Creation of an annual vehicle tab tax of $20 appears to be gaining support on the Spokane City Council.
A letter signed by six of the seven Spokane City Council members said the city “wishes to consider” creation of the tax this year because of “plummeting tax revenues” and the city’s “commitment to provide adequate level of maintenance.”
However, the signers in the Sept. 8 letter to Spokane County commissioners said they were committed to abandoning the city tax at a later date if the county creates a “Transportation Benefit District” of its own and levies a tab tax countywide.
A public hearing on the tax will be held at the City Council meeting on Oct. 11.
“I still favor a regional approach, but I don’t object to the City Council going ahead with a citywide TBD,” said Mayor Mary Verner in an interview last week. “I understand their sense of urgency and I support their effort to try to find money for the general fund.”
The city is working to plug a $12 million budget gap in the 2011 budget. A citywide tab tax, officials say, could generate about $2 million a year – though if it’s approved this year, collections won’t start for another six months, meaning that in 2011 the tax may only generate half that amount.
City Council President Joe Shogan said the budget hole should be closed with spending cuts, tax or fee increases and union concessions.
“If we’re going to get through this, we’re going to have to do what we did last year,” Shogan said. “It’s a triangular approach.”
Money raised from the tax would have to be used on street maintenance, but the city likely would shift some money currently used for streets to other departments.
Some council members have argued that unions will be more likely to give up pay raises if the council agrees to some kind of tax increase. Councilwoman Nancy McLaughlin, the only council member who didn’t sign the letter, has argued that it’s a poor time to raise any taxes.
Councilman Bob Apple said he intends to vote against the tax even though he signed the letter. He says voters should decide the issue.
Tab taxes of up to $20 can be decided without public votes. Anything higher must go to the ballot.
Meanwhile, the City Council on Thursday will hold a briefing on a proposed downtown parking tax, an idea that is generating significant opposition from downtown businesses.
Verner said the council shouldn’t create the tax if its goal is to help balance the budget.
“I don’t think it solves a general fund problem,” Verner said. “There may be policy reasons to pursue a commercial parking lot tax in the future, but it doesn’t solve the budget.”