(The Center Square) – Seattle budget analysts say the city isn’t out of a hole yet, despite Mayor Katie Wilson’s proposal to balance a $149 million general fund deficit before 2027 without major new taxes.
Wilson proposed a $9.1 billion budget last month for 2027, a 2.2% increase compared to 2026, and a $9.5 billion budget for 2028, a 3.8% increase over 2027. The general fund makes up about $2 billion of the citywide budget, with most of it spent on public safety and day-to-day government operations.
“However, the budget does not fully resolve the structural deficit and still relies on one-time resources to achieve balance,” according to staff memos prepared for Tuesday’s Seattle City Council meeting.
A city’s general fund is typically a good indicator of its financial health, and Seattle has dealt with recurring deficits for years, including one estimated at $149 million before Wilson took office. That has since increased to $175 million ahead of 2027, with another $164 million shortfall projected for 2028.
Wilson has said she wants to set the course straight by cutting general fund spending by about $50 million in 2027 and 2028 while eliminating 128 full-time positions, only 13 of which are currently filled.
Despite fears, she plans to do so without major new taxes, but that doesn’t mean residents are entirely off the hook.
Under her proposal, general fund spending would ultimately increase by $13 million compared to the 2026 adopted budget and by $26 million in 2028 compared to the 2027 proposal. The money has to come from somewhere; in this case, account transfers, fiscal reserves and cost-of-living increases.
Council budget memos estimate that Wilson’s budget proposal still leaves deficits of $23.2 million for 2027 and $18.2 million for 2028, which she intends to cover with available fund balances.
The gap is projected to continue at $14 million in 2029, before reaching a $9 million surplus in 2030 if all holds.
One account Wilson intends to rely on to balance the general fund is the JumpStart fund, supported by the Jump Start Payroll Expense Tax, which the council approved in 2020. The money was intended for housing, climate and other initiatives, but city officials began diverting it to the general fund in 2021.
The mayor’s budget would relieve some pressure on the general fund by transferring about $47 million in annual homelessness services to the JumpStart fund. Then, to balance the JumpStart fund in 2029 and 2030, Wilson proposed moving a combined $54.4 million in obligations back to the general fund.
However, “based on current projections, $19 million of cuts would be required to balance the JSF in 2029,” according to the budget memos, explaining that current projections still require future cuts.
Wilson left out new progressive tax measures from her proposal this year, but residents will still face various tax and fee increases from Seattle, on top of those from the Legislature and King County.
“Our economy and especially our downtown are fragile. In that context, raising additional revenue through JumpStart is not the right move,” Wilson said last month regarding her decision not to raise the payroll tax. “Other progressive revenue options need more work, or state authorization, or both. I will keep pushing on this, but it doesn’t help us with this budget right now.”
She proposed a 10.7% increase in the city’s building and land-use permit fees, a new $11 rental fee per unit assessed every other year, a parking tax increase and other fee adjustments. While those are subject to approval, the council has already signed off on 9.5% electricity rate hikes for 2027-28.
Seattle’s water and garbage rates are also set to increase over the coming years, with King County’s wastewater rate rising by approximately 12.75% in 2027 alone. In November, Seattleites will consider doubling the city’s 0.15% transit sales tax rate to 0.3% through 2037, before it expires next year.
Notably, city taxpayers just passed a $1.55 billion transportation levy in 2024, which included funding to establish a task force to find additional funding for what voters said were their priorities at the time.
The King County Council also approved a sales tax hike last week for child and family services, after signing off on a separate transportation sales tax increase in June, which takes effect in 2027.
The Seattle budget memos recognize that Wilson’s proposal makes progress on the city’s ongoing structural deficit, but stress that it doesn’t solve the problem yet, especially if projections fall through.
The council will hold budget meetings from Oct. 13-16 to hear from various departments.