County staff outline 2026 revenue picture; recommend 2% property tax growth (1% levy + add‑on)

San Juan County budget staff presented an overview of projected revenues for the 2026 current expense fund at the Oct. 7 public hearing and discussed levy limitations under state law.

Molly Foote, budget analyst, reminded the council that jurisdictions with populations of 10,000 or more are generally limited to a 1% annual levy increase or the rate of inflation (IPD), whichever is less, but can add amounts attributable to new construction and other add‑ons. Foote reported the IPD for 2026 at 2.44 percent and recommended a total property tax growth of 2 percent for 2026 and 2027, combining the 1 percent statutory increase and an assessor‑advised add‑on for new construction.

Foote reviewed the countys primary revenue sources: property tax and sales tax have historically funded a large portion of current expense; charges for goods and services, licenses and permits, and intergovernmental grants were also discussed. Staff noted several trends: sales tax estimates were conservative at 2% growth, license/permit revenue had decreased in 2025 relative to budget (staff cited a slowdown in building permits that could reflect broader market conditions), and grant revenue projections were uncertain.

Council members asked for additional detail: a definition of a healthy cash/reserve target (beyond the existing 10% policy), a five‑year look back for major revenue streams, and a way to track building permit valuation and counts to better predict sales tax and permit revenue. Foote said staff would follow up with more detail and historical actuals to help inform final levy and budget decisions.

No final budget or levy action was taken at the hearing; the presentation was part of the statutorily required public discussion prior to levy adoption and budget preparation.