Seattle mayor tries to 'right the ship' in her first city budget

SEATTLE — Seattle Mayor Katie Wilson's proposed 2027 budget avoids increasing taxes and includes $68 million in new spending for the Seattle Police Department, as the first-year mayor seeks to quell concerns that she is hostile to business and indifferent to perceptions of chaos on the city's streets.

Her $9.1 billion budget plan, the first in her tenure, is focused on righting the ship" and making city government work more effectively, moves she said would help her expand public services in the future.

Still, seeking to make good on her campaign promises focused on affordability and housing, Wilson noted her plan includes $500 million in investments to affordable housing, renters assistance programs and homelessness services.

"We cannot keep lurching from shortfall to shortfall, year after year. We cannot keep kicking the can down the road because there is no more road," she said in a speech Tuesday at the Seattle Central Library before supporters and other elected officials.

Wilson said she'd "made the difficult decision" to seek "no new revenue" and wouldn't tap the city's rainy day fund.

"I am not touching the city’s reserves," she said. "We live in Seattle. There's always rain in the forecast."

Now the budget heads to the City Council, which could upend the careful balance struck by Wilson's budget team. The mayor has allies on the council, but tensions have built over her first nine months in office.

The city has faced consistently bleak revenue projections for years, with talk of fiscal audits, new revenue sources and more thrown around but little action taken. As was the case last year, spending continued to outpace revenue this year, as the rapid growth seen in Seattle over the 2010s has flipped on its head, with tech companies shedding jobs and downtown office space sitting empty for years.

A dark national economic picture has only put Seattle on less steady footing, and Wilson called out President Donald Trump as a "real and present factor in this budget," primarily due to his deep cuts to social services.

Even with a more optimistic revenue outlook delivered in August, which grew by just 0.7%, Wilson had to plug a $175 million deficit.

Without an increase in revenue, or any proposed new revenue, Wilson cut the general fund by $50 million by slashing department budgets to reflect their actual spending, eliminating 128 current positions — all but 15 of which sit empty — and transferring funds within the city to support necessary programs. Still, the reduction could result in layoffs and lead to some upheaval within the city workforce. Wilson's proposal also adds 169 positions elsewhere. It's unclear where those jobs will be created.

Most notably, the city's payroll tax — JumpStart — is still being relied on to fund homelessness services, a role beyond its original purpose first proposed by Wilson's predecessor, Bruce Harrell.

Wilson said it was "not the right move" to increase the city's income tax, and said the grim economy convinced her that doing so would "come with great risks."

The $9.1 billion budget is the first for Wilson, a self-proclaimed socialist who rode to City Hall on a wave of discontent about the city's direction, winning a close election against a powerful, long-term politician and incumbent mayor.

Before she was elected, she fought to expand progressive taxes, transit and tenant protections as a left-wing activist. As a new mayor, she called the city "filthy rich" and delivered an unapologetic "bye” to the millionaires threatening to leave the state.

Now, as a budget-writing mayor, she's signaled to the business community that she better understands and appreciates how vacant office space and a loss of high-paying tech jobs can wound a city's reputation and finances, while making a play to be a fiscally responsible progressive who can deliver public services while tending to the city's deficit.

Overall, most of the proposed $9.1 billion budget is tied up in utilities and transportation costs, with 80% of spending already dedicated or legally restricted and therefore untouchable by budget writers. What Wilson can control is the general fund, which is just under $2 billion. Over half of that is dedicated to public safety, which includes the police and fire departments, 911 services and community crisis responders.

The Police Department will get the largest share of the general fund, with $556 million, a net increase of $68 million from last year's budget. That includes funding for 1,250 officers — which budget officials said was 66 more positions than allowed by current spending levels.

Though the Police Department struggled for years to hire officers, the mayor's office said there are 3,000 applicants in the pipeline now. With the need for recruitment curtailed, Wilson's budget saved $9.5 million in the police budget by scaling back recruitment and marketing, as well as cutting three civilian positions.

Spending for the Fire Department is $346 million, and Wilson has proposed reducing its overtime budget by $7.1 million. She has also proposed five new department positions, and $8.7 million for renovations to Fire Station 25.

The city's Community Assisted Response and Engagement Department will get $72.6 million, an increase from its current $68.6 million budget. The department is tasked with responding the city's drug, homelessness and mental health crises.

Police accountability offices will get $14.8 million.

The city departments with the biggest reductions in the budget include the Office of Economic and Revenue Forecasts, Seattle Public Utilities, Seattle Department of Transportation, Office of Sustainability and Environment, Office of Planning and Community Development and Office of Civil Rights.

Revenue from the city's JumpStart payroll tax increased by $58 million this year.

The payroll tax was created in the midst of boom times in Seattle, particularly from 2012 to 2020, when the city saw huge gains in employment and investment from the tech industry, as well as affordability problems it spawned.

City leaders saw these twin issues — roaring employment of high paid workers, and the loss of affordable homes — and tried to weld them together. The JumpStart tax, which is imposed on large employers with highly compensated workers, was initially created in part to fund affordable housing.

While Wilson also plans to flex what JumpStart was meant for, similar to Harrell, she's dedicated about $200 million directly to homelessness services rather than putting it into the general fund. It accounts for half of the funding for the city's homelessness services spending.

At the same time, Wilson has wrestled with trying to meet a campaign pledge to quickly ramp up the city's shelter capacity. Earlier this month, she announced a two-year plan to add 960 new shelter units as a starting point to meet the homelessness crisis she described while running for mayor a year ago.

The number of beds fell short of what she said was needed while running for mayor, but she said the state of the city's finances helped dictate what was possible.

Wilson set the stage for her budget proposal not just with her shelter plan, but with an executive order last week that she said would make the city run more efficiently and sustainably with the long-term goal of getting the city's finances in order.

Wilson said she was "not trying to whittle down the size of government," but to "right the ship" in order to improve public services.

In this way, it's an attempt to help progressives seize the mantle of good government stewardship from conservatives, whose ideology Wilson described as "starving government so that it doesn't actually function well, cutting safety net programs."

Instead, Wilson suggested she would begin using the terms "efficiency" and "fiscal responsibility," while acknowledging how discordant they may sound coming from "a progressive, a socialist."

Wilson said she's become more aware of the issues the business community faces during her first months in office and has come to "really understand the dependence of city government on a growing economy. What it means for our city budget when tech workers are laid off, or when a downtown office building sits vacant, or when developers aren't applying and paying for street use permits.