November 5, 1995

City’s Utility Tax Might Spread

 

Question: What is the rate of the city’s utility tax? Could it be levied on Valley residents if consolidation is approved?

Answer: The city levies a 17 percent tax on water, sewer and garbage bills. It collects 6 percent on natural gas, electricity and telephone bills.

Those taxes, which provide about a quarter of the city’s revenue, cannot be levied in unincorporated areas.

Under consolidation, they could be used anywhere in the county. Most likely, they would be used in the urban services area, which probably would include portions of the Valley and other suburbs.

The city-county council would set the rates.

In addition to those utility taxes, cable TV customers pay a 5 percent franchise fee whether they live inside or outside the city.

Q: Besides spreading the utility tax to new areas, could the new government add taxes that either of the existing governments cannot levy?

A: No. In fact, the charter requires a public vote if the government wants to impose a business and occupation tax or other taxes not currently used by the city or the county. No vote is required under existing city and county governments.

Q: Who’s responsible for the Marks family lawsuit if the city and county consolidate?

A: The family is suing the city and county for $40 million over a 1986 police raid of the homes of Jimmy and Grover Marks. Several state courts have ruled the raids illegal.

In August, Spokane County paid the city $390,000 to shed its responsibility in the lawsuit. As a result, responsibility for potential damages lies solely with city taxpayers.

If the city and county merge before the lawsuit is settled, the financial responsibility will return to all taxpayers.

, DataTimes The following fields overflowed: SECTION = THE PUZZLING QUESTION OF CONSOLIDATION

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