Mayor looks to tab fees, union concessions to fill $12 million gap
More than 120 city employees could face pink slips at the end of the year unless city unions agree to concessions or the City Council increases taxes, officials warned Tuesday.
Two months after proposing a budget with more than 40 layoffs, Spokane Mayor Mary Verner told the Spokane City Council in a budgeting strategy session that faltering sales taxes and other factors could result in a 9 percent across-the-board cut to fill a possible $12 million hole.
“You can’t make $12 million in cuts without cutting something that’s very popular, that’s very loved by our citizens,” Verner told the council. “We are taking our tasks very, very seriously.”
In May, Verner forecast a 3 percent across-the-board cut that was dependent in part on persuading county leaders to move the city’s annexation of the West Plains to Jan. 1. But those negotiations have not advanced, and the city no longer is counting on the $2.5 million in taxes that would be raised from early annexation.
Verner said she does not plan to ask voters to raise property taxes beyond the city’s usual 1 percent increase. She also has ruled out asking for a fire bond this year to pay for new fire equipment.
“I just don’t think the voters have an appetite for new taxes,” she said.
However, Verner said she supports the implementation of a vehicle tab fee of $20 that can be imposed by the City Council without a public vote.
A $20 tab fee would be charged on more than 100,000 cars and raise more than $2 million, officials said. The money would have to be spent on street maintenance, but that won’t necessarily improve roads. That’s because council members said most of the current money used for streets would be shifted elsewhere to fill budget gaps.
A tab fee “is appropriate because it’s revenue taken from people who use the streets to pay for maintaining the streets,” Verner said. “We’d be able to stay at the same level,” she said. “Otherwise our street maintenance is going to have to decline.”
Council members also are considering a tax on pay parking lots, such as those operated downtown by Diamond Parking Service.
Councilman Richard Rush said the tax would be used to generate money to improve downtown and wouldn’t necessarily provide much short-term budget relief. He said improvements made with the money could stimulate economic development that could help the budget in the long-term.
Rush suggested a tax of $75 a year on each space, but only in paid surface lots as a way to encourage construction of parking garages.
“My point is not just to raise money; my point is to dedicate this to downtown infrastructure,” he said.
When council members were asked if they wanted to keep the parking tax as an option, all but Nancy McLaughlin raised their hands, the same tally as when members were asked about the tab fee. Councilman Jon Snyder was absent.
Council members debated whether cuts should be an equal percentage in all departments or if the burden should be placed mostly on departments other than police and fire.
Only Rush and McLaughlin raised their hands when asked who preferred an across-the-board strategy.
McLaughlin said state bargaining law makes it difficult to win concessions from fire and police unions – forcing other workers to take the burden of cuts. She said morale would suffer if some workers face a higher burden even after showing a willingness to concede.
“I’m not willing to protect police and fire if they aren’t willing to come to the table,” she said. “The real world out there has had to deal with a recession.”
But some council members said playing hardball with public safety unions is a losing battle and that services like the libraries will most likely have to accept higher percentage cuts.
Last year, the city’s fire union agreed to change its health plan but made no wage concessions. Instead, the city created an early retirement program, giving higher-paid veterans an incentive to leave. The police union agreed to forgo a pay increase in 2010. But members were given 52 hours a year more in vacation and a 4 percent raise in 2011.
Spokane Police Guild President Ernie Wuthrich said he doubts the police union would open up its contract this year since the city and union just inked its two-year deal at the end of 2009.
“We negotiated in good faith, and so did they,” Wuthrich said. “They know we have to come to the table next year.”
But Joe Cavanaugh, who leads the city’s largest union, Local 270, said even though most of the union’s membership has a contract that doesn’t expire until 2012, the group will work with administrators to save jobs.
“We’re more than willing to sit down and discuss any number of ways to decrease the general fund expenditures,” said Cavanaugh, who noted that any concessions would have to be voted on by 270’s membership.
Some council members argued that it may be easier to win concessions from unions if the council is willing to increase taxes or fees.
Council President Joe Shogan said the city should aim for budget cuts, tax or fee increases, and union concessions.
“I don’t think we can sit here and raise revenue and say, ‘Well, everything’s hunky-dory.’ It’s not true,” Shogan said. “I also don’t think the unions are going to be as inclined to make concessions if they don’t see some sort of action by the council on the revenue side.”
Some union leaders said if they are asked to make sacrifices, they would look favorably at attempts to increase revenue to plug a portion of the gap.
“Actions by all parties are appreciated by the others,” Cavanaugh said.
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