The City Council participated in a budget workshop on Tuesday, March 4 to kick off discussions for the 2026 city budget. The regular 6 p.m. Council was canceled due to the daytime workshop.
At the meeting, city staff shared budget-related information to help inform the Council’s discussion. The staff did not make any recommendations; they presented options for the Council to discuss and consider. The discussion introduced anticipated shortfalls in revenues and increased expenditures for 2026 and the importance of funding a full-service city that supports the six identified Council priorities, as they are all interconnected.
There was a quick review of the 2025 budget and a reminder that efficiencies had already been found and several cuts made from the general fund this year that won’t be available in 2026. Spokane Valley has always been and will continue to be a unique city that does as much as we can with as little as possible.
City Comparisons
Staff presented comparable budget data with six other Washington state cities with like-sized populations (Everett, Renton, Federal Way, Yakima, Bellingham and Kirkland), as well as neighboring cities (Spokane, Liberty Lake, Cheney and Airway Heights). Spokane Valley’s total revenue per capita in both comparisons was the lowest of all cities. For like-sized cities, Spokane Valley is at 61% of the average revenues per capita per city.
Challenges
The information presented introduced that 2026 will be more challenging for the city budget than the already challenging 2025. Some of the anticipated challenges identified for the 2026 city budget include:
- Property tax is not keeping up with inflation. The Council has not taken the 1% state-allowed property tax increase for 16 years, so the only property tax increases have been from new construction.
- Sales tax has been flattening or declining for the past two years. Spokane Valley is a sales tax-dependent city and relies heavily on sales tax revenues which fluctuate greatly with the economy.
- Law enforcement costs continue to increase. In addition to the desire to increase the number of police officers, there are staffing expenditure increases due to the collective bargaining agreement and state requirements.
- Cost escalations due to inflation. City expenses continue to increase due to inflation.
- Transportation Benefit District revenue is less than expected. Due to a software glitch with Washington state that duplicated vehicle accounts, the City will receive approximately $1 million less than budgeted from the $20 vehicle license fees, creating funding issues to maintain street maintenance activities.
Potential Revenues
Staff presented possible revenue sources for the Council’s consideration and discussion and recognized that the City continually evaluates every opportunity to maximize the organization’s efficiency. The following list was not a recommendation but a comprehensive list of options available.
- Property tax levy lid lift
- Public safety sales tax
- Utility tax
- Transportation Benefits District
- Business and occupation tax
- Permit fees
- Engineering fees
- Planning fees
- Building fees
- Business license fees
- Transportation impact fees
- Speed safety cameras/School zones
Provide Feedback
The City Council will continue to discuss and plan for the 2026 budget throughout the year, with the final adoption of the budget scheduled for November 18, 2025. Community members are encouraged to share their thoughts with Councilmembers by calling, emailing, providing Public Comment at Council meetings or attending the upcoming Community Conversations at 5 p.m. on March 18 at City Hall.