family has military ties, and he is a strong supporter of veterans, he said.
“It’s been just a phenomenal success,” Brown said. “And today, we are helping many more vets than we did in the past.
That’s one of the reasons the fund balance is down. County and local social service workers became better at identifying and connecting with veterans in need.
“In a way we’re a bit of victims of our own success,” Brown said.
The second point of context was the state of the economy during late 2009, when the county and other public agencies were facing unprecedented funding shortfalls. Brown described revenues at the time as “a falling knife.”
“Sale tax revenues were dropping precipitously. We were dealing with a major financial crisis, not just as a nation but locally,” Brown said.
The board weighed the fact that the veterans fund had nearly $1 million, for a budget of around $400,000, as compared to what had been whittled down to a $4 million reserve in the in the general fund balance. To put that in context, county general fund revenues in 2007, when Brown took office, were about $86 million, he said. They’re now down to $78 million, and the reserve fund has been built up to $7 million. In 2009, the board of commissioners was worried about exhausting its reserve fund. So they chose to use the veterans fund to help balance the budget.
“This was not a decision the commissioners made lightly,” Brown said.
– Now that the economy has more or less stabilized (if not recovered) why wouldn’t the board consider reimbursing the veterans fund, as Burlingame has suggested, for the amount it was unable to collect in 2009, about $320,000?
Brown says that would be a stopgap measure. At the current rate of consumption, $320,000 would last about 8 months.
“I concede there’d be 8 more months of funds,” Brown said, but he denies the action taken in 2009 caused the problems the fund is having today.
Were the board to consider making the transfer, Brown said, it would force a choice between shoring up the veterans fund and cutting essential services, like law enforcement. In the long run, it would not solve the issue of sustainable funding for vets, Brown said.
The vets levy, however, has been successful in King County and Brown thinks it could help address the sustainability problem here. Although not openly endorsing the proposal, Brown said, he’s open to discussing its merits, despite the fact it involves the dreaded “T” word.
– The bill separating the veterans fund from the general fund would have prevented the board from making the budget shift in 2009. Earlier this year, you seemed to favor what you described as elimination of competition between the funds, and yet the law as it is helped you balance the budget in 2009. Can you comment on this apparent conflict?
Brown reiterated his goal, and the goal of county veterans advocates, is to provide sustainable funding for veterans. The bill, which didn’t make it out of committee, would have helped do so by protecting the fund from fluctuations in the general fund.
The bill would have allowed for a small — Brown emphasizes — tax increase, because the money now going to veterans would have been taken out of the general fund maximum in any given year, essential creating more taxing capacity. The impact to individual taxpayers would have been minimal, Brown said. For the owner of a $250,000 home, the 1 and 1/8 cents per $1,000 vets fund levy amounts to about $2.80 per year.
Had the law passed, said Brown, he would have pushed — and still may — for a “council-matic” increase in the vets levy. Brown suggested a penny per $1,000 increase, or an additional $2.50 per year on the same $250,000 home. That would generate about $300,000, which would have a substantial impact on the fund, Brown said, adding it’s the least we can do for our vets.