After nine weeks of public hearings, budget amendments and marathon meetings, the Seattle City Council has ratified its roughly $7.4 billion 2023-24 biennial budget.
Councilmembers were tasked with slimming Mayor Bruce Harrell’s first budget in the context of a worse-than-expected economic forecast. City analysts projected that sluggish economic growth and high inflation would decrease real estate tax revenues by $64 million over two years. Moreover, one-time federal coronavirus relief funding totaling more than $58 million expires at the end of the year, forcing councilmembers to either find new revenue sources or cut vital social programs.
In the end, Seattle’s “JumpStart” payroll tax on big businesses came to the rescue. The 2023-24 budget siphons off a total of $187.6 million in revenue to the general fund in order to fill the deficit, decreasing new investment in areas such as housing and climate change transition.
The budgeting process attracted a lot of involvement and input from community members on a number of contentious issues. More than 155 people signed up to testify at the 10-hour-long Nov. 21 budget committee meeting, which resulted in the council debating and approving or rejecting 195 amendments to the final city budget. The council passed the budget out of committee on Nov. 28 by 6-3, with councilmembers Alex Pedersen, Sara Nelson and Kshama Sawant against.
Unlike the Washington state legislature, which has months to independently draft and pass its budget with only input from the governor, Seattle’s mayor proposes the budget, which is then amended by the City Council. However, despite the imbalance in power, this year’s budget process has been much more cooperative and less acrimonious than in previous budgeting cycles under former Mayor Jenny Durkan.
In the end, the council made difficult decisions to appease various constituencies, leaving all parties across the political spectrum unsatisfied with at least some of the changes and shelving councilmembers’ plans to fund new programs and services.
Nelson and Pedersen voted against the final package due to concerns over not increasing the Seattle Police Department’s (SPD) budget enough, and socialist Sawant voted against the budget because the council rejected her proposal to increase the JumpStart tax to avoid any cuts to services and investments.
Here is a round up on some of the important issues community organizers were looking at with this year’s budget.
An austerity budget?
In the local media, much attention has been focused on the supposed hole in the city’s finances, leading to questions about whether the city will cut services next year to balance the books. This is a bit of an exaggeration. With new JumpStart tax revenues coming, the 2023-24 budget is significantly larger than in previous years. Passed in 2020 amid the George Floyd protests and renewed calls for racial and economic justice, the tax charges businesses that have highly paid employees and a gross revenue of more than $7 million dollars.
Unlike other taxes, which go to the city’s general fund, the JumpStart tax is specifically allocated to investments in affordable housing, small business support, green new deal investments and equitable development for historically marginalized communities. By transferring money from JumpStart to the general fund, Seattle is not cutting many programs but reducing funding for future programs.
In a statement, Budget Committee Chair Teresa Mosqueda’s office wrote that “[d]espite a historically difficult budget year, this anti-austerity budget invests in key services for our City’s working families and small businesses.”
However, a proposal from Sawant to increase the JumpStart tax rate and raise $140 million in additional revenue was voted down by the City Council 6-3. Mosqueda, who voted in favor of the amendment, said that Seattle needed to diversify its revenue sources and look at new progressive tax options.
“My vote is to show that we need additional progressive revenue, period,” Mosqueda said. “However, we also know that we need to diversify the revenue streams that are coming in given the volatility that we’re seeing, especially in the tech sector across the country, which could hit Seattle maybe disproportionately. There’s just a lot of unknowns right now. ”
The City Council also passed an amendment by Pedersen to increase car tabs by $10 for bridge maintenance and other transportation priorities in order to avoid a repeat of the two-and-a-half-year-long West Seattle Bridge closure.
Policymakers also needed to meet the demands of financial markets in order to maintain the city’s triple-A credit rating and thus access to cheap municipal bonds. Apart from balancing the budget and responding to broad macroeconomic trends, which are largely out of the control of individual municipalities, one of the key indicators for the financial health of a city is its ability to maintain a healthy emergency reserve.
Mosqueda said that the council and mayor had to boost this year’s contribution to the city’s reserve in order to maintain a sustainable level. By the end of 2024, Seattle is forecasted to have more than $130 million in emergency cash on hand — a total that doesn’t include other coffers, such as the new JumpStart tax reserve — which should hopefully assure creditors about the fiscal stability of the city.
“I would say that [Harrell’s office] protected more money in the reserves than Jenny Durkan ever tried to do,” Mosqueda said. “You might remember that Jenny tried to take that reserve down to $3 million.”
Echoes of the 2020 Black Lives Matter protests and Defund SPD movement cast a shadow over this year’s budget process. The more conservative and unabashedly pro-police wing of the City Council, empowered by electoral victories in 2021, was more vocal in this year’s budget process. Nelson, in particular, cast herself as a champion for SPD, at times getting into arguments with other councilmembers over police funding.
In a reversal, the City Council agreed to Harrell’s proposal to shift parking enforcement back to SPD from the Seattle Department of Transportation (SDOT). This shift was the main reason why the department’s funding decreased significantly from 2020 to 2021. The parking enforcement program has been plagued with difficulties, and a final decision as to which department — SPD, SDOT or a new department or division — will house parking enforcement officers remains to be determined.
