POST FALLS - With a budget proposal of no tax hike added to its list of options with an increase, the Post Falls City Council on Tuesday still held firm on its intention to support a tax bump to maintain service levels and merit raises.

The public is invited to weigh in on the budget on Tuesday at 6 p.m. The council will make its decision on the budget and any tax increase afterward. Cities are allowed to increase budgets up to 3 percent.

At the budget workshop, the majority of the council members say they are inclined to support a tax hike because there's nothing left to cut, costs have increased, they're being asked to maintain service levels, and some employees are seeking greener pastures, among other reasons.

"I don't want to increase taxes, but I think we have to," council member Ron Jacobson said. "I think it's critical that folks understand that the city has been good stewards of money and that we're feeling the impact. We can't continue to cut and cut and keep the level of services."

The council didn't vote on a specific tax hike to propose, but the majority said it is inclined to support an increase of some sort heading into the hearing.

The city's budget has been reduced by more than $2.7 million over the past three years. The city has not increased taxes the past two years and there has been a salary and hiring freeze for the past three. No new positions are proposed for the upcoming budget.

Barry Rubin, a government watchdog who was the lone citizen at the workshop, said he would support a tax hike of 1 or 2 percent if that means keeping up with "essential" services such as public safety, water, sewer and streets and making sure there's nothing left to cut in other departments.

"Priorities have to be set," Rubin said. "Leaders may need to make some people unhappy for the benefit of everybody."

Rubin said he doesn't advocate for wholesale department cuts, but increasing fees for areas such as parks and recreation should be looked at and the focus needs to be on safety and health of the residents.

Police Chief Scot Haug said his department recently had two officers leave to other agencies - one is making $4 an hour more at Liberty Lake and the other $8 more at Spokane. Two more officers are being trained and it will be another six months before they're on the street.

Being four officers short, the department will postpone its DARE program during the school year and temporarily not have a middle school school resource officer because that officer, Paul Farina, has been diverted to the streets to fill in.

Haug estimates the loss of an employee equates to about $65,000, including separation, recruitment, training and other costs, not to mention losing the experience. He said he doesn't want Post Falls to become a training ground for other agencies.

Council member Skip Hissong said he believes the council needs to do its part to stop such bleeding.

"We can't match other (agencies), but we have to do something better than we have," he said, adding that he would be open to cutting equipment costs to give raises.

Council member Scott Grant said his priorities would be merit pay, streets and plugging the equipment replacement fund, but holding off on adding to the facility replacement fund.

City administrator Eric Keck said the city's budget is at a crossroads because services can no longer be maintained with no tax increase due to past cuts and budget-saving moves. He said the fiscal 2013 budget is an even bigger concern with another year of shrinking revenues anticipated.

"No one likes taxation," he said. "But staff is not looking to make an arbitrary increase. We understand the economic concerns, but we also need to remember that decisions cast today will have ramifications for tomorrow."

A 1 percent tax hike would mean a $4.03 per year increase for the owner of a $150,000 home and $7.81 increase for the owner of a $250,000 home. A 3 percent tax increase would raise taxes $12.08 per year for the owner of a $150,000 home and $23.44 for the owner of a $250,000 home.

Rubin and Keck said a public forum inviting the public to express its views earlier in the budget process may be a way to gauge residents' priorities up front rather than only opening it up with the hearing at the end of the process may reduce frustrations for city staff, the council and citizens.

The council earlier decided to allow 5 minutes for each citizen commenting on the budget at Tuesday's hearing instead of the usual 3 minutes.

What would a Post Falls tax hike mean?

Here's what Post Falls city tax increases of 1, 2 and 3 percent would mean per year for owners of a $150,000 home and a $250,000 home:

Increase $150,000 home $250,000 home

1 percent $4.03 $7.81

2 percent $8.05 $15.63

3 percent $12.08 $23.44