A wake-up call to Seattle City Council members?

Apr 22, 2021
Written by wpengine

Seattle’s budget director Ben Noble shared a cold dose of reality this week with the City Council: while economic recovery from the pandemic is underway, it’s happening slower than the nation as a whole in Seattle.

The details of Noble’s report were captured in Seattle City Council Insight, an online newsletter that serves as a council watchdog. Unlike this week’s press releases from the mayor and council members that touted ways to spend an additional $40 million in revenue evident in Seattle’s latest budget update, Noble has been urging the council to guard against overspending.

Insight quoted a memo by Noble urging fiscal austerity. The coronavirus, with its erratic spikes in infections and hospitalizations, adds continuing uncertainty to the budget and devastated industries such as tourism, hospitality and construction that need council attention to improve Seattle’s economic health, it suggests. Noble’s memo warns that future city revenues could be hurt by Seattle’s controversial payroll tax and the downturn in Boeing business, the full effect of which also is uncertain.

Insight Editor Kevin Schofield observed that the current council has focused the budget on helping the unemployed and homeless through the pandemic while overlooking the needs of the business community. Seattle’s “saving grace,” he wrote, has been retail, namely Amazon and the city’s e-commerce and tech companies that saw employment gains last year to cushion record unemployment statewide.

Schofield also noted from Noble’s report:

  • Job postings for the Seattle area are lagging the rest of the country, as is consumer spending.
  • Breaking out employment by sector, the leisure/hospitality and manufacturing industries, Boeing included, have been damaged during the pandemic.
  • The construction industry, which contributed more than $100 million in sales and business and occupation taxes to Seattle’s economy in 2019, dropped by more than $10 million as the pandemic took hold last year.
  • Commercial real estate excise taxes fell nearly 57% last year and are expected to remain low the next couple of years.

The numbers in Seattle’s budget don’t lie. While revenues are growing again, a deeper dive into the budget reveals issues that demand attention.

Schofield concluded that the budget mandates a refocusing or council reset to new priorities: economic development and job creation, recovery for the hollowed-out retail core and a targeted commitment to help recover tourism, leisure/hospitality, and commercial construction.

Retailers welcome Seattle’s gradual economic recovery. Its economic health extends to the Puget Sound region and Washington State. Heading forward, how the council spends the money it’s collecting will play a major role in determining how soon companies and employees can recover from the pandemic.