Council opts for one-year budget

The preliminary budget proposes cuts to staffing, possible changes to County services, and other reductions across department operating expenses.

||| FROM SAN JUAN COUNTY COMMUNICATIONS |||

This fall, the County has worked to reduce the originally projected $6.6M deficit in the 2026–27 status quo biennial budget. The deficit could have been even larger – up to $10M if all new spending had been approved. After robust deliberation and a series of strategic cuts, the deficit was reduced to $1.5M. At that point, Council determined that focusing on a one-year budget for 2026 will allow the organization to maintain some additional personnel and services while allowing more time to address changes for 2027 and beyond.

The Council opened the public hearing on December 1^st, and continued the hearing to the 2^nd, and 9^th, where they will continue to welcome feedback from the public. Community members are encouraged to attend the hearing in person or online to learn more about the budget process and/or provide feedback.

Adopting a One-Year Budget 

Throughout the process of balancing the budget, the County made strategic cuts to departments’ operating expenses. By the November 25^th meeting, the Council determined that the amount of personnel cuts needed to fully eliminate the deficit would be detrimental to the provision of County services. It was at this point that Council decided to move to an annual budget for next year, focusing specifically on balancing the 2026 budget. 

As of the December 1^st meeting and public hearing, the 2026 budget was balanced. Moving forward, the Council will engage in conversations about restructuring County services and departments, as well as evaluating other potential revenue changes.  

“Balancing this budget has required a series of painful decisions that impact all of us – as employees and employers, as service providers, and as members of the community we serve,” said Council Chair Kari McVeigh. 

These difficult decisions are helping to address increasing expenses that currently outweigh revenues in the Current Expense Fund. Additionally, at the rate of current spending, the County’s cash balances are projected to be consumed in 2027 beyond the required minimum operating reserve balance.

“We’re putting together a stopgap budget to help manage our current financial situation,” McVeigh continued. “Our next task is to engage in more strategic, long-term conversations about how we might realign our finances and shape the impact these financial constraints have on our staffing and levels of service.”

How Did We Get Here? 

These budget problems are not unique to San Juan County, as many other jurisdictions across the state face similar budget challenges. The County’s deficit is due to several factors, including:

• Increased operating costs: the cost of ongoing operations, specifically insurance costs, staffing, and inflation, has risen steadily over time. 
• Funding cuts from the federal and state governments: the loss of several key operating grants, including state cuts to health care funding, is adding pressure to the County’s bottom line and putting existing services at risk. 
• Stagnated revenues: property taxes, the County’s largest general fund source, are limited by the state to an increase of just 1% per year – far behind the rate of inflation. In addition, the County has not raised the levy since 2020.
• New state and federal mandates on County services: new required law and justice services did not come with funding, forcing the County to reallocate existing dollars to provide these new services.

Next Steps: Public Hearing  

The Council will again make decisions on the draft budget during the continued public hearing on December 9, with the goal of adoption. The community is invited to provide comments during this hearing by: 

• Emailing comments to: council@sanjuancountywa.gov 
• Attending in person: 9:00am at the Legislative Hearing Room, 55 Second Street, Friday Harbor, WA
• Attending virtually:  To ‘call in’ for public comment, sign up by 9:00am at https://www.sanjuancountywa.gov/1879/Public-Comment-Signup. After signing up, you can call in at 9:00am to join the meeting via telephone at +1 360-726-3293, phone conference ID: 853 275 322#.

Review past meetings and updates: 

Past Updates:

• County Cuts Budget Deficit by More Than Half; Still Seeks $2M in Strategic Service & Personnel Cuts
• How Does the New State Budget Impact San Juan County Funding & Programs? Council Reviews Highlights
• Council Sets Priorities for 20206-27 Biennial Budget Amidst Funding Challenges  
• Federal Shutdown Impacts on Local Public Health
• Federal Shutdown Update: Supporting Food Access During the Shutdown

Past Meetings:

• July 15: The Council discussed setting budget priorities for the upcoming biennium.
• August 5: The Council continued discussions about budget priorities for the biennium.
• September 23 & 30: the County Council discussed strategies for balancing and preparing the 2026-27 biennial budget. Auditor Natasha Warmenhoven and County Manager Jessica Hudson led discussions with Council about the biennial budget process and projected challenges to presenting a balanced budget.
• October 7: Council held a revenue public hearing to set the County revenues for 2026.
• October 20 & 21: During these workshop meetings, the Council reviewed department-specific budgets
• November 3 & 4: Council continued to discuss department-specific budgets and provided direction regarding further operational budget cuts. 
• November 10: Council heard final presentations from departments and discussed decision package requests.
• November 25: Council continued to discuss department-specific budgets and provided direction regarding further operational budget cuts. Council also decided to adopt at one year budget (2026) instead of a biennial budget (2026-27)
• December 1 & 2: The Council held a public hearing for the budget on December 1, which was continued to December 2. Council finalized decision packages and reviewed personnel cuts during these meetings. The public hearing was then again continued to December 9. The public hearing can be continued for four days. 

This year, the County will publish an Adopted Budget Book after the Council formally adopts the 2026 budget. It will be available in the coming weeks. The Preliminary 2026 Budget is available upon request.

You can review the County’s budget process, past documents (including past budget books), quarterly reports, and more on the Auditor’s webpages here: https://www.sanjuancountywa.gov/2030/San-Juan-County-Budget.  

Budget Questions? Contact: accounting@sanjuancountywa.gov