(The Center Square) – The Spokane Valley City Council approved allocating roughly $3 million in anticipated lodging tax revenue on Tuesday, promoting tourism in the state’s ninth-most populous city.
The Valley levies two taxes on local hotels and motels, totaling 3.3%. City staff estimate the taxes will generate roughly $2.89 million this year, which the council must spend to promote tourism, according to goals set during an Aug. 20 meeting.
While the elected officials have the final say, they rely on recommendations from the Lodging Tax Advisory Committee to guide their decisions. The LTAC consists of two representatives from businesses collecting the tax, two from activities funded by the tax and one council member.
The committee suggested allocating the tax revenue to 12 of the 21 applicants seeking $4.7 million. The council’s approval should provide $2.5 million to wrap up the initial phase of the Spokane Valley Cross Course, which will host major competitions starting this year.
“I don’t want people to think that we imposed a bunch of taxes here,” Councilmember Ben Wick said. “Two percent [of the 3.3% total] is actually a rerate against the state’s sales tax; so by imposing it, the state collects less, so it kinda returns more money from the state back to our locality.”
The Valley’s 2025 budget includes $920,000 in revenue from that 2% of the tax, $893,000 of which it allocated Tuesday, with $500,000 earmarked for the cross-country course. The council split the additional $393,000 between the other 11 applicants.
Spokane Valley HUB Sports Center should receive the most, up to $147,000, outside of the Cross Course project, with the Spokane County Fair & Expo Center earmarked for the least, up to $6,732.
The Valley anticipates generating $790,000 from the remaining 1.3% of the rate, all of which will go toward the Cross Course. The fund holding that revenue also has an existing balance, which will provide the other $1.71 million of the $2.5 million allocated Tuesday for the project.
Collectively, the two funds responsible for lodging tax revenue have about $533,000 left after Tuesday’s allocations, which city staff anticipate should be enough to cover cash flow needs.
All of the allocations are contingent on collections. If the Valley doesn’t generate what it expects, the applicants won’t receive the full award, hence the “up to” a specific amount wording.
“This will fully fund Phase 1 of the course,” Wick said leading up to the council’s unanimous approval. “It’s a significant milestone that should be celebrated by our city as we complete the initial construction.”
