January 24, 2013 in City

Voters to decide whether 5-2 split needed on taxes

Proposition 2 would affect City Council
By The Spokesman-Review
 

Spokane’s Proposition 2 is a way to ensure strong consensus on important issues or a strategy for a minority to seize control from the majority.

That’s the debate among Spokane officials about the proposed requirement that tax increases earn at least five of seven votes on the City Council for approval instead of four.

Voters will decide Feb. 12 if they want to place the increased threshold in the City Charter. Ballots will arrive in mailboxes this week.

Councilwoman Nancy McLaughlin, who sponsored the initiative, calls the proposal a “reasonable taxpayer protection policy.”

“It’s asking no more or no less than what we ask for at the state level,” she said, noting that state and Spokane voters have overwhelmingly approved supermajority thresholds on tax increases from the state Legislature, most recently last year.

Beth Thew, secretary-treasurer of the Spokane Labor Council, said the proposal could put economic development efforts at risk as it becomes more difficult to fund projects. She added that it’s not fully clear what taxes and fees would be affected by the five-sevenths rule.

“If you don’t know what you’re voting for, I think you’re better off voting no,” Thew said.

While the supermajority rule has been popular for state government, imposing supermajority rules for tax increases at the local level is a new concept, at least in Washington. The proposal is based on a similar proposal that was approved in Pierce County, home to Tacoma, in November. Pierce County’s supermajority rule, however, only created the higher threshold for creating new taxes.

Roger Bush, the Pierce County councilman who proposed the rule, said his intent was to protect citizens from new taxes and fees. As the state and federal government lessen support for local government, state leaders have proposed taxes that cities and counties can impose instead. Leaders must first work to find efficiencies before raising taxes, he said.

“We protected the families and we protected the potential employers and the current employers,” said Bush, who served four terms in the state House before his two terms on the county council.

Spokane’s proposal would impose the threshold on existing taxes, too.

Some debate remains about exactly what taxes and fees would be subject to the five-sevenths rule.

Assistant City Attorney Mike Piccolo said the city has not completed a formal legal analysis of which taxes and fees would be affected. But he listed the obvious ones: property tax increases up to 1 percent a year, the local business and occupation tax (which Spokane doesn’t impose), utility taxes, hotel and motel taxes, admission taxes and the gambling tax.

He said he couldn’t say for sure if business license fees, parking meter rates or parking tickets would be affected because analysis hasn’t been completed.

Piccolo said the five-sevenths rule likely would not affect votes on utility fees or building permits.

The initiative says the higher threshold would affect “councilmanic taxes”: taxes that can be imposed by the City Council.

The ambiguity results from the word “taxes.” Piccolo said determinations will be made largely on what the primary purpose of the tax or fee is. If it’s to regulate, then it’s probably a fee not affected by the initiative. If it’s to raise money for government, it probably would be.

McLaughlin said concerns over ambiguity in the Charter proposal are overblown.

“Our attorneys will easily be able to figure out the difference between a fee and a tax,” she said.

City Council President Ben Stuckart said the rule is unnecessary because the history of the City Council shows that it usually does work for strong consensus when approving tax increases. He said he could find no example of the City Council in the past decade imposing a tax by a 4-3 vote that would be affected by Proposition 2.

One recent tax that was approved by a 4-3 vote still could be raised by a 4-3 vote: the vehicle tab tax. The city imposed the $20 annual tax in 2011. But the state law allowing the city to impose the tax gives the power to the Transportation Benefit District governing board. Those board members, under state law, mimic the City Council. The distinction means that Proposition 2 would not apply to tab tax increases, according to Piccolo’s analysis.

Stuckart said the Republican-leaning majority on the council is using the Charter proposal to keep control.

“This is about somebody worried about losing their majority. This is Nancy’s last year in power and she would like to ensure that her counterparts, even if they are in the minority, are still in control of the conversation,” Stuckart said. “It’s politics at its worst.”

Councilman Mike Allen said requiring supporters of tax increases to win one more vote will mean better ideas as more people work together to win passage.

“It seems to me that there needs to be a more thoughtful, collaborative approach to raising taxes,” Allen said. “Apparently, the council president would rather just raise your taxes.”

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