Thurston County road fund faces multi‑year shortfall; officials outline cuts, unfunded positions and options to slow decline

Thurston County public works and budget staff told commissioners Wednesday that the county’s road fund faces a multi‑year structural shortfall, driven by rising construction and materials costs, flat or declining fuel‑tax revenue and legislative shifts that have moved road levy dollars into the general fund.

Public Works Director Sharon Luis and Summer Miller, budget and finance manager in the commissioners’ office, presented a 10‑year outlook showing the road fund’s revenue falling short of projected expenses if current levy‑shift levels continue. “We are shifting and diverting 24% of the available road levy,” Luis said, summarizing the combined levy shift and a $1.5 million diversion earmarked for traffic enforcement. She noted the county is among the top four of Washington’s 39 counties in the share of its road levy shifted or diverted to other purposes.

Staff reported inflation‑driven cost increases across maintenance work: a 51% rise in paint costs used for striping, 48% higher pipe costs, a 23% increase in asphalt since 2020 and a marked increase in chip‑seal contracting costs. Luis said a $2 million chip‑seal program that covered 50 miles in 2017 would cover roughly 29 miles in 2024 dollars.

Revenue trends and projections: the presentation showed property tax (road levy) provides roughly 70–75% of road fund revenue; motor vehicle fuel tax receipts have not kept pace with cost inflation and are effectively flat in staff projections despite a recent 6¢ gas‑tax increase at the state level that yields counties a portion of the revenue.

Budget impacts and containment measures: staff said they have already suspended a $1.2 million operating transfer from the road fund to capital programs and are delaying equipment replacements. Short‑term containment tactics include reducing chip‑seal and overlay miles, delaying equipment replacement, holding vacant positions and, if necessary, unfunding positions — staff estimated 8–10 positions could be unfunded in 2026 under current assumptions. Long‑term options discussed included suspending the rural community support program (about $275,000 annually), altering the traffic calming program and lowering levels of service for mowing, vegetation removal and striping frequency.

Public works staff emphasized that nearly half of the road fund’s indirect costs are equipment and that deferring preservation work increases long‑term capital costs. “If you defer maintenance, you pay exponentially more later,” Luis said, noting that deferred pavement preservation leads to faster pavement deterioration and higher replacement costs.

Commissioners and staff also discussed emergency‑reserve needs: the road fund historically covered major emergency responses (for example the 2022 flood had about $2 million in immediate emergency costs, with later FEMA reimbursement). Staff said the county’s fund balance used to be healthy but that projected deficits could reduce the county’s ability to respond to future emergencies without additional revenue or reductions in service.

Biennial budget context: assistant county manager Jennifer Walker and county manager Leonard Hernandez joined budget staff in outlining biennial budget scenarios and a set of conceptual allocations. The board asked staff to prepare public‑facing scenarios and return with more detailed, dated spreadsheets; staff requested time to reconcile last‑minute adjustments, noting some law‑enforcement and central services lines need formula corrections.

No formal decisions were taken. Commissioners agreed to continue budget deliberations in additional sessions and asked staff to return with more detailed, dated financial worksheets and options for targeted restorations or alternative revenue sources (including discussion of levy lid lift or other long‑term revenue measures).