Coeur d’Alene is grappling with a nearly $3.1 million budget deficit for the upcoming fiscal year, prompting city leadership to consider significant spending reductions and a modest property tax increase to balance the books. Finance Director Katie Ebner has put forward a proposal to trim approximately $1.16 million from the projected shortfall, though the measure would still leave a gap of roughly $1.92 million even after the cuts take effect.
Proposed Spending Reductions in Coeur d’Alene
The deficit reduction plan includes several moves aimed at restraining expenditures across city departments. Among the key proposals is a delay in hiring new staff members—a measure city officials have carefully characterized as a “soft freeze” rather than a complete hiring halt. City Administrator Michael Dominguez stated that the pause is “known as a soft freeze, colloquially,” clarifying that the city is not imposing an outright ban on new positions, as first reported by the Coeur d’Alene Press.
The city had planned to add 2.5 full-time-equivalent positions for the upcoming year, including a building inspector, an HVAC technician, and a part-time city attorney—a slate of hires that would have cost $275,241. Under the proposed plan, those positions would be deferred, freeing up resources for other priorities.
Additional savings would come from postponing a planned $250,000 increase to the special overlay program and redirecting $477,408 in remaining annexation fees from their original purposes into the general fund. The city is also reconsidering vehicle purchases, including $110,000 earmarked for two pickup trucks for the streets and engineering department and $40,000 to replace a recreation department vehicle.
Finance Director Ebner explained the rationale for the targeted cuts, noting that “the first place we look when we’re starting to shore up the budget are the items that are additions from the prior year.” This approach focuses on deferring newer initiatives rather than cutting established services, as first reported by the Coeur d’Alene Press.
Revenue Measures and Property Tax Impact for Coeur d’Alene Residents
To close the remaining gap, the city is proposing a 3 percent increase to the property tax rate, which would rise from $2.57 per $1,000 of taxable assessed value to $2.70 per $1,000. When combined with a proposed 3 percent increase in capital expenditures, the cumulative effect would represent a 7 percent increase in total taxpayer burden for property owners in Coeur d’Alene.
The city is also proposing to take 1 percent of forgone taxes as part of the budget solution. Additionally, municipal leadership plans to draw $680,532 from city reserves if the budget is finalized with the proposed deferments in place.
Budget Framework and Timeline
The city’s total proposed expenditures for the upcoming fiscal year stand at $155.3 million. Projected property tax revenue is estimated at $34.1 million, with non-property tax revenue anticipated to reach $127.8 million. These projections underpin the budget gaps now being addressed through the proposed cuts and tax adjustments.
The Coeur d’Alene City Council has scheduled a public hearing and final budget action for September 1, giving residents and stakeholders an opportunity to weigh in on the deficit reduction plan before the city makes final decisions on spending and tax adjustments.
What Comes Next
The council will present the full proposal at the September 1 hearing, where community members can offer feedback on the proposed cuts, hiring freeze, and property tax increase. Final budget approval is expected that same day, marking the end of months of budget deliberations for the city of Coeur d’Alene.