Budget Hearings: How Many Do You Need?

Editor’s note: We updated this post on September 6 to clarify the budget hearing requirements for special purpose districts, particularly in relation to property taxes.

One question that arises often this time of year is: “How many public hearings are required for the budget process?” The answer depends on type of government and, possibly, the reason for the hearing.

State law sets forth the minimum process requirements, which this blog will discuss, but nothing prevents a government entity from providing for multiple readings or additional public hearings. Always make sure your agency is following its own adopted policies.

Setting Property Tax Levies Always Requires a Public Hearing

Local governments that impose regular property tax levies are required to hold a public hearing when setting property taxes (RCW 84.55.120). This applies to all jurisdictions imposing a regular property tax levy as defined in RCW 84.55.005(3) and RCW 84.04.140, such as cities and towns, counties, and certain SPDs — potentially including (but not limited to) library districts, fire districts, school districts, hospital districts, park and recreation districts, ports, and PUDs.

A hearing on setting property taxes must cover revenue sources, including possible increases in property tax revenues. Local governments may choose to use the same meeting to pass an ordinance or resolution authorizing a property tax increase in terms of dollars and percent increase from the previous year to comply with RCW 84.55.010. Note that the deadline for adoption of a property tax levy and certification to the county assessor is November 30 (RCW 84.52.070).

Budgets Hearings for Cities and Towns

The statutes RCW 35.33.057, RCW 35.34.090(2), RCW 35A.33.055, and RCW 35A.34.090(2) govern budgets for cities and towns. In addition to the property tax/revenue hearing discussed earlier, these statutes require cities and towns to hold public hearings on the preliminary budget “or parts thereof,” followed by a hearing on the final budget.

The statutes do not specify an exact number of hearings that must be held, but it has long been the opinion of MRSC that because the statutes refer to preliminary budget “hearings” in the plural it implies there should be more than one. However, we have opined that the property tax/revenue hearing can be counted as one of the preliminary budget hearings, since the revenues form a “part” of the budget.

In summary, MRSC recommends that cities and towns hold at least three hearings:

1. A revenue hearing prior to the property tax certification deadline of November 30 (RCW 84.55.120), which should include possible increases in property tax revenues;
2. A preliminary budget hearing (See RCW 35.33.057/RCW 35A.33.055 for annual budgets and RCW 35.34.090/RCW 35A.34.090 for biennial budgets); and
3. A final budget hearing, which must be held on or before the first Monday in December (see RCW 35.33.071, RCW 35.34.110, RCW 35A.33.070, and RCW 35A.34.110).

The final budget hearing may be continued from day-to-day but should not go beyond the 25th day prior to next fiscal year (December 7). After the final budget hearing the council may then approve the budget.

Additionally, the city or town clerk must publish notice that the preliminary budget has been filed and then must 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, RCW 35.34.100, RCW 35A.33.060, and RCW 35A.34.100).

Our City and Town Budget Procedures offers a step-by-step overview of the budget process.

Budget Hearings for Counties

In addition to the property tax/revenue hearing discussed earlier, the statutes governing budgets for counties state that the commissioners must publish notice that the preliminary budget has been prepared, filed, and is available to the public, followed by a public hearing on the final budget.

Counties must publish the notice of public hearing on the final budget once a week for two consecutive weeks in the county’s official newspaper (see RCW 36.40.060). 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). This hearing may continue over several days but cannot exceed five days.

Counties can check out our County Budget Procedures webpage for an overview of the budget process.

Budget Hearings for Special Purpose Districts

Unlike cities, towns, and counties, which have several statues governing their budget processes, there is little statutory guidance for developing most special purpose district budgets or holding budget hearings (beyond the property tax/revenue hearing discussed earlier). Some special purpose districts are not even required by law to adopt a budget, although adopting a budget would certainly be a good practice as part of sound financial management policies.

The Washington State Auditor’s Office BARS Manual Section 2.4.3 (cash manual and GAAP manual) provides a quick overview of the budget adoption requirements for many of the special purpose districts in the state. For instance:

• Port districts, similar to counties, must publish notice that the preliminary budget has been prepared, filed, and is available to the public, followed by a single public hearing on the final budget (RCW 53.35.020-.030). The hearing must be held between September 15 and the first Tuesday following the first Monday in October or, alternatively, prior to the first Monday in December (RCW 53.35.045).
• Public hospital districts must hold a single hearing on the proposed budget on or before November 15 but are not required to hold a hearing on the final budget (RCW 70.44.060(6)).
• Public utility districts that levy property taxes must hold a single public hearing on the proposed budget on the first Monday in October (RCW 54.16.080).

Always Follow Your Agency’s Internal Policies

Some cities, counties, and special purpose districts have developed specific budget policies that go beyond the requirements in state law, including requirements related to public hearings. Has your governing body adopted requirements that go beyond the minimum requirements of state statutes? If so, your agency should be sure to follow those policies.

Budget Resources

To learn more about the budget process, take a look at MRSC's extensive resources at Budgeting in Washington State. For personalized guidance on specific questions related to budgeting, eligible local government staff and elected officials may use our Ask MRSC inquiry service.