February 24, 1995 in City

One Government Costs More Than Two Analysis Shows Consolidation Would Cost About $20 Million More Each Year

By The Spokesman-Review
 

Finally, there’s an answer for people who ask whether taxes will increase if Spokane city and county merge as freeholders propose.

The answer is: “Depends.”

Depends on where the taxpayer lives. Depends on the services he demands. Depends on decisions made by politicians who aren’t even elected yet.

A financial analysis released Thursday shows the consolidated government would spend about $20 million more each year than the city and the county do separately.

Most of the additional money would come from people who live or own businesses in the Valley and other suburban areas in unincorporated Spokane County.

The analysis, by Seattle consultant Tom Nesbitt, is based on assumptions about taxes and services made by the freeholders. But the politicians who would run the unified government - if voters decide to create it - may not operate under the same set of assumptions.

The freeholders’ two biggest assumptions:

When city boundaries disappear, all urban residents would receive equal services. In rural areas, services would be unchanged.

Currently, residents in the Valley and other urban areas outside the city are served by fewer police and less-sophisticated libraries than are city residents. They spend far less money on parks.

Equalizing those three items alone would cost about $11 million, said Nesbitt.

All urban residents would pay a utility tax, which now is paid only by city residents.

Nesbitt predicted that change would mean an additional $10 million in taxes, all of it coming from people who live or run businesses outside city limits.

Warning that his figures are rough, Nesbitt predicted the merger would cost $7.9 million upfront. The chore could take years as experts try to determine how to merge personnel policies, computer systems, legal codes and a myriad of other details.

Buying new business cards for 1,500 employees would cost about $15,000. Changing decals on 500 government cars would cost about $50,000 - 10 times that much if the cars had to be repainted.

Government leaders should not try to save money during the merger, he said.

“If the merger is well-managed, it will save a lot of money” in the long run, he said. “It all depends on people who aren’t even around yet.”


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