Title
Approval of a 2026 Operating Budget Balancing Scenario
Recommended Action
Committee Recommendation:
Not referred to a committee.
City Manager Recommendation:
Move to approve a funding/reduction scenario for balancing the 2026 Budget.
Report
Issue:
Whether to approve a funding/reduction scenario for balancing the 2026 Budget.
Staff Contact:
Joan Lutz, Senior Budget and Finance Manager, 360.753.8760.
Presenter(s):
Jay Burney, City Manager
Michael Githens, Finance Director
Brandie Andrews, Tax & License Audit Team Lead
Jennica Machado, Economic Development Director
Background and Analysis:
The City of Olympia budgets on an annual basis with the fiscal year beginning January 1 and ending December 31. The operating budget process is roughly an eight-month long process culminating with the City Council approving the following year's budget in late November or early December.
The 2026 preliminary operating budget process has been in development for approximately five months and is nearing the beginning of the City Council stage of the process. On September 15, 2025, the Finance Committee received an update and status of the preliminary budget; received a high-level review of assumptions included in the budget; were briefed on potential new revenues to assist with budget balancing; as well as a review of the next steps in the budget process.
The Finance Committee did not make a formal recommendation about new revenues and asked that staff provide the revenue information to the full Council, along with a list of reductions to close the current $6.5 million projected deficit for 2026.
The City Council was previously briefed in August on two revenue increases:
* Public Safety Sales Tax - established in the 2025 Legislative session, (HB2015) allows for a new Councilmanic 0.1% sales and use tax pending review by the Criminal Justice Training Center. This would increase Olympia's sales tax rate to 9.9% yielding approximately $3 million for a full budget...
Click here for full text