A workgroup of “civic, policy, community, and business leaders” tasked with unearthing possible new alternative revenue sources for the City of Seattle will present a report Thursday with nine “new or expanded taxes” for leaders to consider.
Meanwhile, the council is also scrambling to explain exactly why the city is in such a rough financial position.
The Seattle City Council’s Finance and Housing Committee will review the Revenue Stabilization Workgroup report Thursday morning as the city faces “a structural budget deficit upwards of $200 million.” The taskforce was convened last year to create and recommend options to narrow that gap.
“Given the looming gap between projected expenses and projected revenue, we all must find solutions to close this gap with additional revenue. I appreciate that this report outlines what options exist,” Councilmember and committee chair Teresa Mosqueda said in a statement. “New revenue is critical to creating a resilient economy and avoiding an all-austerity budget, which we know harms families, businesses, and slows growth.”
The city says the group came up with a list of over “60 potential ideas,” and then used evaluation criteria to narrow the list to nine new or expanded taxes, “all of which are options – not recommendations – that the City may consider implementing.”
Revenue Stabilization Workgroup Options
- Changes to JumpStart Payroll Expense Tax;
- City-level Capital Gains Tax;
- High CEO Pay Ratio Tax;
- Vacancy Tax;
- Progressive Real Estate Excise Tax;
- Estate Tax;
- Inheritance Tax;
- Congestion Tax; and
- Income Tax.
The full workgroup report is embedded at the end of this post with details on each of the possible alternative revenue opportunities.
The city’s 2023 budget plan provided money for more cops, and increased spending for human services but leaned heavily on the JumpStart tax on the city’s largest employers amid a predicted downturn in city tax revenues.
Wednesday, a city council statement on the committee session also included three factors that have Seattle City Hall facing a budget deficit:
The years preceding the pandemic, rapid growth in revenues and a low inflation environment, enabled the city to significantly expand city services in response to community needs (2012-2019).
The Covid-19 pandemic reduced ongoing general fund revenue while the service needs increased, requiring the use of one-time revenues to balance the general fund budget (2020-2024).
In the current post-pandemic period, portions of the City’s tax base are still below pre-pandemic levels, resulting in use of one-time funds to pay for ongoing spending. This transition to a low-growth, high-inflation economy, leads to structural deficit projection.
“The City is facing an annual budgetary cliff starting in 2025, with a revenue deficit average of approximately $224 million each year for the next six years,” the council announcement reads.
The Revenue Stabilization Workgroup member roster is below:
- Teresa Mosqueda – Seattle City Councilmember, Budget Chair, At-large/Position 8
- Tiffany Washington – Deputy Mayor, Seattle Mayor’s Office
- Louise Chernin – former Executive Director, Greater Seattle Business Association
- David Frockt – former Washington State Senator, 46th Legislative District
- Joe Fugere – Founder, Tutta Bella
- Katie Garrow – Executive Secretary-Treasurer, MLK Labor, AFL-CIO
- Lindsey Grad – Legislative Director, SEIU Healthcare 1199NW
- Alisha Gregory-Davis – Coalition of City Unions Representative
- Andrew Guillen – Chief Public Affairs Officer, Seattle Indian Health Board
- Hyeok Kim – Principal, Insa Consulting; former Deputy Mayor of Seattle
- Patience Malaba – Executive Director, Housing Development Consortium
- Darrell Powell – Managing Director, Pinnacle Financial Services, PLLC
- Rachel Smith – President and CEO, Seattle Metropolitan Chamber of Commerce
- Misha Werschkul – Executive Director, Washington State Budget & Policy Center
- Katie Wilson – General Secretary, Transit Riders Union