MAYOR: State voters, Legislature have taken away much of Des Moines’ income

EDITOR’S NOTE: The following is a letter released Nov. 24, 2015 by Des Moines Mayor Dave Kaplan:

State voters, Legislature have taken away much of Des Moines’ income

by Mayor Dave Kaplan

For the past several months, the City Council has been working to address our long-term financial issues through the 2016 budget process.

In conjunction with our economic development efforts, which is the key to making the City financially sustainable in the long run, we are working diligently to address our long-run budget issues.

None of this has been easy. We have had an overflowing crowd of residents come down to tell us they don’t want to cut to services – most notably Parks, Recreation and Senior Services. We’ve had large crowds make compelling cases and outlining our need for additional police officers.

And we’ve had a few overflowing crowds come tell us not to raise their taxes.

The number of residents weighing in on the budget for 2016 has been impressive – the input greatly appreciated.

City revenues cut
It’s in the context of that feedback that we’ve tried to figure out what will work to ensure we keep Des Moines an incredible place to live, and yet meet our obligations for financial sustainability.

The last Washington State Auditor’s report (for 2013) essentially demanded that we get this done now, to ensure our sustainability.

We have been working to overcome years of impacts on the revenues our City receives, and to contain costs as best we can.

In 1999 voters across the state passed Initiative 695 that eliminated the funding source of our Sales Tax Equalization funds. That was 15 percent of the City’s total revenue.

Then in 2001 the voters statewide approved Initiative 747 that capped property tax collections to 101 percent of the prior year’s collections, except for new construction.

So, when we were collecting $2.5 million in property taxes one year, we received an additional $25,000 the following year.

That didn’t pay for the increase in utilities to the City, let alone employee cost increases in health care and COLAs, and other operating expenses.

Then the real estate market collapsed, assessed values dropped, and the City lost $3 million per year in total tax revenues (about 17 percent of operating expenditures.)

Next the Washington Legislature took away sales tax, excise tax and profits on the sale of liquor – which cities had been receiving for over 80 years.

There went approximately $400,000, or 2 percent of Des Moines’ operating revenues.

Cut city employees
Every time we lost these revenues, the City Council stepped up to make cuts to address them.

Since 1999, the City has cut employment by 30 percent and adopted a number of cost saving measures.

There is a structural deficit of about $1.7 million as a result of using one-time money from various construction projects and deferral of putting money into reserves (to replace vehicles, computers, etc.), rather than asking for more tax money from you, the people of Des Moines.

Then the economic downturn pushed the anticipation of future revenues from development out by eight to 10 years.

Encourage business
We’ve been in the process of changing our permitting processes and regulations to actually encourage businesses to locate in Des Moines, rather than the hostile environment that many developers and business people used to deal with here.

We need to build an economic base that will support the services our residents say they want, rather than having them carry the bulk of the burden. Those changes are beginning to happen, with the Sheraton Four Point Hotel, the Des Moines Creek Business Park, Wesley Homes renovation, the sale of Landmark on the Sound (old Masonic retirement home) and a number of smaller developments in our Marina District/downtown.

Things are beginning to happen that will put us on the right path to sustainability.

However, in the end, it will have taken a combination of cuts and some tax increases to get us balanced going forward.

As I said, none of this is easy and none of it happened overnight, but you can be sure that we’ve taken your input into consideration. This won’t be the last we have to address this issue, but we can see the horizon and it is bright.

Thank you again for weighing in and please, stay involved.

Dave Kaplan
Mayor & Councilmember
City of Des Moines, Wash.


14 Responses to “MAYOR: State voters, Legislature have taken away much of Des Moines’ income”
  1. Susan White says:

    Dave, you can say what you want but there is a serious lack of leadership and lack of transparency the community feels. I don’t quite understand why you are taking the role in delivering this information either. It seems like this should come from the City Manager. All the things you are saying now are issues that happened a long time ago. I don’t think any one can say this is why we should be where we are now. I don’t think the public will accept your explanations at this point. Other cities recovered. Des Moines has not and we are addressing the same issues over and over again with frustrated citizens more now than ever. . And your solution is to increase taxes. This doesn’t fare well with most. And the Police Department is suffering and the rest of the City. Although we keep the faith in what Des Moines could be and might be it’s sad to see your approach in justifying all this from things that happened a long time ago.

