A dismal new revenue forecast shows the city of Seattle’s revenues down $82 million in November, leaving the City Council to rectify a more than $145 million shortfall in the general fund at the end of budget season.

For most of the year, the city has been anticipating a revenue shortfall, which leapt from $117 million in April to $140 million by August, driven by stalled growth, growing inflation and a delay by city officials in finding new revenue sources.

In the final quarterly update of the year Wednesday, the council learned the revenue gap had grown to $145 million in the general fund, after an anticipated $64 million decrease in Real Estate Excise Tax revenues, a decrease of $9.4 million in general fund revenues, and a decrease of $4.5 million in revenues from the Sweetened Beverage Tax.

With inflation remaining at a 40-year high and the Federal Reserve raising interest rates, the city’s revenue forecast and overall economic outlook has worsened throughout the year.

“Economic conditions have continued to deteriorate and expectations about future conditions have also deteriorated,” said Ben Noble, Director of the city’s Office of Economic and Revenue Forecasts, in a presentation to council Wednesday.

City Council Budget Chair Teresa Mosqueda was scheduled to introduce her balancing package — a revised version of the budget made of elements from the mayor’s proposal and council amendments — on Monday, but has postponed the process by a week to account for the new forecast.


Mosqueda said Friday that in order to meet the new projection, she’ll spend the next week looking at cuts, focusing on new programs and spending.

“I’ll be looking at anything that is new, that is last in, because in times like this we need to focus on sustainability,” Mosqueda said Friday, noting she would also prioritize spending on basic government services or anything that “directly helps our most vulnerable populations.”

First, she said she’ll consider trimming or delaying projects funded by the real estate excise tax other than the most crucial city services, such as affordable housing and public restrooms.

Other new programs or investments, she said, may get cut to prevent the city from entering an austerity budget — or one that reduces base spending.

“We are scrubbing the budget, not only for new adds from the council but also from the Mayor’s Office as well,” Mosqueda said.

Councilmembers spent October drafting 100 amendments to Seattle Mayor Bruce Harrell’s proposed budget, including ones that would grow or add various services. Harrell’s original proposal included more than $30 million in new ongoing spending in areas like expanding the city’s homeless encampment-focused Unified Care Team and efforts to mitigate graffiti.


Mosqueda did not expound on which investments might be cut in the balancing package, now scheduled to come out Nov. 14.

Jamie Housen, spokesperson for the mayor’s office, said Friday that Harrell understands the constraints on the budget, but hopes to see his investments kept in place.

“Based on our collaboration throughout this process, we believe the Council will ensure these priorities remain adequately funded in the final budget,” Housen said.

Even before the updated forecast, the mayor’s proposed budget relied heavily on use of the city’s JumpStart payroll tax, sweetened beverage tax and other revenue streams to pad the general fund for 2023 and 2024, due to slowed revenues from other sources.

Mosqueda, who championed JumpStart in 2020, has been cautiously open to the city tapping into the funds gathered from the payroll tax in 2023 and 2024, as long as the use was temporary and left some funds to cover its intended uses, including affordable housing and Green New Deal environmental improvements.

“JumpStart has helped play a role in protecting against austerity this year … but my goal is to stay in compliance with the spend plan as codified,” Mosqueda said, noting that any other use of funds should be limited to “two years max.”


JumpStart requires employers with at least $7 million in annual payroll to pay between .7% and 2.4% on salaries and wages paid to Seattle employees who make at least $150,000 per year.

This year, after collecting for the first time in 2021, JumpStart brought the city $231 million in revenue, exceeding the city’s $200 million estimate.

To prevent “revenue volatility” beyond 2023 and 2024, Mosqueda said the city needs additional “progressive revenue” sources, modeled after JumpStart, to avoid relying on the fund for revenue when older sources come up short.

The Seattle Revenue Stabilization Workgroup — a new task force composed of representatives from council, the mayor’s office and the community — will share a report on progressive revenue options in 2023. No new revenue sources are likely to affect the budget until 2025.

Council will begin voting on the balancing package Nov. 21, and the final vote is scheduled for Nov. 28. Council will still hold public comment periods as scheduled: at public hearings at 9:30 a.m. Tuesday, and at 5 p.m. on Nov. 15, and during public comment during the regular City Council meeting at 9:30 a.m. Nov. 21.