December 8, 2010 in City

City vehicle tab tax in limbo

Street maintenance money shifted to rainy day fund
By The Spokesman-Review
 
Where they stand

City Council positions on the proposed $20 vehicle tab tax:

• Supporter: Joe Shogan

• Supporter, but wants to push vote to January: Steve Corker

• Lean against: Richard Rush

• Opponents: Bob Apple, Nancy McLaughlin

• Undecided: Jon Snyder, Amber Waldref

The Spokane City Council is balking on plans to impose a new $20 tax on vehicles this year, and in a surprise move shifted money away from road plowing and repairs to be spent instead rewarding departments whose labor unions made requested wage and benefit concessions.

The council voted in October to give itself the authority to create the local tab tax, but it has since deferred a decision.

In a profanity-laced tirade on Tuesday, Council President Joe Shogan scolded City Council members who are reluctant to approve the tab tax.

“We just spent a whole year on nothing. We created something that’s gutless, has no substance and we just went through a drill,” Shogan said in a council budget meeting. “… I took all heat for creating this bastard and you guys are going, ‘We don’t need it. We don’t want it. We don’t have the guts to pass it.’ ”

The decision to create a tab tax has been complicated by union negotiations. Although a tab tax would have to be used on streets, officials have said other taxes currently used on streets could be diverted from the street maintenance budget to save jobs in departments with unions that make concessions. So far only firefighters have made requested concessions – though the Spokane Police Guild is voting this week on a similar agreement.

With a vote still possible, some council members argue that a tab tax shouldn’t be approved unless the city can prove it will improve streets. Councilwoman Amber Waldref said she’s torn between a desire to use the tax boost to improve streets and a desire not to reward city street employees, who didn’t meet Mayor Mary Verner’s request for concessions.

In a surprise vote on Monday, the Spokane City Council voted 4-3 to shift $1.5 million in street maintenance money to the city’s rainy day fund, where it could be used to support departments with unions that made requested concessions.

City administrators said they weren’t briefed on the concept, which was proposed by Councilman Steve Corker, before the council decision and were uncertain how the cut would affect existing street service. However, they said further layoffs of street employees, who patch potholes and plow snow among other duties, can’t be ruled out. Even before the money was moved, the street department was slated to lose 14 jobs next year.

Councilman Richard Rush said approving a tab tax to pay for streets after diverting money from streets could cause a public backlash.

“I think last night killed it in my book,” Rush said.

Two council members say a tab tax shouldn’t be considered in a sluggish economy.

“You can’t tax yourself out of a recession,” said Councilwoman Nancy McLaughlin.

Fire union concessions will save the city about $700,000 next year and even more in following years. But to save all the jobs called for in the agreement, the city needs closer to $1.4 million. A similar situation will occur in the Police Department if a tentative deal with the Spokane Police Guild is approved by members this week.

The union that represents Street Department workers – Local 270 of the American Federation of State, County and Municipal Employees – hasn’t made the concessions asked for by Verner. Council members said they wouldn’t have targeted the street budget had the union cut a deal.

McLaughlin said she is “disappointed” that Local 270 had not made concessions.

“The concept is we have to be as fair as possible to not reward those who are not coming to the plate,” McLaughlin said.

About half the city’s work force is represented by Local 270, but most of its workers are in utility departments, which are not facing layoffs. The street department is an exception.

City Budget Director Tim Dunivant said that because of reserves, the decision to move $1.5 million out of the street budget would require additional street department cuts in 2011 of around $800,000.

Joe Cavanaugh, president of Local 270, said the only warning he had about the decision before Monday’s vote was a message left by Corker on his voice mail. He said he would wait to offer an opinion until he had a chance to talk to the union’s membership.

Cavanaugh said the city didn’t meet with his group about concessions until November because they were finishing agreements to create cheaper medical plans that the union agreed to last year. Cavanaugh said concessions talks ended on Nov. 18.

“We did not feel they were interested in considering our proposals, which we felt were equally valid,” Cavanaugh said.

Verner has asked all unions to give up their 2011 raises and to pay for next year’s increased cost of providing medical benefits above 4 percent.

Waldref questioned why money should be taken strictly from streets when other unions also haven’t reached agreements.

“If it’s a strategy to engage union participation, it’s coming too late,” Waldref said.

Dunivant said even without diverting the street money, there probably would have been enough in the rainy day fund to cover the extra needed for fire and police concessions in 2011, but it would have used up most of what remains.

Supporters of Corker’s proposal said they didn’t want to use all of the city’s remaining rainy day fund and that the street department was the most logical place to find the money.

Corker noted that the council could refund the street maintenance budget with the tab tax or by diverting income from red light cameras – which currently can’t be used on basic street maintenance. There aren’t similar options for police, fire or other departments.

But Rush said it is foolish to cut streets when the city already is struggling to properly maintain them.


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