City OKs telephone tax

Spokane Valley residents will begin paying a 6 percent telephone utility tax in January to maintain their streets.

The tax will raise $3 million to $4 million a year to help offset an estimated $8 million annual need for street maintenance.

City Council members said they imposed the new tax reluctantly Tuesday.

Deciding how to tell the public what they’d done unanimously proved a bigger challenge for the council.

Mayor Rich Munson wanted to spend $3,000 to place a flier in The Spokane Valley News Herald and The Spokesman-Review. He hoped to keep people from complaining they weren’t told.

Councilwoman Rose Dempsey agreed and seconded Munson’s motion, but citizen Joe Schoener said the money would be better spent on patching potholes.

People “are so disinterested that the $3,000 is a waste of money,” Schoener said. “People don’t care. This place should be jammed with people.”

It wasn’t, though.

One man asked a question about street funding, Janice Austin e-mailed in her “adamant opposition” to the telephone tax, and Schoener counseled restraint.

Add up all the small tax increases governments impose, and “you’ve got a big tax increase,” Schoener said. “There are so many costs out there that the small guy where the rubber meets the road is really hammered.”

Council members Steve Taylor and Gary Schimmels agreed the fliers weren’t needed.

Representatives of 10 social service agencies waiting to make pitches for a share of $36,000 “would be scampering for that extra $3,000,” Taylor said.

He figured people would learn about the new tax from newspaper stories, and Councilman Dick Denenny suggested waiting to see whether news accounts get the job done.

Councilman Bill Gothmann said he was “somewhat torn,” but he went with his “fundamental philosophy that more information is better than less.”

So, with Councilwoman Diana Wilhite absent until later in the meeting, the publicity measure died in a 3-3 tie.

Linda Thompson, who was in the audience for another item, suggested the city team up with telephone companies to put announcements in telephone bills.

To make the tax more palatable, the council guaranteed by ordinance that all the money will go to street maintenance. The ordinance also specified that the tax may be repealed if the council substitutes another tax that is more directly related to street use.

Dempsey said she was “a little disappointed” that the ordinance didn’t call for the tax to end automatically if another one is imposed. Still, she supported it as “one of the least painful ways that we can get money for our roads.”

The tax on a $50 phone bill would be $3.

Although telephone use isn’t related to street use, the telephone tax is a good way of spreading the cost broadly, Munson and Gothmann said.

Gothmann said the phone tax does a better job of taxing businesses along with individuals than does a vehicle license fee the council also has considered.

“Ask yourself who owns the majority of the vehicles,” Gothmann said.

Council members agreed that some new tax was needed.

If the city continued to rely only on state gasoline receipts, which produced less than $2.1 million in 2007, snow would be plowed only from arterial streets and “we would do absolutely no pothole filling,” Gothmann said.

“We’re going to get ourselves into a maintenance death spiral,” Taylor said.

“If you want to see what it looks like to defer maintenance, look to the west,” Munson said. “It’s not acceptable for this city.”

Combined with the state gasoline tax, the telephone tax may cover the estimated $4 million to $5 million annual bill for basic street maintenance, but city officials say long-term preventive maintenance would bring the cost to $8 million.

“This may be a stopgap, Band Aid fix, if you would, but it does serve the purpose,” Schimmels said. “It gets us down the road here for maybe three to five years.”