Thursday, October 1, 2026
A proposed business tax increase and new public safety sales tax have emerged as two strategies aimed at addressing an estimated $7 million budget deficit the City of Olympia is facing in 2026.
The options were presented by City Manager Jay Burney at a City of Olympia Finance Committee meeting on Monday, Sept. 15.
Burney outlined a business and occupation tax as one of Olympia’s possible new revenue streams
Established in 1955 and remaining unchanged for 75 years, the business and occupation tax currently generates about $8 million annually for the city’s general funds.
Any business conducted in Olympia is taxable, with a tax structure consisting of two rates — 0.1% and 0.2% — applied across seven classifications. A $20,000 filing threshold exempts small businesses.
The proposed change would double the tax rate from 0.1% to 0.2% for retail businesses, and raise the tax filing threshold from $20,000 to $500,000.
City officials estimate this could generate roughly $1.9 million in new revenue.
Burney noted staff also modeled alternative scenarios, such as raising the tax across all business classifications rather than just the retail sector.
He added that early outreach to businesses has produced feedback, with some citing the difficulty of new taxes during tight times and other businesses stressing the importance of maintaining city services, particularly public safety.
Council member Kelly Green commented on the proposal, focusing on concerns about affordability and business impact, saying increasing taxes on businesses is regressive.
“Every time we have conversations in this community, that ultimately come down to affordability,” Green said. “Businesses are going to pass that on to consumers who, day to day, are going to feel it.”
The city is also looking at the public safety sales tax, part of a state legislative initiative, that would add a one-tenth of 1% to Olympia’s sales tax rate.
This would generate approximately $3 million annually, but would raise the city’s tax rate to 9.9%.
Coupled with a potential $500,000 in state grants, the revenue could fund critical public safety enhancements, including the expansion of walking patrols and support for a domestic violence unit.
The measure, established through House Bill 2015, offers a three-year grant program that could cover hiring costs up to $125,000 per position, with the city eligible to apply for grants for nine current police vacancies.
Council member Jim Cooper signaled support for moving forward with a balanced package that combines new revenues with limited cuts and some reserve use.
He noted the city already made “five years’ worth of cuts” in the last budget cycle and should avoid taking another deep bite.
Cooper added that a small use of reserves could help fill minor gaps, but cautioned that they should not be used to solve systemic problems. He said both the business and occupation adjustment and the public safety sales tax would help Olympia stabilize its budget.
Green pushed back on the idea of using reserves, saying they should be limited to true emergencies. She argued that relying on reserves year after year is a poor practice and stressed the need to focus on long-term budget solutions. Green and Cooper are members of the finance committee.
Burney reminded the finance committee that the 2025 budget was balanced with nearly $5 million in a one-time fund balance.
Also last year, the city cut 17 general fund positions, part of more than 25 positions eliminated overall, saving about $3.2 million.
Even with those reductions, Burney said the city now faces a projected $7 million general fund deficit for 2026.
“One of the things I’m planning on providing to the full council is, if you did not pass or enact $5 million in new revenues, what would $5 million in reductions look like? We are working our way through that right now,” he told the committee.
In addition to the two proposed revenue streams, Burney also mentioned other options: further expenditure cuts, use of reserves, or some combination of these options to close the budget gap.
City staff will continue developing alternatives and recommendations to be presented to the city council at a meeting on Sept. 30.
14 comments on this item Please log in to comment by clicking here
TheVirtualOne
No new taxes. Make more cuts to spending and layoffs as necessary. That’s what is done in the real world. Taxpayers wallets should not be on the table, especially after what the state legislature and governor did this year.
Tuesday, September 16, 2025 Report this
Honestyandrealityguy
Already having record: business taxes, gas taxes, property taxes, and more, maybe it is time for common sense.
Tuesday, September 16, 2025 Report this
GORECKIF
How did this deficit come about -- the City of Olympia doesn't have an accountant or a chief financial offices.
So now is the time for budget cutting. I"m guessing that payroll is the biggest single line item followed by interest on bonds -- so it's time for layoffs.
Tuesday, September 16, 2025 Report this
Quadlok
God forbid we pay for the society we live in. These anonymous commenters have spoken. You're not gonna cut into their beer and ammunition money!
Fucking children. Spoiled, ignorant, whiney children.
Tuesday, September 16, 2025 Report this
HappyOlympian
City officials must quit giving developers tax breaks. On all other affairs recognize this is a city of 60,000 and stop all these bizarre random projects and grants we give out to culture groups. Do not continue to raise taxes while also promoting an increase in minimum wage. County also talking about asking for more money thru a hefty multi-year property tax boost. Local officials need to spend less on all levels, that is the only long-term solution.
