Conversations to balance the 2027 budget will continue throughout summer and fall months.
||| FROM SAN JUAN COUNTY COMMUNICATIONS |||
On June 30th, the County Council completed an initial step in what is a multi-step process aimed at reaching a balanced budget for 2027. This process involved gathering information from across the organization on possible cuts, reorganization options and previously unidentified savings available from the current budget period. The goal of this exercise was to identify a minimum of $4 million in options so that we could prepare for an extended period of austerity in the county budget going forward. We are not yet there, having identified roughly $3.7 million through the initial exercise. Work will continue.
This first step brought together leadership from across the county, who laid out potential impacts which would affect programs and services throughout the organization. At the conclusion of this first step, nearly 60 separate items are identified as options for consideration in the draft budget adoption. Some items are small, some items are large, but every item will have an impact on the delivery of programs and services across our community. Some are one-time savings and others are longer term, which means that absent additional revenues, further cuts will need to happen in future years. The proposed changes will reduce staffing levels, reduce expenditures, consolidate functions and impact nearly every operating function of our county government.
As we continue to work through November on finalizing a balanced budget, there will be further, focused discussion of specific items. My goal is to continue to assure that these discussions are open, transparent and available to the public, with a commitment to making myself available to all of our communities for deeper conversations. This process will remain a community dialogue, which requires us to look deeply at what is necessary to meet essential and mandated needs first. This discussion is guided by an understanding that available funding has trailed inflation for the last 6 years, all while the county has worked hard to maintain programs and services over that same period with decreased support from the federal and state governments. While none of the choices we are faced with are easy, we have clearly heard from the public that this work must be done. Our charge now is to strike a balance to secure the public, financial and physical health for the county going forward.
I thank my fellow elected officials, our incredible staff and every member of the public who has and continues to provide their thoughts and consideration to this process. Despite the difficulty that this process presents, there is no other place and no other people that I would choose to do this work with.
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I trust Justin to lead this fiscal effort. Read what he writes a few a times.
Thank you, Justin. This is an extremely complex process to work through. It’s nothing like managing the budget of a business. I appreciate your diligence on this matter.
Here’s the 6 month check-in report done in 2024 for more information on the impact of the 32 hour work week.
https://engage.sanjuancountywa.gov/20872/widgets/81869/documents/54512
SJC opted for a one year budget 2026 (biennial budget is the norm) due to projected revenues not meeting planned expenses. The 2027 budget is another one year budget due to same issue … planned expenses exceeding projected revenues. It’s a common problem for all Washington State counties and many public agencies.
The Covid years brought increased federal and state funding programs to help alleviate the pandemics resultant high inflation and worker issues. SJC’s FTE count in 2024 was 248.9 FTE. The 2024-2025 FTE count increased by 33 in 2024-2025, same time the county went to a 32 hour work week. It’s presently at 286.5 FTE. Some of that increase was to fill critical staffing shortages, but there were also added programs. Point here is there was a significant staffing increase and the 32 hour work week created considerable interest in working for SJC.
But post COVID and new federal political reality, the additional COVID funding has largely disappeared. Additionally, new construction has markedly slowed , likely due to high construction costs, both labor and additional tariffs) . So the County Council is faced with another budget issue year, With a 2026 budget of $156.4 million (and 33 funds!) there are a lot of possible options to discuss.
Compounding the financial shortage issue is the union(s) will be asking for pay increases because 2026 CPI inflation will be about 4%, and benefits, specifically health, will continue to increase even faster than the CPI.
One rather unlikely but needed state law change is to increase the current 1% pls new construction tax increase to 2% plus new construction in the 2027 legislative session. But property tax increases are political death, and the 2027 county budget has to be finalized by the end of November 2026.
It’s all doable and has to be done, and a big plus to Justin Paulsen for encouraging full and open public discussion.
Just a few observations after following the latest Council meetings somewhat carefully:
1. We’re lucky to have Councilman Paulsen. He’s thoughtful and even keeled and understands the ins and outs of the islands.
2. As for his seat mates- McVeigh seems tuned in and helpful but a bit less engaged with the details. Fuller (who thankfully is not running for reelection) has been a poor fit and while clearly wants to be helpful, doesn’t have the disposition or understanding of the local community to be a positive force. Quite the opposite really The way she treats both the public and staff is embarrassing..
3. The budget crisis is only going to get worse and we’re going to see ongoing cuts unless we pass a levy. San Juan County punches well above its weight due to our overall valuation, but we’ll end up with the sort of basic services you see at other under 20k population Counties soon.
4. I’m not sure voters will ever approve another levy as long as the 32 hour workweek is in place. I could be wrong (hope I am) but I fear that the knuckleheads who thought a 20% reduction in workweek could be implemented worth zero impacts didn’t really think things through or understand the community. Will be interesting to see what happens with the 2028 budget. I expect far more catastrophic cuts.