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Thursday, March 5th - 11:28 PM

Mayor Verner Rolls Out Approach to 2012 Budget That Does Not Ask Voters for New Taxes

Closes that $6.7 million shortfall and preserves public safety, other critical issues

Release Date: 5/11/2011 4:30:00 PM

MEDIA CONTACT: Marlene Feist 625-6740

Spokane Mayor Mary Verner today proposed an approach to close an anticipated $6.7 million shortfall in the City of Spokane’s 2012 General Fund budget that preserves the most critical City services without asking voters to increase taxes.

The approach prioritizes what’s most important to our citizens—public safety. Thirteen police officers that were slated for elimination in 2012 (as a result of concession agreements for the 2011 budget) would be preserved. The approach also maintains funding for Streets at 2011 levels, provides for some added funding for the Spokane Public Library that would retain all library branches, and makes permanent a successful alternative that reduces jail costs.

The Mayor also proposes reducing operational expenditures across the General Fund, even though costs are expected to rise, and anticipates employee savings through new labor contracts. The approach also includes some strategic use of reserves and modest revenue changes that will avoid dramatic service reductions. Use of reserves and revenue changes would have to be approved by the City Council.

“I am determined to give our citizens an option that makes sense during this period of slow economic recovery—maintaining essential services at an affordable price,” says Mayor Verner. “My many encounters with citizens lead me to be firm in my request to Council that our budget problem this year be solved without asking our citizens to pay more taxes.”

The Mayor is proposing revenue changes totaling $1.4 million—less than 1 percent of the total General Fund. The City’s General Fund pays for basic government services including police, fire, streets, parks, and libraries. General Fund revenues include property, sales, and utility taxes.
For 2011, the General Fund totals about $158 million, compared to $161 million in 2010 and $155.5 million in 2009.

The Mayor included a number of possibilities for revenue changes, including using some money generated by tickets for red-light running to pay for Police services; increasing the hotel-motel tax; increasing parking-related revenue through parking ticket fines or rates, or expanded parking enforcement; and working toward greater cost recovery for some services or special events. The Mayor will forward specific proposals to Council on the revenue changes prior to submitting her formal budget proposal later in the year.

Today’s announcement provides a general approach to the 2012 budget and is just the beginning of the City’s process to develop next year’s annual budget. The Mayor must file her formal budget proposal by Nov. 1. The City Council will hold public hearings on the budget and must adopt a balanced budget prior to the end of year, per state law.

Changes in the budget proposal are possible, especially as the state and federal governments continue their budget work. Local governments may experience impacts from decisions made at the state and federal level.

“My approach to the 2012 General Fund budget acknowledges the financial strains faced by citizens, provides predictability for businesses, and offers balance against other costs citizens will face, including higher utility bills,” the Mayor says.

The Mayor also laid out two additional budget approaches for the City Council’s Finance Committee to consider—one that solves the entire budget shortfall through expense cuts, and one that helps restore services lost in earlier years by asking voters to approve a property tax measure called a levy lid lift.

If the 2012 General Fund budget were balanced through expense reductions only, significantly more services would be lost, including:

  • Seven police officers, impacting investigation of property crimes and other safety issues.
  • Spokane Public Library services, possibly including a branch closure or reduction in outreach programs to youth and seniors.
  • The Arts Department, including the Spokane Arts Commission, Chase Gallery exhibits, and the public art program.
  • The Youth Department, including the Chase Youth Commission, the Chase Youth Awards, BOBfest, and other youth events.
  • The City of Spokane Weights & Measures program, including consumer protection activities that ensure accurate measurements at grocery stores and gas stations. The City would then have to rely on Washington State’s Weights & Measures program.

Meanwhile, the Mayor acknowledged that her 2012 General Fund Budget approach still leaves needs unmet and services underfunded.
For example, the Police Department analyzed its staffing needs and determined that it needs at least another 24 officers and 10 civilian employees to bring the department to minimum staffing levels for a city the size of Spokane. At the Fire Department, the daily staffing level is 58 firefighters today, compared with 64 firefighters 10 years ago. Similar needs exist throughout the City.

A property tax increase (called a “levy lid lift”) could address some of these long-term needs, and the Mayor believes it is something that the City should consider in the future. The Council requested additional information on what a levy lid could provide, so the Mayor developed an option that would focus any revenue generated through a levy lid lift on public safety and library services. That option would balance the City’s General Fund budget for four years, and would provide for about $2.5 million in additional services in 2012.

For the future, the City’s budget outlook would benefit from overall economic growth in Spokane. The Mayor has been focused on assisting the private sector, especially local small businesses, to grow and create jobs.

This year, the Mayor launched the “Seven in Eleven” project, which includes seven practical actions the City will complete in 2011 to help improve the immediate business climate. They range from helping businesses survive road construction projects, to improving permitting processes, to enhancing on-line access to business licenses and permits.

Other economic development work includes accelerating public infrastructure projects into 2011 and 2012 from later years, continuing to support development in defined Target Areas, and participating in the growing clean energy industry sector. Supporting in-fill developments, like Kendall Yards, also helps increase the City’s tax base without placing significant additional burdens on City services.

“We have to attack our budget challenges from all fronts,” says Mayor Verner. “Assisting our local businesses is the end-game that supports jobs and reinvestment in Spokane’s long-term prosperity.”

2012 Initial Budget Fact Sheet

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