The City of Auburn’s biennial 2009-10 budget offers a 2½-percent

cut each year and holds the line on employee hires.

Approved by Auburn City Council on a 6-1 vote last week, the budget totals $164.7 million, including all funds. The total general fund budget is projected to drop from $164 million to $157 million by 2010.

Given the strictures imposed by Initiative 747, which state voters passed in 2001 to limit property tax increases to the lesser of 1 percent or inflation, property taxes will stay at their current $1.49 per thousand.

Councilwoman Sue Singer said there might be additional cuts in the future but no more are necessary for now.

“Due to good budgeting in the past, we are not having to make too many drastic cuts,” Singer said.

With the annexations of Lea Hill and West Hill in January of 2008, the city needed additional staff.

But economic realities have forced Mayor Pete Lewis to freeze 22 of those positions, and they won’t be filled this year.

In addition, Lewis is requiring that for any employee leaving during this time, the human resources director, finance director and the employee’s departmental director meet with him to justify filling that position.

“Some positions will be filled, some won’t,” Lewis said. “We are not looking at doing employment cuts right now, but we never know what the future is going to bring.”

Lewis said the city finds itself in an odd position.

“Our unemployment is 6 percent lower, actually closer to 5 percent lower than it is elsewhere in South King County,” Lewis said. “Our real estate excise tax is dead on budget. It has stayed firm the entire year, which is very odd. We are down in sales tax about 7.8 percent, but that’s 7.8 percent less than the biggest sales tax year in the city’s history, which is not that bad.

“Now we have lost the manufacturing portion of the streamlined sales tax. But if the state government keeps its word, the first check would come in this month,” Lewis said.

The reference is to the Streamlined Sales and Use Tax. Washington state changed from a point of sale collection process to a point of delivery process in July 2008. Analysis has shown that the city could lose as much as $.12 million per year.

Among other issues affecting the budget:

• Initiative 695, which voters passed in November 1999, repeals the motor vehicle excise tax and requires voter approval for future tax and fee increases that state, county and city governments put forward. The state Supreme Court upheld it on appeal. Its loss could cost the city 2 percent of total general fund revenues.

• Initiative 776, which voters approved in 2002 to repeal the $15 local option vehicle excise levied in King, Snohonmich and Douglas counties, is project to cost the city’s street program about $450,000 annually.