‘Full speed ahead’ on proposed Spokane parking tax as vote nears

It’s still “full speed ahead” for a 12% parking tax in Spokane, council President Betsy Wilkerson said Monday – though it will take at least another week for a vote and parking lot operators will get a three-month grace period at the beginning of 2026 if the tax is approved.

The proposal has proven controversial with the city’s downtown businesses, which argued Monday that higher costs for parking would drive away customers and hurt their low-paid employees. Proponents, meanwhile, believe the tax would fund a safer, more vibrant city for pedestrians and bikers while encouraging the redevelopment of parking lots that directly provide little to the city’s tax base or attractiveness to residents and visitors.

The Spokane City Council amended the law Monday to delay implementation to April, which also delayed a vote on the tax until next week because of the city’s rules on late amendments. The council had mulled suspending its rules to allow for a vote Monday, but fell just short of the votes necessary to do so amid “concerns around the tax,” Wilkerson said in an afternoon meeting.

In a brief interview, Wilkerson said those concerns were about the legality of the proposal, but they had been cleared up by the evening. Other council members indicated a desire to sort out how the projected annual revenue – an estimated $2 million, according to city Transportation and Sustainability Director Jon Snyder – would be impacted by the three-month delay.

The tax would join the other incentives and disincentives approved by the council in recent years with the aim of reducing the number of surface parking lots and encourage their redevelopment, along with a redevelopment tax incentive approved in 2023. It would be parkers, not parking lot owners, who would ultimately have to pay the tax, but supporters in City Hall argue that the price hike would lead to fewer people using the lots, eventually cutting into operators’ bottom lines.

The tax was proposed by Mayor Lisa Brown’s office, which argues that the land used now for surface lots would be better suited for residential and commercial buildings.

The proposal also offers another potential source of revenue amid a budget crunch – though state law only allows the revenue to be used on transportation projects – that Brown has already baked into her proposed 2026 city budget.

The tax would hit hardest for surface lots like those owned by prolific operator Diamond Parking, though almost all commercial lots would be taxed to some extent. Parking structures with at least two floors or underground lots would only have to charge customers half the tax rate, or 6%. Parking lots could also qualify for the lower rate if the owner has an accepted building permit with the city to imminently redevelop the lot into a residential or commercial building.

Designated employee parking, residential parking and student parking would be exempt from the tax. Qualifying carpools, government workers and drivers with disability placards also would not have to pay.

On-street parking, which is operated by the city, would also be exempt.

Wilkerson joked Monday that she expected to be “tarred and feathered” for the tax hike, likely referencing the concerted pushback from the downtown business community.

Many of those business owners spoke out Monday night, as did organizations like the Downtown Spokane Partnership, Greater Spokane Incorporated and the Spokane Business Association, broadly arguing that the tax would fail to produce significant revenue for the city and point to already high downtown business vacancy rates. While the tax would apply citywide, downtown business owners in particular expressed concern about its impacts.

Some individual business owners and at least one downtown employee argued the tax would be regressive, hurting staff and residents who spend hundreds or thousands a year on parking downtown.

“A sales tax is an immediate regressive tax that falls hardest on working families and workers,” said Jenny Slagle, Spokane School Board member and owner of Indigenous Eats and Indigenous Chic, both downtown businesses. “A majority progressive council should not be expanding regressive taxation, especially in a way that directly affects the people with the least ability to absorb another cost.”

Council members Kitty Klitzke, Zappone and Paul Dillon repeatedly insisted that employee and residential parking would be exempt.

Ben Stuckart, executive director of the Spokane Low Income Housing Consortium, argued that cost-burdened residents and struggling businesses, especially downtown, would benefit if the land used now for surface lots was sold to developers.

“30% of our downtown is surface lots,” Stuckart said. “That’s unsolvable. If walkability and people downtown shopping is the solution, then 5-10,000 more people downtown is how we’re going to get there.”

“A disincentive is the only way they’re ever going to sell that land… we’ve been waiting for 30 years, and it’s only getting worse,” added Stuckart, who is also a former City Council president.

A number of local transit and transportation safety advocates also spoke in support of the tax hike Monday night.

“I really want to stress the possibilities, the benefits and improvements that could be felt all across Spokane,” including millions in revenue for improving pedestrian and biking facilities and discouraging vehicle use through the city, said Sarah Rose, co-director of Spokane Reimagined.

David Haring, CEO of the Spokane International Airport, argued the airport had long declined to pass on parking taxes to its customers but would have to reconsider this policy if a new parking tax was implemented.

“If the costs are not passed on to the public, the airport will immediately see a 4% loss of revenues, which equates to an estimated loss of $2.5 million in 2026 increasing thereafter,” Haring said.

It’s not immediately clear why the airport estimates a higher reduction in its revenue than the city estimates it would raise next year from the tax overall, but Haring argued the lost revenue would cut into the airport’s ability to reinvest into its infrastructure and own growth.

Erik Lowe, another co-director of Spokane Reimagined, argued that the airport should actually see a higher rate than the rest of the city.

“With annual parking revenue over $26 million, Spokane International Airport is less an airport so much as it is a parking garage with airline terminals attached,” Lowe said. “These are parking facilities that already take up over 100 acres of land area … in the case of the commercial parking facilities at the airport, I believe the proposed rate doesn’t go nearly far enough.”