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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

City braces for budget cuts despite strong sales taxes

Some officials, union leaders think early deficit forecast is high

Spokane is collecting sales taxes like it hasn’t since before the recession.

Even so, city officials are preparing for another multimillion-dollar deficit in 2014.

That would be on top of five years of gloomy budgets that forced program cuts and worker concessions.

“Most of the excess services that the city was providing are gone now,” City Councilman Mike Allen said. “Cuts now are going to hurt.”

At a news conference last week, Spokane Mayor David Condon declined to predict the hole the city faces because numbers are in flux. But administrators have estimated the deficit as high as $4 million in briefings with City Council members.

That’s less than half of the deficit the council faced last year, but it still has some council members and union officials wondering why the cuts remain in the forecast.

“When we’re hearing that the economy is doing OK, their numbers don’t seem to verify that and we’re not sure why,” said Joe Cavanaugh, president of Local 270, the city’s largest employee union, which is part of the American Federation of State, County and Municipal Employees.

Council President Ben Stuckart said with sales taxes strong for several months, it’s time to revise the early prediction.

“I don’t think the $4 million is really $4 million,” Stuckart said.

But Allen said the mayor and his staff are right to use conservative budget numbers so the city isn’t forced to make cuts if the recovery doesn’t hold.

Administrators stress that the budget is about much more than sales taxes. While collections have risen impressively this year, those taxes make up about one-fifth of the general fund budget, which pays for tax-funded, non-utility services such as police, fire and libraries.

Budget Director Tim Dunivant noted several increasing costs and unknowns for 2014, including a rise well above inflation in the cost to provide health care plans for members of the city’s largest union. And it’s still unknown how much of a raise, if any, will go to the Spokane Police Guild, which has worked without a contract since the end of 2011. He added that some smaller sources of revenue face downward pressure, such as traffic ticket fines, which have fallen as a result of cuts to the police force. Interest revenue is tiny.

Among the positives for those working to balance the budget: Most workers have agreed to no raise in 2014. And the city’s fire and managers’ unions have agreed to cover any increases in the cost of health insurance beyond 4 percent. In the past, the city has sometimes had to swallow increases topping 10 percent.

For the past five years, city leaders have slashed their way to a balanced budget. Those cuts were:

• $7 million for 2010

• $12 million for 2011

• $8 million for 2012

• $10 million for 2013

The budget has been balanced in several ways, including employee concessions, utility tax increases, layoffs and the elimination of departments, including weights and measures, arts and youth.

Officials appear to be backing off plans to ask voters for a tax to hire more police officers. Condon said late last year that he was considering a public safety tax.

But many City Council members say that although they support the idea of a tax to increase the number of police on the beat, they won’t ask the public to vote on a tax until they know how much police officers will be paid. The guild and city are in mediation to resolve their contract dispute.

Allen said the city can’t estimate how many officers a tax could support without settling the guild’s contract.

“Citizens need to know what they’re voting on, and having an open contract doesn’t allow for that,” he said.

Stuckart said the city is in dire need of new police, and contract talks shouldn’t hold back a boost to the city’s force. He said he’ll move a tax plan forward even if Condon doesn’t. “This council will have the opportunity to put something on the ballot,” he said.

Last week, Condon said he will rely heavily on the public in formulating his proposed budget. Starting Aug. 1, they will be able to leave comments on a new website, He also will release a draft budget at the same time.

Condon will present his detailed budget to the City Council on Oct. 7 – about a month ahead of when he’s required to do so.