POST FALLS - There's no longer even talk of a tax increase in Post Falls.

The city budget that will be open to public comment on Aug. 17 does not include a tax increase and is less than the past two years.

The proposed General Fund budget is $14.8 million, about $630,000 less than the current budget and $3 million less than in 2009.

"This budget ... is an indicator of just how difficult the past two years have been economically," said Eric Keck, city administrator.

The City Council last year proposed a 2 percent tax hike, but agreed to no increase after public outcry during the public hearing. This year, after bantering a 1 or 2 percent hike during workshops early on, the council asked staff to build the budget with no hike heading into the hearing.

Cities are allowed to increase taxes up to 3 percent.

Keck said the city will also not tap into its foregone tax balance of more than $300,000.

Passing on the options for additional revenue did not result in the loss of any more employees - eight positions have been cut during the recession - or create a decreased level of service, Keck said.

"While staff certainly is aware of the current delicate and precarious economic conditions, to continue to ask for the same level of service without the injection of additional revenues will become extremely difficult, if not impossible, in the future," he said.

Keck said the one caveat in the proposed budget is the unsettled insurance rate increase expected to be determined in about a week. However, the city may choose to change its benefit package if the increase is 20-plus percent rather than ask for a tax hike to pay for it.

A hiring and merit pay freeze remains in effect at the city, but Keck said the salary situation will likely change when the economy improves.

The largest ongoing cost addressed in the proposed city budget is $193,919 for street sealing and maintenance. It is part of the street department's seven-year program to address streets, Keck said.

"We are still behind with the program, but making great progress," he said.

Property tax income for fiscal 2011 is projected to be $780,000 less than the current fiscal, but the city anticipates receiving $135,000 in new growth funds to help cover the loss. The budget has also been helped with about $567,000 in urban renewal rebate funds.