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December 17, 2011 in City
Rush proposes end to city utility tax
Outgoing councilman wants public vote on idea on Feb. 14 ballot
It was as if pigs had grown wings and landed on the roof of Spokane City Hall.
George McGrath, a conservative, longtime follower and critic of the City Council, approached the microphone at this week’s meeting and praised a plan proposed by outgoing liberal Councilman Richard Rush.
It’s rare for McGrath, who often speaks multiple times during council meetings, to offer positive commentary on city government. It’s downright shocking when it’s about a policy floated by Rush.
Rush’s proposal would mark a huge policy shift: he’s asking the City Council on Monday to place a question on the Feb. 14 ballot to bar the city from collecting taxes on sewer, water and garbage fees.
If such a plan made the ballot and was approved by voters, it would blow at least a $32 million hole in the city budget as of Jan. 1, 2014, when it would go into effect. Or, as Rush hopes, it would force the city to come up with an alternative tax to make up the difference – perhaps a city income tax.
In Spokane, 25 percent of the amount residents pay in utility fees for sewer, water and trash service is really a tax that is diverted to pay for police, fire, library, park and other non-utility services. That tax isn’t noted on city bills.
Rush’s plan almost certainly won’t make it to the ballot this year. Rush – who lost his seat in the November election to former Councilman Mike Allen by 91 votes – said this week that he’s not sure he will get any support from his fellow council members, but his effort aims to highlight the city’s increasing reliance on its utility tax.
City officials during the administration of Mayor Jim West increased the rate, which is one of the highest in the state.
Mayor Mary Verner and the Spokane City Council decided in 2008 to begin taxing previously untaxed utility fees that are devoted to paying for large construction projects. The intake has kept growing as the city has raised fees to pay for a half-billion dollars of sewer projects, including ones that will nearly stop the flow of raw sewage into the Spokane River.
As fees rise, tax collections rise with them.
Incoming Mayor David Condon said in his campaign that he wants to roll back the tax on “rate stabilization fees,” the charges that are meant to be set aside for capital construction projects, but doing so would mean a loss of $4 million or so.
The city collects more in utility taxes on city-run utilities than it does in sales taxes. It collects only a few million dollars more in property taxes, though with a 1 percent cap on increasing property taxes, the city’s utility tax on trash, water and sewer likely will soon be its top source of revenue.
Rush said the utility tax is too painful for the poor and middle class because, except in the summer months when some water bills rise as a result of water usage, most residential utility customers pay about the same for their service.
Thus most customers are paying about the same amount in taxes no matter how big their income or their property value. About the only variables are the amount of water they use, the size of trash can they have and whether they pay for a yard waste cart.
Outgoing Mayor Mary Verner said she agrees that the utility tax is too high but said that a replacement tax would need to be better understood before ending the utility tax.
“If I were still on council I would choose to not put it on the ballot because I think it would be premature,” Verner said. “It would be very appealing to voters to get rid of tax. That’s an easy answer for a voter and it would be devastating to the city financially.”
Rush said political leaders are unlikely to find a replacement tax unless the utility tax goes away.
Rush said he thinks a city income tax may be the best option because he considers it the most progressive tax.
“You’re spreading the cost of government over income, rather than the necessities of life,” Rush said about switching from a utility to an income tax. “At least you have to have an income to have an income tax.”
But an income tax doesn’t exist in Washington and was rejected by voters last year even when the statewide proposal focused the tax only on the rich.
Former city Councilman Steve Eugster, a longtime critic of the city’s utility tax, said there’s a more realistic replacement because state law already allows it: the business and occupation tax.
Even so, the B&O tax has a long history as a political nonstarter in Spokane. The tax is charged on business sales revenue, not profit, and is often criticized as regressive. Furthermore, local leaders argue that a local B&O tax would simply drive businesses out of Spokane. Of course, many argue the same about a local income tax.
But Eugster says the key to a B&O tax is exempting the first million dollars or so of a business’s revenue so that small companies aren’t affected.
He has proposed a separate citizens initiative that would cap the amount the city could tax its own utilities at 6 percent, the same cap as on private utilities – electricity, natural gas, phone and cable.
He said he hopes to start collecting signatures over the summer and place the proposal on the ballot in 2013.
At the very least, Eugster said, the city should inform ratepayers on their utility bills how big a tax they’re paying.
“There would be a totally different perspective if people saw that $25 out of the total $100 they’re spending goes to city taxes,” Eugster said. “That would create furor.”
MAC faces angry crowd 
Dazzeetrader11 on December 17 at 12:17 a.m.
What doesn’t Rush and Verner get about being voted out?
