February 10, 2013 in City

‘Supermajority’ proposition on tax hikes hotly contested

By The Spokesman-Review
 

On the Web: Get up to speed on all the issues in Tuesday’s special election at The Spokesman-Review’s Election Center, www.spokesman.com/elections.

Of the three items Spokane voters will consider Tuesday, one has clearly sparked the most heated debate.

Campaign groups have formed on each side of Proposition 2. Signs are up around the city and rhetoric is high.

The proposal would add language to the city charter to change the threshold needed to approve a tax increase by the City Council to five of seven, up from four.

Here is a look at a few claims made by opposing sides.

Claim: If approved, Prop. 2 would require just one additional vote (a two-thirds majority) on the council to raise taxes. If the council cannot find agreement among five of its seven members, voters can be asked to increase taxes by a simple majority vote.

Source: News release from Spokane Citizens for Responsible Government

Accuracy: The math is half false.

Analysis: We have heard several supporters refer to Prop. 2 as a requirement for a “two-thirds” majority. We thought about calling a math professor on this, but feel confident that math skills we learned in elementary school are sufficient to label this statement false. This example is particularly interesting because the second sentence accurately describes the math. So, just to be sure everyone’s on the same page, the following mathematical statement is false: 2/3 = 5/7. 

Claim: “It’s confusing because some taxes are exempt from this. Some fees are not exempt. A business registration fee would be required (affected) by this charter change. We don’t know what other taxes aren’t included.”

Source: City Council President Ben Stuckart in a YouTube video

Accuracy: What’s confusing is in the eye of the beholder, but city attorneys should easily be able to make the call.

Analysis: Of course, just because city attorneys grasp the legalities doesn’t mean the public will. To understand the difference between a fee and a tax in this state, think about how the money is used.

If the money pays for services the payer is using, it’s a fee that would not be affected by Proposition 2. So that’s much of what’s on your water, sewer and trash bill. The same is true for inspection fees and many developer fees that cover the cost to the city to employ inspectors, planners and so forth.

The city’s business license fee likely is a tax (that would be affected by Prop. 2) because much more is collected than is used to carry out the program (the City Council even raised those fees a couple years ago to help balance the overall budget).

Some taxes won’t be affected for various reasons. The city charter already requires a citizen vote to create a business and occupation tax. An odd tic in state law also exempts the city’s vehicle tab tax. The annual 1 percent option the city has to increase property taxes, gambling taxes, admission taxes and some other taxes clearly would be affected by Prop. 2.

One “fee” that seems unclear is parking meter rates. We would guess that because they pay for some things unrelated to parking enforcement (including the annual payments the city makes for the River Park Square parking garage settlement) that it’s probably a tax. We’ve heard supporters of Prop. 2, however, argue that parking meter revenue would be unaffected. City attorneys say they haven’t done a thorough analysis to make a final say. 

River Park Square is owned by Cowles Co., which also owns The Spokesman-Review.

Claim: Spokane’s proposed charter change does not go as far as other states’ taxpayer protections. In Michigan, for example, local lawmakers are subject to the Headlee Amendment, which requires voter approval of all tax increases at the state and local level. In Colorado, voter approval is required of all tax increases before they can become law.

Source: Washington Policy Center’s Citizens’ Guide to Proposition 2

Accuracy: True.

Analysis: It’s true that Spokane wouldn’t be alone with these kind of restrictions, though the rules would likely be the most restrictive on a local government in Washington. 

Pierce County voters approved restrictions on tax increases in November, but the new rules there don’t affect proposals to increase rates of taxes already on the books.

It is true that Michigan’s Headlee Amendment prevents local governments from raising tax rates beyond what they were in 1978 (when the amendment was approved). On the state level, the Headlee Amendment caps the amount of taxes that can be collected, but legislators still can increase a tax without putting it on a ballot, and the cap is high enough that it’s rarely been an issue, said Bill Ballenger, editor of Inside Michigan Politics. (Interestingly, Michigan voters last year rejected a proposal to require two-thirds votes in order for the Legislature to raise taxes.)

In Colorado, voters passed the Taxpayer Bill of Rights in 1992 that does as advertised by the Washington Policy Center.

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