(The Center Square) – Ballot boxes opened Friday as voters consider renewing a 0.2% Spokane Transit Authority sales tax, while the agency continues to spend less and generate more than it had budgeted.
If approved, the sales tax, worth about $30 million annually, would continue to cost taxpayers 2 cents on every $10 spent until 2048. It is the only portion of STA’s 0.8% sales tax rate currently subject to voter approval, and STA has completed all but one of the projects it had planned since its passage in 2016.
The STA Board of Directors and finance team claim they need the 0.2% sales tax to maintain service levels and implement their Connect 2035 plan. On Thursday, however, CEO Karl Otterstrom presented data to the officials showing June sales tax collections were 3% above the 2026 budget year-to-date.
“We did expect growth over last year,” Otterstrom said, “but this is stronger than anyone predicted.”
He expects to end the year with a $208 million fund balance, compared with the budget’s $204 million projection. That balance was about $50 million when voters passed the tax, according to past budgets.
The board has budgeted drawdowns on those reserves for years, but it repeatedly comes out on top.
Otterstrom says that STA plans to move about $100 million in cash to a capital projects fund in 2027.
“How would it work if the funds came in more favorable?” Zack Zappone, an STA board member who also sits on the Spokane City Council, asked STA’s Chief Financial Officer Robert Hamud on Thursday.
Hamud responded, noting that any additional tax revenue would go to reserves or expanding services.
The Spokane City Council, Spokane County Democrats and a political action committee called Yes for Buses have come out in support of the sales tax renewal, along with other regional officials. They say it could help secure federal funding for another upcoming project, but not everyone is on board.
Mike Allen, a former STA board member, wrote the ballot statement opposing the sales tax renewal.
“Before asking for more taxes, deploy the money already collected … voters should expect proof that current revenues and reserves are insufficient,” Allen wrote, highlighting STA’s healthy fund balance.
STA revenue exceeded budget by $5.4 million as spending came in $9.3 million under budget in 2025.
Former Spokane City Council president Ben Stuckart argued in a social media post that STA deserves the extra $30 million in annual revenue as a reward for “being a good steward of [public] resources.”
“STA followed through on time and under budget on all of their projects after the last levy vote,” he posted Tuesday. “This is NOT a tax increase. Vote yes, pay the same and keep expanding service!”
Spokane County Commissioner Al French, who sits on the STA board, told the Spokesman-Review that he won’t support the tax renewal. The Spokane Business Association, Downtown Spokane Partnership and Alan Nolan, a Republican running for a seat in the state House, have also come out in opposition.
SBA President Gavin Cooley has noted that while STA plans to end 2026 with a $204 million to $208 million fund balance, it started 2026 with $249 million. He says the agency budgets so conservatively that, from 2016 to 2025, STA recorded cumulative positive budget variances totaling $319.5 million.
“Taxpayers don’t realize that that’s what’s happening. They’re not paying for what they think they’re paying for,” Cooley told The Center Square in April. “They’re actually paying for increasing reserves.”
Voting will continue through Aug. 4.
