Property tax increase passes, avoids cuts

Voters in Spokane agreed to raise their property taxes for the next two years to ease an ongoing financial crisis at City Hall and to avoid new cuts in police, fire and library services.

Proposition 1 was leading in Tuesday night poll results with “yes” votes adding up to several percentage points more than the simple majority needed for passage.

“It’s a strong affirmation of what we are trying to accomplish at City Hall coming up with long-term budget solutions,” said Gavin Cooley, the city’s chief financial officer.

Mayor Jim West, who faces a recall election next month, was gleeful. “It’s good news for us. It’s good news for the city. It is good news for citizens,” he said, noting that the plan will allow the city to increase hours of operation at five neighborhood branch libraries.

The tax increase also will help budget writers maintain staffing and programs for police, fire and several smaller City Hall departments.

Opponents said the tax increase will hurt people with low incomes, particularly elderly pensioners who cannot afford higher living expenses.

Valentina Howard, who was trailing in her race against City Councilman Al French, said many residents in her northeast Spokane district “can’t afford it” and that residents there are opposed to tax increases.

Councilman Bob Apple, also an opponent of the tax increase, said he believes the mayor can find other sources of money without raising taxes.

The tax is expected to raise $3.3 million a year, and is part of a broader plan to balance the city’s general fund through two tax increases and employee concessions. The ballot measure was needed because state law prohibits cities from increasing regular property tax collections by more than 1 percent per year without voter approval.

Tuesday’s measure lifts the property tax levy rate for Spokane city government by 32 cents per $1,000 of assessed valuation, or $32 on a $100,000 home. The regular levy cannot exceed $3.60 per $1,000.

The City Council is also being asked to increase the tax on city utilities from 17 percent to 20 percent, and city labor groups are negotiating with city management over packages of wage and health care concessions. But the council is under pressure from card-room casinos to lower its gambling tax so those businesses can compete with casinos outside the city where taxes or fees are lower.

Together, the city must come up with $6.8 million to cover an anticipated shortfall in the city’s $127 million general fund for police, fire, streets, parks, libraries and a host of other non-utility programs.

On Monday, West announced that leaders of Local 270, the city’s largest labor union representing rank-and-file workers, had agreed to a package of delayed wage increases as well as health-care concessions over the next two years. The package is worth about $2 million through 2007, including $850,000 in the general fund.

The city’s six other labor organizations are being pressed by the mayor for concessions as well.

Last year, the mayor and council cut 152 positions and $18 million from the general fund. Some positions were restored in 2005, including eight firefighters.