(The Center Square) – The city of Spokane recorded the fifth largest drop in tax revenue last year among Washington municipalities, according to a new report from the Washington State Auditor’s Office.
Spokane’s sales tax collection decreased by more than $ 4.1 million from the previous year, from $ 63.7 million to $ 59.6 million; a decrease of 6.4%.
Overall Washington sales tax collection fell 4.5% last year, down $ 76.7 million. The auditor’s office, however, reported that “167 of 272 cities (that’s over 60%) saw an increase in their sales tax collections compared to pre-pandemic 2019.”
“We believe that each city has its own story that explains the increase or decrease,” the report said. “We shouldn’t assume that just one factor is responsible for the changes.”
While Spokane’s sales tax collections were down, the percentage change was only slightly worse than the state average.
Spokane is the second most populous city in the state, according to the website Washington Demographics. Still, Washington’s fifth-largest city, Bellevue, saw a drop from the previous year’s collections of more than $ 19 million, eclipsing Spokane’s decline.
City of Spokane communications director Brian Coddington said some of the economic dynamism can be attributed to planning.
“The city has worked closely with business and public health to develop COVID-safe marketing and business support strategies to encourage and remind people to patronize their favorite local businesses, even on the edge. street, ”he said. “A few weeks of night markets and other marketing partnership efforts have kept a certain level of business activity going. “
Nonetheless, Coddington sees a difficult economic road to travel.
“Spokane’s economic base relies heavily on retail and hospitality, which have been hit hardest by the pandemic, especially in the first year,” he said. . “
Lance Beck, chairman of the Greater Spokane Valley Chamber of Commerce, which represents the suburbs of Spokane, has agreed with Coddington on the effects of COVID-19 on downtown Spokane.
“We saw downtown close,” Beck said. “The high rise buildings were empty of employees and it was oddly quiet.”
Beck believes that many of Washington cities’ problems with collecting sales tax last year boiled down to “centralized employment but non-resident workers.” When large numbers of workers from out of town were prevented from doing so, they tended to stay at home and spend the money locally.
In Spokane, a large number of people live in the same town where they work, Beck said. When downtown closed, more people were still working and spending locally than in many other metropolitan areas.
However, some people who made it to Spokane still had to stay at home.
“We saw a bonus ‘in the Spokane Valley,’ because people were working from home,” Beck said.
Beck cited the small town of Liberty Lake in Spokane County as an example. While sales tax collections were down 6.4% in Spokane, things were booming in Liberty Lake, which saw a 20.5% increase in collections.