    • BirchCreek says:

      Susan, “no bucks, no Buck Rodgers”. Moeny has to come from somewhere! The decrease taxation initiatives the people (us) voted in have come back to bit us in the butt!

  2. Fed up says:

    Other cities recovered partially because they were accepting of new development in places like their downtown. You have very few people holding the City of Des Moines hostage in terms of development (height limits anyone?). Let the city grow a bit and you might see the financial benefits. Otherwise you might as well give up now.

  3. BirchCreek says:

    Thanks Mayor for the info.

  4. DM Resident says:


    Thank you for the explanation although I’m sure most of us knew this information at one time and many of us have forgotten it. It’s amazing to look at this information and see just how much the City has lost in revenue.

    Susan White: Correct me if I’m wrong but I believe you served on the council from 2001 to 2009 (2 terms). If you have the answers and were able to see this coming why didn’t you take more of a leadership role and resolve this problem back in 2001? I know, I know Susan, it’s just easier to kick the can down the road and let someone else have to deal with it. Fact is, you were one of the most ineffective council members we’ve ever had on the city council. And now, your solution is to stand at the council podium during pubic comment and talk about Redondo leaving Des Moines and going to Federal Way. Ahhh, now that is a solution. I think those of you in glass houses should not throw stones at the current council members who have dealt with the tough issues and are working to solve a problem that you let continue.

    Lastly Susan, you comment that other cities have recovered from this. I’m not sure you follow other cities news carefully. Currently Normandy Park is about one month from bankruptcy, Kent is borrowing from their reserve funds to keep paying bills, and I’m sure there are others you would point to that have recovered that when you dig deep simply have not.

    • Susan White says:

      Very strange people don’t actually say who they are on this blog. They must have reasons for that.

      • Absolutely- Stand for yourself or don’t stand. I have seen some of the work that Susan did for our city, and it was never utilized….Susan was not utilized.

        • DM Resident says:

          Then please tell me why in her eight years on the council they didn’t fix this financial problem. This problem isn’t new, it’s been plaguing this city for about 20 years now. As for my identity, simply because I don’t reveal who I am doesn’t mean I don’t speak the truth. If you want to dismiss me because I don’t put my name, feel free.

          • Candace Urquhart says:

            You expected her to single handedly have fixed our town in 8 years? Yet others
            ( some that have held office for near to 20 years ) be absolved?

  5. Erin E. says:

    Reality is we have Major problems, yet we are still being run by Minor players. We need change, we need new leadership, we are paying very high competitive salaries, it’s time to bring in a new City Manager that has no history to the old way it’s always been, but says this is the way it needs to be. Do any of you realize that our current City Manager has applied for other jobs in other cities and not gotten them? He is not here by desire, he is here because he has yet to find a job elsewhere. The City of Des Moines deserves better, The Citizens of Des Moines deserve a strong City Manager and Mayor who can fully lead us into a successful future. The is no reason for a town with water advantage to be in this dire of shape!

  6. RedondoRick says:

    Erin, The reason he hasn’t found another job, is that he’s run down this small city (32,000) to almost insolvency. His record speaks for itself. We need leadership, the city manager needs to go. 20 years is long enough. This city will only continue to spiral downward, with his management…Rr

  7. Charles Wilkes says:

    There’s a lot of sturm und drang these days about who wrecked the economy. And there is a lot of yelling about how to fix it.

    But the economy is complicated, so it’s easy to get fooled by someone who is yelling persuasively, especially if they play for your favorite political team.

    And the truth is that the “government” is never going to fix our economy. The government can’t fix our economy. The only people who can fix our economy are us.

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