November 5, 1995

Consolidating Offers No Financial Guarantees

By The Spokesman-Review
 

A consolidated government would make Spokane a better place to live, but it wouldn’t necessarily mean lower taxes, say government experts.

“The big thing that drives growth in government has to do with what people want government to do and how much (the services) cost,” said David Nice, who teaches political science at Washington State University.

“Government structure … doesn’t usually make a big difference.”

“It’s not at all clear that economic efficiency has resulted” from consolidation in other communities, said David Olson, political science professor at the University of Washington.

David Rusk, author of “Cities Without Suburbs,” thinks consolidation is a good idea to preserve the economy, make better land-use decisions and provide better political representation.

“The consolidated city-counties have all outperformed the competition,” said Rusk, a former mayor of Albuquerque, N.M.

But Rusk, who has consulted for 65 cities in two years, wouldn’t promise the new government could do more with less money. “It may or may not be (more efficient), depending on your leadership,” he said.

A recent study commissioned by the economic development group Momentum concluded taxpayers could save at least $5.5 million a year in payroll and employee benefits by consolidating city and county governments.

The savings, which researchers called “conservative,” were based on the number of management jobs that are duplicated.

If accurate, those savings would more than cover the cost of improving parks - the only increase that’s mandated by the charter.

But the savings wouldn’t pay for more police and better streets, if city-county residents demand them.

A Seattle consultant who conducted a study for freeholders who wrote the charter estimated it would cost $20 million a year to provide city-style services to 80,000 people living outside the city limits.

Some of the assumptions used in that estimate were wrong: the consultant overestimated the work needed on roads outside city limits, for instance. But everyone agrees suburban residents will pay more taxes if they want better roads and more police.

A utility tax is the most likely source of that money, since it’s already used in the city.

The threat of that tax didn’t stop Washington Water Power Co. from making a $10,000 contribution to the pro-charter campaign. WWP officials say the benefits of creating a new government outweigh the risks.

“If this new government is implemented, we will be arguing that they should come up with the most equitable taxes possible,” said Tom Paine, manager of government affairs, who calls the utility tax “regressive.”

Hedging by academics doesn’t discourage consolidation boosters from making bold claims, either in Spokane, in other communities considering consolidation or in those that already have taken the step.

“The theory is very simple: Fewer politicians means more efficient government,” Stan Campbell, a councilman from Charlotte, N.C., told members of the Spokane Area Chamber of Commerce last month.

Charlotte consolidation supporters are so confident a single government would cut waste that their charter promises $20 million in savings in the first five years. Voters will be asked to approve the charter next year.

“I sort of hope you don’t consolidate,” Charlotte Mayor Richard Vinroot joked in a videotaped message to the chamber. “If we do and you don’t, we’ll be ahead of you” in cutting waste and recruiting new businesses.

In Spokane, boosters note taxpayers would save money on politicians’ wages alone. The combined salaries of the executive and 13 council members would be $155,000 less than is earned by City Council members, county commissioners and appointed executives whom they would replace.

The proponents predict that government would save even more by not replacing employees who retire or quit during the two-year transition from two governments to one. The charter promises they won’t be laid off.

Kerry Lynch, a paid consultant for the pro-charter campaign, recently wrote that the reduction in employees would offset the up-front cost of the merger, estimated at nearly $8 million by the freeholders’ consultant.

The experts think that’s optimistic. The only employees who could be easily eliminated, said Nice, are the people who run departments.

Line workers “are not really duplicating each other’s work, so there’s not a lot of jobs you can get rid of,” he said.

And the new government would have just as many potholes to fill and parks to groom, he noted.

, DataTimes MEMO: This sidebar appeared with the story: CHARTER LAYS OUT RULES FOR TAXES, SPENDING Here’s what the proposed city-county charter says about money issues: The consolidated government could levy a business and occupation tax countywide, but not without a public vote. Now, county governments cannot use the B&O; tax; the city of Spokane does not have one. The government could levy a utility tax, which the city already uses. County governments cannot levy utility taxes. Government debt would be limited to half of what’s allowed under state law. The charter requires a public vote before the government could sell bonds that are more than 10 percent of the general fund. The government could sell the bonds without public approval if 11 of the 13 council members agreed. The charter requires public approval of bonds of any amount, once the government’s non-voter-approved debt hits 1.5 percent of the assessed value of property in the county. If the city and county were limited by that cap now, they could not sell any more bonds without a public vote. Their combined debt is slightly higher than 1.5 percent of property value. The government could levy higher taxes inside the “urban services area” than outside that boundary. More services would come with the higher taxes. Eight percent of the city-county budget would be earmarked for parks. Currently, the city uses 8 percent of its general fund for parks. The county does not have a set-aside for parks, but gave them 1 percent of its budget in 1994. Spending for parks in 1994 would have increased $4 million if the 8 percent minimum had been in effect. The money would have come from other county departments. The charter promises that no city or county workers will be laid off, or lose wages or benefits, for at least two years. That guarantee does not apply to department heads. The charter would not affect the way taxes are levied and collected by small towns, schools and other special taxing districts. - Dan Hansen

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

This sidebar appeared with the story: CHARTER LAYS OUT RULES FOR TAXES, SPENDING Here’s what the proposed city-county charter says about money issues: The consolidated government could levy a business and occupation tax countywide, but not without a public vote. Now, county governments cannot use the B&O; tax; the city of Spokane does not have one. The government could levy a utility tax, which the city already uses. County governments cannot levy utility taxes. Government debt would be limited to half of what’s allowed under state law. The charter requires a public vote before the government could sell bonds that are more than 10 percent of the general fund. The government could sell the bonds without public approval if 11 of the 13 council members agreed. The charter requires public approval of bonds of any amount, once the government’s non-voter-approved debt hits 1.5 percent of the assessed value of property in the county. If the city and county were limited by that cap now, they could not sell any more bonds without a public vote. Their combined debt is slightly higher than 1.5 percent of property value. The government could levy higher taxes inside the “urban services area” than outside that boundary. More services would come with the higher taxes. Eight percent of the city-county budget would be earmarked for parks. Currently, the city uses 8 percent of its general fund for parks. The county does not have a set-aside for parks, but gave them 1 percent of its budget in 1994. Spending for parks in 1994 would have increased $4 million if the 8 percent minimum had been in effect. The money would have come from other county departments. The charter promises that no city or county workers will be laid off, or lose wages or benefits, for at least two years. That guarantee does not apply to department heads. The charter would not affect the way taxes are levied and collected by small towns, schools and other special taxing districts. - Dan Hansen

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


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