Cowlitz County reports preliminary 2024 deficit; sales-tax shortfall cited

Kathy Funk Baxter, Cowlitz County finance director, told the Board of County Commissioners that preliminary financials for 2024 show county revenues lagging expenses and a multi‑million‑dollar shortfall.

“We have at least two months’ worth of sales tax … about $2 million that hasn’t been recorded yet,” Kathy Funk Baxter said, noting the current books show revenues of roughly $56.5 million and expenses of about $64 million, yielding a preliminary deficit of a little over $7 million. Baxter said pending accruals and late sales‑tax receipts will reduce, but not eliminate, the gap.

Baxter said property‑tax collections were “pretty much right on line” with the budget (about $19.5 million collected versus a $19.8 million budget) but that general‑purpose sales tax fell short of projections. The finance director said the county budgeted $11.4 million for sales tax but had received about $8.5 million through October‑period earnings; with November and December collections still to be recorded, she said final 2024 sales tax receipts are expected to be closer to $10.5 million — about $900,000 below the adopted budget.

Other major funds showed mixed results: the County Road Fund had collected about $23 million and spent about $20 million (a preliminary surplus), the health department reported roughly $3.9 million in revenues and $2.9 million in expenses, and Building & Planning was near break‑even with roughly $2.7 million in revenues and $2.6 million in expenditures. Baxter emphasized that many funds still require December accrual postings that will adjust the final totals.

Commissioners pressed for specifics on where the general‑fund gap is largest; Baxter pointed to the sales‑tax shortfall and said staff will propose a budget amendment in late February and expects a careful review of department requests. One commissioner urged expense reductions going into the 2026–2027 budget cycle, saying property taxes are capped and sales tax growth is uncertain.

Baxter said routine accruals (sales tax lag, payroll accruals, and a small number of late grants) are the principal near‑term adjustments and that staff will continue monthly monitoring and bring formal amendment requests as needed.

Looking ahead, Baxter said the county will start calls for the 2026–2027 budget cycle in summer and that the finance team will ask departments this month to submit any amendment requests for a planned Q1 budget amendment.

Ending

Finance staff recommended continued monthly monitoring and a February budget amendment to reconcile accruals and adjust department budgets. Commissioners signaled support for a tighter expense posture for the upcoming two‑year budget cycle.