Pinching pennies

By Dan Richardson

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by Dan Richardson

Commercial areas generate a wave of sales tax money for whatever local government collects it. Here's how it works:

Local sales tax is 8.1 percent. The city and county collect that money from businesses in their jurisdictions and send it to Olympia. State government returns a portion. A city gets 1 percent of the sales tax back -- but has to send 15 percent of its take to the county to reimburse it for countywide services like courts, the county prosecutor and the regional health district.

So the county makes one buck for every $100 spent at businesses in unincorporated areas -- plus a take of the city's sales tax portion. Given that same $100 of business, the city of Spokane makes 84 cents.

Those pennies add up to an estimated $25 million for the city's general fund in 2001. If allowed to annex commercial areas like the Division strip and other places, the city stands to gain millions. The county, of course, would lose most of that money.