County manages to elude budget woes

While Spokane and Spokane Valley struggle to find money to maintain services in 2005 and beyond, Spokane County’s budget will remain fairly stable next year.

The county’s proposed $123 million general fund budget is just a slight increase over 2004’s $120 million budget.

There are no big cuts, no major reorganizations.

“The target budgets were pretty much the same,” said County CEO Marshall Farnell.

And the county is still projecting a $14 million reserve at the end of 2005.

It’s a different story in Spokane Valley, which balanced its $44 million 2005 budget, but projections show that at current spending levels, the city will have a $14.5 million deficit by 2010.

Now council members are considering a utility tax to make up the difference between the predicted 6 to 8 percent annual growth in expenditures and the predicted 1 percent annual increase in revenues.

At the city of Spokane, conditions are even more dire.

Council members there are wrestling with the $118 million 2005 budget proposed by Spokane Mayor Jim West. It is $18 million lower than the 2004 budget.

Firefighters, cops, librarians and just about every city department are on the chopping block.

Meanwhile, the Spokane County Sheriff’s Department just commissioned six new deputies.

So what’s the difference? Why is the county’s financial house in such better shape than its two largest cities?

“I think it’s a couple of things. The county has a reserve fund, and we’ve used that fund for some capital expenditures,” said Spokane County Commissioner Phil Harris, who added that without the reserve, the county might have had to make more cuts during recent lean years.

Spokane city spokeswoman Marlene Feist points to the county’s greater potential for sales tax growth and increased property taxes for new construction.

But Spokane County Commissioner Kate McCaslin said the difference has been a consistent emphasis on keeping expenditure growth in line with revenue growth while at the same time saving money during the good years.

Though it caused a lot of grumbling among other county elected officials and department heads during the high times of the late 1990s when revenues were growing up to 7 percent annually, commissioners built up their reserve rather than spending more, McCaslin said.

“So later when the economy tanked, and we had shortfalls, we were able to tap into reserves and cushion the reductions,” she said, adding, “Believe me, when the hard times hit, you didn’t hear the grumbling then.”

For the past eight years, commissioners have tried to keep spending growth to no more than 1 percent per year, said Farnell. This year, the county slightly exceeded that self-imposed cap.

Departments haven’t been complaining much about that this year, Farnell said.

“They look at the city and don’t want to be in that position,” he said.

But spending hasn’t been so tightly restricted at the city of Spokane.

Former Mayor John Powers’ attempts to build a reserve account were derailed by council members, who chose instead to give more money to their favorite departments, including the police.

Spokane County and the city of Spokane have also handled employee wage increases differently over the past few years.

County employees received about a 3 percent cost of living increase in 2003 and went without a COLA in 2004. And for years most county employees have worked 7.5 hours per day, rather than the traditional eight – a savings of about three weeks of pay a year.

By comparison, city employees’ wages have grown considerably over the past few years.

In 2002, as the city was already experiencing budget difficulties, members of the city’s largest union representing most workers other than those in public safety, were given a 2-4 percent raise for 2003 depending on their income level and a $235 bonus for 2002.

Under a new contract, those members’ salaries will grow 15 percent by 2006, although they will have to pay more of their health insurance costs.

Spokane Police Guild members saw their wages increase 9 percent between 2002 and 2004.

And a recent fire union contract reached after two years of no raises boosted firefighters’ salaries by 11 percent.

All told, Spokane’s labor costs will rise $5 million in 2005.

County employees now in contract mediation may also get raises soon, but Farnell said he doesn’t expect any salary increases to have a major impact on the county’s budget.

The increase in Spokane County’s 2005 budget can be attributed mainly to a new, voter-approved sales tax increase for criminal justice and public safety. Those funds will be used to begin planning for a new sheriff’s communications system and to continue funding a special methamphetamine task force.

The only department taking a big hit is parks, which is having to lay off a number of employees because Spokane Valley is no longer contracting with the county for parks maintenance.