(The Center Square) – Mayor Lisa Brown and her cabinet unveiled an estimated $35.6 million baseline deficit on Thursday for the 2027-28 biennium, which the Spokane City Council must balance by the end of the year.
Brown and Chief Financial Officer Matt Boston released the city’s six-year general fund forecast during a budget meeting with the council on Thursday. The anticipated gap comes on the heels of the council balancing a $25 million budget deficit heading into 2025 and another $13 million gap ahead of 2026.
In both cases, the mayor and council turned to raising taxes on residents and various spending cuts.
“Bottom line up front here: It’s not very good news,” Brown opened on Thursday. “Things are trending in a not great direction … we’re going to have our work cut out for us as we go into this next budget.”
Under the baseline projection, Boston expects 2027 spending to total $301.7 million, with $284 million in revenues for a $17.8 million annual deficit. They also show a $17.8 million gap in 2028, with $312.4 million in spending and $294.7 million in revenues, for a $35.6 million combined shortfall for 2027-28.
Brown and Boston said there’s a “high degree of uncertainty” so the revenue projections could change.
“We’ll be making challenging policy decisions to try to deal with the expense side,” the mayor warned.
Thursday’s presentation also included “optimistic” and “pessimistic” revenue and spending projections.
Under the best-case scenario, the city could face a combined shortfall of roughly $8.5 million for 2027 and 2028 under Boston’s projections. That assumes easing inflation and that implementing Spokane’s new independent emergency dispatch system will come in under budget across the 2027-28 biennium.
In the worst-case scenario, the projections show a roughly $75.3 million combined deficit for the next biennium, assuming labor costs rise and retroactive pay increases with medical inflation and jail costs.
“These are challenging economic times,” Council President Betsy Wilkerson said regarding the outlook.
City staff said medical benefits, collective bargaining agreements, contracts with Spokane County for jail and animal control services, dispatch implementation and inflation are the main budget pressures.
Nobody during Thursday’s meeting explained whether the projections included the council’s 13 budget priorities that could add more than $10 million in additional pressure without offsets or new revenues.
Councilmember Michael Carthcart asked what revenue options the mayor is considering for next year, though he voted against the 13 budget priorities two weeks ago due to the lack of identified funding.
It’s up to the council to implement taxes and put measures requiring a public vote on the ballot, and the deadline to put one up in November is next week. The council has briefly discussed a few options in the last couple of months that it can impose without a vote of the people, which Cathcart opposes.
Still, most of those options on their own would only fill a fraction of the baseline deficit for 2027-28.
Boston says they have options in mind, but it will require lengthy conversations with the council and administration. The first step is determining how big the deficit will be as the city finalizes its revenue assumptions, before then determining how to fill it, with either new revenues, cuts, or a combination.
“Definitely want to have a sense of a little more solid revenue estimates before we go there, and I’d like to get some more certainty around the bargaining contracts,” Brown said in response to Cathcart.
Boston said Spokane isn’t alone, referencing media reports showing a $488 million deficit in Seattle for 2027-29; a $40 million gap for Tacoma in 2027-28; a $43 million shortfall that Vancouver closed for 2025-26, and Spokane County’s own $30 million projected general fund shortfall for next year alone.
He said the administration will hold monthly budget meetings with council starting in September.
Wilkerson said they need to be realistic this time around, after filling back-to-back multi-million-dollar deficits the last two years. Even after filling the $13 million shortfall last November, quarterly financial reports released earlier this year revealed that the council still started 2026 with a $2.6 million deficit.
“I’ll just say the chatter on our side of the house is we do not want to pass a budget in December and then we’re out of budget [in] January,” Wilkerson said, closing the meeting.
“We really want to be realistic going forward and not play chess, for lack of a better term, with numbers to balance the budget.”