County finance warns of multiyear commitments: collective bargaining, insurance and behavioral-health costs to shape 2026–27 budget

Cowlitz County finance staff warned the Board that existing contract commitments and program expenditures will shape the 2026–27 budget and that several items will require board decisions in the upcoming budget cycle.

Kathy Funk Baxter, finance director, presented preliminary estimates for new and continuing commitments. For collective bargaining agreements and step increases she estimated "about 600,000" in projected commitments and an additional $200,000 for step increases for nonunion positions. Baxter said medical-insurance contribution increases are built into contracts and projected at about $300,000 for general-fund employees.

Baxter also reported a sizable reduction in employer retirement contributions driven by state action: the county’s employer rate is falling from about 9.11% to about 5.5%, which she estimated will yield roughly $800,000 in savings.

On liability and insurance assessments, Baxter said the county’s risk pool expects a roughly 25% increase in general-liability assessments; she estimated the general-fund portion for that increase would be about $300,000–$325,000. "So right now, I'm looking at, at a minimum, probably $625,000 of new commitments that I'll have to build into the 2026 budget," she said.

Baxter also discussed the behavioral mental-health tax fund, which finances multiple programs. She said the fund’s expenditures run "about those expenditures on that fund are 2 point almost $3,000,000" and that the largest single item is about $1.3 million paid to the jail for two officers and related services. Baxter said drug court costs are about $629,000 and that the county’s grant-funded MAP program is a major line item. She said the fund has a reserve and that she expects about $2.5 million will remain at year-end — "almost enough for all of '26, almost, but not quite."

Baxter said an anticipated Office of the Public Defender change is "unknown right now" and may be delayed beyond the next budget cycle; she said she would follow up with more information.

Ending: Finance staff asked commissioners to consider these commitments in upcoming budget planning and scheduled a dedicated workshop on the behavioral mental-health tax to gather public input prior to decisions.