Washington must fill $130k budget deficit

WASHINGTON — City officials in Washington said last week they needed to make up for a six-figure projected shortfall in next year’s general fund, but the adjustments aren’t expected to heavily impact municipal operations.

City Administrator Joe Gaa said at a city council meeting Jan. 21 that projected revenues for FY 2026 were $130,705 lower than the local government’s proposed roughly $5 million of expenditures.

Gaa said it “isn’t the worst news I’ve had this week,” suggesting decision-makers could fill the gap by diverting uncommitted funds from other municipal accounts.

Part of Gaa’s suggestion includes changing the city’s hotel/motel tax fund, which brings in about $80,000 per year. While at least 50% of that money is earmarked for tourism-related spending by state law, he said the city could use 25% of it — roughly $20,000-$25,000 — to cover Washington’s support for the local Chamber of Commerce, which otherwise comes from the general fund. The other 75% would be allocated at the suggestion of an appointed hotel/motel committee.

That’s in contrast from FY 2025, when the city moved half the hotel/motel cash to its general fund, in a move that hotel/motel committee members said happened without their consultation.

“It seems like a good compromise between (the committee) having it all, and having only half of it,” Mayor Millie Youngquist said.

In another shift, the city plans to allocate expected money from the Washington County Riverboat Foundation to parks projects, Main Street Washington matching grants, a library genealogy project and a police department camera system.

Gaa said the move would fall in line with WCRF’s goals as well, and spend money that would otherwise come from general fund accounts. City officials said they wouldn’t know how much cash to expect from the organization, however, until sometime next month.

“They like to see things that really show off the community,” he said. “Betterment, quality of life, those things … I anticipate this is going to have a lot to do with everything: playgrounds, trails, athletic fields, all of those types of fields will fall into this.”

Lastly, Gaa said the city could use local-option sales tax revenue to keep the general fund balance, estimating it could divert $80,000-$100,000 in FY26. That’s out of $1.25 million of total expected sales tax revenue.

The cushion would help prevent cuts to public safety spending, Gaa said.

“We never know, without our sources, how sustainable we are. But I feel pretty good about that,” he said of the sales tax revenue, which fluctuates from year to year.

All said, the city’s estimated property tax levy for FY26 comes in tentatively at $15.84, slightly lower than the $16.14 number used in FY25. That’s offset, however, by a 2.6% increase in valuations, according to city staff.

Comments: Kalen.McCain@southeastiowaunion.com