Resistance to tax cut builds on Valley council

Two more Spokane Valley City Council members are expressing reluctance to consider tax cuts next year.

Councilmen Bill Bates and Ben Wick praised the city’s history of fiscal discipline, including the likelihood of a sixth straight year without a tax increase, but said it would be a mistake to begin reducing rates.

“I think it’s a little premature to talk about a tax cut at this time,” Bates said Tuesday night, noting the uncertainty about what state lawmakers might do in Olympia in the next legislative session that could affect local budgets. Wick agreed.

Last week, Councilman Chuck Hafner became the first to publicly declare he would oppose any proposed cuts to the city’s tax rate, saying the city has an enviable record of holding taxes down during tough years when most other communities were increasing taxes. The Valley has gone five years and is likely to go a sixth without taking the state-authorized annual 1 percent increase in its property tax levy, which would generate about $110,000 in additional revenue next year.

The comments came in response to Councilman Ed Pace’s suggestion earlier this month that the city consider looking for enough spending cuts to enable a 1 percent reduction in its property tax levy as a symbolic gesture to taxpayers.

Pace made the proposal official Tuesday night, saying the city could look at cutting back on association membership fees, travel expenses and other spending “that doesn’t directly benefit our citizens” to come up with the $110,000 in savings needed to cover the 1 percent levy cut.

“It will send a clear message to businesses that might want to relocate here that, ‘Wow, this is a city that cares about reducing taxes, we want to do business there,’ ” he said.

The proposal will be considered by the seven-member council in the months ahead as they craft the 2015 budget.

Meanwhile, the council Tuesday sought to downplay a 2015 revenue-and-spending forecast that shows it would spend about $395,000 more than the $64.5 million in anticipated revenue next year.

The shortfall is the result of nearly $500,000 in one-time expenditures the council decided in June to undertake next year and would be covered by surplus reserves. The city has among the healthiest operating reserves in the state and it would remain at 51 percent of annual operating costs even with the one-time expenditures, said Deputy City Manager Mark Calhoun.