Thurston County budget revenues are projected to increase in 2022 and 2023 largely due to strong tax revenue and pandemic relief funding.
The county released its annual preliminary budget report on Nov. 22. Public hearings for the proposed budget are scheduled for Monday and Tuesday at the Thurston County Courthouse Campus.
For this budget, the county commissioners decided to revert to a biennial model rather than the annual model it adopted last year. Although pandemic-related uncertainty continues, Assistant County Manager Robin Campbell said the economic forecast has improved.
"No one gives me a crystal ball, but (the economy) is much more stable and no one is expecting an economic cliff anytime soon," Campbell said.
While acknowledging the impact of the pandemic and inflation, the budget report describes an overall positive outlook for Thurston County finances.
One reason for this is strong tax revenue. The report indicates the county expects to collect about $171.4 million in taxes in 2022 and $177.4 million in 2023. In all, taxes account for 43% of all revenues in the new budget.
For comparison, the county forecast nearly $143 million in tax revenue in its 2021 adopted operating budget.
The primary tax sources are property and sales tax. The county expects property tax revenue to reach $87.7 million and sales tax to total nearly $27 million in 2022.
"The big change is the strong growth in sales tax revenue," Campbell said. "The board has made quite a few budget decisions to increase capacity in our offices and departments, so they're able to provide services to the growing population."
Part of the reason sales tax revenue has been so strong for the county is because people have continued to spend by shopping online from their residence in rural, unincorporated areas.
The county has also continued to receive substantial revenue from federal and state sources, especially for pandemic relief.
Campbell said the board has been using relief funding for economic recovery and public health efforts, such as vaccine clinics and contact tracing among other services.
In all, the county expects intergovernmental revenue to total $129.8 million in 2022 and $52.5 million in 2023. The 2022 total exceeds the 2023 total because it includes American Rescue Plan Act Funding.
In May, the county received $28 million in ARPA funds, and it expects to receive an equal amount in 2022 for a total of about $56 million. This funding has been spent and earmarked for a wide variety of uses that are outlined on the Thurston County website.
Notably, the budget includes funding to lease and remodel the Atrium building on 3000 Pacific Ave.. The county will relocate general government offices and departments to this location by mid-2022, Campbell said.
The county also set aside about $50 million for infrastructure upgrades at the aging main courthouse campus on Lakeridge Drive, she said. With this funding, the county hopes to reconfigure the campus into a law and justice center.
The cost of the landmark State v. Blake decision, which struck down the state's simple drug possession law, will also continue to affect county finances for years to come.
Unless the state allocates more funding to counties in future legislative sessions, Campbell said the county will be forced to use its general fund to process cases and refund legal financial obligations.
Campbell noted other investments including more full-time equivalents at the Auditor's Office for licensing and passport services, interpreter services at the county's courts and funding to support a ninth Superior Court judge.
She added the Sheriff's Office will get more FTEs, body cameras and training. Meanwhile, the coroner's office will get more FTEs and equipment, she said.
Lastly, Campbell pointed out funding for more county park maintenance, an agricultural community manager, climate change initiatives, conservation projects, public health, social services, rent assistance and animal services.
Thurston County will start 2022 with about 1,276 FTE positions, per the report, the most it's had in at least 11 years. These employees will get a 2.5% cost of living adjustment in the new budget as well.
While considering the full report, Campbell praised county staff for drafting such a complicated budget in a short amount of time.
"There were more requests and limited funds, so (the board) had to make some difficult choices, but the board did a good job," Campbell said. "Staff across the county delivered a really solid product for them to work with and they always do a wonderful job."
Residents can comment on the proposed budget during public hearings set for Monday, Dec. 6 and Tuesday, Dec. 7. The hearings will be located at Thurston County Courthouse Building 1, Room 280 and start at 1:30 p.m.
The preliminary budget report can be found on the Thurston County budget website.
