Clallam County officials warn one‑time grants, rising insurance and labor costs could exhaust reserves by 2028

Clallam County officials presented a three‑year financial forecast at a special county meeting, warning that one‑time grant revenue and persistent cost pressures will likely produce operating deficits starting in 2026 and could exhaust the county’s general‑fund reserves by 2028. County staff said the shortfalls stem mainly from the end of large 2025 grant advances, continued growth in labor and benefit costs, and an unexpectedly steep run‑up in insurance and risk management expenses.

County Chief Financial Officer Mark (CFO) said the county received $4,000,000 in Health Care Authority reentry grant advances in 2025, a one‑time inflow that materially improved 2025 results but will not repeat. “What we are projecting is our revenues next year, 02/1926, are projected to decrease 5.6%,” Mark said, adding that projected revenue growth for 2027 and 2028 is anemic: about 0.9% and 1.7%, respectively.

The forecast uses the county’s 2025 adopted budget as a starting point and layers in assumptions for taxes, intergovernmental payments and contract escalators. Staff told commissioners they modeled property‑tax growth constrained by the statutory 1% annual limit plus assumed new construction of roughly 3% per year; overall tax revenue was modeled to grow about 2.1% annually. Sales‑tax growth was assumed to be roughly 2.4% annually under staff assumptions.

Mark called out three revenue categories that drove the 2026 drop and the weak multi‑year outlook:…