PORT ANGELES — Clallam County’s 2026 budget is nearly complete.
The three county commissioners on Tuesday conducted a public hearing on the budget, which is the next in a series of steps toward passing the annual plan.
Before the public hearing, the finance department presented the proposed budget. The county is looking to pass a deficit budget of about $1.2 million, which is down from the original estimated deficit of $3.258 million, Chief Financial Officer Mark Lane said.
“I’m very pleased with where we, I think, ended up, given the challenges we were facing,” Lane said.
The county is projected to have $57.335 million in revenue in 2026 with taxes accounting for 47 percent, or $26.898 million. Real and personal property taxes account for $12.456 million of that $26.898 million.
Since 2022, the average annual growth rate for property taxes has increased by 2.26 percent, according to Lane’s presentation.
Sales taxes, combined with local/juvenile criminal justice/public safety sales tax is budgeted at $14.036 million for 2026.
Early in the budget process, the finance department noted that sales tax growth has slowed since the pandemic as inflation with high interest costs have slowed consumer spending, Lane said.
“I will note that over the last two to three months in 2025, we have actually seen fairly robust sales tax growth, far in excess of what we were expecting,” he said.
Expenditures for 2026 are estimated at $58.729 million with personnel costs — payroll and benefits — accounting for 69 percent, or $40.794 million, of that amount.
The total expenditures is a 6.78 percent increase, or $3.7 million, over 2025, Lane said.
For expenditures covered by the general fund, 60 percent accounts for public safety such as the Sheriff’s Department ($19.289 million, or 33 percent), public defense ($3.183 million, or 5 percent), juvenile services ($3.315 million, or 6 percent) and courts ($4.576 million, or 8 percent).
The county is expected to have 331 full-time-equivalent employees next year, according to the presentation.
“I will note that the general fund is the largest employer of people within the county,” Lane said.
Deputy CFO Rebecca Turner provided information on the capital outlay overview, which covers $1.782 million of the general fund.
Covered in that overview is $1.412 million for the Healthcare Authority (HCA) Medicaid Reentry program, which is grant funded, and $527,000 for Parks & Facilities capital projects. The county roads department will receive $9.940 million for right-of-way land purchases, county road construction and vehicle and equipment purchases. The Sheriff’s Department is set to receive $17.36 million, with most of that money for the Joint Public Safety Facility, Turner said.
For the total county capital budget of $54.3 million, nearly $44 million will be sourced from grants or loans, according to the presentation.
The county’s general fund reserve is projected to be at $14.595 million for 2026 with 42 percent set as committed budgetary reserves, 6 percent as restricted reserves and 52 percent as unrestricted reserves.
“The county has been able to maintain reserve levels at or above the 25 percent goal from 2021 to 2023 and again in 2025 (but due to HCA grant advances received),” the presentation states. “Based on the Proposed Budget for 2026, reserves are projected to end the year at 25.2 percent, in line with the 25 percent goal.”
The HCA grant was an advance of $4 million, Lane said.
“So as those monies begin to be spent, it’s understandable, certainly, that we’re going to see our reserves drop a bit as those monies are utilized,” he said. “And for 2026, we do see our reserves for next year decreasing approximately 7.5 percent.”
The proposed budget is “remarkably solid” for 2026, Commissioner Mark Ozias said.
“What we are not seeing is significant erosion of our reserve in order to cover costs this year,” Ozias said. “What we are not seeing is massive amounts of layoffs and what we’re not seeing is instability.”
During the public hearing, John Worthington of Sequim said the commissioners will be doing a disservice to Clallam County citizens if this budget is passed.
In response to criticism of the budget relying so heavily on property taxes, Ozias said that only two or three, maybe four, counties in the state have more sales tax revenue than property taxes.
“The thing that all of those counties have in common is extremely large tourism economies,” he said. “It’s unusual, in terms of county finances, for sales tax revenue to be more significant than property tax revenue.”
A public hearing was continued to 5 p.m. Tuesday, which was after press time. The discussion may continue Dec. 9.
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Reporter Emily Hanson can be reached by email at emily.hanson@peninsuladailynews.com.
