To close a projected $43 million budget deficit, outgoing Vancouver City Manager Eric Holmes’ recommended 2025-2026 budget proposes five new taxes, including on movie tickets and parking, as well as cutting the equivalent of nine full-time jobs.
“While the budget does include some difficult trade-offs and difficult reductions, overall, it came together in a very positive way,” Holmes said during a Vancouver City Council workshop Monday evening.
Despite the deficit, the 2025-26 city budget is $46 million more than in the previous two years, partially due to some funding carrying over, budget manager Shannon Olsen said. The total recommended biennial budget is $2.11 billion.
“We’re in a forever business,” Holmes said. “And while we do experience cycles, we need to continue to make strategic investments in the community to meet the growing demand and need for services associated with our growth and urbanization.”
New taxes
For the first time in a decade, the city of Vancouver will have to make budget cuts due to inflation and slowing growth.
“Inflation was extraordinary,” said Natasha Ramras, the city’s chief financial officer. “We’ve seen inflation at levels we have never seen before at the national level and locally, and we are impacted in … all our cost areas.”
To reduce budget cuts and fill the deficit, the recommended budget includes generating new revenue through new taxes.
A 6 percent cable tax would generate $1.9 million. An admissions tax, which would mostly show as a 5 percent tax on movie tickets, would generate $400,000.
A commercial parking tax starting in 2026 would produce $500,000 for transportation by charging 15 cents per transaction for short-term, off-street parking and 20 cents for on-street parking.
Starting in 2026, a 0.1 percent sales tax would generate $6.5 million for arts and culture, including facilities in the Vancouver Arts District and student access to culture and arts.
To fund an upcoming 150-bed homeless shelter, the city is considering a 0.1 percent business and occupation tax on retail starting in 2026. The tax would generate an estimated $7.1 million.
Previously, the city estimated acquiring and building the shelter would cost about $16 million. Operating it will take another $6 million to $7 million per year.
Other ways the recommended budget may generate new revenue include tapping into “banked” levy capacity, which was created with the passage of Proposition 2 in 2022, to fund the replacement of Fire Stations 3 and 6, as well as a remodel of Station 8.
Other revenue recommendations include passing onto consumers the credit card fee charged by credit card companies on transactions with the city, adjusting several fees for inflation (including special license fees and land-use fees) and reducing city financial support for nonresidents’ recreation fees.
The budget does not include mention of Proposition 4, which voters will decide in November. The ballot measure would add up to 80 full-time sworn officers and 36 nonsworn police positions, form a traffic enforcement camera program, expand the city’s Homeless Assistance and Resources Team (which has two officers), upgrade equipment and cover costs of the expanding services.
The Proposition 4 levy lid lift would increase the city’s 2024 general fund property tax levy by 41 cents per $1,000 of assessed value for 2025. The levy would increase 5 percent a year for six years and be permanent. The levy lift would raise about $15.5 million the first year and about $36 million by 2030, according to the city.
If voters decide to pass the measure, those elements will be added to the budget.
Workforce reductions
The recommended budget reduces the city’s overall workforce by the equivalent of 9.05 full-time jobs, which includes reduced hours, shifting responsibilities and job eliminations, Holmes said. Some of that reduction comes from the city’s fire and police departments.
The budget recommends eliminating a vacant position in the Vancouver Police Department’s records division and shifting five corporal and two sergeant positions to patrol enforcement, according to Monday’s budget presentation.
Three nonsworn positions, including two senior support specialists and one material control coordinator, within the fire department would also be eliminated. Two of those positions are occupied and one of them is vacant, Olsen said.
Some councilors expressed concern over losing any positions in fire or police. Councilor Diana Perez said the departments are already struggling to meet demand with a growing population.
“We have such a surge in gun violence in the community, as well as an issue with enforcing any type of drug enforcement across the landscape. … I can’t sit there with a straight face and tell somebody from the public, ‘We’re reducing positions in fire and police,’ ” Perez said.
Holmes pointed out the budget proposal wouldn’t cut uniformed positions.
Councilor Sarah Fox still indicated unease with eliminating nonsworn positions.
“Reducing any staffing feels to me like the wrong decision,” she said.
Budget staff said it would be difficult to avoid any reductions in public safety.
“When about two-thirds of the general fund is spent on police and fire alone, addressing the forecasted deficit with zero impacts to those two departments is exceptionally challenging,” Holmes said.
The next budget workshop is Oct. 14. The full recommended budget can be found on the city’s website under the budget dashboard.
