Property taxes won’t be raised in Spokane Valley next year despite city’s budgetary challenges

Autumn in Spokane Valley means leaves changing colors, pumpkins being carved and the annual vote by the city’s elected leaders against raising property taxes.

The Spokane Valley City Council Tuesday decided against taking a 1% increase in property taxes next year, bringing its running streak of opting against the tax to 16 straight years.

By abstaining from the increase, the council is saving the typical Valley homeowner less than $4, while missing out on an additional $138,060 in revenue next year. The levy rate will remain at 79 cents per $1,000 of assessed value for 2025.

Councilman Rod Higgins and Deputy Mayor Tim Hattenburg were the only members of the board who supported taking the increase.

State law allows governments to collect 1% more in property taxes every year, and most do, given the limited funding options they have. Taxes are the primary funding mechanism, and the 1% is unique in being one of few ways governing bodies can increase taxes without voter approval.

Property taxes are the leading recurring revenue source for the city’s general fund behind sales tax returns. The city expects to collect $13.8 million this year and around $14.1 million in 2025.

While funding constraints are ever-present for local governments, Spokane Valley has a handful of pressing concerns unique to this round of budgeting.

Next year’s expenditures are expected to grow five times faster than what the city collects, and city staff have warned the council general fund revenues will outpace spending by only $2,000, as reported by The Spokesman-Review.

Statewide, sales tax revenues have remained stagnant, meaning local governments are not seeing the growth they may have budgeted for in past years.

The Valley is also without enough funding to reach the council’s stated goal of adding more than two dozen deputies and staff members to the Spokane Valley Police Department.

Hattenburg said the city has, for decades, missed out on funding that could be used in that effort, which is why he dissented Tuesday.

Higgins cited those budgetary concerns more broadly when asked why he supported taking the increase. He said he’s been advised that the council’s annual decision could affect city-issued bonds down the road, as the city could be seen as a less reliable lender.

“When you’re running short of money, as we are tending to do now, and you don’t take everything that’s available to you, that’s going to affect your bond rate,” Higgins said.

Higgins also worries abstaining from the increase could lead to eventual cuts to city services, given the city’s existing financial challenges.

“We are running short, and we’re looking at other needs, such as hiring additional police officers,” Higgins said. “So it really doesn’t make a lot of sense that we don’t take it. We’ll have to find it someplace else that may be even more painful.”

The council will adopt a final 2025 budget in November. Interested residents can provide comments at one last public hearing regarding the process at 6 p.m., Nov. 12 at Spokane Valley City Hall.