Spokane city officials warned Thursday that a growing budget crisis could balloon into a $137 million shortfall by 2030 unless immediate corrective action is taken. The alarm was sounded during a City Council briefing, where budget analysts cited underperforming revenues and escalating expenses as the primary threats to fiscal stability.
The city faces a $3.8 million deficit for 2025, despite having just balanced a $25 million gap last December. Budget officials based the current deficit forecast on a historical average of 3% annual revenue growth, but actual performance is lagging. For the first two months of 2024, sales tax collections were 2% below last year’s target—a concerning sign, given that sales tax is one of Spokane’s largest revenue sources.
Chief Financial Officer Matt Boston said if sales tax revenue fails to hit projections, budget cuts in 2025 will be inevitable. Analyst Jacob Miller warned that if left unaddressed, the deficit will reach $12.6 million by 2026 and continue growing annually, culminating in a $37 million shortfall in 2030 alone.
Personnel costs, growing at 9.2% annually, are a major driver of the crisis. These rising costs, combined with deferred union negotiations, overuse of one-time fund transfers, and reduced consumer confidence, are depleting the city’s reserves. The city’s unappropriated cash reserves have fallen from over $20 million in 2020 to under $10 million today.
Boston said upcoming six-year budget projections will require “pretty immediate shifts” to address the worsening outlook. He will meet with Mayor Lisa Brown and the council on July 10 to discuss next steps. Brown emphasized the urgency: if revenue trends hold, either spending must be restrained or a new fiscal strategy must be developed.
Economists are projecting a 50% or higher chance of a recession in 2025, which could further weaken tax collections and deepen the deficit.
