Spokane sets tourism records as city, county budgets slip deeper into the red

(The Center Square) – A new report shows Spokane broke tourism records last year, generating $233 million in state and local taxes, but plateauing revenues remain an issue for local officials.

Visit Spokane, a nonprofit that promotes local tourism, releases annual reports put together by Tourism Economics to track industry growth. The 2023 Economic Impact of Tourism report highlighted the first time that visitors and their respective spending surpassed pre-pandemic data in Spokane.

According to the 2024 report released Thursday, 10.1 million visitors flocked to Spokane County in 2024, up roughly 3% from 9.77 million in 2023. Each one spent an average of $152 per visit, amounting to $1.53 billion in direct victor spending, nearly 4% more than in 2023.

“Visitor spending supported 1-in-19 jobs in Spokane, including 5,281 jobs in the food and beverage industry,” according to the 2024 report. “The $1.5 billion in visitor spending means that $4.2 million was spent every day by visitors in Spokane, on average.”

That $1.5 billion also triggered $840 million in indirect and induced impacts, such as employees spending their wages and business-to-business purchases. The tourism industry’s total impact amounted to $2.4 billion countrywide last year, providing $233 million in taxes and supporting roughly 18,000 jobs.

Spending across the food and beverage, lodging, retail, transportation and recreation industries increased over 2023, but retail and recreation continue to fall short of 2019. The city of Spokane and Spokane County feel the impact, too, as both are experiencing plateauing sales tax revenues.

Last December, both jurisdictions worked down to the wire to balance multimillion-dollar deficits ahead of 2025. The Spokane City Council and Board of County Commissioners hoped their budget woes were behind them, but both are now anticipating revenue shortfalls ahead of 2026.

“Sales tax revenue (January 2025 activity) is falling short of the budget,” according to a quarterly financial report released by the city last month. “Time will tell as we watch the very uncertain markets, but it is likely sales tax will consistently fall short of the budget.”

Last year, Spokane reduced its 2.3% revenue growth projection to 1.2% for 2024. Matt Boston, the city’s chief financial officer, then budgeted what he thought was a conservative 2% increase for 2025; however, he told the council last month that they may need to reduce it again this year.

The county budgeted a 2% increase in sales tax revenue last year but only reached half that. Local officials settled on a 1% increase for 2025, and things are holding steady, but the county still needs to balance a $20.6 million deficit ahead of 2026. The city needs to balance a $3.8 million hole this year.

From 2000 to 2023, the county averaged a 4% annual increase in sales tax revenue. Consumer confidence rebounded in May after the Trump administration paused some tariffs against China, but that will need to continue if either jurisdiction hopes to avoid tough cuts ahead of 2026.

“Consumer confidence improved in May after five consecutive months of decline,” Stephanie Guichard, a senior economist at the conference board, wrote in a news release. “The rebound was already visible before the May 12 U.S.-China trade deal but gained momentum afterward.”