Tumwater sees volatile sales-tax months; consultant warns of $13M "shadow deficit" without priority changes

Tumwater's finance director and an outside consultant presented the city's quarterly financial update and a 10-year baseline fiscal assessment, showing short-term revenue volatility and longer-term structural pressure on general-government operations.

Troy Niemeyer told the council August produced "an outstanding month for sales tax collection," with approximately $1,082,000 collected in August — the highest August total in three years in the data shown — and year-to-date collections about $121,000 (roughly 1.8%) higher than the prior year. Niemeyer cautioned that sales tax is volatile month to month and that earlier months in 2025 had been weaker, leaving the year-to-date total slightly behind budget through July until August helped close the gap.

Niemeyer's quarterly update also noted other revenue and expenditure items: public-safety sales tax (a voter-approved county measure that began collections in mid‑2024) had a solid August; business-and-occupation tax (B&O) revenue was ahead of prior-year expectations overall; building-permit revenue had already exceeded the year's budgeted total through August; and general-fund expenditures across departments were about 10% below expected levels for this point in the year, providing a cushion if revenues remain weak. He also said enterprise fund reporting can be skewed by big capital projects that have not yet incurred expenses or received reimbursements; for example, major water capital projects were shown as low in the report because billing and construction had not yet started.

On the economy, Niemeyer noted GDP's rebound in the second quarter (revised to +3%) after a first-quarter contraction, but he flagged labor-market risk: initial jobless claims for August were the highest in three years and the unemployment rate had ticked up. He also reported inflation at about…