March 27, 2009 in City

Officials rack brains to bridge budget gap

By The Spokesman-Review
 

Cuts, concessions and taxes.

They’re all on the table as Spokane leaders face a $5.5 million budget deficit in 2010.

Mayor Mary Verner and her staff offered several ideas to City Council on Thursday to bring the budget in line. They include pay cuts, a reduction in work hours for employees and business-license fee increases.

As an alternative, they said, they could slash most city budgets by 4 percent, a reduction likely to lead to the loss of dozens of jobs.

“All of the more creative approaches require people coming together and making them work,” said Chief Financial Officer Gavin Cooley. “That’s the stage we’re at right now: collaborative discussion to see if there’s better alternatives to across-the-board cuts.”

Changes affecting worker pay and benefits need union agreement.

State and local government leaders have struggled in recent months to gain concessions from labor unions in efforts to avoid layoffs. Verner and council members expressed hope that negotiations will be successful in Spokane.

“When it comes time to do things that are in the best interest of the city collectively, I’m confident that they’ll come to the table,” Councilman Al French said.

Attempts to reach Joe Cavanaugh, president of Local 270 of the Washington State Council of County and City Employees, were unsuccessful Thursday. Local 270 is the city’s largest union.

Some City Council members said the city should consider creating a head tax – a fee charged on every employee, payable by employers or the workers themselves. French suggested a tax on businesses with loading docks, a concept used by some cities in Western Washington.

“At this point we’re running out of other options,” French said.

Councilwoman Nancy McLaughlin said many employees recently received “very fat raises.” She said the city should create a “balanced” package to fix the deficit.

“My heart starts to pound a little bit when I hear the word tax so much in this kind of setting,” she said.

Last year, McLaughlin was one of two council members who voted against a contract for Local 270 that includes 5 percent raises each year from 2008 through 2010. Supporters of the agreement pointed to concessions the union made on retirement and other areas.

The ideas for extra revenue discussed by Verner’s staff largely centered on business licenses. The city could generate $2.4 million by raising license fees from $60 to $100, doubling rates charged for the number of employees in an establishment and by requiring nonprofits to get licenses, according to Cooley’s presentation at Thursday’s meeting.

The city’s $5.5 million gap could grow by several million dollars if officials reverse their decision last year to begin taxing some sewer and water fees.

The City Council agreed to the tax but said it would be reviewed again before 2010.

The city last faced a significant budget shortfall in 2004, when dozens of city workers were laid off. This time, officials believe they have a head start on a budget that won’t be as painful.

Councilman Richard Rush said he’s hopeful a plan will include cost cuts as well as increased fees or taxes.

“Employees at the city, particularly the organized, unionized employees are looking at some concessions if pain is widely shared,” Rush said. “We can get a balance that leaves us on a steady state rather than an extreme burden on any one sector.”

Jonathan Brunt can be reached at jonathanb@spokesman.com or (509) 459-5442.


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