City’s budget outlook dims

The bleak economic picture in the state likely will make the Spokane City Council’s job of balancing the 2012 budget harder by about $1 million, the city’s budget director told the council on Thursday.

But not all the news was bad at a council budget briefing. Budget Director Tim Dunivant said better-than-expected sales tax revenues will help carry the city through 2011 without the need for additional cuts. Through August, the city collected $13.6 million in sales taxes, about $1 million more than expected.

That increase will help offset unexpected declines of more than $100,000 each in water, sewer and telephone utility taxes and gambling taxes. Earlier this year, the city estimated that in 2012 it will receive $6.7 million less to the general fund than is needed to maintain current services with the same number of employees. The general fund pays for police, fire, parks, libraries and other services paid for through taxes as opposed to utility fees.

Dunivant said he expects that number to grow by about $1 million before Mayor Mary Verner releases her budget in October.

He said some city departments have been asked to prepare for an additional 1 or 2 percent cut.

Verner’s preliminary budget plan, announced in May, proposed closing the gap, in part, by diverting $400,000 in red-light-camera traffic fines to the general fund, increasing parking penalty revenue by $200,000 and netting an extra $800,000 by increasing the hotel tax.