SEATTLE (AP) - New projections show the coronavirus pandemic may cause Seattle to collect $210 million to $300 million less than expected in tax revenue this year, Mayor Jenny Durkan announced Tuesday.
The city’s general fund, which pays for basic services such as parks and police, could be down by as much as $186 million, while other revenue sources that pay for other services could fall by as much as $114 million, The Seattle Times reported. The resulting $300 million shortfall would mean a 18% reduction in expected revenue.
The projections are based on”rapid recovery” and “slow recovery” economic forecasts that indicate the Seattle area could shed 65,000 to 170,000 jobs this year, according to a presentation by the city’s budget office.
The city’s budget relies greatly on property taxes, sales taxes and business taxes. Sales and businesses taxes are expected to plunge this year, as are real estate taxes.
The new projections are worse than a month ago, when the budget office predicted a $110 million general-fund shortfall.
“The COVID-19 pandemic has become one of the most consequential and transformative events of our lifetime,” Durkan said in a statement. “We are rethinking how city government can respond to the urgent needs of our community and create a foundation for recovery.”
Seattle has about $67 million in an emergency fund designated for surprise expenses and about $61 million in a revenue stabilization account sometimes referred to as the “rainy day fund” that is held for shortfalls, according to the budget-office.
The city also could reallocate levy dollars and seek additional state and federal assistance.
Seattle’s departments have stopped hiring as well as stopped spending on travel and are curbing spending not related to the coronavirus crisis, Durkan said.
City councilwomen Kshama Sawant and Tammy Morales have proposed a new payroll tax on large businesses, saying the measure could raise as much as $500 million a year. The council’s budget committee is scheduled to discuss it Wednesday.
Please read our comment policy before commenting.