Spokane finance team warns of widening general fund gap as personnel costs outpace revenue

City of Spokane finance officials warned council members during a budget study session that the city faces a growing structural imbalance driven by rapid personnel cost growth, depleted unrestricted reserves and the loss of one-time funding sources.

"A fund's resiliency is directly related to the cash it has on hand," said Jessica Stratton, director of management and budget, as she outlined declines in the city's unappropriated fund balance after multi-year bargaining settlements drove retrospective payouts.

The finance team told the council that about $14,000,000 in transfers from other funds supported the general fund over the past three years and that many of those transfers were one-time sources — including ARPA allocations, the EMS levy and criminal justice assistance funds — that are no longer available. Jake (Jacob) Milner, a member of the finance team, summarized the projection bluntly: "Ultimately, we have a problem," saying staff project a $137,000,000 cumulative deficit between 2025 and 2030, with roughly $37,000,000 of that shortfall occurring in 2030 alone.

Officials presented recent fiscal trends to explain the gap: tax revenue grew about 3.2% on average over the prior two years (near the city's…