Ruling Puts Road Projects Back On Track But Initiative Dubbed ‘Son Of 695’ Leaves Question Mark In City Budget For Next Year

Thousands of Spokane residents choking on dusty roads can now breathe easier.

Because of Thursday’s state Supreme Court decision that ruled Initiative 695 unconstitutional, the city and county can proceed with dozens of road paving and sewer installation projects that were on hold following last November’s vote.

Those projects, called local or rural improvement districts, were put on hold by I-695 because of its provision that all fee increases need a vote of the people. LIDs and RIDs are financed through higher tax assessments on property owners who benefit from the improvements.

“We essentially haven’t been doing LID programs because of 695,” said Ken Brown, the city’s principal engineer. “We have been in a holding pattern for a year. It’s good news if we can move forward.”

While the hiatus on LIDs and RIDs appears to be over, the most significant impact of I-695 on the region - the millions in lost motor vehicle excise tax dollars - appears to be long lasting.

The city of Spokane had depended on $3.9million a year in the excise tax money, and its loss meant cutbacks in most city departments. Those included shutting the downtown library on Saturdays and taking city police officers off the serial killer task force, which eventually caught Robert Yates Jr.

The state Legislature provided the city with about $1.6 million to help make up for the loss this year and next, but the city will have to adjust permanently to having less money, city budget director Collette Greenwood said.

Thursday’s decision “doesn’t balance my budget, but it allows me to do some things,” City Manager Hank Miggins said. “In a psychological way, it allows the city to move forward.”

That could include a property tax hike above the 2 percent the council tentatively approved Monday. However, Miggins and city officials are still leery of any new taxes because of Initiative 722, which is on the Nov. 7 ballot. Called “the son of 695,” I-722 would roll back any tax or fee increases passed in the last six months of last year, and would limit any tax raise to 2 percent.

If I-722 passes, the city may have to pay back millions, Miggins said.

“What does 722 mean now?” he asked. “Because 722 was predicated on 695.”

While the city was left reeling by I-695, the county was able to withstand the $1.2 million hit I-695 delivered to its general-fund budget because it had nearly $14 million in reserve at the time, said Marshall Farnell, the county’s budget director.

I-722 would have little impact as well, Farnell said, because the county did not raise taxes or fees for the 2000 budget.

“We took the conservative route, so there’s really been no impact on us,” he said.

Staff writer Adam Lynn contributed to this report.