Facing daunting shortfalls in revenue, the Spokane City Council will discuss tonight instituting a tax on vehicle license tabs.
Councilman Bob Apple said he will bring a proposal forward for a $20 fee, which is the most the city can impose without going to voters for approval.
“My viewpoint is if we are going to have financial problems, we need to do something,” he said.
Mayor Mary Verner announced last week that more than 120 city employees could face layoffs at the end of the year unless city unions agree to concessions or the City Council increases taxes.
Verner told the council that weaker than expected sales tax revenues and other factors could result in 9 percent across-the-board cuts to address the projected $12 million shortfall. That news came only two months after Verner predicted 40 layoffs because of budget woes.
Although Apple said he will propose a $20 tab fee, which would be paid by drivers every time they renew their license plate tabs, the amount of the proposed tab tax has been left open. Apple said some of his colleagues have discussed pegging the fee at $85.
Even if it is set at $20 – which would not require voter approval – Apple said he wants it to go to voters. The meeting tonight would be the last opportunity for city leaders to get something on the November ballot, he said.
“I want voters to be able to have the chance to decide whether or not we raise taxes,” he said.
Councilwoman Nancy McLaughlin said she won’t be in favor of Apple’s proposal.
“I think it’s a knee-jerk reaction to find dollars for our budget crisis,” she said.
The city currently does not charge a tab fee. But state law allows cities and counties to enact one for up to $100. Any fees of more than $20 would trigger a public vote.
McLaughlin said city leaders have discussed the need to put something like this proposal forward to get city unions to reopen negotiations.
“I think we could do minimal layoffs if everyone comes to the table and does the right thing,” she said. “Until we face that gorilla in the eye and say we have to get employee wages in line, we are going to be looking down a dark hole.”
If the council approves a $20 fee, it would only generate about $2.1 million. While the tax revenue must be used on roads, McLaughlin said city leaders want to shift other money out of streets to help balance the budget shortfall.
“I don’t know how we can sell it when we are not actually going to fix more streets,” she said. “We need to have a much more complete conversation about this.”
Former Councilman Al French, who’s running for county commissioner, likewise, said he will not support the proposal.
“I think the license tab fee is flawed in a couple different ways. One, it doesn’t raise enough money to solve the problem. And two, it’s disingenuous. It only raises $2 million and they are looking at a $12 million shortfall for doing maintenance the way it should be done,” he said. “This is a failed strategy to solve a problem. But for them, they can impose a $20 fee without the vote of the people.”
The tab tax won’t be the last major debate as city leaders struggle to solve the budget gap, French added.
“It’s one of many taxes that will be coming to a household near you,” he said. “Tell the public what the need is and then have an honest conversation about what the needs is. Don’t nickel-and-dime them to death.”