Cowlitz County commissioners approved a three-year contract with sheriff’s deputies Tuesday but said the ever worsening financial outlook means all county contracts may need to be re-examined.

Commissioners knew they’d likely have to revisit the 2009 budget even when they approved it in December. Since then, though, the state and county economic forecast has worsened. Officials will need to look at all options for saving money, including talking to unions about contract changes, Commission Chairman George Raiter said.

“We’re going to ask all contracted employees to work with us and look at all our options,” Raiter said. The union contracts are binding unless both sides agree to make changes, and Raiter said he hopes that’s a possibility. “We tried in 2002 without much success, but we can always ask.”

The deputy contract includes a 4.5 percent raise for 2009 — the same as every other union and employee group. The increase was budgeted for, but the contract took longer to complete, meaning approval came after financial conditions worsened.

Commissioners Axel Swanson and Raiter said they normally wouldn’t be approving such raises in such tough economic times, but they wanted to match those given to other employee unions. Commissioner Kathleen Johnson was absent from Tuesday’s meeting.

“I don’t think it makes sense to pull the rug out from under this particular contract,” Swanson said. “But we do need to let all bargaining units know the numbers we’re facing are very grim.”

Due to worsening conditions, Raiter said managers and employees need to discuss ways to reduce the budget “with the minimum impact on people’s livelihood.” He added that county employees may need to make a judgment call about whether that means cutting salaries or seeing more co-workers laid off.

Commissioners used reserves to balance the 2009 budget, cut 32 positions and warned more cuts may be needed. Initial numbers for January show that more than $4 million will now need to be trimmed from this year’s budget to ensure 2010 doesn’t start off in the red.

“We always knew it was going to be hard, but it’s getting harder,” Swanson said after Tuesday’s commission meeting.

The county ended up using more reserves in 2008 than expected, meaning officials may need to borrow from other funds to keep the county running until the first half of property tax payments are received in April, said finance director Claire Hauge. Initially, she didn’t think the county would need to borrow from other funds until late fall. Property tax revenues are the county’s main source of revenue.

Sales tax payments — the second highest source of revenue — also are down from both last year at this time and initial projections. The county received $303,000 in sales tax revenue in January, down from $425,000 in January 2008. Hauge budgeted conservatively but still expected to bring in $25,000 more last month.

“We’re significantly down,” she said. “We’re back to 2005 levels,” when the county was still recovering from a local economic downturn. For all of 2008 the county took in $660,000 less in sales tax than budgeted.

Hauge hasn’t yet calculated how much the county will need to trim from the current budget but hopes to have preliminary figures to commissioners at next week’s Tuesday meeting.

The 4.5 percent raises approved Tuesday means deputy 2009 base salaries range from $49,164 to $70,464 depending on seniority and job title.

In 2010, deputies’s pay will increase by 5 percent because their workweek will be expanded by 5 percent. They also will receive regular raises tied to 80 percent of the consumer price index, a measure of inflation. The 80 percent figure also was used to calculate this year’s 4.5 percent raises.