Those two idiots need to have their offices locked, their things boxed up and marched to the City Hall door and have thier little credential sqipe cards conficated and burned.
No soup for YOU!! It’s over! 11th hour nonsense.
liberal_in_right_wing_land on December 17 at 2:01 a.m.
Proof Dazzee just hates liberals, even when they are trying to do away with a tax her and her tea bagger friends hate.
Also, yes they were voted out, but the term hasn’t ended yet. You know thats pretty basic knowledge about politics on why the newly elected officials don’t take office right away after an election, but shocking a tea bagger doesn’t seem to grasp that. Should the city just not run for two month while the newly elected officials hire staffs and prepare for the job? Should George Bush have left the White House and stopped working when Obama was elected?
Tea bagger logic makes no sense.
oneanddone on December 17 at 4:57 a.m.
No one wants to pay taxes but everyone wants smooth roads, good schools, cops, firemen, parks, clean air and water. This list is endless. But funding has to come from somewhere. I’m all for lower taxes but for all of you who think taxes are evil in every instance, just tell me where you cut. There has to be taxes. My only change would be to be sure they’re all progressive. The more you own, the more you buy, the more you spend, the more you pay to maintain American life for yourself and everyone else.
WillyPeter on December 17 at 5:36 a.m.
A city income tax! HOOT! Nothing would make the Lesser Spokane folks happier…….:-)
mdriftmeyer on December 17 at 5:46 a.m.
Rush proposed this to show how utterly asinine such a proposal is for any city.
Spokane has 70-90 year sewers covering more than 7,000 miles of lines.
Guess what? They all need to be replaced. We use the sewers. Each and every business, apartment and home owner uses them.
A Tax on their usage is the logical means to provide future revenue to replace them when they fail in fluid dynamics terms.
Instead of requesting funds for a project and once received the Council authorizes the design to be modified and weakened thus freeing up funds to band-aid other projects ultimately requiring more than one project to be correctly built out and higher costs perhaps the City can provide an initiative that requires, under criminal sanctions, the barring of city funds to be usurped from other projects or said officials will see jail time.
Case in point: 37th Project had a 2.8 Million price tag from Perry to Regal. The funds were allocated. Mid-way through the project a new cost was posted at the City’s web site for 1.8 million with 1 million being diverted.
The project resulted in band-aid side walks, poorly drained roads which the contractor had to lower twice and still screwed it up by not committing to getting the road to below grade from the side walk down to the street so water runs towards the street and not to the houses; and ultimately saw the contractor offering steep discounts to repave multiple driveways to recoup some of their losses.
The sidewalks required by the state were spot fixed, instead of being leveled and repaved to make sure the slopes to the street were a negative grade instead of the often positive grade.
This lowest bidder approach to all projects any Engineer who knows Engineering Economics will tell you results in higher maintenance that surpasses the cost of the original high bid [designed cost up front with the lowest long-term maintenance] and the citizenry gets a sense of being abused and demands free infrastructure as if that will ever happen.
The State needs to change it’s low bid approach or it will continue to never produce long-term solutions any person of any political persuasion can be proud to see their taxes put towards.
soccermomsusie on December 17 at 6:13 a.m.
Finally, George McGrath is getting some press! WAY TO GO GEORGE!!!
Here is a short video of McGrath in action:
http://spovangelist.com/city-council-highlights-as-told-by-soccermomsusie/
I wish he would record a Christmas album.
HEAR OUR VOICE!!!
dataxman on December 17 at 7:26 a.m.
mdriftmeyer - it is not a tax that is used to fund the utilities - it is a tax that goes to the general fund. You pay $10 to the City for garbage and the garbage department keeps $8 and sends $2 to the City which is deposited into the general fund. Eliminating this tax will not lead to less money for the sewer system - just less money for the city leaders to spend.
Verbal on December 17 at 7:50 a.m.
If this was such a good idea, why didn’t he propose it last year, or even last summer before he knew he wasn’t coming back.
Compassion for the poor, or passive aggression towards the new council?
fairchildairman on December 17 at 8:21 a.m.
Verbal,
Rush talked about this before the election. That’s why Mike Allen started spewing lies in each debate that Rush was trying to add a city income tax. Allen failed to note Rush’s entire policy idea which is worthy of consideration; only the politically useful.
But you and Dazed wouldn’t know. You just see a couple familiar names (Rush, Snyder, & Verner) and spout your garbage without reading and comprehending.
GSLFan on December 17 at 9:11 a.m.
“A Tax on their usage is the logical means to provide future revenue to replace them when they fail in fluid dynamics terms.”
