Facing a $20 million budget shortfall, Spokane County officials are expressing cautious optimism as recent sales tax collections outperform expectations. Heading into the summer, the financial outlook has slightly brightened thanks to stronger-than-expected revenue from retail sales tax—the county’s single largest source of general fund revenue.
After nearly flat growth last year, the county’s 12-month rolling average for sales tax growth reached 1.7% as of May. In Monday’s budget meeting, budget analyst Jason Metcalf reported that May collections—based on March activity—brought in $6.6 million, pushing year-to-date revenue to $31.2 million. That figure is 0.6% above forecast and 2.8% higher than the same time last year.
Jeff McMorris, senior director of Finance and Administration, said the stronger numbers suggest the county is beginning to “turn the corner.” However, he stressed that more needs to be done to make up the full shortfall.
The Board of County Commissioners is actively developing next year’s budget plan. McMorris noted that while current trends are promising, the county must still generate an additional $2 million to repay reserves tapped to balance the 2025 budget.
To address the gap, McMorris sent a letter to all department heads last Friday, directing them to maintain flat budgets next year and implement additional expenditure cuts. He also asked for the elimination of roughly 40 long-vacant positions that have remained unfilled for at least six months.
“If all the recovery savings today were to stay in place,” McMorris explained, “the overall gap has been closed by about $5 million. And with the expenditure reductions, that actually does close the budget pretty close.”
So far, salary and benefits recoveries have totaled $3.37 million for the year. But McMorris cautioned that because these reimbursements are received after payroll is processed, the final numbers could vary.
An additional $1 million in general spending cuts has also helped narrow the deficit. If departments maintain discipline and stick to the updated spending guidance, county officials believe the gap could be fully closed.
The Board of County Commissioners is scheduled to meet with department heads on Tuesday to review budget requests for fiscal year 2026.
