Spokane County begins planning for 2025 budget; positions and discretionary spending may be cut

Shoppers, home buyers and developers are spending less money in Spokane County this year than expected, which means the county may need to cut some positions and expenses to balance its budget as sales tax collection slows.

Spokane County is in the early stages of the budgeting process for 2025. Starting Monday, each department will begin crafting their individual budgets for consideration by the county commissioners in September. A final budget will be adopted Dec. 2.

The 2024 budget totaled $937 million, up $64 million from 2023. Sales, real estate excise and property taxes, which the county is allowed to raise 1% annually under state law, are the primary funding functions for the county government.

When the county commissioners adopted their 2024 budget, it was based on projections that sales tax proceeds would grow by 2%. So far, proceeds have only grown to roughly half of what was expected this year.

The county has forecast the sales slump to continue into next year, with no growth expected year over year.

In a letter circulated to county department heads and elected officials this week that laid out guidelines for those leaders to begin their budgeting process, the commissioners warned that vacant full-time positions will be cut at the start of the budgeting process.

The county departments with the most vacancies are the Spokane County Sheriff’s Office with roughly 35, followed by Detention Services and Juvenile Detention Services, said Randy Bischoff, senior director of finance and administration .

But that doesn’t mean those positions will remain dissolved. Bischoff said it’s more of a jumping -off point to ensure the county is operating within its means moving forward.

“We send out a letter every year to the departments, saying it’s budget time and laying the ground rules,” Bischoff said.

Also included in the budgeting guidance letter was a request for departments to identify and propose cost -saving measures, and to focus on potential cuts to discretionary spending on things like travel, industry conferences and office supplies.

“While it’s not dire straits, we do need to be careful,” Bischoff said.

In addition to no growth forecast for 2025 sales tax collections, the county will also need to contend with expected wage increases and inflation. Staffing is the largest expense for the county, and those costs increase by 7.5% each year when factoring in step increases and contractual cost-of-living adjustments, according to the letter.

“Continuing to operate exactly as we do today is not possible,” the letter reads. “Increased staffing costs, inflation and the need to maintain appropriate reserves all add to the cost of doing business.”

The county does expect to see minimal growth in its general fund in 2025, despite the projected lack of sales tax growth.

Patrick Jones, executive director of Eastern Washington University’s Institute for Public Policy and Economic Analysis, said the county’s outlook may change by the time the county commissioners are ready to approve a 2025 budget.

State figures forecast more activity in the latter half of this year and into the beginning of next, Jones said.

Jones said other jurisdictions across the country and within the state are dealing with similar issues when it comes to budgeting post-pandemic, but noted that state revenue is still expected to increase year over year.

“During the pandemic, we experienced these double-digit increases in taxable retail sales and property taxes and things like that, and that was obviously unsustainable,” Jones said.

He said a slowing housing market, less construction early in the year and automobile sales could all be contributing factors to the lackluster sales tax growth.

“I think this is the hangover, in part, because of the pandemic injections into the economy,” Jones said.