# Real Briefings — 2025 Year-End Financial Review: Bellingham Faces Mounting Budget Pressures Amid Economic Uncertainty ## Meeting Overview The Bellingham Budget and Finance Committee convened on April 13, 2026, for a sobering review of the city's financial position as 2025 came to a close. With Committee Chair Lisa Anderson participating remotely, Vice Chair Michael Lilliquist stepped in to lead the session that would reveal both cautious optimism and significant concerns about the city's fiscal health. Andy Astrom, the city's Finance Director, presented a comprehensive year-end financial review that painted a picture of a city walking a financial tightrope. While Bellingham managed to close 2025 with a narrow surplus in its general fund, the presentation exposed deeper structural challenges: flat sales tax revenue growth, declining tourism, rising healthcare costs, and the specter of a global economic downturn casting uncertainty over future projections. The hour-and-a-half session, attended by committee members Dan Hammill and Michael Lilliquist (with Lisa Anderson's temporary replacement), focused entirely on agenda item 24874 — a detailed examination of the city's preliminary financial statements for the year ending December 31, 2025. The discussion would reveal that despite careful budget management and mid-year cost reduction exercises, Bellingham faces mounting pressure from inflation, increased service costs, and economic headwinds that threaten the city's ability to maintain current service levels. ## The Revenue Reality Check: Flat Growth in an Inflationary Era Astrom opened his presentation with a stark assessment of the city's primary revenue source: sales tax collections had essentially flatlined despite nominal dollar increases. "We're not seeing a lot of growth in our sales tax. It's very, very flat throughout the last four years," he told the committee, noting that collections had grown from only $32.3 million in 2022 to $33.6 million in 2025. More concerning was the impact of inflation on these numbers. When adjusted for purchasing power, Astrom revealed, the city's sales tax revenue had actually declined to the equivalent of about $27.2 million in 2020 dollars. "The dollars not going as far with inflation and seeing that flat sales tax numbers," he explained, highlighting a fundamental challenge facing municipal governments nationwide. The city had received some relief through changes to state sales tax law in 2026, which expande…