If Thurston County continues on its current financial trend without any adjustments, its general fund will run into the negative by 2027.
That’s why the Board of County Commissioners sat down with County Manager Leonard Hernandez and Budget and Fiscal Manager Summer Miller last Wednesday to discuss pathways toward maintaining a balanced budget.
As of May 6, the county estimates that its 2024 year-end fund balance will actually be greater than written in its revised budget thanks to an increase in revenues and a decrease in expenditures. The revised budget showed an estimated ending fund balance of $24.6 million, but the actual estimate to date is $32.1 million, according to Miller’s presentation.
While the increase is a welcome sight for the county budget team, the county is still expecting significant drops in its fund balance in the next three years. The estimated year-end fund balance for 2025 is $17.1 million, with $122.1 million in estimated revenue versus $137.1 million in projected expenditures. Miller said these numbers do not include updates to contracts or other legislative actions that may affect the county’s budget.
The 2026 year-end close in the general fund is an estimated $1.3 million, without updating any practices, before dropping to a negative $18.2 million in 2027.
“It is not an indication that we support the county running the budget into a negative fund balance scenario. It’s strictly a visual aid,” Miller told the commissioners as she displayed the future forecast on the screen.
According to the county budget team, Thurston County is facing two significant challenges, including a reduction in revenue coupled with an increasing demand for services. Miller said a potential revenue option is a levy lid lift, which has been met with criticism by residents, and she added it would allow the county to secure the necessary funding to sustain and enhance the services it provides. Without the potential voter-approved increase, Miller said the county may be faced with difficult decisions, including scaling back programs or reducing service levels. The budget team will come back to the board at a later time to discuss all available revenue options.
Another option is budget containment, which Miller said could potentially save the county between $800,000 to $2.5 million with no growth and diminished service. A budget reduction is also in play, and Miller said a 10% budget reduction as an exercise would save about $13 million to $15 million.
Budget containment pathways include:
• Freezing non-essential hiring and spending
• Restricting equipment purchases to those necessary for basic agency functions and health and safety
• Reducing travel
• Evaluating programs that were implemented since 2020 or are not fully implemented, as well as programs originally funded one time with federal COVID-19 dollars
• Positions control
• Reducing incremental spending
• Eliminating unused capital assets
In order for these potential savings to be impactful, Miller said immediate future growth is necessary.
Revenue options include property taxes, sales and use taxes, lodging taxes, real estate excise taxes, state-shared and federal revenues, and more.
Vice Chair Wayne Fournier said the county should consider economic development in its conversations, along with budget containment.
“We can’t just tax our way out of this and cut our way out of this. We also have to grow our way out of this,” he said.