Wednesday, September 17, 2025 Report this
HappyOlympian
Quadlok - feel free to donate money to any government agency you like. Maybe take on a second job (if you have one already) and donate all the money you make to the city general fund and quit taking the easy way of having others pay for your wants. I have a feeling you live with a parent and do not put out any real effort to make an actual contribution, but don't worry about it, the rest of us will continue to carry you.
Wednesday, September 17, 2025 Report this
JW
Quadlok would probably be first in line to question everything the federal government is doing right now, but since the local government is run by his fellow leftists, there must be unquestioning obedience and surrendering of money through taxation to support the leftist government religion.
Wednesday, September 17, 2025 Report this
ClownPenis88
My question is DEI ? related as part of on going safety concerns. If you call the NON -emergency number for thurston county you will get an automatic message saying "FUNDING for non- emergencies can not continue due to the fact that this program along with many other services that are deemed necessary like safety and inclusion to the public can not help the community they serve because DEI is no longer in service. Which only makes the judges and commissioners look like complete idiots in there own communities they "falsely serve"
Wednesday, September 17, 2025 Report this
Mugwump
I don't resent city government for the amount of taxes I have to pay to live here. Heck, I'd even be willing to pay a little bit more if I thought it were truly warranted. But in my limited experience following local government what I've seen is a government with high ideals and little interest in keeping up the basic services everyone needs to feel as though they're receiving good value for their money. Art is good. Full stop. Supporting ALL communities and ensuring we all feel welcome is good. No question. But when the infrastructure of the city is visibly crumbling while the leaders spend resources on non-essential projects one has to wonder if their priorities are out of whack., and why. One thing I can say with confidence having spent some time working in local government elsewhere, local governments are always in thrall to real estate interests. If real estate developers and speculators ever paid their fair share of supporting infrastructure we wouldn't be having this conversation.
Wednesday, September 17, 2025 Report this
TheVirtualOne
Mugwump - Excellent commentary on local government. I too have worked in a local government entity elsewhere and have had similar experiences that you describe. I will mention one I had here recently that is concerning. Local artists are often awarded large sums of money and then have their art work displayed around the city. One such artist was awarded a significant amount for a sculpture. That piece was taken down more than a year ago and has never been seen since. I asked our city fathers about it and after a significant amount of time waiting for a response, I was finally told “it will be placed back in the next moth or so”. It’s been over 4 months now and still no progress. Why should the city be spending so much money only to warehouse the work of art so no one can see it? This is a good example of tax dollars being spent for nothing.
Wednesday, September 17, 2025 Report this
Mossbackman
Honest question to liberals, is this what you wanted?
Why can't you stop asking for this? Is it because you're not from here and don't care what happens to this place?
Wednesday, September 17, 2025 Report this
CobraCommander
Mossbackman here with a hot take while trump balloons the deficit and extracts tariff funds from the general population.
Thursday, September 18, 2025 Report this
36098501
The City should not increase taxes to solve a self-inflicted problem of knowingly overspending the City’s tax revenue.
A primary City government responsibility involves managing the budget to align with tax revenues. The City doesn’t have the magic of the Federal government to print new money – it has to come from local taxpayers.
Spending needs to be aligned with expected revenues along with a buffer to build up an appropriate reserve.
Programs are always going to come back with asks – asks that typically exceed inflation as they attempt to expand programs. In any budgeting process, Inflation expectations need to be built into programs forecasts.
Local public government, and local school districts, continue to go down a similar path by spending one-time lump sums of money, maybe Covid money or a Federal grant, on reoccurring liabilities that then get shifted to the local taxpayers as an ongoing, and growing, tax obligation.
The City has has made choices to allocate taxpayer revenue to programs that then crowd out spending and investment for what many in the community would consider primary City functions.
By the numbers presented in the article, it looks like 34 general fund positions need to be cut to harmonize the budget to actual tax revenues.
Tax revenue hasn’t been highly volatile. Sales tax revenue has grown by 35% since 2020. City property taxes received has gone up by 12% since 2020. Business and Occupation taxes have increased 37% since 2020. This is a similar story across all City tax revenue sources going back long before 2020. Tax revenue has been stable and without downside volatility even considering the financial impact of Covid. Inflation was also high during these times, but taxpayer revenue exceeded inflation over this time.
City budgets can be reviewed online at:
https://www.olympiawa.gov/government/finance.php
Here is another recent local budget example
https://www.thejoltnews.com/stories/flat-revenue-projections-push-thurston-county-to-narrow-treatment-sales-tax-spending,26447
Local taxpayers are already running to stand still financially. The City of Olympia shouldn’t contribute to pushing them out of Olympia altogether.
Friday, September 19, 2025 Report this
BettyVerdammt
Cut climate programming (useless and expensive), unhoused/housing programming (expensive and ineffective for a small town), DEI (purely performative), and all of Council's giveaways (kickbacks for votes).
Saturday, September 20, 2025 Report this