The Centralia Finance Committee is currently drafting the city’s new biennial budget for 2025 and 2026.
There’s just one issue — a budget deficit is looming, leaving no other options but to raise the city property tax and institute a new business and occupancy (B&O) tax, according to finance committee members.
During the Centralia City Council meeting on Tuesday, Sept. 10, Interim Centralia City Manager Amy Buckler said cuts to services is the other possible option.
No decision or action was taken on the issue during Tuesday’s meeting, and city staff are planning a workshop to further discuss this issue before the Centralia City Council’s next meeting at 5:30 p.m. on Tuesday, Sept. 24.
“In order to balance this budget, you’re going to have to decide whether you want to bring in additional revenues or make cuts to city services,” Buckler said. “The city is facing an approximately $1.1 million budget shortfall in our general fund.”
She said around 75% of the shortfall was attributed to rising costs in labor contracts, insurance and unfunded state mandates. The remaining 25% relates to proposals to restore certain staff positions in Centralia’s Parks and Streets departments.
“So we can respond to public requests to better maintain what we have, carry out our parks plan, advance our Hub City Greenways vision and maintain those infrastructure improvements,” Buckler said.
As per state law, municipalities such as Centralia are required to submit balanced budgets. This led to Buckler and the finance committee making the recommendation to raise property taxes and establish a B&O tax during the Centralia City Council’s meeting on Tuesday, Sept. 10.
“Over the past 15 years, ever since the Great Recession that started in 2007 and ended in 2009, the city councils prior have had to make tough decisions in order to balance the budget,” Buckler said. “That has included cutting staff, cutting programs and finding creative ways to get things done. I think that you know the city is running as lean as possible, and in fact we are struggling to keep up with the growth we are experiencing. There’s really not a lot of fat to be cut.”
She added if the council chooses not to enact the property tax increase and establish a B&O tax, the next programs the city will have to make cuts to in order to balance the budget are the Centralia Police Department along with further cuts to the Parks and Streets departments.
“This is a really important pivot point for our community,” Buckler said.
Former Centralia Deputy Mayor and finance committee chair Cameron McGee added that councils in the past, including those he had been on since 2018, chose to continue banking the council’s authority granted by state law to raise property tax by 1%.
He agreed with Buckler the city doesn’t have anywhere else to cut spending in order to balance the upcoming budget. McGee was in favor of raising property taxes and establishing a B&O tax, along with raising business license, permitting and other city fees to match inflation rates.
“We lost our rec department. We’ve had department heads that have been combined. Our deputy city manager is also our parks director,” McGee said. “... We don’t want to cut anymore. We can’t cut our way to thriving communities. We don’t want to lose more services. We can’t let the roads deteriorate. We can’t lose public safety.”
Following the Sept. 24 budget workshop, Buckler will be hosting an online question and answer session for business owners concerned about the B&O tax on Sept. 30, with additional details as to how to attend and what time it starts to be announced soon. Centralia Finance Director Bret Brodersen will also be a part of the session.
A public hearing along with a first reading of any ordinances related to taxes will be held during the Centralia City Council’s regular meeting starting at 7 p.m. on Tuesday, Oct. 8.
The Centralia Finance Committee will continue work on the city’s 2025-2026 biennial budget as it prepares to submit it for final approval before the end of the 2024 fiscal year.
For more information on Centralia’s proposed property tax increase and B&O tax, visit the city’s website at https://bit.ly/4d4rTzw.
To view past City of Centralia budgets, visit https://www.cityofcentralia.com/201/Budget.
