City of Spokane faces $13M deficit halfway through budget cycle

A year after closing a $25 million deficit, the City of Spokane is facing a $13 million budget hole as its November biennial review grows closer.

The deficit is caused by external factors, a news release from the mayor’s office said – specifically, a slowing national economy, weak consumer confidence and low sales tax revenue. The growing number of inmates at the county jail and uncertainty over federal contracts are other key players, the release said.

City Councilman Michael Cathcart disagreed that the deficit is entirely caused by outside factors, though he also acknowledg ed the economy could be better. He said the strategies used to close the $25 million deficit last year weren’t sustainable, more accurately masking the issue by moving dollars around rather than addressing the root cause.

The release states there were $1 million in unanticipated costs for 2024, as the cost of services at the county jail increased faster than the city’s average daily population. Cathcart argues that the city should be more conservative in projecting revenues and that any money coming in after hitting the projection can be put in reserves.

The city’s $13 million deficit does not include funds that would be needed to establish a new city emergency communications center, spokeswoman Erin Hut said in an email.

Cathcart said that while he doesn’t know for sure, it is “far more likely than not that there will be force reductions,” clarifying that the city would go for “low-hanging fruit” like negotiating with labor partners and refinancing loans before resorting to staff layoffs.

Budget deficits, Cathcart said, were a problem in Spokane Mayor Lisa Brown’s first year. In recent months, though, he said the dynamic between the council and the mayoral office has been more open to collaboration – a trend he hopes continues when it comes to reworking the budget.

“Closing an additional $13 million deficit is challenging, but I am confident we can do it while minimizing impacts to both the services our residents rely on and the staff who deliver those services,” Brown said in the release. “We will continue working to address our budget challenges while keeping community safety at the forefront. Crime is down, neighborhood resource officers and the traffic enforcement unit are back, and we are committed to expanding and investing in behavioral health, all while moving toward a stronger place of fiscal responsibility.”

While not expecting to be able to fix everything all at once by any means, Cathcart is also hopeful when it comes to closing the deficit, saying that “we can start now with the hard decisions in a responsible and thoughtful way.”

Consolidating city homeless services to be more efficient, a new design for the county jail to reduce staffing demand and an overall emphasis on programs collaborating with their “jurisdictional neighbors” are a handful of steps Cathcart said could benefit the city’s budget, clarifying that he doesn’t believe “that we should sacrifice standards.”

The community should engage with their city council members about their priorities, Cathcart said, as the deficit could impact them too.

This article was edited to clarify that the development of a city emergency communications center is funded by local sales taxes rather than a federal grant.

The online version of this article was edited to correct one of Michael Cathcart’s statements – that budget collaboration with Mayor Lisa Brown’s administration has improved in recent months over her last year in office.