Seattle’s outgoing council leaves fiscal challenge for newcomers

Dec 7, 2023
Written by WR Communications


In late November 2023, Seattle’s outgoing City Council passed a significant $7.7 billion supplemental budget for 2024, leaving a complex financial legacy for the incoming council. This budget, the last for six of the nine members, has two critical implications:

Insufficient Addressing of Future Deficits: The budget does little to mitigate the anticipated deficits of $221 million in 2025 and $207 million in 2026.

Increased Burden on Businesses: Despite high vacancy rates in downtown offices and stores, the council raised the city’s Payroll Expense Tax by 6.5%, exacerbating the cost of doing business in Seattle.

Like the State of Washington, Seattle operates on a biennial budget cycle. The council’s recent adjustments were intended to refine the biannual budget established in November 2022. However, with significant deficits on the horizon, the departing council members shirked the responsibility of addressing the financial issues stemming from their previous decisions. Instead of initiating substantial budget cuts, they passed 120 amendments, many of which increased taxpayer funding for their favored projects. For instance, Councilmember Lisa Herbold allocated an extra half million dollars for a gun violence reduction initiative.

The council acknowledged the looming budget crisis by increasing the controversial Payroll Expense Tax, which previously led major employers to relocate thousands of jobs out of the city. This hike will likely drive more businesses away and deter new ones from filling the vacant spaces in downtown Seattle.

Seattle’s budget has surged from $4 billion in 2013 to $7.7 billion today. Despite a 94% increase in tax collection, the city’s population and job growth have not kept pace, indicating a disproportionate tax burden. This period has seen worsening homelessness, drug abuse, violent crime, retail theft, housing affordability, police understaffing, and traffic congestion despite the doubled taxes and budget.

The new council, set to take office in the new year, is expected to pursue moderate solutions.

Read the article from Change Washington


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