City finances in good shape
Revenues are up from both sales and property taxes in Spokane Valley, and budget experts are predicting another year in the black for the city in 2008.
“I think we’re still in pretty good shape,” said City Finance Director Ken Thompson.
At Tuesday’s City Council meeting, he presented a budget that predicts a 2.8 percent increase in sales tax dollars and a 7.7 percent increase in property tax dollars coming to City Hall in 2008.
During the first quarter of this year, taxable retail sales have gone up 5.7 percent over the same quarter last year, according to the state Department of Revenue.
Sales increased by 11 percent in Spokane, by 10.5 percent in Liberty Lake and by 9.4 percent across Spokane County.
The difference between Spokane Valley’s sales compared to those in other parts of the county is likely caused of the different mix of retail establishments concentrated in each jurisdiction, Thompson said.
For example, big-box retail sales and car sales that bring in much of the Spokane Valley’s sales tax haven’t been as strong as in year’s past. Also, a slowdown in housing construction affects sales tax because of all of the items purchased to go inside new homes.
With property values continuing to rise, property tax collections are expected to increase.
As drafted, the 2008 budget keeps the city’s tax levy at $1.60 per $1,000 in assessed value.
That tax rate could be reduced by about 5 cents if the city removes a proposed $4 million transfer into a fund for new civic facilities, said Councilman Bill Gothmann.
“We’ve got to realize that property taxes have increased this year,” he said.
Before the final budget is passed this fall, Gothmann suggested the council study a reduction in the tax rate further at future meetings.