City government faces budget deficit.

The City Budget Office (CBO) currently estimates an ongoing budget deficit of approximately $300 million out of our $1.7 billion General Fund and related accounts.

For the April 22, 2020 presentation by City Budget Office (CBO) regarding budget deficit, CLICK HERE.

The city government has only $125 million in emergency funds. Therefore, it may be necessary to find cost savings, which could include rolling back the new pay raises for the highest-paid city government workers (except for sworn police officers and firefighters). During these difficult times for our city budget, Councilmembers should considering taking a pay cut, too. Subject to hearing more from constituents and conferring with my city government colleagues, I want to make sure we preserve human services and public safety.

(Note: the entire city government spends $6.5 billion each year, but that grand total includes our utility operations and capital improvement / infrastructure programs, while city budget officials typically focus on the more flexible “General Fund” dollars.)

New funds from federal and state governments focused on COVID relief and economic stimulus.

For the April 28, 2020 presentation by Mayor’s Office, City Budget Office, and Office of Housing regarding federal and state financial aid due to COVID-19 public health pandemic and economic crisis, CLICK HERE.

So far, our City Budget Office has tallied approximately $170 million that our City government would receive. This does NOT include the loans backed by the federal government to small and large businesses or the grants to Washington State government to boost our State’s unemployment insurance benefits paid to those laid off due to the COVID crisis. It also does NOT include grants that our transit agencies will receive from the CARE Act: $243 million for King County Metro (buses) and $166 million for Sound Transit. In addition, we expect the federal government to provide more funding focused on repairing/constructing infrastructure and other stimulus spending.

The federal government is allowed to create and increase its own budget deficits and often increases spending to stimulate the economy (fiscal policy). State and city governments, however, are required to have balanced budgets.

Posted: April 29th, 2020 under Councilmember Pedersen