Spokane Valley seeks property tax increase

Spokane Valley residents will decide Sept. 14 whether to increase their taxes in exchange for better streets.

The Spokane Valley City Council voted unanimously Tuesday to put a $0.21 property tax per $1,000 of assessed property value – $21 a year on a $100,000 home – on the ballot. If 60 percent or more of voters approve it, the money will be used to improve streets when sewer lines are installed. The increase would return property tax levels to the amount residents paid Spokane County before the city incorporated on March 31, 2003.

Since the levy was introduced late last month, some residents have expressed disappointment in the new city. Incorporation backers told the public two years ago that they would pay less for the same or better services if they voted to break off from the county.

Resident Robert Blum said he was skeptical at the time.

“I thought it might be four or five years before you asked for more taxes, but not 14 months,” he told the council.

The city is grappling with a gap between projected revenues, which are growing 1 to 2 percent a year, and expenses, which are growing about 6 percent a year.

A study conducted by the Spokane County Boundary Review Board before incorporation, during more robust economic times, estimated that the city would be receiving more sales tax revenues than it is.

“The Boundary Review Board did the very best they could to give us a revenue projection,” Councilman Richard Munson said. “They simply made a mistake.”

But that study also indicated the city would need a utility tax to survive, and one has not been enacted.

Incorporation backers touted a second, rosier study they commissioned, which estimated the city would have a $6 million surplus by the end of its first year – without raising taxes. They called the Boundary Review Board study a “worst-case scenario” in 2002.

The tax increase on the September ballot applies only to a specific use: repaving the full width of roads when sewer lines are installed in neighborhoods.

Since the 1980s, Spokane County has connected residences and businesses to the public sewer system through the so-called Septic Tank Elimination Program. STEP has helped protect the aquifer, which lies under the Spokane Valley and provides drinking water to most Spokane County residents, as well as those upstream in Idaho’s Kootenai County.

The STEP program has been beneficial in another way. Between 1999 and 2003, the county fully paved the streets under which sewer lines were installed. Prior to that, the county simply repaired the trench it opened to lay down the pipes. But repaving the entire width of the road is a more economical way to improve streets since some repaving is required to patch the trench anyway. It also creates a better, longer-lasting seal over the road, said city Finance Officer Ken Thompson.

The tax increase would allow full-width paving to continue. It would sunset after six years, and property-tax rates would return to the current $1.60 rate, unless other changes are made in the meantime.

Before the city incorporated, citizens paid the county a road tax of $1.81 for every $1,000 worth of assessed property value. The county paid for full-width repaving, among other things, with those funds.

When the city incorporated, it replaced the road tax with a municipal property tax of $1.60 per $1,000 of assessed property value. Suggesting a move back to the prior level is leaving some residents disillusioned.

“Why did we incorporate to begin with?” Ron Brennecke asked the council. “One of the promises made … was we’re not going to raise any taxes. That’s one of the reasons I finally got around to voting for the city.”

In addition to requiring a 60 percent majority vote, at least 6,172 citizens –or 40 percent of the turnout at the last general election – will have to vote to validate the election. If the levy fails, the county will continue STEP and repave just the trenches.

There’s also the possibility that the county could put the STEP program on hold. That option has been discussed as a way to reduce the amount of sewage being treated and dumped into the Spokane River. If the levy passes and STEP were put on hold, the city could either stop collecting the money or continue collecting it and put it aside until STEP begins again, Thompson said.

The council defended its efforts to curb spending and encouraged citizens to drive on the roads where sewers were installed before 1999 and the pavement was patched instead of fully paved.

“We have to take care of our investments in our roads,” Councilman Steve Taylor said. “We can look to our neighbors to the west (Spokane) and see what happens when you have a maintenance backlog that’s not taken care of.”

Only one citizen spoke in favor of the tax hike.

“Curb-to-curb paving makes perfect sense,” said David Crosby. “I’d gladly pay 21 cents per thousand to pay for it.”