Utility tax in Liberty Lake questioned

The City of Liberty Lake has been collecting a six percent utility tax on telephones, electricity, gas and cable since the beginning of the year. The decision behind this was based on an expected budget shortfall for 2011, with the option of reviewing the plan in six months.

Mayor Wendy Van Orman announced the tax was expected to bring in $825,000 during 2011. As of June, the city had collected $586,628, about 71 percent of the expected amount.

She also asked the council to review a rebate plan for low-income seniors and the disabled.

Councilwoman Susan Schuler pointed out that in the first six months of the tax they had collected almost the whole amount expected. She felt the tax was always supposed to be a bridge over tough times for the city.

“I never intended it to be permanent,” she said.

Nancy Holmes, a board member of the Spokane Valley Chamber of Commerce, told the council she felt the shortfall the city was expecting never materialized and the council should rethink it.

“The tax has a negative impact to business in the city,” she said. She added that the Chamber would be happy to participate in discussions about the budget and the utility tax.

Wayne Frost of Greenstone, a development company in the city, said he has tried to bring two companies to the city, but both found locations elsewhere because of the utility tax. He said the businesses would have brought $200,000 in revenue to the city.

“This tax, in my opinion, was hurried and nonvetted,” Frost said. “It should go away.”

Councilman Josh Beckett said the city has attracted employers since the beginning of the year, employers who have brought 600 jobs to the community. Others are staying and expanding.

“I don’t think it’s fair to say the utility tax is killing business,” he said. He did agree the tax was tough on the citizens.

The conversation is expected to continue, especially after the council receives updated numbers at the end of July.

In other council news, voters will get a chance to decide whether the city should have a city manager form of government.

The Committee for Better Government turned in 266 signatures to the Spokane County Auditor. Van Orman said the group needed 202 signatures collected and 240 of the signatures have been validated.

City Attorney Sean Boutz told the council the city needs to prepare the ballot title for the proposition by Aug. 16.

Voters will decide whether to change Liberty Lake’s form of government during the election in November.