Title
2026 Operating Budget Update
Recommended Action
Committee Recommendation:
Discussion only. No action requested.
City Manager Recommendation:
Receive an update on the status of the 2026 Operating budget update.
Report
Issue:
Whether to receive an update on the 2026 Operating budget update.
Staff Contact:
Joan Lutz, Senior Budget and Finance Manager, 360.753.8760.
Presenter(s):
Jay Burney, City Manager
Michael Githens, Finance 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 Council stage of the process. This agenda item provides an opportunity to give the Finance Committee an update and status of the preliminary budget, receive a high-level review of assumptions included in the budget, receive recommendations for revenue increases to assist with budget balancing, as well as a review of the next steps in the budget process.
Two revenue increases will be presented:
* Public Safety Sales Tax - established in 2025 Legislative session (HB2015) establishing 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 year.
* Business & Occupation Tax - increasing retail rate from 0.001 to 0.002 as well as raising the no tax due threshold from $20,000 to $500,000. The anticipated revenue from both changes is $1.9 million for a full budget year.
The City Manager will present his preliminary budget to Council on October 14, 2025.
Climate Analysis:
There are no anticipated climate impacts from receiving an update...
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