Spokane’s property tax collections to go up

Tax collections in Spokane are expected to increase by 3.2 percent on existing property in 2007, despite a 17 percent average rise in assessed property values during 2006.

As a result, homeowners will likely see only a small increase in their property tax payments to the city, Spokane budget officials said Monday. The state limits annual property tax increases without voter approval.

The city should see an increase in property tax collections from $33.5 million in 2006 to $35 million in 2007, with about $900,000 of that increase coming from new construction or improvements to existing buildings. The city has taxable property of $12.6 billion, and it takes in 36 percent of property taxes paid by city property owners. The rest goes directly to schools, the state to pay for schools and county government.

Chief Financial Officer Gavin Cooley said the city’s assessment on property is expected to decline from $5.25 per $1,000 of assessed valuation in 2006 to about $4.75 per $1,000 of property in 2007.

The general tax fund, which finances public safety, parks, streets, planning, libraries and parts of City Hall, would increase from $127 million in 2006 to $134.2 million in 2007 under a budget proposed last week by Mayor Dennis Hession.

Hession wants to keep existing city programs and add some staff in the building and planning departments to handle an expected upswing in new construction in 2007.

City officials expect that tax collections next year will be $137.6 million in the general fund, leaving nearly $3.5 million in cash that could be applied to the 2008 budget.

Voters last year approved a two-year increase in property taxes, which expires in 2008.

Budget Director Tim Dunivant said the extra tax money will help close a cash shortfall for 2008 that had been predicted to run as high as $10 million to $12 million.

Sales tax revenues, which have been up 11 percent in the city this year, are expected to increase another 2.5 percent in 2007.

“We are anticipating healthy sales taxes again next year,” Dunivant told the City Council, but the budget is taking a cautious approach to sales tax revenue growth in what is being described as a conservative budget.

The city is expecting to lose $600,000 next year because of a planned two-year reduction in the city’s gambling tax. The tax will drop from 15 percent to 10 percent next year.

However, private utility taxes are expected to increase 4 percent while city utility taxes will go up 3.5 percent.

The council has scheduled a public hearing Monday to take testimony on city programs that relate to the environment, health, learning and leadership.

In other business, the council approved an ordinance establishing a $125 fine for failing to register a burglar alarm with the Police Department. About 10,000 burglar alarms were registered this year after the city adopted a program to prevent false alarms by requiring registration and setting fines for false alarms of $75 for a residential false alarm and $150 for a commercial false alarm. The ordinance went into effect last spring but was amended Monday because the original ordinance was unclear about the fine for failing to register an alarm.

City police had been responding to nearly 7,000 false alarms annually, which cost about $800,000 for officer salaries and vehicle use.

The council also confirmed appointments by Hession to a new local redevelopment authority advisory committee, which is being asked to come up with plans for reuse of the Joe E. Mann U.S. Army Reserve Center in Hillyard now that the military is moving its reserve operation to a new consolidated facility at Fairchild Air Force Base.

The advisory committee members are Kenneth Watts, council members Bob Apple and Al French, Larry Griffith, Paul Hamilton, Jeff Johnson, Ray Mooney, Luke Tolley and Wallace Williams.