Pledging to transform the budgeting process and to deliver basic services more efficiently, Mayor Ed Murray on Monday presented his two-year city budget to the Seattle City Council.
The mayor's proposal, the first budget since he took office this year, includes $4.8 billion in total funds in 2015 and nearly $5 billion in 2016, with roughly $1 billion in general fund expenditures each year. Central to the mayor's speech Monday was a theme he and his staff have repeated often in recent weeks: Despite an economic upswing in Seattle, the city remains stretched thin financially.
Mayor Ed Murray presents his 2015-2016 city budget to the Seattle City Council. Photo: Bill Lucia
"We are now the fastest-growing city in America," the mayor said during his speech in the City Council chambers Monday afternoon. "And yet, the city budget is not keeping pace with existing demand for services."
The general fund is the main pot of money for basic services such as firefighters, police, parks and libraries. Seattle City Light and Seattle Public Utilities account for big chunks of the total budget figures, but generate much of their cash from ratepayers, wholesale revenue, fees and bonds.
Property taxes, sales taxes, business taxes and utility taxes are the three biggest streams of general fund revenue. Under Murray's proposal, the general fund would rise to nearly $1.07 billion by 2016, a 4.3 percent increase compared to this year's figure of $1.02 billion. The increase would cover both rising costs and new initiatives.
Driving local economic growth are the technology and aerospace sectors, as well as a construction boom, according to the Mayor's Office. As these industries hum along, the city benefits financially. But stubbornly sluggish sales tax revenues, and state-imposed constraints on the rate at which city property taxes can increase, have hemmed in the amount of money Seattle is collecting.
Annual taxable retail sales in the City of Seattle. Source: Washington State Department of Revenue
"Even as the local economy has recovered, we have not seen a strong rebound in city revenues," Murray said during his speech.
At a press briefing after the speech, city budget director Ben Noble noted that, in the wake of cuts brought on by the recession, city departments are seeking fresh resources.
"The departments have had a pent-up demand," he said. "They're hungry and thirsty to break free of that, and they have a long list of ideas and staffing needs."
"We're not seeing the kind of revenue growth to support that," Noble added.
Because of state law, Seattle's property tax growth, not including voter approved levies, is limited to 1 percent annually, plus the amount of any additional property taxes generated from new construction.
Projections for next year, including new construction, estimate that total growth will be in the neighborhood of 1.5 percent, according to Noble. Property taxes flowing to the general fund would amount to roughly $271 million, about 26 percent of the fund's total revenues.
Construction in Seattle (August)/Gregory H (Flickr)
The mayor's budget includes a one-time expenditure of just over $1 million for filling 25 vacant firefighter positions in 2015, and another $1 million in ongoing funding to station a new emergency medical services vehicle and EMS staff near Pioneer Square.
Murray also wants to see police staffing rise to an all-time department high of 1,336 fully trained officers by the end of 2016.
Council President Tim Burgess voiced some skepticism about that proposal during an interview after Murray's speech.
While he supports replacing officers to maintain current staffing levels, Burgess said he would not back a net increase in the number of cops until the police department completes a management assessment and a deployment study the City Council requested last year.
"I think what has become apparent over the last year and a half," Burgess said, "is that internal police department management and business protocols, and deployment of resources, is far worse than we imagined; that's why we need this information."
On the transportation front, Murray proposed $8 million across the two years for resurfacing and repairing city streets, $800,000 for the development of the downtown cycle-track network to improve safety for bicyclists and $2.4 million for greenways along the 23rd Avenue corridor in the Central Area.
The budget would create a new Transit Division, within the Seattle Department of Transportation, to coordinate streetcar services and any bus service the city purchases from King County Metro Transit. City voters will decide in November on whether to approve a 0.1 percent sales tax increase and a $60 vehicle licensing fee to help buy back Metro service hours that are currently slated for cuts.
To enforce the city's paid sick leave rules and recently adopted minimum wage ordinance, which increases Seattle's pay floor to $15 per hour over the coming years, the mayor proposed creating an Office of Labor Standards within the Office for Civil Rights.
The budget also includes a new office focused on helping domestic violence and sexual assault victims. During last year's campaign, Murray and his opponent, then-Mayor Mike McGinn, clashed over McGinn's decision to eliminate the city's division of domestic violence and sexual assault and its director.
In terms of employees, Murray's proposal would add the equivalent of almost 190 full-time positions, to the tune of about $21 million. Roughly $6 million of that amount would come from the general fund.
While there are no tax increases proposed in the mayor's budget, there are a number of ballot initiatives in the offing designed to raise new revenue.
Along with the bus funding measure, the November ballot will also include an initiative to fund universal pre-school with a property tax increase. And in August, city voters approved a ballot measure to create a parks district that would levy its own property taxes.
Meanwhile, the Bridging the Gap levy is set to expire next year. Approved in 2006, the levy has provided a key source of funding for Seattle Department of Transportation maintenance projects, including $120.6 million of expenditures in 2013 alone.
"I think it's pretty obvious that lacking some big change on the state level," Burgess said, "we're going to have to see that renewed."
Murray noted in his speech that he felt the budget process itself is flawed. The process, he said, focuses on spending additions and cuts, without looking closely at the base-level of expenditures; different accounting systems across departments also make that base number somewhat difficult to understand.
"This system is outdated, it is obscure and it is inefficient," Murray said. "It provides no guarantees that we are paying for outcomes or making progress on the issues our expenditures are meant to address."
Over the coming years, the mayor said, he would like to work with the City Council to move toward a performance-based budgeting approach that allocates money based on outcomes, which will include new systems and metrics for tracking department goals.
"We will use data, not tradition, to drive how government functions," Murray said.
Councilmember Nick Licata cracked a smile when asked about the mayor's ambitions for reforming the budget process.
"I've heard of performance-based budgeting more than once from prior mayors," Licata said, adding that he backs the idea. "What every mayor discovers is that each department offers an opportunity for resistance to his goals."
Licata, who chairs the Council's Budget Committee, was generally supportive of the mayor's proposal, but there was one thing he did not hear in the speech.
"I think the biggest unspoken element was the need for new revenue," he said.
Licata's preferences for generating new city income would be a commercial parking tax increase, a so-called "head-tax" on businesses, which would be based on the number of their employees, and fees charged to developers.
He also said that he would like to see the Council look more closely at both police staffing and human services programs.
"We have to get, particularly, families and children off the street," he said.
Murray said during the speech that he has asked Human Services Director John Okamoto to conduct an audit of the city’s nearly $35 million annual investment in homelessness services.
The City Council's budget committee will begin taking a closer look at the budget before the end of the month. The Council's budget deliberations typically last until late November.