Seattle faces deteriorating economic outlook

There's some bad news for the Seattle economy as widespread inflation continues to cause concern.

Office of Economic and Revenue Forecasts Director Ben Noble says the city's overall economic outlook has worsened since August.

"Economic conditions have continued to deteriorate and expectations about future conditions have also deteriorated," Noble said.

Noble says the updated forecast shows the city's revenue will drop by nearly $80 million over the next two years.

Seattle City Council budget chair Teresa Mosqueda says this breaks down to a $64 million decrease in Real Estate Excise Tax (REET) revenues, a decrease of $9.4 million in general fund revenues, and a net decrease of $4.5 million in revenues from Seattle's Sweetened Beverage Tax.

“Today’s revenue forecast demonstrates the instability and insufficiency of the existing revenue streams to meet the growing needs of Seattle’s residents and the inequities exacerbated by Covid-19,” Mosqueda said in a statement. “We will respond with urgency and compassion to this new revenue forecast by continuing to craft a budget that focuses on core city services, avoids austerity, and invests in a more equitable economy. Today’s revenue forecast news amplifies the need for more long-term, sustainable, progressive revenue for future budgets to ensure we can meet the needs of our city’s residents, infrastructure and local economy.”

Mosqueda's office also said the council will now need to push out its usual budget timeline. So the council's balancing package will now come out on Nov. 14. A final vote is now set for Nov. 29.

“Updating our budget calendar will give us the time needed to account for the updated revenue forecast in our balancing package, in an intentional and thoughtful way,” Mosqueda said.

Mosqueda commented that newer progressive revenues will be needed to keep Seattle afloat, pointing to the JumpStart tax as an example.