At a meeting of the Seattle City Council Budget committee this morning, the city's budget analysts predicted weak growth and an ever-growing deficit of $67 million in the city's general fund for 2010-2012, $11 million more than forecast in April—which means bigger cuts to Mayor Mike McGinn's upcoming budget proposal.

So what's changed since April? Locally, construction jobs have tanked. "We’re very concerned about construction spending," said City Finance Director Glen Lee this morning. "It drove a large part of our revenue streams in the middle part of this decade. We’ve had a very, very steep decline in construction spending, we believe both anecdotally and statistically, there’s a bottom that has been hit." Lee says it might be another three to four years before the city sees construction growth. "We're very anxious about what’s in our future on the construction side," he adds.

Retail sales and B &O tax revenue have also been weak. "Since the April forecast, sales and B&O taxes have been short two-to-three percent on a month-to-month basis," said Lee. From 2003-2007, sales and B&O tax growth averaged 8.5 percent annually. From 2010 to 2014, that annual growth is projected at a weak 5.4 percent.

Seattle City Council Member Sally Clark asked for clarification on the weak growth levels, saying "to the average person, it's still great that we're growing."

Oh, but it's not, said City Budget Director Beth Goldberg: "A lot of our programs were supported by the rainy day fund," she explained, speaking to the importance of preserving some of those funds. "When you back that out, the growth rate in revenues, while still going up, is even more modest."

Meanwhile, nationally weak job and economy growth have contributed to our growing deficit (the GDP slowed from 3.7 percent growth during the first quarter to 1.6 percent growth). And compounding the problem is the growing risk of a double-dip recession, which would result in an estimated $12.7 million loss for the city in 2011 and $28.2 million in 2012, according to the city's Department of Financial and Administrative Services.

Seattle isn't the only municipality facing depressing financial forecasts—King County, the state, and Sound Transit are also facing greater-than-expected shortfalls.

The bottom line, says Goldberg, is that "We're in uncertainty. This recession has been a different beast from what anyone would’ve projected."

McGinn is scheduled to present his budget proposal later this month.