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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

City of Spokane short $6.6 million in ’12

Projected deficit about half it faced this year

For the fourth straight year, Spokane leaders are forecasting a multimillion-dollar shortfall in the next annual budget.

The city predicts a $6.6 million gap between expected revenues and expenses in the city’s 2012 general fund budget, Budget Director Tim Dunivant said in a briefing Wednesday to the Spokane City Council. The general fund pays for fire, police, parks, library and other services funded mostly by tax collections.

While unwelcome news at City Hall, the gap is about half the size of the deficit the city faced with the 2011 budget.

Administrators for months had speculated that the gap would be in the millions. Wednesday’s number, though preliminary, was the first time a precise figure was released publicly. Officials blame the gap, in part, on continuing large increases in health care benefits and the sluggish economy.

Spokane Mayor Mary Verner said she will present a plan to deal with the deficit in the coming weeks after meeting with department leaders. She said her plan may include across-the-board cuts, targeted cuts or a combination. She did not say at Wednesday’s meeting if she would propose a tax increase, though during a debate about library funding in February, she suggested that she would propose a tax increase.

“What we really are working on right now is what is the approach going to be given that we’ve played every card in our deck already,” Verner told the council Wednesday. “We have three major union contracts in negotiations right now. We’ve already eliminated positions and left positions unfilled and cut to the bone.”

Verner has used a combination of union concessions, a utility tax increase, layoffs and an increase in business license fees to balance previous budgets. She also has used the city’s rainy-day fund, which once had $5 million, to cushion the impact from shortfalls, but that fund is expected to be nearly emptied by the end of 2011.

Earlier this year, the Spokane Public Library Board of Trustees asked the City Council to consider placing a property tax request on the ballot to prevent closure of branches next year. Verner opposed the plan, arguing that if the city moves forward with a property tax increase (called a levy lid lift), it should be used to assist other city departments as well as libraries.

City Councilwoman Nancy McLaughlin said Wednesday that she might be willing to let voters decide on a property tax proposal, depending how it’s packaged. But she said she doubts voters would approve a new tax if it doesn’t improve service.

“A levy lid lift to maintain status quo would be a hard sell to the voters,” McLaughlin said.