(The Center Square) – The city of Tacoma is working to manage a $24 million structural deficit, with council members considering several options, including cuts
The city council is currently considering its proposed 2025-2026 budget, but needs to find $5.6 million in cost savings.
Tacoma Spokesperson Maria Lee told The Center Square in a phone call that the $5.6 million will come from 26 cuts to staff positions that are mostly filled.
After accounting for the $5.6 million in cuts to positions and removing $1.4 million in projected vacancy savings, Lee said the city still needs to identify $4.7 million in additional cuts.
The 2025-2026 proposed general fund totals $641.2 million. That is a 4% increase from the $615.2 million dedicated to the general fund in the 2023-2024 budget, and a 21% increase from the 2021-2022 budget that totaled $530.6 million.
Despite an increasing budget, the city is facing a lingering $24 million budget deficit that the proposed budget aims to fix. Lee explained that a structural deficit is a built-in gap between ongoing costs and incoming revenue, so the city will need to find a way to earn more or cut back in a long-term way.
Councilmember Joe Bushnell worries President-elect Donald Trump’s proposed tariffs could negatively impact the city’s budget.
In a post on his Truth Social network last month, Trump said he was ready to sign an executive order on his first day in office imposing tariffs of 25% on imports from Mexico and Canada and 10% on goods from China.
This was framed as a response to the ongoing fentanyl crisis and related flood of illegal immigrants and migrants at the U.S. southern border.
The Center Square previously reported on freight executives expressing concerns over the tariffs’ potential economic impacts on Washington.
Bushnell is concerned about tariffs impacting the costs associated with construction.
“A lot of our lumber actually comes from Canada – like 85% of it – and if there is like a 100% increase in the cost of lumber, how’s that going to look for our facilities,” Bushnell said at Tuesday’s city council meeting. “Our facilities are already in dire straits as it is.”
Tacoma is a port city, meaning the city receives more imported goods than elsewhere. Bushnell said the city receives a lot of business and occupation tax revenue from port operations.
“We could see imports completely implode,” Bushnell said.
An amendment approved by the city council by a 5-3 vote, balances the budget without relying on the use of the city’s $8.9 million in available cash above its reserves.
Lee pointed out to The Center Square that this does not solve the city’s structural deficit, but instead begins to address it while freeing up the $8.9 million to help address any emergent issues through 2026.
City staff impacted by the layoffs will be notified likely in January 2025.
A second reading on the proposed 2025-2026 budget is scheduled for Dec. 10.