Deficit triggers budget reduction plan for Thurston County 

Thurston County’s budget woes escalated this week, as commissioners confronted a significantly reduced spending blueprint for 2026.

The budget showdown unfolded with the same problem facing counties across the state: unfunded mandates colliding with a 1% cap on property tax growth. 

County department heads have presented cutback proposals to the Thurston County Board of County Commissioners, according to a statement from the county on Wednesday, Sept. 17.

The proposals are viewed as the opening moves in a longer budget fight to close what is regarded as a structural deficit.

The county said its general fund, the account for operations, receives about 8% of property tax collections. That pool has lagged behind inflation since 2001 when state law imposed the 1% cap on property tax growth.

County officials contend the formula has created a persistent mismatch between revenue growth and the rising costs of services required under state and federal law. 

Fund balance forecast

 In a May 13 budget update, the Commissioners Office said the board's budget team was monitoring the general fund balance through 2025 to provide sufficient information for decisions shaping the 2026–27 biennial budget and beyond. 

Data showed the county closed 2024 with an ending fund balance of $32.1 million. 

For 2025, county projections show a shortfall of about $15 million and an estimated $17.1 million ending fund balance. 

By 2026, the balance would narrow to $1.3 million, and in the years following swing into deficit: $15.2 million in 2027, $28.3 million in 2028, and $41.3 million in 2029. 

To steer through those declines, the county has utilized two resolutions that represent best practices and force earlier corrections rather than temporary fixes. 

Resolution 15932, passed in 2020, stipulated budget and fiscal principles, including a goal of a two-month ending fund balance and a general fund reserve equal to one month of annual expenditures. 

Resolution 16010, adopted later, established a minimum cash-flow reserve of $12 million and a budget stabilization fund of $4 million. 

Fiscal stress 

According to county figures, nearly 70% of the general fund is dedicated to law and justice operations, reserving the remainder to support other departments while accommodating new state and federal requirements. 

“Unlike federal or state agencies, Thurston County doesn't make laws, it carries them out. In practice, that means state and federal mandates often arrive without the dollars needed to implement them,” the county said in the statement. 

Many of these state and federal mandates — from public health and social services to corrections and indigent defense — were launched years ago and have since lapsed, offloading costs onto the county’s local funding streams. 

The trend is unsustainable without changes to the current funding model, the county added. 

“Growing costs and expanding services are left to local funding, creating a substantial financial burden for the county. … The county’s revenue streams struggle to keep up with the demands of a growing population and a rising cost of living,” the county said in the statement.

The board, newly expanded to five members, and their reorganized executive team have been trying to put checks on the process. 

“Throughout the year, budget staff have been working to give the Board of County Commissioners better and faster visibility — acting as an early warning system, providing immediate insights and the ability to make iterative adjustments,” the county said in the statement.

The commissioners, aiming to set an example, requested in March that the Citizen’s Commission on Salaries for Elected Officials forgo 2026 pay raises. 

Commissioner Emily Clouse said the step was “the responsible thing to do” to protect public resources. 

Commissioner Carolina Mejia, who authored the letter, said, “We’re facing, you know, $12 to $14 million gap in our budget, and the state is not coming to really save us or really assist us in any way.” 

Bond proceeds 

While pursuing reductions in operating costs, the board also authorized a $34.9 million deal on July 30 to purchase a downtown Olympia property from Vine Street Associates LLC. 

The acquisition covers 7 acres near Plum Street and Eighth Avenue SE, and includes four buildings and parking spaces. 

The county said the purchase would not affect the general fund. Proceeds come from a previous bond restricted to facilities, which must be spent by the end of October 2025 to avoid arbitrage penalties. 

Acknowledging the budget ahead entails “difficult decisions,” the board pledged transparency and committed public participation. 

Community members may address the board in person at 3000 Pacific Ave SE, Room 110, Olympia. 

Written comments may be submitted to Clerk of the Board Amy Davis at amy.davis@co.thurston.wa.us at least two hours before the meeting. 

Further information on the county’s general fund and budget process is posted here.