County Council approves biennial budget, enacts property tax hike

Whatcom County Council approved the 2025-26 biennial budget in a 4-3 vote on November 19, increasing the tax bill for property owners by roughly 2.7 percent in unincorporated parts of the county, and one percent in cities.

Following more than two and half hours of public testimony, mostly railing against the proposed budget and tax increase, council voted 4-3 to enact the budget, with Todd Donavan, Kaylee Galloway, Barry Buchanan and Jon Scanlon voting to adopt, and Tyler Byrd, Mark Stremler and Ben Elenbaas voting against.

Under the budget, property taxes for someone living in a $650,000 home in unincorporated Whatcom County would increase by $134 per year, a 2.7 percent increase. For a property of the same value in a city, the increase would be $45, around one percent.

Many speakers cited an 11.4 percent overall increase to their property tax bill, a misunderstanding of the increase that was repeatedly shared online. That 11.4 percent figure represents how much of the county’s portion of the tax bill will increase for unincorporated properties, not a total increase of how much a homeowner would see on their tax bill.

County council and executive Satpal Sidhu repeatedly cited “banked capacity,” tax dollars that the county could have taken in previous years but chose not to, as a way to explain the sticker shock by residents over the sudden and significant increase in property tax rates.

Taxing district are allowed an annual one percent increase; any increase not taken a given tax year becomes a “banked” increase that can be applied in later years.

The county hadn’t increased property taxes for the last several years due to what Sidhu said was an infusion of federal pandemic-response funding and sales tax growth, which “masked” a profound funding problem that must now be addressed.

“Banked capacity was preserved precisely for a moment like this,” an October 18 letter from Sidhu read. “I understand that any decision to increase the tax burden on our constituents cannot be taken lightly, but this must be weighed against the impacts of defunding local government.”

Roughly half of the county’s budget goes toward personnel. Councilmembers cited the increase in public safety hires over the past biennium, including 10 new sheriff’s deputies, new prosecutors, and a 90-day hiring freeze enacted in July as proof of how expensive staffing was becoming for the county government.

“I understand that people want us to cut,” council member Kaylee Galloway said during the meeting. “But really what you’re saying is you want us to fire people.”

While Whatcom County has avoided increasing property taxes in recent years, many city governments have increased property taxes, including Blaine, which enacted its one percent increase for the 2025 budget on November 12.

With pandemic era ARPA and CARES funding now completely dried up – the county received $44.5 million in federal pandemic relief in 2021 alone – the county must either make up those funds, or cut back to pre-pandemic levels.

While many members of the public lamented the county’s growing tax burden put upon property owners, the county is still facing budget shortfalls, and will be working with a shrunken budget compared to previous years, according to county budget documents.

Ben Elenbaas, the county representative for Blaine and Birch Bay, said he vehemently opposed increasing taxes on property owners, and asked councilmembers to be more scrupulous when supplemental budget requests are brought to council throughout the session.

In 2024, Whatcom County brought in $364.8 million in revenue, according to the passed budget, and expects to bring in $351.1 million in 2025 and just under $318.1 million in 2026.

The county spent $429.1 million in 2024, and expects $380.9 million in expenditures for 2025, shrinking down to $317.8 million in expenditures for 2026.

By state law, taxing districts cannot run at a deficit and must maintain a balanced budget. As seen above, expenditures in some years exceed revenue. The county’s budget nevertheless remains balanced through three main mechanisms:

1. Use of saved funds (fund balance) from previous years

2. Budget lapse - the county expects about 5 percent of budgeted money won’t actually be spent

3. Transfers between different county funds

By using these strategies, the county maintains fiscal balance and complies with state law while showing expenditures that exceed single-year revenues in some areas.

“If we do not increase revenues to make up, at least in part, for these rising costs, then we all will experience the cost of degraded road infrastructure,” Sidhu wrote. “That may not happen overnight, but once we start down that path, it’s almost impossible – and certainly more expensive – to turn around and catch up.”