Tumwater committee hears mixed revenue signals after national uncertainty; April sales tax dips

TUMWATER, Wash. — At its May 23 Budget & Finance Committee meeting, staff presented a monthly financial update that framed Tumwater’s local revenue picture against national economic shifts, noted a weak April sales-tax receipt, and reported stronger business-and-occupation (B&O) taxes and property-tax collections.

The presentation, given by Troy (staff member), opened with national context — including recent tariff actions, falling consumer confidence and a Moody’s downgrade — and then reviewed Tumwater-specific data showing month-to-month volatility in sales-tax receipts and stronger year-to-date B&O and property-tax collections.

Troy said the economy entered 2025 with a “soft landing” but recent tariff actions have created market uncertainty. “Markets don’t like uncertainty, and neither do consumers,” Troy said. “Tariffs…are highly inflationary policies. That’s not a political statement. That is just an economic fact.”

The local financial highlights he presented included: - Sales tax: Tumwater saw a small decrease at the start of 2025, strong February and March receipts (each up about 46% month-to-month compared with the prior year in the slices Troy showed), but an April sales-tax number that was “under $700,000,” the lowest monthly figure in three years on comparable data. Year-to-date, Tumwater remained positive — roughly 2.66% above the prior year — but below budgeted expectations. Staff said the April figure and a negative U.S. first-quarter GDP (-0.3%) raised concern and warranted close monitoring. Troy said May sales-tax receipts were expected late next week and would be reported at the June quarterly budget update. - Public safety sales tax (restricted fund): The new public-safety measure (revenue tracked separately since 2024) could project to just over $1 million annually if first-quarter receipts continued at the same pace; the adopted budget assumed $940,000. Troy said the 2024 collections are currently held in a special account and not spent until the 2025–26 budget schedule calls for tapping that fund. - B&O tax: B&O collections were stronger year-to-date, with January up about 6%, February about 5.7%, March over 10% and April roughly 5.5% on a month-to-month comparison; year-to-date B&O tax was about 7.5% higher than the same period in 2024. - Property tax: Tumwater received a large property-tax remittance and reported roughly $4.5 million collected, representing about 45% of the annual budgeted property tax (staff noted the May county remittance was still pending and adjusted percent-of-year estimates accordingly).

Councilmembers pressed staff on causes and implications. Councilmember Swarthup asked whether the public-safety levy revenue had been tapped; Troy replied it remained in the special account and was budgeted for 2025–26 spending. Councilmember Swarthup and others also asked whether new retail development near Home Depot and Walmart explained some revenue gains; Troy said a few stores had just opened and that much of the B&O strength likely reflected existing businesses performing well.

Troy emphasized uncertainty from national policy and markets as a risk to local revenues but stressed that Tumwater’s revenue mix — with sales tax comprising a smaller share of general-fund revenue than in some jurisdictions — provided some resilience. He recommended close monitoring and reporting at the June quarterly update.

The committee did not take formal action on budget changes at the meeting; staff said they would return with updated May data and a full quarterly budget presentation to the full council on June 3.

Less critical details: Troy cited surveys and media coverage about falling consumer sentiment; he referenced a Municipal Research and Services Center notice about legislative changes to sales and B&O taxes and agreed to research how those changes might affect Tumwater’s returns and report back at a future meeting.