Major tax increase proposal headed to Spokane voters in August ballot to fill budget hole and invest in public safety

Apr. 29—Voters will be asked in August to raise property taxes in the City of Spokane to stave off a looming budget deficit and public safety.

On Monday, the Spokane City Council voted 5-2 to place a levy on the August ballot after at-times bitter debate between the liberal majority and the conservative minority.

If the levy fails, it would immediately entail deep, painful cuts to existing city services and positions. Though the city has said it would first focus on eliminating unfilled positions, layoffs of existing staff could follow.

If approved by a majority of voters this summer, the property tax increase would cost the median homeowner an additional $323 each year, according to property value estimates from the county assessor's office. The city's own projections are higher, with an annual cost of $377 for the median homeowner.

In all, the proposal would raise an estimated $38 million each year in perpetuity — the exact amount collected would increase slightly over time — by collecting an extra $1 per $1,000 of assessed value. This would raise around $228 million over the next six years, for example, and Brown has recommended spending roughly $40 million of that to expand the services provided by the fire department, another $40 million for the police department and another $12 million on other issues related to public safety over the next six years.

Complicating the pitch to voters, around 60% of the funds raised by the levy over the next six years would not go to fund new or expanded services, but instead backfill a massive and growing hole in the city's budget inherited by the Brown administration. The mayor's office has stated it is preparing to announce budget cuts in the coming months, but even then, the general fund deficit going into 2025 is projected to be $20-25 million.

More than half of the city's roughly $240 million general fund is spent on police and fire services, and the costs for those departments has increased over the last four years much more quickly than the city's revenues. That gap was initially bridged with now-expiring pandemic relief funds and by dipping heavily into dwindling city savings. The most significant driver of those increasing costs were contracts with city unions negotiated by Mayor Nadine Woodward's administration and approved by the City Council.

During the COVID-19 pandemic, which coincided with the Woodward administration, public employers like the city of Spokane felt pressured to significantly increase compensation packages for employees to keep up with rapidly rising costs across the economy, said Matt Boston, the chief financial officer for the Brown administration who served as the City Council's budget director during the Woodward administration.

For instance, a four-year contract with the Spokane Police Guild, which represents officers and sergeants, was approved in June and included enhanced benefits and annual salary increases of between 5% and 7%. The budget for the Spokane Police Department jumped from $81.1 million in 2023 to $96 million this year, with the approved contract accounting for a significant portion of that jump.

Woodward, who while in office positioned herself as a politician hesitant to raise taxes, had acknowledged the city's budget was headed for such a crisis that, in the middle of a campaign for re-election, she began to suggest that a significant tax increase would be necessary to avoid cuts to city services.

Early on in the levy's life, around two-thirds of the added funds would go to pay for those prior cost increases now that stopgap measures have dried up, Boston said. However, those contracts with city unions begin expiring this year, and by 2027 everyone will be on a new contract. Those new contracts will not have the same unsustainable cost increases, Boston insisted, meaning that over time a larger proportion of the levy funds will be freed up to improve existing services.

Where exactly cuts would occur is a matter of continued debate. In an executive summary Brown presented to council on Friday, she suggested that the levy failing could result in the layoff of 50 police officers and 30 firefighters, plus an additional 70 employees across other departments. Councilman Michael Cathcart has sharply criticized this calculus, arguing that the city's first priority must be law and fire, and that any necessary cuts should come first from elsewhere.

There would be fewer options remaining to find that money, however. Police and fire make up $160 million of the $240 million general fund, so protecting those departments from cuts would leave $80 million from which to make cuts of upwards of $20 million.

The city would have between the August ballot and the end of the year to approve a balanced budget and find ways to fill whatever gap remained.

If the levy is approved, Brown has recommended a number of uses in the next six years for the money not needed to cover existing expenses. This includes purchasing dozens of fire vehicles, replacements of which were deferred under the Woodward administration, expanding the behavioral health and street medicine teams within the fire department, and increasing the mental health support for firefighters.

The police department would see another 12 neighborhood resource officers, six neighborhood traffic officers and seven downtown foot patrol officers under Brown's recommendation. Police vehicle replacements have also been deferred in recent years to help bridge prior deficits, and Brown recommends replacing 132 police vehicles.

The municipal court system would see a $6 million investment under Brown's recommendation, meant to make permanent a pretrial services program and electronic monitoring system, which would allow low-risk defendants awaiting trial to be released from jail. The mayor also calls for spending around $1.1 million to enhance the staffing and training for the Office of the Police Ombudsman, which provides independent oversight for the police department.

However, there are few guarantees built into the ballot measure for how the additional money will be spent. The levy spells out that the funds can be used for broad categories such as community safety operations, emergency management, traffic calming and safe streets, but how much money goes to which programs and priorities is not set in stone.

Ultimately, those decisions will also be made each year during the city's budget-setting process, when the current mayor proposes a budget and the City Council approves it.

That lack of clear guardrails frustrated Cathcart and his fellow conservative council member Jonathan Bingle, both of whom voted against placing the levy on the August ballot.

"We can just take the dollars away from police and fire and move them to something else," Bingle said. "We cannot guarantee these dollars will be for public safety purposes only."

This is ironic, Bingle added, given the opposition of Brown and liberal members on the City Council against last year's Measure 1, the unsuccessful county-wide sales tax increase proposal that would have paid for, among other things, a new jail and other investments in the county's criminal justice system. Brown was highly critical at the time of the lack of guarantees for how that money, approximately $1.7 billion raised over 30 years, would be spent.

Councilman Paul Dillon argued that the City Council was, ultimately, the guardrail for this year's tax increase proposal.

"We are the accountability for what's in here," he said. "We are going to really be careful about how we spend what's in this proposal."