The City Council also approved Harrell’s plan to boost police recruitment and retention, allocating $4.25 million in hiring bonuses and $1.5 million for advertising open job positions. The department hopes to reverse the trend of cops leaving, with a net goal of filling 30 positions in the next two years. For context, more than 400 officers have left SPD in the past two and a half years.
One of Sawant’s amendments was to divert $500,000 from the SPD advertising budget to the Northwest African American Museum (NAAM) for reopening renovations, a proposal that was voted down 6-3. According to the Stranger, Nelson “egregiously misconstrued” comments made by NAAM President and CEO LaNesha DeBardelaben, falsely claiming that she opposed moving funding from SPD to the museum.
Police accountability advocates did score notable wins in this year’s budget. The City Council authorized $50,000 to go toward support services for families and loved ones of people killed by police. It also agreed to Harrell’s decision to formalize the elimination of 80 police positions that remain both unfunded and unfilled.
These job vacancies have been labeled “ghost cop” positions by the progressive coalition Solidarity Budget, which called on the City Council to divest from policing and invest in other community services. This resulted in savings of about $11 million, which went back to the general fund. SPD retained approximately 160 other “ghost cop” positions, the funding for which was reinvested in other areas of the department.
Solidarity Budget organizer BJ Last said that, while this was an improvement on previous years, the City Council still needed to do more to reduce SPD’s budget.
“So I’m glad that they abrogated 80; that’s good,” Last said. “It’s a little unfortunate that they didn’t abrogate all of them.”
Transportation safety for pedestrians and bicyclists was also a top concern for many community activists. Over the past two years, Seattle has seen a surge in vehicle-caused injuries and deaths, making the city’s “Vision Zero” goal of having no vehicular deaths by 2030 seem increasingly unattainable. According to Seattle Neighborhood Greenways Community Organizer Clara Cantor, nine people have been killed just since Harrell released his proposed budget at the end of September.
Cantor and others in the Solidarity Budget coalition called on the City Council to increase investments in bike lanes, sidewalks and other traffic safety improvements. Of particular frustration is the perceived prioritization of certain neighborhoods over others. Cantor said that, even as North Seattle projects go ahead, four have been delayed in South Seattle, despite the area being disproportionately affected by traffic violence.
“There’s a pretty extreme difference between how safe our streets are between the wealthier neighborhoods in Seattle and lower income areas and BIPOC neighborhoods,” Cantor said. “And that’s pockets of North [Seattle] on Aurora and Lake City and most of the South End. And half of those deaths that happened in Seattle happen in [District 2] in the South End.”
In frustration with this lack of prioritization, District 2 Councilmember Tammy Morales inserted a provision in the budget that requires SDOT to spend at least $1 million in existing funding on new safety projects specifically in South Seattle. The amendment was passed unanimously.
Housing and homelessness
One of the big differences between Harrell’s proposed budget draft and the final version passed through the Budget Committee is the preservation of direct homelessness service provider salaries. In the original proposal, Seattle would cap pay increases for service providers who contract with the city to 4 percent — below inflation — and thus a real-terms pay cut. The move contradicted City Council policy passed unanimously in 2019 by, among others, then-councilmember Harrell. The final budget restores the pay raise.
The council did maintain Harrell’s proposed “Unified Care Team,” the interdepartmental squad tasked with conducting sweeps of and outreach toward unhoused people living in tents and vehicles. The new budget increases the team to 61 full-time-equivalent positions from 52.5, costing the city $13.7 million.
On the housing front, the City Council approved $900,000 in additional funds over the next two years for eviction legal defense, even as it reduced housing development money coming from the real estate excise tax. The budget also approves half a billion dollars for the development of new affordable housing through the JumpStart fund — a substantial increase over previous levels.
A housing proposal that failed to pass was Morales’ amendment to establish a municipal housing administration program. If passed, it would have helped create a new, environmentally sustainable building accreditation system for construction workers and identify city land that could be redeveloped into affordable housing.
The Real Change advocacy team and its political committee, House Our Neighbors! (HON), was disappointed by the rejection of the amendment. (Writer’s note: The Real Change newsroom maintains editorial independence from the advocacy team.) Real Change Advocacy Intern Camille Gix said that this amendment could have helped lay the groundwork for a new social housing developer through Initiative 135, which will be on the ballot in a February 2023 special election.
“We know that with the way that things are working, we are not housing everyone,” Gix said. “We have so many Real Change vendors who are having a hard time finding affordable housing. People — friends of mine who grew up in Seattle — are working as nurses and teachers and not able to find affordable housing, because they don’t qualify for traditionally affordable housing.”
Among the five councilmembers to vote against the amendment was Mosqueda, who explained that there was not enough money to authorize new programs.
“It may be a great idea, but we will need to find additional revenue to support many of these new initiatives and pilots that councilmembers and the mayor wanted,” Mosqueda said. “So it was not unique to that proposal.”
The new budget will be signed by Harrell and is set to come into effect on Jan. 1, 2023.
Read more of the Nov. 30-Dec. 6, 2022 issue.