Seattle Budget Office's Economic Forecast Highlights Continued City Revenue Decline in 2020 and 2021

by Emerald Staff

On Monday, Seattle's Budget Office released some dire economic forecasts and revenue projections, which showed an additional $26 million reduction to the City's 2020 General Fund revenue, relative to the June forecast, and is now projecting a total 2020 General Fund revenues of $1.19 billion, down from the adopted 2020 budget of $1.5 billion.

The Budget Office says that when combined with the loss of other revenue streams that support a variety of basic municipal services, it now anticipates $337 million less revenue, when compared to the 2020 Adopted Budget. This represents a revenue shortfall of 19%.

The projections were outlined in a memo provided to Mayor Jenny Durkan and the City Council Monday morning. In a press release, the Budget Office cautioned against taking the forecast as rock-solid, including a disclaimer that "No assurance can be given that the forecast results described will be realized, and actual results may differ materially from those expressed or implied … It has not been prepared with a view to, nor is it suitable for, any investment decision regarding any bonds or financial obligations of the City or any of its instrumentalities."

However, the fact that the City's coffers continue to be severely impacted by COVID-19 is beyond dispute.

"Two weeks ago, I made the hard decision to veto the depletion of our City reserves because it was my belief that the City may need its emergency funds if our revenues continued to plunge. Unfortunately, today's projections confirm that is the case," Durkan said in a press statement. "Our challenge is to chart a course to meet 2020's basic city services, support current COVID-19 relief, and address any additional unanticipated challenges. We also know that the City alone cannot scale to the scope of the challenges facing our city, region, and state."

Durkan says that in order to address the significant budget impacts in 2020, she will continue to review the need to further adjust the budget through administrative or Council action, especially as more data emerges on tax collection, the duration of COVID-19 restrictions in King County, and economic relief by the federal government.

The forecast came hours before the City Council is expected to vote on cuts to the Seattle Police Department's budget.

Featured image courtesy of the Seattle Department of Transportation.