Raising property taxes can't always be the answer

If you have ideas for how the city of Coeur d’Alene can balance its budget, now is the time to share them with City Hall and members of the City Council. As it stands, the primary solution to a projected $3.1 million deficit is another property tax increase.

We have long maintained that Coeur d’Alene is a well-run city. The City Council is experienced, and city staff works hard to be responsible stewards of taxpayer dollars. But even we are beginning to wonder why raising property taxes has become an annual exercise — and why it increasingly appears to be the only answer to budget shortfalls.

What’s perhaps most surprising, traditionally, is how little public pushback there is. Maybe residents believe speaking up won’t change anything. Maybe they are willing to absorb higher tax bills. Or perhaps they compare Coeur d’Alene with other communities and conclude taxes here remain relatively reasonable.

Finance Director Katie Ebner faces the difficult task of finding savings before the city’s budget hearing Aug. 4. We hope she succeeds. Surely there are opportunities to trim spending, postpone projects or eliminate lower-priority expenditures before asking taxpayers to dig deeper into their pockets once again.

Last year, the city approved a buyout program designed to reduce costs by encouraging some of its highest-paid employees to retire. About 25 took the offer. Whether the program will ultimately save money remains unclear. Replacing decades of institutional knowledge and experience often comes with costs of its own before any savings materialize.

One exchange during Monday’s budget workshop stood out.

Mayor Dan Gookin asked fellow council members whether a 7% property tax increase was truly necessary.

“Mr. Mayor, we don’t have a choice,” Council member Kenny Gabriel responded.

Actually, they do.

The answer to operating deficits cannot always be higher property taxes. Sometimes the answer is spending less. Businesses and families make difficult decisions when revenues fall short. Government should be willing to do the same. Yet Coeur d’Alene’s expenditures are projected to rise from roughly $58.7 million in 2026 to nearly $61.8 million in the proposed 2027 budget.

According to data presented by Ebner, 62 cents of every tax dollar goes to public safety, 19 cents to general government, 12 cents to public works and 7 cents to culture and recreation.

Residents strongly support police officers and firefighters. They are essential to maintaining one of the safest communities in the country. No one disputes that. But support for public safety does not relieve the city of its responsibility to live within its means.

City officials will point to House Bill 389, which caps annual local government revenue growth at 8%. They note the city collected only about $201,000 in construction revenue last year despite adding $84 million in new construction value. Those are legitimate concerns. But even an additional $1 million in new-growth revenue would not erase the projected deficit.

Once again, we emphasize that Coeur d’Alene remains a well-managed city. Yet taxpayers deserve more than a yearly conversation about how much taxes should increase. They deserve a serious conversation about whether spending can be reduced.

Perhaps the public has ideas worth hearing. It’s time for city leaders to ask — and to listen.