Stick with engineering, not finance.
The whole crux of the matter is the water/sewage system is outdated and needs replacement. So instead of piecemealing together budget to budget trying to come up with bandaids year after year after year, the city needs to bond out the project, schedule over a 5 to 10 year replacement period and pay back with bonds schedule over a term that matches the longest timeframe available (essentially the useful life). The water department is GENIUS at making all this look like ‘repairs’, of which they can pad their pockets and keep their woeful crews busy ‘repairing’ that which should be replaced….and replaced by private contractors going through a fair bid process at (likely) far less cost than this ongoing fiasco.
Trying to do MASSIVE replacement and repair projects is like trying to remodel one’s basement on a credit card. It’s possible to do it - it just makes way more cash flow sense to take out a second and pay for it over 30 years. The credit card comes due every month while the home equity loan is broken up into 360 bite sized pieces.
Why the city of Spokane cannot grasp this concept is beyond me - other than the current fiscal structure allows for gaping holes in the general fund to be covered up by adding up to a 20% (I believe) surcharge to utility bills which can be used at the council/mayors discretion.
What Rush is trying to do here is hamstring the Condon/next council’s hands by making a HUGE change to how utility funds have been slushed to general operations over the years. Then the Verner/Rush proponents are going to say “see, we told you so…it’s not so easy to balance the budget” as effectively they are slashing the historic revenue stream on the front side with this measure. It’s like trying to turn an airliner at 90 degrees - makes sense if you want to go in another direction but lots of folks get thrown around in the process. Relative to utility tax and ‘repairs’, this needs to be planned out carefully and structured with ‘good’ debt instead of the finger in the dike, acceptable practice of that past.
This is plain and simple politics instead of solution-oriented, long term planning. Same as handcuffing the city with a 4 year contract with the employees union. Shameful. Simply shameful.
DickAdams on December 17 at 9:15 a.m.
Its Rush`s coup de grace, the same as the stunt Verner pulled with her coup de grace.
The_Seer on December 17 at 9:15 a.m.
lib: They are trying to get rid of something Tea Baggers hate and eventually replace it with something they hate even more.
Spokanewaste on December 17 at 9:21 a.m.
If this would lead to less taxes and more cuts I am for it. What should be on the agenda is the repeal of the recent motion to give the part time council assistants full time benefits at a cost to us taxpayers of over $100k. Or the repeal of the motion that gives Stickert a second assistant to the tune of $45k. Woldref, Snyder and Stuckert should be one term as a result. It will be great when the conservatives take charge in January. They would never support any of these initiatives.
Spokane_Citizen on December 17 at 9:37 a.m.
Aside from the transfer funding of the general fund through the contentious utility tax issue, the continued use of rate stabilization funding for huge Clean Water Act MANDATED wastewater treatment and stormwater related infrastructure upgrades is the best course of action. It completely avoids the debt service cost associated with bonding (interest on the bonds, for the yahoos out there).
And make no mistake about it, you’re going to have to pay for those upgrades, one way or the other.
99%Progressive on December 17 at 9:55 a.m.
Soccarmomsusie you’re so funny…
I followed your link to see George McGrath speak at City Council. Nobody could stutter that much; you must have taken a video of George McGrath and cut it so it looks that way. What a HOOT!!!!
Its soooooo funny when you show and elderly man artificially repeating, repeating, repeating, repeating himself.
(You sould have done the same video with Davey Condon when he declared himself the winner the winner the winner the winner the winner of the race for mayor of Spoakne)
Maybe you could get last the 12-12-11 council meeting’s video and show how outgoing council members Rush, Shogan, Corker along with Waldref and Synder,sold out, sold out, sold out, sold out, sold out sold out the citizens of the city of Spokane to the local #270 employee union,
You could show more video of George McGrath down at that same meeting telling city council that renewing local #270 contract a year early in a gottcha lame duck move is wrong wrong wrong wrong wrong for any city council to do…right before Joe Shogan went a yelling spree at McGrath for trying to stop the council’s pay back to the union.
Keep up the good work showing the republicans that we liberals know how to better spend their money on our people Soccarmomsusie!!! Go local #270!!!
If the Tea Party or republican doo doo doo gooders stand up and cry unfair, you will be there to give them a two handed murrphy….. I am sooooo glad glad glad glad you are really a liberal democrat soul sister soccarmomsusie!!!
Hear her flocking flocking flocking flocking flocking flocking voice and watch her mocking, mocking, mocking, mocking video…
Coffee on December 17 at 10:28 a.m.
Soccarmomsusie: I hope you got the rights to use that footage,because if you didn’t you might be receiving a bill for using it.
