More jobs to keep Seattle economy moving—Nickels

SEATTLE—Faced with a $24-million projected general fund revenue shortfall in 2004, Mayor Greg Nickels last week proposed a city budget that would cut allotments in almost all departments. It also focuses on job growth to keep Seattle’s economy moving.

“This year, we’ve made progress on every goal, but each step brings a reminder that the strength of our city and its government hinges on an improved economy,” Nickels, in a speech to the City Council, said.

“It all boils down to one thing—jobs,” he added.

Nickels cited three main reasons for the projected shortfall: downturn in retail sales tax revenue for the ninth consecutive quarter, continued decline in telecommunications tax revenues and lower-than-expected revenue from parking tickets.

Most of these shortfalls reflect continuing weakness in the region’s economy, Nickels said. Employment levels are lower than predicted last fall. The war in Iraq hurt tourism in the spring, leading to lower hotel occupancies and tax revenues.

The proposed $660 million biennial budget is $77 million includes cuts in almost all departments, except for small agencies whose budgets consist almost entirely of staff-related costs. Most departments were asked to reduce budgets to 2.75 percent below the 2004 endorsed level. The police and fire departments were asked for reductions of 1 percent or less.

Additional savings were found as a result of lower-than-expected inflation, which lowered costs for salaries and non-labor expenditures.

More than 60 full-time equivalent (FTE) positions were cut.

"This is not just a problem for Seattle,” City Finance Director Dwight Dively said. “The economy in the Puget Sound region continues to bedevil forecasters throughout the region.”

Dively, however, emphasized that the city's long-term fiscal health is good, noting significant reserves to meet its long-term obligations.

Budget highlights:

• The proposed budget keeps uniformed police and fire staffing at 2003 levels. It, however, reduced some non-uniformed positions and reorganized the the police department to reduce overhead.
• The proposed budget continues efforts to stimulate economic development, including transportation improvements in urban centers, such as Northgate and South Lake Union, façade improvements and business development efforts in neighborhood business districts, and a new manufacturing and industrial business retention program in the Office of Economic Development. The budget also continues support for economic development projects in the International District, Central Area, Rainier Valley, Aurora Avenue and Pioneer Square.
• The proposed budget establishes a new account in the Neighborhood Matching Subfund to support projects in neighborhoods that have accepted growth in excess of the targets set out in the 1994 Comprehensive Plan. The budget includes $900,000 of Real Estate Excise Tax funds for projects in the 12th Avenue, Greenwood, Madison/Miller, and Pike/Pine neighborhoods. The projects to be funded were selected from high priorities identified in the neighborhood plans. The budget continues funding for other portions of the Neighborhood Matching Subfund at $3.2 million for 2004, which is the same level as provided in 2003 after mid-year reductions were implemented.
• The proposed budget restricted cuts to human services programs. It added $450,000 to fund hygiene facilities to offset the temporary closure of the Compass Center and to expand services in at least one other hygiene facility.
• The proposed budget includes funding for transportation in areas targeted for growth, including Northgate and South Lake Union. The city will continue to participate in the replacement of the Alaskan Way Viaduct and begin steps to improve the Mercer Corridor. Seattle will use funds from Sound Transit and the Seattle Monorail Project to review and support development of these projects. The budget also continues efforts to improve pedestrian facilities, such as sidewalks and trails. Beginning next year, new parking meter technology that accepts credit cards and debit cards, in addition to coins, will be available to Seattle residents.

Office of the City Mayor release, September 29

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