spot_imgspot_img

Spokane’s structural deficit may continue growing due to tax-revenue shortfalls

(The Center Square) – As the City of Spokane climbs out of a $25 million hole, its city council discussed projections on Monday that show the deficit will continue to increase into the next biennium despite reductions.

Mayor Lisa Brown is expected to release her preliminary budget on Oct. 1, with a more well-rounded proposal by Nov. 1. Balancing the structural deficit is one of her administration’s top priorities, already taking the shortfall from around $25 million to $10.9 million since taking office.

Despite Brown reducing the deficit heading into next year, she said in April that general fund reserves had also sunk by nearly $21 million since 2019. When paired with the initial deficit, it accounted for an almost $50 million structural gap.

On Monday, Council Budget Director Kate Fairborn told the officials that despite Brown’s reductions, the general fund deficit is still growing due to declining tax revenues. She said the city is approximately $35 million behind what it projected to generate in tax revenue by Sept. 20.

“In spite of the administration’s cost control efforts,” Fairborn said, “our deficit’s growing in large part due to this revenue shortfall.”

Fairborn said the year-to-date deficit is around $24 million and growing. However, that doesn’t include Brown’s cost-savings measure that will impact the next biennium. Once implemented, the measures should reduce the delta to roughly $10.9 million or more, depending on other cuts.

Communications Director Erin Hut told The Center Square that, to the administration’s understanding, Fairborn’s numbers do not give a “true representation” of the 2024 revenues.

Chief Financial Officer Matt Boston said in July that the deficit will decrease heading into next year but then increase by a few million again during the following two years. Boston also presented on Monday but did not mention how much the deficit would increase.

He attributed much of the revenue shortfall to the timing of tax collections. Spokane has only collected until June, half the year, meaning they don’t have any data for the last three months. In reality, that $35 million shortfall is likely smaller but still concerning, he said.

The previous administration projected sales tax revenues to increase by around 2% to 3% over 2024, which Boston said was too generous. Once the Brown administration took over, he adjusted the projected revenue growth to around 0.3%, and Spokane is currently around 0.4%

“That’s not to say that I’m not concerned about where we’re at for 2024,” Boston said. “… There are a lot of things that keep me up at night when we budget very, very tightly like we have, and we’ve pulled expenditure line item budgets. We don’t have a whole lot of margin for error.”

Fairborn said Spokane isn’t alone, noting that, according to a February 2023 article, 50 out of the 75 largest cities nationwide are also experiencing deficits.

“There are several undeniable trends that underline these widespread financial challenges,” she said. “The largest difficulty for us and many other cities is declining revenue, and in Washington state in particular, you all know there are legal limits on the city’s ability to raise additional revenues.”

DON’T MISS OUT

Be the first to know about the latest news, giveaways, events, and updates from The Black Chronicle!

We don’t spam! Read our privacy policy for more info.

spot_imgspot_img
spot_img

Hot this week

African and Caribbean Nations Call for Reparations for Slave Trade, Propose Global Fund

Nations across Africa and the Caribbean, deeply impacted by...

Health care company agrees to pay $22.5 million to settle claims of over billing

A health care company agreed to pay nearly $22.5...

Sports betting expert offers advice on paying taxes for gambling winnings

(The Center Square) – Tax season is underway, and...

Entertainment district benefits don’t outweigh the cost, economists say

(The Center Square) — Weeks later, after more details...

Business association ‘disappointed’ by WA L&I’s proposed workers comp rate hike

(The Center Square) – The Association of Washington Business...

Milwaukee schools sued by group, parents over lack of SRO hires

(The Center Square) – The Wisconsin Institute for Law...

‘No relief is coming’: Seattle restaurants prepare for $3 minimum wage hike

(The Center Square) – Seattle Mayor Bruce Harrell claims...

White House Braces for Dual Hurricanes Amid Funding Crisis

Florida is bracing for the catastrophic Hurricane Milton, expected...

Election 2024: Marshall bids for 8th term as secretary of state

(The Center Square) – Democratic Secretary of State Elaine...

Bossier City Council advances new charter without community-proposed term limits

(The Center Square) — After a fiery discussion the...

Three utilities form unique partnership responding to regional energy woes

(The Center Square) — Three utilities are uniquely coming...

Election 2024: Treasurer’s race one of six to change Council of State

(The Center Square) – When North Carolinians select their...

Biden admin removed federal union accountability webpage

Earlier in his term, President Joe Biden nixed an...

More like this
Related

Milwaukee schools sued by group, parents over lack of SRO hires

(The Center Square) – The Wisconsin Institute for Law...

‘No relief is coming’: Seattle restaurants prepare for $3 minimum wage hike

(The Center Square) – Seattle Mayor Bruce Harrell claims...

White House Braces for Dual Hurricanes Amid Funding Crisis

Florida is bracing for the catastrophic Hurricane Milton, expected...

Election 2024: Marshall bids for 8th term as secretary of state

(The Center Square) – Democratic Secretary of State Elaine...