May 11, 2011 in City
City may tap ‘Photo Red’ money for general fund
Spokane Mayor Mary Verner gave a preview Wednesday of a 2012 budget she says would be painless for residents who obey the law.
Verner proposed to close a tentative $6.6 million revenue shortfall with a combination of administrative actions and $1.4 million in new revenue that would require council approval.
The new money would come from diverting $400,000 in red-light-camera traffic fines to the general fund, increasing parking penalty revenue by $200,000 and netting $800,000 by increasing the hotel tax.
“It would not be felt by any citizen of Spokane who obeys the law,” Verner told the City Council finance committee.
Verner also outlined a second, “all-cuts” budget that would save $551,600 by eliminating seven police positions.
That budget also would save $474,000 by freezing the library allocation, possibly forcing a branch to close, and $393,000 by eliminating the weights and measures, arts and youth programs.
Those cuts “are really not acceptable for a city of our size, of our caliber,” Verner said.
Both of the budget possibilities she outlined call for saving nearly $1.3 million by freezing the street allocation.
Other major savings include a $1.1 million draw-down of city reserves and a one-time, $1.3 million “rate holiday” to take advantage of a surplus in insurance reserves.
Those and other adjustments subject to mayoral control are included in each of Verner’s budget scenarios.
Her prescription for pain-free revenue relief depends in part on negotiations with the autonomous Spokane Public Facilities District. Verner wants to trade a hotel tax increase for a more-flexible admissions tax the district collects on its events.
Budget Director Tim Dunivant estimates that a hotel tax increase of 1.3 percentage points, to the maximum 12 percent, would generate $900,000 next year.
However, the tax is limited to tourism-related activities and would have little value in balancing the city’s general fund. The 5 percent admissions tax would generate only about $800,000, but it has no strings.
Verner’s proposal to shift $400,000 in “Photo Red” traffic fines to the general fund is likely to be controversial among council members as well as the public. It would essentially erase one of the city’s central arguments for the program.
Critics of red-light cameras say they’re cash cows aimed more at raising money than improving safety. To answer that criticism, the City Council required fine revenue to be used for traffic safety projects.
Chief Financial Officer Gavin Cooley said the proposed $400,000 transfer to the general fund is intended to leave $350,000 that originally was projected to go traffic programs.
The city currently nets about $500,000 a year from eight cameras that automatically nail motorists who run red lights or don’t come to a complete stop before making a right turn.
Four more cameras that are to be installed this year, and Verner’s proposal assumes they will bring next year’s take to $750,000.
Councilman Jon Snyder said using the money to balance the general fund may be a hard sell for some council members. Also, he cautioned, the cameras may produce less as drivers adjust their behavior.
At the council’s request, Cooley and Dunivant presented a “middle-of-the-road,” four-year levy lid lift proposal for asking voters to increase their city property taxes. The measure would generate about $2.5 million for next year’s budget.
However, Verner counseled against a property tax increase.
“I am getting a lot of concern (from constituents) about taxes, a lot of concern that this is not the time for tax increases,” Verner said.
That’s a shift from February when she suggested that a property tax was likely necessary to avoid service cuts.
Staff writer Jonathan Brunt contributed to this report.