Mayor offers budget fixes

The pain from last year’s budget cuts had barely subsided at Spokane City Hall when Mayor Jim West dispatched his troops to Council Chambers with more bad news.

Payroll costs were growing faster than tax revenue and deeper cuts would be needed in 2006 without help from taxpayers and city employees.

West sat in the audience last month while his emissaries offered the council a three-prong plan: two separate tax increases and an unusual request for union givebacks. Without it, the city is facing the loss of several dozen firefighters and police officers as well as cuts in other basic services.

For an embattled mayor facing recall over sexual impropriety, the proposal is no less than a bold stroke to preserve the city’s diminishing ability to deliver services – and maybe give the mayor a platform to fight off recall.

“He counts on this as the secret to him not being recalled,” said Councilwoman Cherie Rodgers.

The mayor is wrapping his fortunes around the value of public safety, and pursuing what would appear to be a tough stance toward employee unions.

The budget problem, according to West’s staffers, is caused by continued escalation of employee pay and health-care benefits versus slower growth in tax revenue. Tax revenue is increasing about 2.5 percent a year, while expenses – 60 percent of which go for employee pay and benefits – are rising at 4.5 percent annually.

“I think the city’s spending habits for many years have contributed to the problem,” said Deputy Mayor Jack Lynch.

West’s top budget writers and several citizens made the pitch for more tax money the day after Labor Day. The council two weeks later voted to send a $3.3 million property tax measure to voters on Nov. 8 as city Proposition One.

For West – a master politician accustomed to the wins and losses of public life – the problem is just one more challenge in a 30-year career in state and local government.

The mayor apparently sees his proposal as his mission. In a Sept. 25 fund-raising letter to past political supporters, West wrote, “As hard as it is to ask, I need your help to save this city.”

The letter also said, “Proposition One will raise money to reopen libraries and keep firefighters and police operating without further layoffs. I urge you to vote ‘yes.’ We have trimmed the fat out of city government and now we’re working together on a proposal to bring new revenue to our police, firefighters and libraries.”

Here’s the plan:

“Voters on Nov. 8 will be asked to approve a $3.3 million increase in the regular property tax collection, a measure that can pass with a simple majority and would remain in effect for two years. A survey conducted by the mayor last summer showed widespread support for the measure since it would provide relief specifically for threatened police, fire and library services.

“The council is being asked to increase the tax it charges its utility customers. Currently the utility tax stands at 17 percent and is one of the highest among the state’s large cities. The proposal calls for raising the tax to 20 percent for two years to gain an additional $2.85 million a year.

Council members appear just as eager as the mayor to avoid cuts in 2006, although some of them are looking for ways to reduce utility expenses to minimize the impact of a tax increase on utility bills.

“The city’s seven labor organizations are being asked to relinquish $1.9 million in expected health care benefits in 2006. The savings would come through increases in deductibles, dependent premiums and co-payments. Unions so far have balked, but continue to meet with management.

About $850,000 of the savings would apply to general fund departments, including police, fire and libraries. The other $1 million would be saved in city utility departments, which would ease the burden of the utility tax increase being sought from the City Council.

West is saying he needs union givebacks to convince voters that employees are not being greedy, and that they are sharing in the pain of balancing the budget.

Indeed, the mayor’s survey of 250 residents last summer showed that support for a property tax increase grew to about 80 percent when respondents were asked how employee givebacks would affect their votes.

But the unions are being asked to agree to benefit changes in ad hoc discussions that fall outside the traditional pattern of contract talks and settlements. If the unions say no, they come off as the bad guys. If they say yes, they risk splintering their memberships and causing tension among the different employee groups and potentially causing hardship to lower-paid employees.

“It is right where the city wants us to be,” said Lt. Greg Borg, president of firefighters Local 29.

Borg said the strategy “is kind of obvious, don’t you think?”

Union leaders met with administration officials on Tuesday, and agreed only to keep talking. “We are still open to suggestions and look for a solution,” Borg said. He complained that the administration has so far been unwilling to consider union-sponsored proposals for cutting health care costs, such as the creation of two types of health plans with two different levels of out-of-pocket costs for employees, who would have more choice over managing their health care expenses.

West said, “We can’t afford 17 or 23 percent increases in health benefits.” He said unions will have no choice but to “capitulate” eventually.

Union leaders said any changes in benefit structure will have to be approved by union members.

West, for his part, sidesteps questions about what would be lost if the tax increases and union givebacks cannot be obtained. But the city will be forced to cut dozens of employees. This would follow a 2005 budget with 152 fewer positions than the budget in 2004. Jobs were lost in police, fire, libraries, streets, planning and other departments.

Crime Check was closed, and a new Spokane Crime Reporting Center was opened with reduced hours. School resource police officers were cut. Fire staffing was reduced. Library branches are offering fewer hours this year; the street department has fewer workers to clear snow, paint lines and patch potholes; and neighborhood planning work was curtailed.

West acknowledged that talking about potential cuts is a losing strategy. To counter that problem, the library administration has come up with a plan to restore some of the lost branch hours with part-time workers.

West characterizes his proposal as an initial step to gain control of the budget, a step to be followed with a restructuring of service delivery and initiatives to promote tax-producing growth.

But the strategy has a number of potential pitfalls.

Getting employees to agree to a reduction of health care benefits is a long shot, said Councilman Bob Apple. “In reality, I doubt very much you are going to get what you ask for,” Apple told administration officials at last Monday’s council meeting. “This has to be a real problem for employees.”

Employees are facing pressure not only to give up benefits, but to put their union money behind a campaign for the levy-lid ballot measure. Borg said three unions representing police, fire and rank-and-file workers are expected to campaign for the ballot measure despite being asked to give up benefits.

If unions balk at givebacks, voters may not be as inclined to support a property tax increase, the mayor’s survey indicated.

Rodgers said the mayor’s strategy to squeeze the unions may be backfiring on him. “It’s an implosion up there,” she said last week.

While city officials struggle to find budget solutions, already approved salary contracts continue to increase city costs for delivering services.

Firefighters received a 2 percent salary increase last January and a 2.5 percent increase in July.

Local 270’s rank-and-file workers will have received 15 percent in salary increases over three years by the end of 2006.

Management and professional workers received 2.5 percent in increases this year.

Three unions, including the Police Guild and two smaller bargaining units, have contracts that expire at the end of the year. Police are expected to take a tough stance in talks after settling contracts at the end of 2003 that gave them a 0.7 percent cost-of-living raise in 2005. At the same time, other large cities in the state are paying at least as much to police officers if not more, and state law gives public safety unions the ability to seek pay comparable to Seattle, Tacoma, Bellevue, Vancouver and other similar-size cities.

Since the mayor took office, his salary has increased from $109,000 a year to $137,000 this year. The raise came because of a city law requiring that the mayor earn at least as much as the police and fire chiefs, both of whom got $30,000 city raises in 2004. The salary increases for the mayor, fire chief and police chief are costing the city nearly $100,000 in added spending.

Rita Amunrud, a member of Citizens for Integrity, the group that’s pushing the mayor’s recall, called on West to give back his salary increase. “I don’t see him jumping to do that,” she said.

“I think people are dumbfounded and numb,” she said, predicting the mayor’s proposal may not be greeted favorably by the public. “People are going to realize, ‘Are we really that much ahead?’” under West’s leadership.