Utility tax under consideration

The Liberty Lake City Council heard its first read of a new 6 percent utility tax that could be imposed on residents as early as Jan. 1.

What the utility tax would mean for residents

The tax would charge residents a 6 percent tax on services such as cable, telephone, cell phones, pagers and solid waste collection. The tax would be added to residents’ monthly bills.

The council will review the tax after six months of implementation and yearly to be amended and adjusted, depending on the city’s needs.

Liberty Lake is the only city in Spokane County with more than 600 residents that does not charge residents a utility tax.

What it means for the city

The tax is the first of a two-part plan to fend off a probable $700,000 budget shortfall the city is expecting in 2011. The second part of the plan includes about $270,000 in budget cuts of city services and possible layoffs.

Doug Smith city community development director, told the council that the city has made in excess of $1.3 million in budget cuts since 2008.

“We are no longer in a position to reduce expenditures and move forward with no impact,” he said.

The council won’t take any action on this ordinance until its Oct. 19 meeting, and if passed there is a 60-day lag time. The ordinance would also need to wait five days after publication of the ordinance. If the city passes the ordinance at its next meeting that would make the ordinance ready to go by Dec. 26, Smith said.

What the council thinks

At the meeting Tuesday, some council members were concerned that this tax was up for approval before they had a chance to see what the budget cuts would be.

Councilwoman Susan Schuler said she would like the council to wait 30 to 45 days before making such a decision to give the council time to review the budget cuts. She was concerned that the new revenue would make the council overconfident in its budget and decide not to make cuts.

“I just want them addressed at the same time,” said Councilman Ryan Romney.

“I’m not trying to sabotage this, but I don’t know how people will vote,” Schuler said.

Councilman Josh Beckett likened the ordinance to a leap of faith. He said the council should pass the ordinance now and make the budget cuts during the usual budgeting process.

Councilman Odin Langford said the council seemed to be in agreement that the city needed to increase its revenue. But the cuts seemed to be stalling the council. He suggested the city staff and the council come up with suggestions for trimming the budget.

But he said the council couldn’t put off the topic of revenue generation any longer.

“If we need it, step up to the plate and let’s do it,” Langford said.

What is next

The finance committee will get a chance to look at some budget recommendations next week to get some clarity about what they could approve in the 2011 budget.

The ordinance will come up for a vote during the council’s meeting Oct. 19.