(The Center Square) – New revenue forecasts for Seattle in 2024 have Mayor Bruce Harrell seeking to adjust next year’s budget to utilize the additional funds in order to pay down a looming $251 million budget deficit facing the city.
On Tuesday, the Office of Economic and Revenue Forecasts released new projections for the city’s revenue in 2023 and 2024.
Seattle’s Jumpstart Payroll Expense Tax is seeing a two-year total increase of $14.2 million for 2023-24. The new forecasted revenue for the tax on businesses with over $7 million in annual payroll is now set at $309.8 million in 2024.
However, the office notes that recent data collected by the city shows that employees are returning to their offices, but the data also indicates attendance may be plateauing for large companies based in downtown Seattle. A long-term shift away from Seattle office locations would constrain potential JumpStart Payroll Expense Tax revenues.
Kastle Systems‘ back to work barometer shows the 10-city average occupancy rate of offices is at 49.8% for the week of Oct. 11.
According to the Downtown Seattle Association’s downtown recovery dashboard, there were an average 84,067 daily worker traffic in September 2023, a 4.9% drop from the 88,408 average in August.
The city’s admission tax is also seeing a two-year total increase of $1.9 million. For 2024, the city anticipates the tax to generate $24.4 million.
In total, the projected general fund for 2024 increased $9.8 million to $1.69 billion. This is enough for Harrell to call on the city council to increase funding on school safety, resolving labor contracts with city employers and paying down the budget deficit in next year’s budget .
“I would encourage the council to consider focusing this additional revenue on restoring investments in school safety through automated traffic enforcement cameras, resolving open labor contracts for our city employees, and paying down the looming deficit in 2025,” Harrell said in a statement.
The Seattle mayor added that the $251 million deficit will be addressed next year “with a comprehensive approach in collaboration with the city council.”
Despite the increased revenue projections, the Seattle Office of Economic and Revenue Forecasts also estimates a $3.5 million decrease in Real Estate Excise Tax revenue, as well as a combined decrease of $5 million in combined transportation revenues.
The city’s general fund is expected to see a slow growth through 2028, but the office states that the projections are lower than projected inflation through the next four years.
“The forecast really does imply very slow growth for the next few years and that [causes] an impact on the resources available at least from existing revenue streams,” Office of Economic and Revenue Forecasts Director Ben Noble said at Tuesday’s Economic and Revenue Forecast Council meeting.
Growth rates for the general fund are fairly consistent with 1.8% growth in 2024, 2% in 2025, 2.4% in 2026, 3.1% in 2027 and 3.6% in 2028.
The Seattle City Council will consider the additional revenue as it reviews Harrell’s proposed 2024 budget adjustments before the end of the year.
