During the last budget cycle, the City of Centralia took in record amounts of revenue.
The city utilized its banked property tax capacity, adding $2.47 million to its regular budgeted property tax revenue. It increased every utility tax to the maximum allowable amount, while the sales tax rate remained at the highest percentage possible.
Despite these increases, the city still budgeted to use reserves to cover the budgeted expenditures.
This budget cycle, the story has remained the same; revenues will not cover budgeted expenditures. The Centralia City Council has been presented two options: raise taxes or lay off police officers and parks staff.
However, if we take a closer look, neither of those options are necessary, and some important facts are being withheld from the public.
Staffing shortages
The year 2007 has consistently been used as the benchmark for the beginning of the city’s staffing shortages. From the year 2007 to 2008, the city experienced a reduction of 18 full-time equivalent (FTE) employees. The message has been that the city has never fully recovered from those reductions and is at a breaking point due to staffing shortages.
What has not been fully disclosed is, in 2008, the Centralia Fire Department joined the Riverside Fire Authority, transferring 23 of the full-time employees out of the city’s jurisdiction. When accounting for the fire department’s transition, the city has not actually lost employees over the last 20 years. Instead, it has added 19.9 FTEs to its budget. The largest increase occurred during the last budget cycle, when the city added 12.5 FTEs.
Annexation expenditures
Another argument being made to explain the deficit is the additional costs associated with annexation.
While it is true annexing areas will bring additional costs to the city, the current budget does not account for the added revenues that result from annexation. Under RCW 82.14.415, Washington state allows qualifying cities that annex areas with populations greater than 2,000 to receive a portion of the state’s existing sales tax revenue for up to 10 years. This funding is intended to offset the difference between the additional costs of providing services and the revenues generated by the annexed area.
Therefore, annexation should not create additional budgetary concerns or contribute to the city’s deficit.
Unfunded state mandates
Another budget obstacle frequently cited is the costs of unfunded state mandates, particularly those related to court operations and indigent defense. However, this issue has been addressed. In July 2026, the council enacted a new public safety sales tax (HB 2015) that will generate enough revenue to fund the state mandates and add one additional police officer.
Layoffs are not the only solution
The council has also been warned that if taxes are not raised, the only alternative is to eliminate police officers or parks staff positions.
Additionally, it has been suggested that the city would be responsible for unemployment costs if employees were laid off, resulting in little to no savings.
This argument is misleading.
The city’s preliminary budget includes hiring four additional employees, on top of the new police officer and the second bailiff required for court operations. The city does not need to be threatened with layoffs when a much simpler alternative exists: freezing the hiring of new employees.
Rising fuel costs
While it is true that fuel costs have risen since the last budget cycle, those increases do not come close to explaining a $2 million deficit.
For example, the police department is the largest consumer of fuel of all city departments. Its 2026 budget included approximately $40,000 for fuel. Due to the rising prices, the department is expected to spend approximately $60,000.
That $20,000 overage represents only a small fraction of the city’s overall deficit and should not be used as a justification for the shortfall.
Other expenditures contributing to the deficit
There are also significant expenditures that have not been adequately discussed as contributing factors to the city’s financial challenges. These include the $1.5 million paid from the General Fund to the United Learning Center and the approximately $3 million in debt incurred through the city’s REET (real estate and excise tax) fund and lodging tax fund to reconfigure First Street and help fund the Fox Theatre.
While REET funds are separate from the general fund and are restricted in how they can be spent, they can be used for qualifying projects, including street improvements. Rather than committing these funds to other projects, the city could have prioritized eligible street projects that would otherwise require general fund support.
These financial decisions deserve just as much scrutiny as the expenditures being cited to justify additional taxes.
The city has more than two options
There are more than two options available to the city. However, to be successful, those alternatives require fiscal discipline, transparency and cooperation with other entities like the Port of Centralia and the Lewis County Public Facilities District.
Common sense would suggest that, after collecting record revenues and increasing taxes, the city should not need to ask taxpayers for even more money. The intuition expressed by many people in the comments sections is correct.
The City of Centralia does not need higher taxes to close the budget deficit. It needs strong leadership and fiscal discipline.
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Tucker Voetberg is an elected Centralia city councilor of Council District 4.
