Growth Adds To County Coffers Increasing Population Boosts General Funds With Tax Revenues

For three years, the message from Spokane County commissioners was the same: money coming into the government was leveling off and managers needed to cut staff.

Not so this year.

The increasing number of people moving to the unincorporated area spawned a surge in retail sales, money from home transfers and rising property taxes.

“For the first time in three years the budget’s not out of whack,” said County Administrator Marshall Farnell. “We’ve finally got control over expenditures. It’s good news in that we aren’t looking at massive shortfalls.”

The money is being used for everything from a $5.5 million sewer interceptor line for the northern suburbs to buying a $76,000 building for a community policing station in the Spokane Valley.

Overall, the county’s general fund - the main source for services such as the auditor, treasurer, assessor, the jail, prosecutor and courts - will grow from $60.1 million in 1990 to an estimated $73.4 million in 1995, an increase of 22 percent. If a special sales tax approved by voters for criminal justice is included, the increase is higher.

A big reason for the boost is new construction. The assessor’s office added close to $600 million to the tax rolls in 1993 and will do the same this year. The result is that property tax revenue increased by 10 percent this year and will do the same in 1995 - unless the tax rate is lowered.

Led by construction spending and people buying new vehicles, retail sales tax is charging ahead, too. The county expects to take in 9.3 percent more this year in sales taxes - about $1.7 million - and 6 percent more in 1995.

Part of that money is going into the special pot for criminal justice needs, a fund approved by voters in 1990. The tax, one penny on a $10 purchase, now brings in more than $2 million a year. Another $2 million is raised from motor vehicle transfers and together the fund pays the salary of 75 people from prosecutors and public defenders to court clerks, juvenile detention officers and traffic sergeants.

Sales tax money also has been used to fulfill a promise to unions and hire a labor relations specialist; to increase electronic monitoring of juveniles who aren’t getting into the crowded detention center; and to pay lump-sum retirement benefits to senior managers.

Among other things, the funds have enabled the county to add accounting positions in the treasurer’s office and temporary help for the county assessor to process the increasing number of tax parcels, and to purchase property for a new community policing program in the Spokane Valley.

The sales tax traditionally is the most volatile income source for local government. It comprises 28 percent of the general fund and analysts already are seeing a slowdown in the consumer-spending binge, which started last June.

That’s why commissioners want to use part of the unbudgeted income this year to beef up the $1 million reserve fund, which is less than a third of what it should be.

“You can’t say everything is great, that sales tax is up and property tax is up and everything’s fine,” said Farnell. “We’re still going to be here in ‘96.”

Additionally, the county is seeing more money from fees and grants dedicated to a specific purpose.

The state Department of Corrections gave more than $300,000 to various departments to pay for impacts of the Airway Heights Corrections Center where the state is housing more than 1,100 prisoners.

The money is being used for deputy prosecutors, two sheriff’s deputies, a public defender and an intern in the defender’s office.

Spokane County’s District Court handed over its unpaid accounts to a private collection agency last year and so far money collected by the court is up 20 percent, with $210,000 coming from the collection bureau.

The planning department also increased fees so those seeking to subdivide land, build a new apartment building or home pay a larger share of the department’s costs. Department fees are used to pay for land-use analysis and zoning hearings and the money has been used to hire planners and clerks to process plat applications.

Commissioners also have increased taxes in selected areas to solve specific problems stemming from growth and development.

Population growth has increased more than 12 percent - some 31,000 people - in the unincorporated area since 1990 and commissioners earmarked some special taxes in order to pay for new infrastructure and open space.

For instance, commissioners increased the tax paid by the seller of property last year by one-quarter of a percent, or $250 on a $100,000 home. That is expected to raise $2.5 million a year and the money from the tax is being earmarked to repay $5.5 million in bonds that will pay for extending sewers to the Gleneden area north of the city.

Commissioners also took advantage of a state law that allows them to tax property 6 cents per thousand, or $6 on a $100,000 home, to buy property for conservation. The fund is expected to bring in $800,000 a year with $236,000 spent so far to buy an ancient cedar grove adjacent to Liberty Lake Park in the Spokane Valley.

With the prospect of going into a budget year on an even keel, commissioners are pledging to set priorities for how additional money is spent and stick with it. The most frequently mentioned need around the courthouse and at neighborhood meetings: more money for county parks.

But any discussion on 1995 spending is preliminary. The proposed budget has not yet been reviewed by department heads, who must compete among themselves for new spending.

Undersheriff John Goldman said his department is going to request 15 more deputies for next year to keep pace with population growth. That cost alone would be $500,000.

“We really do have a need to continue to add people,” he said.

One thing commissioners have not discussed is the possibility of reducing the county’s property tax levy.

The government is legally allowed to collect 106 percent more in 1995 than it did in 1994 from existing property. The 6 percent increase is not automatic, but every government body except schools - from fire districts to small towns - automatically build that increase into spending plans. And whatever happens with county spending doesn’t change the fact that most property tax money goes to the state to pay for education.

Still, a rollback next year by local governments would give slight relief to homeowners, some of whom have seen property taxes increase more than 40 percent.

“I guess we have to get a whole lot richer before we do that,” Commissioner Pat Mummey said. “We still have a lot of unmet needs.”