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Spend savings before raising taxes, city told

– Three Republican City Council members say existing money – even Legacy funds – should be used to fill budget gaps before property taxes are increased, though no tax increase has yet been proposed.

Councilmen John Crawford, R-at large, Mitch Harper, R-4th, and Russ Jehl, R-2nd, came together Wednesday to voice their support for spending down existing fund balances rather than increasing taxes in the 2013 city budget. That budget, however, will not be presented until the end of this month.

City officials would not comment directly on whether next year’s spending plan includes any type of tax hike.

“The administration looks forward to having a dialogue with City Council as we work together to find solutions to position our city in the best way possible,” mayoral spokesman John Perlich said.

“The proposed 2013 budget will be presented to City Council in a few weeks. Since Mayor Henry has been in office, he has been committed to keeping the city’s finances strong while continuing to provide quality services to residents.”

Rather than proposing cuts Wednesday, the three councilmen listed money that could be spent. Included in the money they said should be made available is the Legacy Fund – $75 million from the lease and sale of the City Light & Power utility. It’s a fund the administration has said it does not want to use for day-to-day expenses.

The three also said there is $15 million available in cash balances, $3 million in a rainy day fund and $20 million in tax increment financing money. TIF money can be spent only for infrastructure projects within the district it was collected from.

“With the economy, a tax increase is not a good option now,” Crawford said. “But there’s a lot of money on the sidelines.”

In the meantime, Jehl said, the city seems intent on charging residents more.

“Placed in front of us (this year) was 10 possibilities, nine of which involved raising taxes, and one of which was spending cuts,” he said. “So we definitely feel the deck is stacked against us in favor of raising taxes.”

The city administration is scheduled to present its proposed 2013 budget to the council Sept. 25; it is expected to have a $3 million to $6 million shortfall.

All three councilmen decried the structural deficit the city is expected to have – a financial situation in which the city spends more than it takes in, though the budget may appear to be balanced by the city’s borrowing or spending cash it already has.

But the proposals they presented Wednesday would not address the deficit and may actually increase it, because they also called for a freeze on property taxes.

Republicans have held a majority on the council for years, but in the last decade have never managed to cut 1 percent of the proposed spending from the budget.

“The problem is, when you try individual spending cuts like that, many defenders come to the table,” Crawford said. “It’s hard to piecemeal it. The easier thing is to go after the big things, like cut the property tax revenue, and then force the individual cuts that way.”

Despite not proposing cuts, the three councilmen said that in general, discretionary spending should be trimmed.

“The question is, are we going to raise taxes or keep more revenue, more income, more wealth in the hands of the people who need it?” Harper said. “We have a rainy day fund, and with this economy, it’s been raining.”

When pressed on the spending question, Jehl said the council has no control over what is in the budget. When it was pointed out that not only is that not true but that Republicans have controlled the council for more than a decade and should be able to put their principles into action, Harper said the party’s majority “is not monolithic.”

He said the council was not able to make cuts last year because the administration did not give them year-to-date spending figures and delays giving them the budget so members don’t have time to analyze it.

“It’s not an accident it’s submitted late. It’s on purpose,” Harper said. “It’s one of the tools in their toolbox.”

The budget is submitted according to state law, Perlich countered.

“Certainly we do not submit budgets late,” Perlich said. “Our goal is always to work collaboratively with City Council, to work together to find budget solutions and find ways to benefit the community.”

Last year, the council proposed 27 budget cuts – 26 proposed by Republican Liz Brown, who is no longer on the council, and one by John Shoaff, D-at large. All were overwhelmingly rejected, with some failing to get enough support to even come up for a vote.