KOMO 4: Seattle City Council contemplates $241M budget cut amid escalating spending concerns

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Source: KOMO TV

This story was originally published by KOMO TV on April 18, 2024.

SEATTLE — Seattle’s City Council began the process of cutting $241 million from the 2025 budget on Wednesday while acknowledging it may have to make significant cuts to programs and services and even consolidate departments.

“If we didn’t have the Jumpstart tax, here in our city, we would be in a really bad fiscal situation,” said budget chair Dan Strauss after the initial briefing. That controversial tax, implemented in 2020 on Seattle’s biggest employers, has exceeded expectations, providing a surplus of $69 million on that line item and expected to grow in 2025 and 2026.

But almost every other line has gone the other direction, according to a briefing by city staffers. Sales Taxes, B&O, and property tax collections are all down, blamed in part on the lack of a return to work and office occupancy rates near 30%.

Strauss said it is why he’s attacking this issue in his committee now instead of the usual budget cycle in the fall.

But critics point out, that the city’s spending is up 29% since 2019, and that is why the city’s leadership finds itself in this position.

“Our challenges over the last several years have not been a revenue problem. They’ve been a spending problem,” said Jon Scholes of the Downtown Seattle Association. “We like what we’re hearing from this council a pragmatic perspective around how we’re spending the tax dollars.”

Scholes also said the massive construction engine is slowing down. “We’re going to see less development and construction in the next couple of years that’s generated a lot of tax revenue for the city over the last decade,” he said. “How we ultimately grow the tax base without having to raise new taxes is by having more businesses and more jobs in our city. Downtown has always been our economic engine, we want to get it firing on all cylinders, once again.”

Scholes dismissing any discussion about once again relying on the JumpStart Tax.

The council was presented with the idea, by city staffers, of reviewing spending restrictions on using the Sweetened Beverage Tax, Admission Tax, Jumpstart Payroll Tax, or Transportation Network Companies Tax to get out of the hole.