(The Center Square) – The Spokane Transit Authority is asking voters to approve a major sales tax this August, as local business leaders argue that it essentially acts as a reserve building tool for the agency.
The STA Board of Directors voted 7-2 on Wednesday to place a 0.2% sales tax renewal on the August ballot, after another 5-4 vote in favor of including a 20-year sunset clause.
The renewal accounts for a fraction of the 0.8% sales tax that STA levies, and is the only portion of the tax subject to voter approval.
The 0.2% up for renewal doesn’t expire until 2028, but the board wants to secure the funding now to help the agency compete for $82 million in federal grants for a transit project along the Division Corridor.
Gavin Cooley, director of strategic initiatives at the Spokane Business Association, says that STA never needed this portion of its tax levy in the first place and should be able to finish the project, even if it expires.
“It’s just mission creep,” Cooley told The Center Square, arguing that STA has finished every project it identified for voters when they first approved the tax in 2016, while STA’s reserves continue to pile up.
The 0.2% sales tax amounts to roughly $30 million of the transit authority’s operating revenues for 2026.
After voters approved the tax in 2016, STA expected to finish 2017 with a $43 million cash balance, of which $20.8 million was “board-designated reserves.” STA ultimately ended that year with $55.58 million.
STA planned to spend some of that balance down in 2018, but actually expanded it by $19.8 million.
Cooley said STA budgeted so conservatively that cumulative budget variances totaled $319.5 million from 2016 to 2025. The fund balance stood at $249 million at the start of 2026, which STA expects to be $204 million by year’s end, despite conservative projections consistently exceeding expectations.
According to the 2026 budget, the fund balance is intended for future capital expenses from 2026-31.
“Taxpayers don’t realize that that’s what’s happening. They’re not paying for what they think they’re paying for,” Cooley said Thursday.
“They’re actually paying for increasing reserves and identifying new projects that aren’t identified to the taxpayers at the time they’re voting for the tax, like right now.”
Cooley attended the meeting on Wednesday with written statements opposing the tax renewal, since the STA board wasn’t accepting public testimony. He told The Center Square that SBA is working with other community groups to ensure taxpayers are aware of STA’s budgeting practices.
SBA’s opposition comes as a regional public safety task force plans to issue recommendations in May to help local officials develop another tax proposal to fund new detention and crisis response facilities.
The public safety tax will likely appear on the November ballot, so some local officials are worried that STA’s renewal could reduce the chances of the other proposal passing later on, due to taxpayer fatigue.
Cooley said SBA would oppose STA’s tax renewal, whether it ran on the ballot in August or next year.
STA explained its reasoning for seeking the extension in a statement sent to The Center Square.
“The STA proposition will give voters the opportunity to renew the sales tax and decide for themselves if they want to continue to fund the expanded service they approved 10 years ago,” Carly Cortright, STA’s chief communications & customer service officer, wrote to The Center Square in response to Cooley’s analysis.
“This funding has greatly expanded bus service, increasing night and weekend service, building new transit centers and introducing bus service to growing areas previously unserved.”
“STA’s reserves are set aside to fund capital projects in a pay-as-you-go fashion, allowing STA to avoid debt and maximize resources for transit service. Capital investments will include projects such as ongoing bus replacements, the region’s second bus rapid transit line, and increased safety through enhanced lighting at bus stops throughout the region,” she continued.
