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Spokane Valley staff warn state tax changes could reduce local sales tax revenue; police summarize ALPR and sheriff-related bills
Summary
City lobbyist Brianna Murray told council the 2026 legislature enacted major tax revisions (including a proposed income tax and sales-tax exemptions tied to it) that could lower local sales-and-use tax receipts; Police Chief Dave Ellis outlined new limits on automated license plate readers and a separate sheriff-credential bill that is under injunction.
City lobbyist Brianna Murray and legislative policy coordinator Virginia Clough told the Spokane Valley City Council that the 2026 Washington Legislature made several tax-policy changes that could affect municipal revenues and local budgets.
Murray said the most prominent change was a proposed 9.9% income tax on income above $1 million scheduled to take effect Jan. 1, 2029. She said the income tax’s implementation plan includes delayed effective dates because the measure is expected to face legal challenges and possible voter initiatives. Murray added that the bill also included sales-and-use tax exemptions for items such as diapers, hygiene products and some over-the-counter medicines; because those exemptions apply to state and local sales taxes, cities could see revenue declines when they take effect in 2029.
Murray told council the Legislature included a $200 million placeholder in the 2027–29 outlook intended to mitigate impacts to cities, counties and transit agencies but called the amount "written in pencil" — not a binding appropriation — and said its distribution and ongoing status are uncertain.
On public safety issues, Police Chief Dave Ellis summarized two notable bills. He said Senate Bill 6002 revises the use and retention of automated license plate reader (ALPR) data: the bill reduces retention from 30 days to 21 days, restricts queries to felony and gross-misdemeanor investigations, limits access to certain databases (including NCIC), and prohibits use for immigration enforcement and collection near sensitive sites such as schools and health-care providers. Ellis said the department paused parts of its ALPR pilot to require software safeguards ensuring officers can query only for allowed offenses.
Ellis also summarized Senate Bill 5974 (commonly described as the sheriff's bill), which adds hiring and background-check requirements for sheriff or police chief appointments, clarifies eligibility, and assigns certain decertification consequences to the Washington State Criminal Justice Training Commission; litigation and an injunction in Thurston County were reported as pending.
Murray and Ellis recommended council and staff track revenue impacts over the next three years, prioritize nonrecurring spending for now, and continue advocacy at the Association of Washington Cities to protect municipal interests.
