Spokane City Council approves parking and utility taxes to balance 2026 budget

With a last-minute compromise Monday, the Spokane City Council approved filling a $13 million budget deficit for 2026 through spending cuts, roughly 20 layoffs and two new taxes.

Parking in a paid lot will get more expensive next spring after the council adopted a 12% parking tax expected to raise $2 million in a normal year. The tax is discounted to 6% for parking garages with exemptions for designated employee, residential and student parking. Implementation of the tax was delayed to April, lowering revenue forecasts to $1.2 million.

A 0.5% utility tax and rate increase was also approved on Monday, expected to raise $1.5 million next year. Utility rates set the price paid for water, sewer and garbage by city customers; utility taxes determine how much of that payment is diverted away from the utility departments and into the city’s general fund.

Monday’s vote raises the overall utility tax rate to 21.5%. The 0.5% utility tax increase has a one-year sunset baked in, though a similarly “temporary” 1% utility tax hike approved in 2023 was made permanent the next year.

The council seemed stalled on the last few hundred thousand dollars as two different factions weighed how much funding to restore to the public library system and where to find that money. Spokane Public Library Executive Director Andrew Chanse earlier this month warned that significant service cuts would be made in 2026 without at least $500,000 in additional funding.

One council faction, represented by members Zack Zappone and Kitty Klitzke, offered $800,000 to the libraries, paid for with deep cuts to the council office’s own staff. The other side, represented by Council President Betsy Wilkerson and Councilman Paul Dillon, fought any layoffs in the council office, offering the libraries $500,000.

The two sides struck a compromise on Monday, making a delayed modification to the Wilkerson-Dillon proposal. The libraries will still only get $500,000, and no council office layoffs will be immediately necessary; however, $149,000 of funding for council staff was shifted into reserves, fully funding staff for only the first six months of 2026.

This theoretically forces the council to spend the first half of the year hashing out the long-term future for council office staff and a larger possible reorganization of these types of support roles throughout the city. However, technically the $149,000 slotted to reserves could be shifted back to staff by July, though at least some of it is being eyed to pay for a consultant who would make recommendations for a hypothetical reorganization.

“We’ve been talking about restructuring the office for two years now and it hasn’t happened,” Klitzke said in a brief interview. “So there’s a lot of concern and difficulty trusting that is going to happen.”

Dillon is more comfortable discussing possible layoffs if it is part of a holistic conversation, rather than an eleventh-hour attempt to slash the council office’s budget, he said in a brief interview.

The council’s amendments to the final budget also funded an additional public defender position, in part to manage the added caseload to the municipal court system from homeless people prosecuted under recently reformed camping laws and restoring a position for the city’s public access station City Cable 5, among other adjustments.

These modifications were made to Mayor Lisa Brown’s budget proposal, which includes roughly 20 cut positions citywide. The city employs roughly 2,800 people.

Reductions include four FTEs removed from communications and marketing, 3.2 from finance and administration, 4.9 from housing and human services, four from the office of the mayor and two from police. The mayor committed to not lay off any uniformed member of the police department, though these reductions could be administrative staff.

Another 121 positions will be shifted from the city’s public works and economic development divisions into the newly created transportation division, which will be headed by Jon Snyder, a former councilman who has worked for the past year in the mayor’s office. Snyder’s job was one of the positions cut from the mayor’s office.

Councilmen Jonathan Bingle and Michael Cathcart voted against the budget, arguing against using either the parking or utility tax to balance it.

“I think there were ways to get to where we needed to be with the budget without increasing tax, and we presented some options there that ended up not getting selected,” Bingle said.

Cathcart expressed continued frustration with patched deficits year after year and skepticism that the city wouldn’t be in the same position heading into 2027.

“I think that as a result of this budget … I do think it will result in another substantial deficit,” Cathcart said. “We’re adding taxes while we’re adding a number of expenditures. … We’re not making the right choices, whatever those are, to ensure sustainable spending.”

Several of Cathcart’s council colleagues voiced broad agreement that the city needs to be smarter about long-term budgeting. Wilkerson noted the city’s longstanding issues with sustainably funding personnel stemming from large salary increases in the last round of union negotiations and expressed some modicum of hope that this spending could be reined in.

He also rejected the use of a consultant to recommend changes to the council office, calling it wasted money for a job the council should be able to accomplish alone.