PORT TOWNSEND — Jefferson County officials say the next two years are looking positive financially.
County commissioners got their first look at the biennial budget Monday, a document which Administrator Mark McCauley said reflects a cautiously optimistic outlook for the next two years.
“If projections hold, we’re going to have a very good five-year period ahead of us,” McCauley said. “We’ve insulated ourselves somewhat against an economic downturn.”
Commissioners are expected to approve the budget at their next meeting on Monday.
Total projected revenues for 2024 are more than $101.4 million and $84.3 million in 2025, according to meeting documents, with expenditures estimated to be approximately $109.8 million in 2024 and $91.3 million in 2025.
The county has seen “tremendous” investment income, higher-than-normal timber sales and strong sales tax revenue, resulting in record-setting reserves for the general fund, the county said.
Included is a 12 percent pay increase for one of the county’s bargaining units — the United Food and Commercial Workers — even as labor negotiations continue.
The budget also includes 1 percent property tax increases for the road fund; general fund; conservation futures fund and base sales tax. A sales tax of 0.1 percent is being added for the criminal justice fund; mental health and chemical dependency; Jeffcom 911 and housing and related services.
The Port Hadlock sewer project is fully funded and under construction with $35 million from state and federal grant funding, and the Department of Community Development is now fully staffed.
However, chronic fund shortages are occurring in some funds such as the road fund, largely driven by increases in property taxes not being able to keep up with inflation. Property taxes are limited to an annual 1 percent increase, but inflation has been at 21.5 percent since 2020, meeting documents said.
Additionally, the transition to electric vehicles is stalling the growth of the Motor Vehicle Fuel Tax, which is used to fund road projects.
McCauley called the levels of inflation “stunning” and said it is making things more difficult for local governments.
“This is making life difficult not just for us but for businesses and governments that rely on tax revenues,” he said.
At the end of 2023, the county will have a fund balance of $8.4 million, with a projected ending fund balance of $7.6 million in 2024 and $7.2 million in 2025.
The county maintains a general fund reserve of 15 percent of expenditures, which in 2024 will be $4.4 million and $4.3 million in 2025.
Projections through 2028 show a relatively healthy unreserved fund balance, helping to insulate the county from financial downturn, documents said.
Commissioners have been working on the budget periodically since August and made little comment about Monday’s presentation. District 1 Commissioner Kate Dean said the county should start considering ways to save money for a capital project for a new county facility in the future.
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Reporter Peter Segall can be reached at peter.segall@peninsuladailynews.com.
