August 10, 2020
Today the Seattle City Budget Office (CBO) released an updated revenue forecast for the city. General fund revenues for 2020 are now expected to be $1.194 billion—15.0 percent below the level of revenues assumed in the adopted 2020 budget ($1.404 billion) and 2.1 percent below the June forecast. General fund revenues for 2021 are now estimated to be $1.254 billion (10.7 percent below the adopted 2020 budget).
Ben Noble, the director of the CBO writes, “recovery to pre-virus levels cannot be reasonably anticipated until 2023 and 2024.”
As I wrote last week, the City Council had passed—and Mayor Durkan vetoed—a bill that would use the city’s emergency funds for new spending related to the economic impacts of COVID-19. Kevin Schofield of Seattle City Council Insight notes that the Council may override the veto on Wednesday. About this potential use of the reserves, Noble writes,
And while there are additional cost saving steps we can take in 2020, a significant additional reliance on our financial reserves will be unavoidable this year, unless we were to move quickly to reduce the City’s labor costs, as we have already taken steps to reduce most non-labor discretionary spending. This need for an additional draw on our financial reserves conflicts with the City Council’s current plans to deploy the remainder of the City’s fiscal reserves for other purposes in 2020.