Voters in the Spokane area will decide on August 4th whether to extend a 0.2% sales tax for Spokane Transit for twenty years, even though the agency holds reserves exceeding $300 million — roughly three times its annual operating expense. The proposal, detailed in a new report from the Washington Policy Center, would renew a tax set to expire at the end of 2028, generating about $30 million per year. The report questions whether the extension is needed and raises concerns about rising costs and declining efficiency despite the agency's strong performance compared to other Washington transit systems.
Since 2016, Spokane Transit has expanded service by 35%, but ridership has only increased by about 6%, and the number of passengers carried per service hour has fallen from 25.8 to 19.4. The inflation-adjusted operating cost per passenger has climbed 34% to about $10 per boarding. Bus service now costs nearly $200 per hour while generating only about $14 in fare revenue. The agency's total revenue in 2025 was just over $160 million, with the 0.2% tax adding to a permanent 0.6% sales tax. At year-end 2024, total reserves exceeded $300 million. Ridership now exceeds pre-COVID levels, though it remains below the 2014 peak of nearly 11.5 million passengers. The agency has completed 26 of 27 projects funded by the 2016 tax increase.
The report notes that Spokane Transit is "among the very best transit agencies in Washington" and deserves credit for giving voters the choice of renewing a portion of the sales tax rather than imposing taxes in perpetuity. According to the Washington Policy Center, the agency has "prudently avoided debt" and "done a better job of managing costs than most agencies in Washington." However, the report questions why a twenty-year tax is needed to pay for Connect 2035, a ten-year strategic plan, especially one that doesn't involve issuing debt.
The report argues that Spokane Transit's strong financial position raises questions about whether the full 0.2% tax is necessary, suggesting that current service levels could potentially be maintained with a 0.1% tax while slowly drawing down some of the surplus. The trend of diminishing cost-effectiveness reflects an industry-wide problem, but the report states it "isn't obvious how the additional revenue provided by Proposition One would address the unfavorable cost and productivity trends." The report also highlights uncertainty about how Spokane Transit will adapt to changing mobility patterns, including remote work, online shopping, and emerging technologies like autonomous vehicles and robotaxis, which are likely to offer on-demand service in many cities before 2035. Few transit agency plans address these technological advances or shifts in travel behavior that are already becoming apparent.
The report suggests voters might benefit from waiting until next year for the tax renewal vote, noting that the existing tax doesn't expire until the end of 2028. There's currently more uncertainty than usual regarding the economy, federal funding, fuel prices, the practicality of electric buses, and emerging transportation technologies. The Washington Policy Center concludes that to make an informed decision, voters may want to know more about what renewing the tax would accomplish — in particular, whether the additional funding will lead to a more efficient transit system, or simply a larger public expenditure with higher costs.