Campaign ads dubious

Spokane Valley voters must choose between City Council members who slashed $10 million from the budget or challengers who would “just say NO to deficit spending.”

At least that was the dilemma posed in a double-barrel blast of campaign advertisements last week. Both views offer more rhetoric than fact.

Incumbents Diana Wilhite, Rich Munson and Ian Robertson claimed in a shared advertisement in the Oct. 15 Valley Voice that they were “key in cutting $10,000,000 out of the budget for 2010.”

They also told readers that Spokane Valley had the fewest employees last year among 18 Washington cities with populations of 50,000 and more.

And that the city’s general fund per-capita revenue this year is the second-lowest among 10 Washington cities.

In the same edition, challengers Dean Grafos, Bob McCaslin, Brenda Grassel, Tom Towey and Gary Schimmels made similarly dubious claims in another shared advertisement.

“Can you afford a NEW 2.9 percent property TAX?” they asked.

Or, they continued, a $22,511,662 “deficit”?

“Just say NO to Deficit Spending,” they urged.

Can there really still be a looming $22.5 million deficit if the incumbents have just cut $10 million? It’s time for a fact check.

The truth is there has been no budget crisis that required the council to trim $10 million. City Manager Dave Mercier and Finance Director Ken Thompson brought the council a balanced 2010 budget, and the council adopted it.

Although the overall budget is down about $10 million, the reduction is in capital spending such as street construction.

“It’s just a reduction in the number of projects that we’ll do,” Thompson said.

Capital projects mostly are budgeted in special funds that can be expected to have large changes from year to year. Many of the projects are heavily supported by state and federal grants.

Council members who now want to take credit for a reduction in capital spending have objected in the past when critics inaccurately pointed to increases as evidence of burgeoning bureaucracy.

The general fund – the one that matters – actually is up nearly 10.7 percent next year, from $49.3 million to more than $54.5 million.

However, the general fund totals include beginning balances – or reserves – that are predicted to rise nearly $7.3 million from this year to next. In other words, the budget makes the city’s savings look like an expenditure.

But your property taxes are going up 2.9 percent, right?

Wrong.

The city’s property tax levy is going up 2.9 percent. The actual average tax increase for existing property owners is 1 percent, the maximum allowed by state law.

The extra 1.9 percent comes from new construction. As homes, stores and factories are built, owners have to start paying taxes on the increased property value.

If local governments didn’t collect tax on new construction, owners of new buildings would get a free ride at the expense of those who are already paying.

Charging the newcomers is appropriate because development creates more demand for police, fire, library and other services.

Speaking of police, fire, library and other services, what’s wrong with the incumbents’ charts showing Spokane Valley has the fewest employees and the second-lowest per-capita revenue among selected Washington cities?

The charts are lifted from a “City Finance 101” presentation Mercier released in May. They don’t include Mercier’s understated disclaimer on the revenue chart that the “services provided by cities vary.”

In fact, services vary so much as to render the per-capita revenue chart meaningless.

For example, the chart fails to account for the fact that Spokane and many other listed cities provide fire protection and libraries. Those services are provided in Spokane Valley by the independent Spokane Valley Fire Department and the Spokane County Library District.

If Spokane Valley residents want to know how their taxes compare with those in Spokane, they need to include fire and library district levies.

The staff-size comparison is similarly skewed by failure to acknowledge that other cities don’t hire out as many of their responsibilities as does Spokane Valley.

For example, the 84 full-time employees listed for Spokane Valley in 2008 don’t include more than 100 police officers the city employs indirectly through a contract with the Spokane County Sheriff’s Office.

Spokane Valley hires out a number of other jobs, including park and street maintenance, that Spokane provides directly. Spokane also provides garbage and water service that Spokane Valley doesn’t.

That’s not to say contracting for services isn’t a good idea. As Thompson pointed out, it allows the city to avoid personnel management problems as well as some legal liability.

“We’re pretty proud of the fact that we can run with roughly 90 people and let somebody else handle those problems,” Thompson said.

What about that $22.5 million “deficit” that has the council challengers wanting to say no to “deficit spending”?

It doesn’t exist, and deficit spending – borrowing or printing money to balance a budget – isn’t permitted. State law requires Washington cities to balance their general fund budgets with available revenue.

The challengers’ advertising fails to acknowledge that the $22.5 million revenue shortfall they cite is just a forecast. City officials estimate revenue years in advance to identify trends and head off problems.

The real issue is who would best heed the warning.