Thurston County may ask voters to approve higher property tax. Here’s why
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Thurston County works to close 2026 budget deficit
Thurston County commissioners are deciding how to close an estimated $36 million budget gap in the general fund, the county’s primary operating fund, for 2026.
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Thurston County may ask voters to pay more property tax so it can address a widening budget deficit in the years ahead.
The Board of County Commissioners must decide what to do about a structural deficit in its general fund that has grown to an estimated $23.8 million in 2025.
One potential solution is a 6-year levy lid lift. On Wednesday, Assessor Steven Drew presented the board with a still-hypothetical option of lifting the county’s levy rate to $1.225 per $1,000 in the first year followed by up to 6% increases in years 2-6. This plan would add about $26 million to the county general fund in the first year and give the board leeway to bring in more money as needed in future years.
State law generally restricts the board from increasing its levy beyond 1% annually, even when yearly increases to the cost of business exceeds that. Raising the levy by more than 1% requires voter approval.
Drew’s presentation was purely informational. The board did not approve proceeding with a ballot measure. Still, the mere consideration of this move is indicative of the difficult position the board finds itself in.
The same day, the board voted to oppose the approval of fiscal year 2025 requests from its departments for general fund additions, positions or reclassifications that may impact the general fund.
“I made the motion last time,” Commissioner Wayne Fournier said. “I think that I have information in my mind to say that, yes, we need to make sure we’re taking some action to stop the bleeding as we triage forward.”
The county recently warned employees of looming cuts. An internal email reviewed by The Olympian states the county is facing rising costs, community growth and unfunded state requirements that have contributed to a structural deficit.
“We are focused on finding solutions, which must include both cutting spending and increasing revenue,” the email says.
“During the next several weeks, offices and departments will look for ways to reduce spending and present these options to the Board to explain the potential impact of cost saving measures on our community and organization.”
The county’s general fund is its primary operating fund, meaning it’s used to pay for a myriad of public services and personnel across its many offices and departments.
That includes the Sheriff’s Office, Prosecuting Attorney’s Office, Public Defense Department, Superior and District courts, public health, public works, elections and much more.
The county expects to spend about $149 million from this fund in all of 2025 while bringing in only about $125.1 million, according to county documents.
That means there is an estimated $23.8 million budget deficit in 2025.
Expenditures started outpacing revenue in 2023. That year, the structural deficit was just $2.6 million. In 2024, the deficit grew to about $6.4 million.
Staff estimate that the county will need to cut spending by about 25% in 2026 to meet month-over-month fund balance obligations.
The general fund gets 42% of its revenue from property taxes, 23% from sales tax and 35% from fees, fines and other sources, according to the email.
Despite the current predicament, the county is still going ahead with plans to purchase property in downtown Olympia where it may relocate its courthouse and administrative offices.
The email states this acquisition should not impact the general fund.
This $34.9 million real-estate deal is being funded with a previously approved bond that expires in October and may only be used for county facilities.
“The purchase will provide the county with several assets and prevent us from having to lease space for administrative services in the future,” the email says.
The county will approve a new biennial budget in December.
How much would the lid lift cost property owners?
Drew provided an example of how a levy rate of $1.225 per $1,000 would apply to a home valued at $500,000.
However, he cautioned that these calculations are based on 2024 assessed values for tax collected in 2025. A levy lid lift that takes effect in 2027 would use different numbers.
“We’re using year-old values to get a really good picture of the choice that you have before you,” Drew said to the board.
A lift to $1.225 would be about 40 cents higher than the current rate. If approved, that would mean that the overall average tax rate would rise from $9.828 to $10.229.
As a result, there would be an increase in annual overall property taxes from about $4,914 to $5,115, or about 4% for a $500,000 home, Drew said.
The county’s portion of a total property tax bill is only about 9%, according to the presentation. So, in this example, the county levy portion would increase from about $412 to $612.
A later 6% increase in the county levy rate would equate to about a 0.5% increase in total property taxes, he said.
If a 6% limit factor was approved, the board may choose not to impose 6% increases each year, Drew told The Olympian. In fact, it may be better for the county if the board showed some restraint in the near term because that could help the county stave off a budgetary crisis beyond the sixth year of the lift.
“By not using the 6%, by using 3% or 2%, you end up with 15% to 20% of banked capacity,” Drew said. “That enables the board to apply a limit factor of 2% or 3% for more than 10 years, keeping pace with inflation.”
The county may ask voters to pass a single year lid lift or a multi-year lid lift, like the one Drew presented.
A single-year lid lift could be voted on during a general, primary or special election. A multiple-year lid lift could only be voted on in a general or primary election.
“Whichever path you go, you want to choose the earliest option to run it because you want to preserve a second opportunity, because of how important it is to pass something,” Drew said.
Fournier said the county’s levy rate has not kept up with inflation year after year. He likened the problem to how the county neglected to address its deteriorating courthouse campus for years.
“We’re in a similar situation where we are stuck with the difficult task of getting the county out of a hole that we didn’t put it in,” Fournier said. “It’s tough, but you know, we do have a duty to solve this problem and not pass it on to the next generation.”
Earlier in the conversation, Fournier described the levy lid lift as a maintaining effort just as some fire and school districts have called their levy lid lifts in the past.
Drew said that’s a legitimate point of view for officials, but the consequence for taxpayers is still an increase.
“I understand where you’re coming from, but when you talk to the taxpayers, you have to deploy trust on steroids,” Drew said. “You have to be so transparent that you don’t get in your own way, to have them take the leap with you to stabilize government.”
New public defense needs impact budget
The county must still hire 35 new public defense attorneys and 18 support staff to meet new caseload standards set by the Washington state Supreme Court on July 9.
Hiring that many people will be costly for the county, especially as it contends with the structural deficit. On Wednesday, the board moved to meet the new standards in seven years rather than the five staff recommended.
Internal projections show the county may have to spend about $13.7 million over five years or $15.8 million over 10 years to satisfy the order.
The plan the board favored called for following the 10-year plan for two years and then scaling up to the pace of the five-year plan. The compromise eases the burden on the general fund for two years and gives the county time to lobby the legislature for more funding.
The state Supreme Court slashed the caseload standards to provide relief to overworked public defenders who represent poor clients. Those defenders are struggling to provide suitable and equitable counsel to their clients — counsel that these clients have a right to under law.
Counties have 10 years to comply. However, some are moving to comply in as little as three years, so there is renewed competition for attorneys, Public Defense Director Patrick O’Connor has said.
This story was originally published September 15, 2025 at 5:00 AM.
