Island County voters will decide in the Aug. 17 primary election whether to increase property taxes to cover the county’s budget shortfall.

The three county commissioners decided Tuesday afternoon to place a proposed levy rate lift of $0.16 per $1,000 of assessed value on the ballot. That would amount to an extra $40 a year in property taxes for the owner of a $250,000 home. The rate increase would generate an estimated $2 million a year for the county’s current expense fund.

The budget director’s financial forecasts show that the county will have a shortfall of $1.2 million next year that will grow to more than $1.8 million in four years.

“What we’re trying to do is forestall an impending crisis,” Commissioner Helen Price Johnson said. “We’re trying to bridge a gap to stop the bleeding.”

The commissioners decided to place the measure on the primary ballot, instead of the general election in November, to give themselves more time to deal with the budget shortfall in case it doesn’t pass. If voters reject it, the commissioners would likely do more budget cutting and layoffs. A half dozen county elected officials and department heads at a meeting on Monday said any more cuts would be devastating.

“I’m in a position where I can simply say further cuts would be harmful to public safety,” Sheriff Mark Brown said.

If the tax increase passes, the extra money probably wouldn’t be enough to bring back staff or services slashed during budget cuts over the last two years, which was a concern for Commissioner Angie Homola. From 2008 to 2010, $4.2 million was cut from the current expense budget, which stands at about $21 million this year. More than 50, or about a third of the employees in departments funded by current expense, were laid off.

Homola proposed increasing the lift rate beyond $0.16 to restore a few cut positions, including a deputy prosecutor and a hydrogeologist, and fund the septic inspection program, a performance audit, public broadcasting of meetings and possibly cost-of-living increases for staff in a couple of years. At the same time, she said the commissioners could do away with the $62 septic tank fee and give up on the idea of a clean water utility tax.

But the other commissioners disagreed, arguing that the levy increase should be as small as possible to cover shortfalls, with some wiggle room in case the county’s assessed value plummets. If the total assessed value of the county decreases substantially, then the tax increase of $0.16 per $1,000 of assessed value would generate less than expected.

Assessor Dave Mattens predicted that the total assessed value of the county would decrease by 12 percent, though he won’t know the exact number until the assessment work is done Friday. But the deadline for getting the measure on the primary ballot was Tuesday, so the commissioners had to make their best guess.

“My position was that it’s important to keep it as a stopgap, a tourniquet, rather than rebuilding,” Price Johnson said, referring to the tax increase. She added that the higher the amount, the less likely it is to pass.

Dean argued that it wouldn’t be appropriate to make plans to give staff cost-of-living increases, or COLAS, in the present economic climate.

“We don’t get COLAS and we don’t give COLAS until the rest of the world goes back to work,” he said.

The resolution that puts the measure on the ballot lays out the argument for the tax increase. It states that the “structural budget gap” is due to a number of factors, including a reliance on revenues derived from new construction, the recession and initiatives 695 and 747. One initiative eliminated sales tax equalization funding and the other limited property tax increases each year to the lower of 1 percent or the rate of inflation, unless the voters approve a greater amount.

It also lists all the cost-cutting measure the commissioners have made so far. They include layoffs, work hour reductions, a $50,000-a-year reduction in energy consumption, reduction of health care benefits for non-represented employees and the commissioners’ decision to forego travel allowances.

Island County currently has a property tax rate of $0.51 per $1,000 of assessed value, which is the lowest among all 39 counties in the state. Only five counties have rates lower than $1 per $1,000, according to the resolution.