Well, Seattle. It's budget season.
The whole 2020 rebalancing budget process—all three months of discussion, a veto, and a veto override—wrapped up just in time for Mayor Jenny Durkan to unveil her 2021 budget plan. Durkan (who went by "jenny d" on WebEx) and Ben Noble, director of the Seattle City Budget Office, went over the budget in a press conference this morning.
Durkan's 2021 budget navigates COVID-19 deficits, shows a reliance on the new payroll tax that Durkan didn't sign into law, hints at the $100 million Durkan is setting aside for investment in local Black, Indigenous and people of color (BIPOC) communities, and outlines some vague Seattle Police Department defunding (or, reimagining? I forget what the appropriate buzzword is here).
In unveiling her budget, Durkan stressed the need to find more progressive revenue alternatives since "we rely primarily on regressive taxation." While projections show that some revenue sources may recover in the near future and the federal government could step in with more relief funding (though there's not even a whiff of this happening yet), the budget as it stands now is a product of creative rebalancing in order to preserve basic government functions. That comes at a cost.
The city's general fund, or the pool of money meant for general governmental operations, is around $1.5 billion while the complete city budget, which includes the budgets of utilities and other departments, sits at $6.5 billion.
Normal funding mechanisms for the general fund and for the rest of the city's budget have been hit hard due to COVID-19 and its economic impacts. That's stuff like the sales tax, business and operation taxes, and even the money from commercial parking. In order to meet numbers nearly identical to the budget passed in 2019, Durkan relied on money from the city's emergency funds and the new JumpStart Seattle high-earner payroll taxed passed this summer.
On top of that, the city will maintain hiring freezes, lay off around 40 employees, and pause some capital projects. The city provided no details about who they will lay off and which projects they will pause.
The JumpStart Seattle payroll tax, passed this summer by the Seattle City Council, imposes taxes on businesses with $7 million annual payrolls that pay employees over $150,000. The tax will raise around $214 million a year. Durkan never signed the bill and instead passively let it go into law. She was a stalwart critic of implementing the tax. In fact, she vetoed the bill outlining the tax's spending plan. Council overrode that veto. Now, Durkan is relying heavily on the tax she didn't support to balance out the city's budget. Classic.
"I had concerns and continue to have concerns that we levied that tax on only Seattle businesses," Durkan said, parroting the fear that businesses will leave Seattle for Bellevue. "I think we should have a city-wide income tax and more progressive revenues other than Jumpstart."
Durkan plans to lobby the state legislature to allow Seattle to pass an income tax. However, that work will take time. In the interim, she's fine spending the JumpStart money to rebalance the budget.
JumpStart's spending plan earmarked money for building affordable housing in the longer-term and for funding various COVID-19 relief efforts in the shorter-term, which raises the question of whether Durkan plans to use these funds for rebalancing the budget when they should have been spent elsewhere.
According to Noble, using the funds to rebalance the budget is "entirely consistent" since the spending plan stated the funds in 2021 would be used for "sustaining city services and COVID response."
Durkan chimed in to remind listeners that "funds aren’t dedicated in resolutions," implying that she had control over how JumpStart money will be spent.
However, as PubliCola originally reported last week, Durkan intends to use JumpStart money (as well as money from the Uber/Lyft tax) to fund her $100 million investment in BIPOC communities. The “Equitable Investment Task Force” will determine how the city spends that money, according to the Mayor. The new "Director of Recovery and Equitable Investment," a position that hasn't been filled and that boasts a salary of $120,000 to $180,000, according to PubliCola, will steer the yet-to-be-named members of the task force.
It's unclear how this task force will function differently from the participatory budgeting process that King County Equity Now kicked off yesterday, which the council supported with $3 million. Durkan said she believes they could work together.
Noble said that the city will try to find a "sustainable funding source" for the $100 million by 2022.
Protesters and organizers this summer (and continuing well into this fall) demanded the city find that "sustainable funding source" in SPD's budget, but Durkan's plan for SPD doesn't meet that demand.
In fact, Durkan's plan for SPD is pretty... underwhelming. The budget includes the changes to SPD that Durkan highlighted this summer. She's moving four departments and their budgets (911 call center, Office of Emergency Management, victim advocates, parking enforcement) out of SPD and either into other city departments or into their own independent department. While on its surface that looks like a sweeping $59 million cut to SPD's budget, it's just a transfer of departments out of SPD's control.
The only significant cut is a reduction in sworn officers and overtime hours, plus a hiring freeze, which will reduce the budget by $22 million. It is unclear how much of these layoffs are from natural attrition.
Durkan said she is looking into more significant cuts, with an emphasis on "looking into." Before any change can happen, the city's Joint Interdepartmental Team (IDT) will analyze 911 call data and overtime policies. Durkan will sign an Executive Order this week with a timeline for that analysis but a final report won't be done until 2021. That means it'll be some time before any big changes happen to SPD, according to Durkan's budget plan.
While things are looking okay as far as spending for general government functions, specific departments are facing big budget holes. The Seattle Department of Transportation, which got hit hard with low gas tax and commercial parking revenues, is facing reductions. Some of that can be alleviated if the Seattle Transit Benefit District renewal is passed by voters this November. The Seattle Parks Department is also facing setbacks that will result in project delays, maintenance reductions, and more.
From now until mid-November, the council will hold meetings on this budget. Their meetings will start tomorrow, with sessions at 9:30 a.m. and 2:00 p.m. every day for the rest of the week. City departments will filter into council to discuss their specific budgets, laying out what and who they may lose to cuts.