PORT TOWNSEND — Jefferson County departments have made significant concessions to their 2026 budgets, whittling a general fund deficit down from more than $5.2 million to more than $1.15 million.
The county expects to finish the year with a $1.66 million balance.
“It’s been a wild ride. There have been a lot of ups, a lot of downs,” Finance Director Judy Shepherd said.
Progress comes in the form of almost $3.03 million in cuts and almost $1.08 million added in expected revenue.
Of the cuts, more than $1.86 million comes from most of the 16 general fund departments.
The cuts will result in laying off staff in the Department of Community Development, reducing courthouse security, suspending all rehire positions until late in the first quarter of 2026, pending review, significantly diminishing services such as WSU extension’s after-school program in Brinnon, and possibly closing some county parks and/or ending recreation programs, Shepherd wrote in an email.
The county will meet with city of Port Townsend staff this week to discuss the possibility of suspending its recreation programming in the downstairs section of the Port Townsend Community Center as well. Suspending the service would cover $81,229 of a $100,000 budget gap, Shepherd wrote.
The board also approved a temporary hiring freeze at the end of October, which will affect unfilled positions across multiple departments.
Added revenue includes $150,000 from opioid settlement funds and a newly proposed public safety tax, expected to net $301,000. The new tax is scheduled to go before the board of commissioners on Dec. 22.
Funds would be at least partially directed toward contracting with public defenders. The county’s public defense budget for 2026 is $1.1 million. Shepherd noted that providing public defenders is a state-mandated service.
A recent state Supreme Court decision limited the number of cases public defenders can take on, which is likely to result in more associated costs for counties.
The tax, which would cost taxpayers one-tenth of 1 percent in sales taxes, would join the two-tenths of 1 percent transportation benefit district (TBD) tax increase, passed by voters in November. A public hearing notice passed on Monday’s consent agenda said the increase would bring Jefferson County’s sales tax to 9.5 percent.
Jefferson County’s 2026 budget hearing is scheduled for Dec. 22. The late adoption date follows a series of difficult conversations — led by Shepherd — aimed at balancing the budget.
In a Nov. 3 county commissioners meeting, Shepherd shared the stark numbers: Expected revenues for 2026 were $27 million with expenditures of nearly $32 million. Failing to balance the budget would eradicate the reserves, commissioner Greg Brotherton said.
The 2025 budget was adopted with a $2.6 million deficit, said Shepherd, who explained that the prior budget not only began in deficit but expanded during the year through additional appropriations and cost increases.
While some sources of revenue have slowed down, like sales taxes and Department of Natural Resources-managed timber sales, state-mandated services including public defense have continued to rise, as have other costs, including insurance premiums and internal service charges.
In the November meeting, Shepherd expressed sober concerns around the strong likelihood that balancing the budget would require job cuts. Shepherd called on department heads to bring forward reductions in an effort to carve 12 percent off the top in the least destructive way possible.
On Nov. 10, the commissioners reconvened, with Shepherd presenting the board with a short list of budget-balancing options.
“Anything that we decide is not going to be popular,” Shepherd said. “Our goal is to save some jobs.”
One option she presented was pulling the general fund contributions to the Public Works roads fund, noting that the newly implemented TBD is expected to generate $1.6 million for roads in 2026.
The option was strongly opposed by the commissioners, who referenced the will of the voters who wanted the increased funding to go toward the struggling road fund.
“I have never in my seven years with the county seen so much inter-departmental strife,” Brotherton said. “I agree with the echoes that we’ve heard from department leads that we need leadership.”
In times of plenty, collaborating on a budget is easy, Brotherton said.
The commissioners repeatedly spoke about lacking a whole-system view of the budget. Independently, each service and program seemed worth defending but they needed to make cuts and lacked the ability to make clear judgements between the many services.
Brotherton characterized the difficult cycle as lacking central leadership and said he did not see himself as capable of providing for the need.
“I’m looking at you Josh (Peters, county administrator). (Department directors) can’t make all of these decisions,” Brotherton said. “I’ve got a crayon drawing of the budget. How am I supposed to decide between water quality and prosecutor’s office? I don’t have the information.”
In response to Brotherton’s reflection on internal division present in the process, Shepherd noted that this budget cycle was the first time in the county budget-making process during which general fund departments worked together.
“They rolled up their sleeves, they’re having open conversations,” Shepherd said. “That didn’t happen 2008. In 2008, it was like, ‘This is what we have to do, we’re doing it.’”
While the cycle was tense, coming together with all of the best minds in the room was worthwhile, she said.
Shepherd wrote that she does not expect any further cuts to be made leading up to the Dec. 22 hearing and that the budget is expected to be adopted.
The county will approach a financial plan to address the deeper issues leading into this budget cycle in the first quarter of 2026, Shepherd said.
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Reporter Elijah Sussman can be reached by email at elijah.sussman@peninsuladailynews.com.