Now i would not drop a dime on you, but a sneaky little QWSer like liberal_in_right_wing_land might as soon as he settles down enough from the thought of getting a tea bagger busted.
nslopeofw on December 17 at 11:40 a.m.
Coffee-
Because soccermomsusie is a fake person, dreamed up by the liberals, “she” can get way with anything. Ignore anything written by conservative hating, fake susie.
bsdetector on December 17 at 12:01 p.m.
New Story. Same “experts” spouting the same BS.
Spokanewaste on December 17 at 12:27 p.m.
You are so correct bsdetector. I am glad that you agree that the Council approving $100k in full time benefits for their part time assistants and a second assistant for Stuckert is bs. It is gross and tone deaf too! Every support position in that office should be part time! This will be an issue in the next campaign. Thanks for calling bs.
misjustice on December 17 at 1:48 p.m.
“Rush proposes end to city utility tax” but calls for replacing it with a city income tax.
REALLY? A tax by anyother name is STILL a tax…
*sigh*
Dazzeetrader11 on December 17 at 2:56 p.m.
Well you libs voted for Stuckart. Live with it.
Fairy man…be nice. Your side is sunk.
nslopeofw on December 17 at 3:28 p.m.
Why do you SPOKESMAN REVIEW blog monitors keep deleting my derogatory comments about lib_in_rt_wing_land’s sexual preference, yet continue to allow him to attack TEA party’ers using derogatory sexual comments? Is it because its OK for liberals to use offensive material, but not if one is a blue dog conservative? I am very offended by the term TEA baggers, and have repeatedly asked them to not use it, yet they blow me off. So, I type this stuff because i want to show how offensive it is, and because its apparently acceptable language here, yet, you continue to censor my posts, while allowing Lib_in_rt_wing_land to write as he pleases. Please explain your logic.
new_to_wa on December 17 at 3:36 p.m.
Wow, the libs up here are just as nasty as the ones where I came from! If you idiots want to drive business and homeowners out of Spokane just vote in a City Income Tax! Look at the cities that have them and see how they are doing. I’ll say it’s a progressive tax, that’s the kind of tax libs/progressives love the most. Kansas City, MO has a city income tax and businesses and residences can’t move to the Kansas side fast enough. You don’t see many if any new business move into the Kansas City, MO city limits. No way in Spokane can we afford a city income tax. Ever!!
Steve Eugster on December 17 at 4:26 p.m.
Would someone please show us where a charter city in Washington has authority under the law, or the constitution, of the state of Washington to impose a city income tax?
If the state cannot impose an income tax why would a Washington city be able to do so?
nslopeofw on December 17 at 4:29 p.m.
Because the have the killer popo to enforce their iron will
nslopeofw on December 17 at 4:32 p.m.
And, the “double standard’s” team at the SR to manipulate the stories as they please.
Verbal on December 17 at 4:48 p.m.
As you know, Mr. Eugster, there isn’t one.
This is just Rush living in his fantasyland and why he was voted out of office.
Childman - in your post, you say that Allen lied during the campaign about Rush wanting to impose a city income tax, but this article clearly states that is exactly what he wants to do.
Or is it that you didn’t like the fact that Allen didn’t make it sound like a good idea, and neither could Rush, though it WAS his idea.
Again, I ask that if this is such a good idea, why didn’t Rush bring it to the council before the election?
Spokane_Citizen on December 17 at 5:23 p.m.
A city income tax (even if found lawful), or a B&O tax (even with the first million exemption) are politically DOA arrival in Spokane. An end to the utility tax means a huge general fund deficit, and I hope you all clearly understand that the predominant general fund expense is Police and Fire (yes, there’s the Street Department, but it has already been decimated, not much left but remnants). While I personally don’t find police and fire department manpower reductions all that frightening, the general public has always demonstrated that they find such reductions rather terrifying. Maybe that’s changed, but I doubt it.
Spokane_Citizen on December 17 at 6:07 p.m.
I thought that TEA Party people sometimes like to carry and display tea bags around to honor and commemorate the Boston Tea Party. How can the term ‘Tea Bagger’ be sexually derogatory in nature? I must be getting old, because I simply don’t make the connection. Would you explain it to me? You should be proud to be a ‘Tea Bagger’.
DickAdams on December 17 at 8:13 p.m.
Reading writer Jonathan Brunt`s story, his comparing city taxes re saying the real estate tax is the city`s main source of revenue is wrong.
“The city collects more in utility taxes on city-run utilities than it does in sales taxes. It collects only a few million dollars more in property taxes, though with a 1 percent cap on increasing property taxes, the city’s utility tax on trash, water and sewer likely will soon be its top source of revenue.”
