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Spokane County briefing flags possible large local revenue losses from state income-tax bill
Summary
County officials warned March 10 that recent changes to a proposed state income-tax bill could cut local sales-tax revenue, estimating a $150'$200 million annual hit to counties and prompting county officials to seek mitigation language in the budget.
County leaders at a March 10 briefing said recent amendments to a high-profile state income-tax bill have broadened sales-tax exemptions and could substantially reduce local revenue. The board of county commissioners's state lobbyist, Lee Burgess, told commissioners that the legislature is engaged in lengthy floor debate and that budget documents expected on March 11 will show whether a proposed local-government mitigation fund provides offsets for lost revenue.
A county official (speaker 3) said the added sales-tax exemptions prompted the county association to change its stance from neutral to opposed, and estimated the combined impact on counties could be between $150 million and $200 million per year; he added estimates for cities could be larger. Burgess said the bill includes language creating a mitigation account but noted that any mitigation funding would require appropriation in the operating budget.
Commissioners asked how and when any offsets would arrive. Burgess said the final operating and capital budgets would spell out funding levels for specific projects and mitigation, and he promised a district-by-district project list after the legislature releases the budgets. He also summarized other bills the county is tracking, including a waste-to-energy proposal awaiting concurrence, a data-center tax-exemption repeal with pending floor amendments, and a tobacco-tax measure that stalled in committee but may be revisited because of impacts to public-health funding.
Why it matters: Commissioners said the potential reductions could affect local services and capital projects and asked staff to review the budget documents closely when they become public. The briefing produced no formal action; staff said items will return to next week's legislative agenda after officials have had time to analyze released budget materials.
Next steps: Staff will circulate the legislative budgets when posted and present a breakdown of potential impacts and recommended follow-up at the next briefing.
