Shining a light on fees vs. taxes
POST FALLS - Post falls city officials had a response ready to Larry Spencer's street lights topic Tuesday night, before he even broached the topic.
The city council couldn't take action on the proposal - that city street lights should be expensed through the general fund, not as a fee on power bills - because it was not on the agenda and Spencer spoke during the citizen comment time. However, the board learned that staff was aware of the request and had penciled in the topic for discussion during budget workshops starting in July.
Spencer, a Kootenai County resident and executive director of the non-partisan Idaho Property Owners Association, sent an email to officials in multiple cities on Friday, citing court cases that back his request.
"I'm asking that the council put this on a future agenda and talk to legal counsel," he said at Tuesday's meeting. "The case law is very clear."
Post Falls was Spencer's first stop, but he plans to also discuss this proposal with other cities including Coeur d'Alene. Rathdrum, Spirit Lake and Sandpoint also fund street light expenses through a fee, but Hayden does not.
Post Falls council member Joe Malloy said he wanted to make sure that it was on the record that the proposal will be discussed as a line item during budget workshops. He asked staff to explore a breakdown of the costs, options, legal opinions and any possible ramifications of the proposal.
The U.S. Supreme Court in 1974 distinguished fees from taxes in that fees are based on usage by individual homeowners at services funded by taxes benefit the general public. Other cases reaffirmed the definition and some cities, including Kuna near Boise, have stopped charging a fee for street lights.
Cities will have to tweak their budgets if they agree with Spencer's proposal as street lights would be funded through taxes held in the general fund.
Coeur d'Alene collected $572,000 in street fees in the last fiscal year, while Post Falls budgeted $466,100. Coeur d'Alene's monthly fee is $2.58 per month, Post Falls' $3.85 and Spirit Lake's $1.
The total paid for street lights in Rathdrum last year was $78,038. Most of that amount was paid with a fee, but $5,000 from the general fund was spent on lights.
If city councils agree with Spencer's proposal, they will discuss taking foregone taxes to fund the lights if they are no longer funded as a fee, raising taxes or holding the line on taxes with cuts. The net effect on taxpayers on if the switch is made is debatable, local officials say, as some believe it would be a wash and others believe it could result in a gradual increase in taxes.
Some city officials have said residents should not worry about street lights being shut off if they agree with the proposal and that they'll find a way to still fund the lights.