Spokane County faces possible service cuts, hiring freezes because of anticipated budget shortfall
This story was originally published on MyNorthwest.com.
Spokane County is bracing for a $20 million deficit heading into 2026, as reported by The Center Square.
According to Jeff McMorris, senior director of the county's Finance and Administration Division, projections indicate general fund revenues will drop to $262 million next year, $2 million less than the 2025 budget.
McMorris suggested a hiring freeze and cutting non-essential services as potential solutions. He also proposed eliminating 106 vacant positions to save $10 million. However, labor contracts and agreements are limiting the county's ability to cut costs.
'We're heading into a big contrast,' McMorris told The Center Square. 'The extra money outlook is going in the opposite direction, and that's going to impact this year's budget. Things are not super great.'
He attributed the shortfall to the end of federal COVID-19 relief aid and broader challenges.
More from MyNorthwest: $4B in cuts and furlough days? A look at Ferguson's proposed bipartisan budget
'Our forecast is showing a $20 million deficit in 2026,' Tessa Sheldon, budget and financial operations manager, said
Sheldon explained the shortfall affects the entire county budget, which heavily relies on federal and state funding.
Decreased consumer spending and tax revenue are also results of corporate cutting. Bischoff had budgeted a 1% sales growth for 2025, but McMorris set 2026 at 0%, with gradual increases in subsequent years.
Spending is expected to reach $282 million in 2026 and surpass $350 million by 2030, with revenues projected at $281.9 million.
From 2000 to 2023, Spokane County averaged a 4% annual growth in sales tax revenue. Sales tax is 30% of the county's general fund revenues, followed by services at 26% and property taxes at 24%.
Salaries and benefits are 69% of the general fund budget.
Bischoff wants departments to propose their own reductions after initially offering his suggestions. McMorris plans to conduct monthly reviews to monitor costs.
'We're not in the hole,' he said. 'We have a fund balance. It's just if we don't start doing something now, give it a year, and we'll be in a tough situation.'
Relate from MyNorthwest: WA Republicans accuse Democrats of inflating budget deficit to justify more taxes
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