Today, the Seattle City Council passed its final 2021 budget, a roadmap for the city’s spending over the next year. The overall budget is roughly $6.5 billion, much of the attention over the next two months will focus on the $1.5 billion general fund, which is the City’s general purpose fund and the most flexible segment of the budget.
To better educate members and inform our advocacy this year, the Chamber convened a member-led task force that worked with local firm ECO Northwest to examine the City’s revenues and expenses from 2010-2019 and the choices that City leaders have made with the significant resources at their disposal. This research, which focused on the general fund, also considered special assessments and levies and you can see a summary of key findings here.
From this research, our Fiscal Task Force made six recommendations for the City of Seattle’s budget. Below is an overview of these principles and how the 2021 budget addressed each of these principles.
One major element we will pay close attention to in the year ahead is whether the City allocates appropriate funding for core services. Our research found that special funds for the city’s budget have increased by 30 percent over the past decade, after factoring in inflation and population growth and we continue to be concerned that these funds are replacing, rather than supplementing, city spending on basic services like transportation and parks.
As the Chamber works with officials at every level of government on relief and economic recovery, we will continue to advocate for smart policies that rebuild our economy so that it is more competitive, equitable, and resilient.
- Do no harm. Do not raise business taxes in this recessionary environment. Businesses are struggling to survive at best due to the ongoing impacts of the pandemic.
Budget passed by Council: Does not increase general business taxes further, despite a proposal from Councilmember Kshama Sawant to increase the payroll tax that Council passed four months ago. The Council did lower the tax threshold for Transportation Network Companies from 1,000,000 trips per quarter to 200,000 trips per quarter.The Council has also requested that the City’s Finance and Administrative Services department provide a report on options for business and occupation tax relief for small businesses. - Invest in recovery: Ensure critical needs like transportation infrastructure receive the investment they need. These investments are important for safe travel, they create and maintain jobs and they make long-term improvements in how people get to work and goods to get to market.Budget passed by Council: Includes $10 million in bridge maintenance budgeted by Mayor Jenny Durkan, which is a slight increase from last year and higher than the average annual amount, $6.6 million, that the City spent between 2006-2019. Councilmember Alex Pedersen also advanced an additional $4 million in one-time funds for bridge maintenance. This total comes from a combination of the General Fund, REET I and REET II funds.
Earlier this year, an independent audit requested by Councilmember Pedersen noted that SDOT’s most conservative estimate of bridge maintenance needed is $34 million annually.
- Protect our communities: As Seattle reimagines its police department, it is vital that leaders articulate a thoughtful plan for how it invests in public safety. Ensuring residents, employees, and visitors are safe when they return to activities will be critical to Seattle successfully competing in a post-pandemic economy.
Budget passed by Council: The 2021 budget creates a new Community Safety and Communications center which will house the 911 call center and parking enforcement.The Council eliminated 93 vacant positions in the Seattle Police Department, which, as PubliCola reported, has seen record-breaking attrition. Majorities of the Council rejected a hiring freeze for SPD, as the Seattle Times reported. Councilmembers also rejected Councilmember Sawant’s $151 million proposed cut. Seattle City Council Insight has additional context about the Council’s decisions on police staffing as of Friday evening,
- Explore pension management options: Seattle’s pension payments for its employees grew from $50 million in employer contributions in 2011 to $118 million in 2018. Exploring merging the pension into Washington State’s well-run system could provide more stability in returns and minimize the degree to which pension obligations are crowding out essential services.
Budget passed by Council: Does not change the City’s management of pension obligations.
- Improve transparency: The City’s finances are complex and extremely difficult to examine. Identify existing models that allow citizen visibility into spending, thereby building confidence/accountability.
Budget passed by Council: Includes funding for a participatory budget process for public safety, a process that the City has used for several years for various programs, starting in 2015 with the Youth Voice, Youth Choice program, as Publicola reported.However, the budget process did not address ways to make budget documents more readily available through existing public platforms, or ways to track spending more easily across issue areas, particularly those that span multiple departments.
- Use special funds to supplement, not replace, spending on core city services: The increased use of dedicated funds makes it even more important that the City delivers on its promises and that any freed financial capacity should prioritize core municipal services and unfunded infrastructure.Budget passed by Council: Adds $24.8 million in Seattle Transportation Benefit District funding now that the measure, supported by a broad range of community groups including the Chamber, has passed with over 80% of the vote. The Council also approved a $20 increase in the City’s vehicle license fee; that will raise 3.6 million for the 6 months it is collected in 2021 and $7.2 million annually thereafter. The Council voted to consider a spending plan following a three-month stakeholder process. Councilmembers Lisa Herbold, Alex Pedersen, and Andrew Lewis had proposed allocating all of this funding for bridge maintenance, citing the auditor’s report referenced under point #2 above.