We're thinking about the Seattle budget early this year

Jul 03, 2025

Seattle News:

First off, we have some new revenue possibilities on the table for Seattle, one of which is progressive and one of which is decidedly not.

Councilmember Alexis Mercedes Rinck introduced a B&O tax proposal that would bring in an additional $90 million of revenue every year. Should the city council pass the proposal, it will be brought before voters to decide this November.

There have been some changes to the legislation since my reporting above. Most importantly, there will no longer be a specific spending plan that will be hammered out at the beginning of next year. Instead, the legislation outlines specific investment areas that are allowable uses for the new revenue being generated by the B&O tax restructure. Up to $30 million of the proceeds will be available to use to address potential federal funding reductions within specific categories, while the rest will be used to backfill certain investment areas within the general fund.

You can take a look at the following presentations for more information:

Central Staff’s revenue options presentation
The Mayor’s Office B&O tax changes presentation
Central Staff’s B&O tax rebalancing presentation

One big thing to note from the first presentation: Last year, we forecast a 2027 budget deficit of $89 million. However, that number has gotten markedly worse and now stands at $233 million. That is for just 2027’s budget. Depending on how economic conditions develop, that number could continue to go up.

2025’s original deficit, dealt with during budget season last fall, stood around $250 million or so. Harrell chose to address it by reallocating JumpStart payroll tax proceeds away from its spending plan buckets to instead backfill the general fund. It is not clear whether that fix will work a second time to balance 2027’s budget, especially without largely eroding the intended JumpStart investments.

Following the above presentations, Councilmember Bob Kettle stated he didn’t like how new revenue being passed is given buckets of investment areas for which it can be used. On Bluesky, I explained that often new revenue streams are dedicated to specific investment areas in order to avoid all new funding being used for purposes such as the police department, homeless sweeps, and pet projects of current electeds. Providing funding buckets focuses investment on urgent needs and/or long-term needs (such as affordable housing), meaning those investments don’t have to compete with other funding priorities. Especially with a voter-approved initiative, it’s important to give voters a clear idea of what investments they’re voting to support.

Council President Sara Nelson also announced this week that should the council implement the state-allowed 0.1% “public safety” sales tax, up to 25% of the collected funds may be spent on “evidence-based treatment” for addiction. Don’t get too excited, though. Up to 25% is less than $9 million, and Nelson provides a long list of initiatives that she says the $9 million would support: a much longer list than $9 million could be realistically expected to pay for.

PubliCola also expressed skepticism of the announcement, given that at the related press conference, Nelson was “flanked by a much larger contingent of allies from “treatment first” groups.”

Finally, a sales tax is a very regressive tax. We can already expect to see a sales tax increase of 0.2% in King County next year, and this would increase that to 0.3% within Seattle.

The Seattle Public Schools (SPS) school board met this week, but they decided not to take up their moratorium on police officers in Seattle public schools until later this summer. In the meantime, The Urbanist published an op-ed written by SPS students expressing the desire to keep police out of schools.

The public safety committee heard again from SPD Chief Shon Barnes last week, followed by a full council vote on his confirmation as chief on Tuesday.

The public safety committee also heard about new legislation that would fine graffiti taggers $1000 per piece of graffiti (Seattle City Attorney Ann Davison’s latest foray into policy making) and an amendment related legislation on chronic nuisance properties that would expand the CIty’s power to hold businesses responsible for illegal activities that don’t take place on their premises. You can read more about both of these pieces of legislation over at PubliCola.

The Families, Education, Preschool, and Promise (FEPP) levy will be on the ballot this November. In addition to the levy providing new investments in student mental health and school safety, which could include money going to SPD, PubliCola reported that the levy will shift funding for 30 programs that are currently supported by the general fund, the JumpStart payroll tax, and the sweetened beverage tax. This adds up to almost $50 million per year. Yikes!

In the last edition, I reported about an AI pilot being tested by the City Budget Office and Central Staff. Last week we also heard about an AI pilot that began this spring to improve the City’s permitting process.

Lastly, ‘tis the season for endorsements, and The Stranger just came out with their Seattle mayoral endorsement for Katie Wilson.

Upcoming local events:

There are several upcoming events in Seattle I’d like to call to your attention.

First, on Monday, July 7 at 7pm, there will be a crisis care center townhall at Vermillion to discuss the new proposed site of a crisis care center in Capitol Hill.

Second, The Burner will be holding a candidate forum on Thursday, July 10 at 6:30pm at the First Baptist Church in Capitol Hill. Present will be three candidates for Seattle City Attorney, three of the four candidates for the City Council D2 seat, and three of the mayoral candidates, including the aforementioned Katie Wilson.

The Stranger will be hosting their usual candidate forum on Thursday, July 24 at 7:30pm at Neumos.

Finally, the Mayor’s Office will be hosting “Safer Seattle Community Forums” this summer in each council district, for which you need to RSVP to save a spot. District 2’s forum will be on Thursday, July 10, at Rainier Community Center from 6-7:30 PM. District 4’s forum will be at the Magnuson Community Center on July 15 from 6-7:30 PM. None of the other dates have been announced.

WA State News:

The Washington State Economic and Revenue Forecast Council released a new forecast, which estimates that WA State will have a $720 million budget deficit over the next four years. Governor Bob Ferguson said he doesn’t anticipate having to call a special legislative session in response to this news.

“As we begin preparing to draft my first budget, OFM has already communicated to agencies that they need to look for additional savings,” Ferguson said.

In other words, look for Ferguson to be pushing more austerity in the coming months.

Notes from the Emerald City

We're thinking about the Seattle budget early this year

Seattle News:

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