Spokane Valley is preparing to pass a $78 million balanced budget for next year that includes funding for road preservation, public safety, infrastructure and park improvements.
The city’s public safety contract with the Spokane County Sheriff’s Office remains its biggest expenditure at $26 million.
The city expects to spend more than $19 million on road preservation, infrastructure projects to separate rail and vehicle traffic as well as Browns Park improvements, which include expansion of volleyball courts and the addition of playground equipment.
The city indicates plans in the budget to hire two engineers and three construction inspectors, who will assist with Community and Public Works Department projects. Their salaries will be primarily financed through grants.
Spokane Valley anticipates collecting more than $45 million in revenue next year, which is about $2.5 million more than 2018. Sales and property taxes are two of the largest sources of revenue for the city, generating a combined $35 million.
Spokane Valley ranked second in the state for the largest jump in taxable retail sales in the first quarter of 2018. With $567 million in reported sales, the city experienced about an 11 percent increase in taxable sales over last year – trailing only Vancouver, according to the Washington State Department of Revenue.
The city chose to forgo a 1 percent property tax levy increase allowed by state law, marking the 10th consecutive year it is opting out of raising property taxes.
Although the budget contains a more than 1 percent increase in expenses over last year, the city anticipates a $2.5 million general fund budget surplus in 2019.
City officials discussed options to allocate the budget surplus at an Oct. 23 council meeting.
Spokane Valley City Councilman Ben Wick said he would like to consider allocating $2 million of the surplus toward capital projects.
“Right now, if we just allow that $2.5 million to roll over – we’ll get it eventually – but it might be two or three years from now before we roll it over into the capital projects fund,” he said.
Spokane Valley City Manager Mark Calhoun said the city intentionally waits about two years to transfer the surplus to the capital projects fund in case there’s an economic downturn.
Spokane Valley City Councilwoman Pam Haley said the surplus shouldn’t be immediately allocated to capital projects because it is estimated funds the city has yet to receive.
“I’m extremely fiscally conservative when it comes to other people’s tax money and I would hate to mis-guess on that, so I would be for keeping it the same way it is,” she said.
The city remains concerned about a decline in street fund revenue in 2019. Street fund revenue is heavily dependent on motor vehicle fuel and telephone utility taxes – both of which are declining as vehicles become more fuel efficient and people give up landline telephones.
The city’s telephone tax revenue, which generated $3 million in 2009, is only expected to generate $1.7 million in 2019.
As a result, Spokane Valley has relied on real estate excise taxes to pay for pavement preservation, but that limits the city’s ability to provide matching dollars required by federal and state agencies for road projects.
The city is expected to adopt its budget at its council meeting on Tuesday.
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