Cowlitz County finance director reports preliminary 2024 deficit; sales tax shortfall cited

Cathy Funk Baxter, Cowlitz County finance director, told the Board of County Commissioners that preliminary year‑end 2024 financials show the county’s general fund with revenues of about $56,531,000 and expenses of roughly $64,018,000, leaving a preliminary deficit in the low‑millions.

The discrepancy reflects timing and accruals that have not been posted yet, Baxter said, noting the county expects at least $2 million of general sales tax collections for November and December to be recorded soon and that final accruals will narrow the gap. Even after those entries, Baxter said she expects 2024 to close with a deficit and estimated the likely shortfall will be more like $5 million rather than $7 million as preliminary figures suggested.

Why it matters: The general fund pays for core county services. A larger‑than‑expected shortfall will require either drawing from reserves or cutting planned spending unless revenues improve. Baxter told commissioners staff will prepare a budget amendment in February and has asked departments to submit any needed adjustments for consideration.

Baxter said the principal driver of the shortfall is weaker-than-budgeted sales tax revenue. Sales tax receipts through earnings reported for October were roughly $8.5 million against an $11.4 million budgeted expectation; staff estimated the county will be about $900,000 short of the sales tax target once final accruals are posted. She told the board that property tax collections were close to budget (roughly $19.5 million collected vs. $19.8 million budgeted) and that timber excise and other smaller revenue sources were near prior‑year levels.

County Road and other funds: County Road showed a year‑to‑date surplus in preliminary numbers, with revenues of about $23 million and expenses of roughly $20 million through the same reporting period, although accruals may change that position. The health department and building & planning fund were reported near break‑even or modest surplus positions but also carry outstanding accruals.

Next steps and context: Baxter said the county will run the February budget amendment process, calling departments to submit requests this month. Commissioners discussed the need to "sharpen our pencils" on the expense side given constrained revenue growth and statutory limits on property tax increases. The board asked staff to bring more frequent monthly reporting and to plan for tighter spending in the 2026 budget cycle.

Commissioners and staff emphasized that the sales tax weakness appeared to be concentrated in the county — driven largely by fewer large construction and equipment purchases in 2024 — and was not clearly a statewide trend, though final statewide comparisons were not yet available.

Ending: Baxter said staff will present an updated set of year‑end accruals and the proposed February budget amendment to the board once the remaining receipts and payroll accruals are posted.