Cowlitz County commissioners on Tuesday were warned that the proposed 2026–27 biannual budget would rely on one‑time reserves to cover recurring expenses and could reduce the county’s reserve cushion from roughly three months to about one month.

Finance director Kathy Funk Baxter summarized previously workshopped budget items, including the county’s 6‑year Transportation Improvement Program and a 5‑year capital plan that still carries about $44.5 million in planned Hall of Justice expenditures for 2026. Staff told the board they project general fund receipts of roughly $62 million in 2027 against expenditures just over $80 million.

“Right now I’m projecting [the beginning fund balance] a little over $19,000,000,” Kathy Funk Baxter said. The board chair said that the budget as presented would mean dipping into fund balance and that the county must align ongoing spending with anticipated revenue. “We’re running a deficit budget,” the chair said.

The chair outlined possible, illustrative reductions for 2026 intended to restore cushion and reduce carryover effects into 2027. His list included a 20% reduction for drug court and juvenile programs, a 5% reduction to public defense (delaying new standards), 8% reductions for the clerk, prosecuting attorney, auditor, treasurer, assessor and district court, 10% for the sheriff, 5% for information technology, and removing general‑fund transfers to the expo center. He also proposed pausing a $1,000,000 annual transfer for Public Works’ facility five‑year plan.

Kathy Funk Baxter agreed to calculate the fiscal impact of those illustrative percentages and return specific numbers to the board. “I can put the numbers together,” she said; she told commissioners she would have the estimates ready by next week.

Why this matters: county officials said state auditors prefer multi‑month reserves and that allowing the general fund cushion to shrink to one month would raise concerns. Commissioners stressed they prefer not to raise local taxes immediately and instead want a mix of expense reductions and revenue strategies to rebalance the two‑year budget.

What’s next: staff will provide modeled savings tied to the proposed percentage reductions for board review at an upcoming meeting. The board formally moved this public meeting to Dec. 23, 2025 for procedural scheduling and will continue budget deliberations before adopting the biannual budget.