Clark County could be looking at a $10 million shortfall in its general fund next year.
County Manager Kathleen Otto broke the news to the county council during a budget presentation at a council meeting last week.
“Like many governmental jurisdictions, our revenues are not keeping pace with our rising costs,” Otto told the council.
Closing the funding gap could come down to cuts to programs or services, requests for new staffing being left unfilled or an increase in the public safety sales tax and the 1 percent property tax increase allowed by state law, among other measures.
Some of the county’s main revenue sources, such as property and sales taxes, are stable, but Otto said they are not growing at the same rate as related expenses. That is putting a strain on the ability to create a balanced budget while still maintaining service levels.
“This is our structural deficit, which … has been part of our general fund discussions for many years,” Otto said.
Since 2021, the impact of declining revenues was offset by the $95 million in federal pandemic relief funds the county received. But now nearly all of those funds have been allocated or spent. Sales tax revenue did increase during the pandemic, but only temporarily, when more people were shopping online.
“Unfortunately, one-time revenue is not sustainable long term, and the sales tax revenue has come back down and leveled off,” Otto told the council.
Some of the main issues the county is facing in creating a balanced budget, Otto said, are new unfunded mandates, increased demand for services, risings costs for technology, infrastructure maintenance, and goods and services.
Keeping up with rising labor costs has also been a challenge, Otto said. In 2023, the county completed a yearlong compensation study, which found pay rates for many of its employees were below market rate. The county council approved pay increases, with special attention given to pay rates for sheriff’s deputies. The total cost of the increases was estimated at $4.5 million, much of that coming from the general fund.
The general fund is only one part of the total county budget. The 2024 operating and capital budgets total $746.5 million in expenses, with the general fund accounting for just over $202 million, or about 27 percent. Yet, there are key differences in the general fund that make it a crucial part of the budget.
Other funds — emergency medical services and county roads, for example — have restrictions on how they can be spent. The general fund has fewer restrictions and can be used for a wider spectrum of programs and services.
More than 65 percent of the general fund goes to public safety, which includes the sheriff’s office, county jail and court system.
Otto said finance department staff are looking into one-time revenue sources, such as exhibit hall rentals and a public utility privilege tax, as well as expense reductions and operational efficiencies.
One area likely to be impacted is the addition of new staff. Otto said the county has not increased the number of employees for many years, despite the county’s continued population growth. More than 100 requests for new hires were submitted as part of the 2025 draft budget process. Otto said most of those requests will not be approved.
“I would say many, if not all, of our departments should have additional staff. We just don’t have the funding to support that,” she told the council.
Funding requests for public safety needs will be a top priority in the coming year, Otto said.
“They provide countywide services for law and justice. Some of them have been underwater for many years, including the sheriff’s office and the clerk’s office. We’re looking at efficiencies, but we need to figure out what we’re going to do to support them in order to provide adequate services to our community,” Otto said.
Submitted requests related to public safety include additional deputies and support staff, maintenance and operations costs for the sheriff’s office, Superior Court staffing, court records management, court staff, and booking and records staff at the county jail, among others. Otto said the council won’t be able to approve all of the requests and will have to prioritize available funding.
Chair Gary Medvigy said fixing the county’s sales tax leakage (the sales tax revenue lost when Clark County shoppers make their purchases in Oregon) would be a better solution.
“Years ago, I asked this question. If we took every avenue — increases, tax increases — how would this chart look differently,” Medvigy said referring to Otto’s general fund presentation. “The answer would be, it wouldn’t. That’s why I started tilting at sales tax leakage.”
However, there is little the county can do. Fixing the sale tax leakage issue will fall to the Legislature, but there’s no guarantee it will come up during the next session.
Medvigy said the council has approved the 1 percent annual property tax increase in the past, but it didn’t seem to help. Along with the tax leakage, he said the county has to address why it is spending more than it makes rather than relying on tax increases.
Otto said a budget model showing the impact both with and without the 1 percent annual increase over several years was created and the difference was significant. She said she would have that information available for the council before the public hearings scheduled for Dec. 2 and Dec. 3.
“I agree with you fundamentally that we always need to look for where we can adjust our expenses to accommodate the revenue we receive,” Councilor Glen Yung said. “But I have every single department and other (elected officials) saying they don’t have enough resources to do their jobs. Where would we cut?”
Councilor Sue Marshall said taking the 1 percent property tax increase won’t solve all of the county’s problems but not taking the increase compounds year over year.
“We need to be looking at all the revenue sources that are available to us because the community has grown and the needs have grown and the problems have gotten more complicated,” Marshall said. “I think it’s a disservice not to look at what revenue we can take.”
Both public hearings begin at 10 a.m. and will be held in the sixth-floor meeting room in the Public Service Center, 1300 Franklin St., Vancouver. The hearings can be viewed online at CVTV.org (Comcast channel 23).