The story only includes the so called public city utility tax, when in fact, the private city utility tax added to the city`s U tax, brings the total amount of revenue to a outrageously high revenue stream.
I know Mr. Eugster may not agree with me, as he calls a portion of the tax something else but the bottom line is the City Utility tax ordinance is used for both private and public utility taxes, even though semantics might be used to identity the tax and call it what ever.
The city of Spokane is real cute about the city utility tax evidently, and the brain trust at city hall, continue to blindfold the users.
At one time as you may remember, the percentage of the U tax was shown on the users billing. City Hall removed it, I think to dumb down the citizens paying the tab.
Spokane_Citizen on December 17 at 8:36 p.m.
Dick, this is what I truly admire about you. You just want ‘transparency’ (though what an overworked and nebulous term it has become). I really don’t think you have a problem paying for government services, provided they aren’t submerged in a thicket of subterfuge.
soccermomsusie on December 17 at 8:49 p.m.
927%. You pretend to be a Conservative, but your avant garde way of spelling, punctuation and total disregard for THE AMERICAN LANGUAGE SHOWS YOU FOR THE LIBERAL YOU TRULY ARE!!!! If nothing else, your prose reminds me of another (defeated) who tried to stop the Tsoccermom Tsusie Tsunami Tsensiblity Tsurge.
George McGrath is the most cogent, thoughtful voice for all of us Conservatives in “Spoakne” (too much absinthe or pain killers?) today. That you say he stutters and is elderly is even too insulting for an obvious Libertard like yourself!
Perhaps, you are a Liberal pretending to be a Conservative pretending to be a Liberal. Because your missive seems to shift a lot between these viewpoints.
I DIDN’T MAKE THE VIDEO! The crippled kid next door did. I gave him a dollar to do the job (bad enough already that my insurance rates are upped because of his MDA lifestyle). I said make George relevant for the kids. He assured me this kind of rapp music is what is “in.”
And we TEA PARTIERS ARE NOT THE DOO DOO GOODERS!! That’s your Dumbocrat OBAMATRON 2000. He’s the one who said “Ooooo GWB (BEST) has kept the Iraq War off the books. I shall include it all in my deficit now.” What a maroon. LOSER!
WE REPUBLICANS ARE ABOUT OUR TEAM WINNING AT ALL COSTS! NOT ABOUT BLEEDING HEART DO-GOODISM! Real Americans respect that. Obviously, you don’t!!!!
HEAR OUR VOICE!!!!
brianrbreen on December 17 at 9:01 p.m.
@Spokane_Citizen
This Yahoo might…. that’s might…go along with you as far as PD staffing in concerned. If there were some halfway decent statistics available. Among other things I can’t figure out how Audrey Cowan as the administrative secretary, by her self, managed to handle the workload for three Chiefs, the supply Lt., and who ever else came her way for so many years.
BTW: Thanks for the lesson regarding debt service. I always thought it was just an excuse the working girls used when they said there was no money exchanged and they were just showing their gratitude for an old debt they owed.
brianrbreen on December 17 at 9:08 p.m.
Regarding my last post. It was not in any way intended to offend “soccormomsusie”. Don’t tack a worry on it soccermom…what happens in Vice… stays in Vice.
greenlibertarian on December 17 at 11:26 p.m.
You’ve outdone yourself, SoccerMomSuzie.
I stand befuddled of course, but in awe.
Keep at it you’re going to give Nslope an aneurysm.
nslopeofw on December 18 at 1:24 p.m.
nslope is just pointing out to the new people that soccermomsuzie is fake, and an attempt by the liberally dominated spokesman review to laugh at non liberals. My real beef (no pun intended) is that SR lets the resident homosexual spout offensive sexual rhetoric, yet deletes any post i make that points out his sexual preference in slang. (less offensive slang than he uses every day)
99%Progressive on December 19 at 12:23 p.m.
Soccermomsusie you are so funny
Now you claim you didn’t make the greenliberal amateurish video; but it’s so your style of humor Soccermomsusie; mocking old people who take time away from their evening to speak out against the Spokane City Council when the city council is obviously misspending public money….ha ha he he good for you!!!
You are way to modest soccarmomsuse; giving all the credit to “The crippled kid next door…” ….you humble brag too much….
Who is greater the promoter or the creator; they all should share equivalent acclaim…
I am so glad you are really a raging progressive…gal…posing as a GOP loving, God fearing, sock her rmom…SHHHH I won’t tell your secrets soul sister!!!!
Adhere to her flocking voice…after all, it is Christmas…