Seattle returned from the Labor Day weekend to an update on the city's revenue forecast for the 2013-2014 budget from Mayor Mike McGinn. In a press conference this morning, McGinn did his best to tout modest revenue increases and initially conservative projections that have turned out better than anticipated, while at the same time tempering excitement and repeatedly reminding the media assembled that the city wasn't out of the woods yet.
"We're fortunate because we're outperforming expectations a little bit," said McGinn, noting that the modest improvement in budget projections should allow the city to make prioritized investments in 2013 and 2014 in areas like education, job growth, transportation and public safety - as long as the city continues to be wise with its money and prudently conservative with its budgeting.
According to McGinn's office, a 6.6 percent increase in job growth, a 13.2 percent growth in taxable sales from the first quarter of 2010 to the first quarter of 2012, and growth in the construction, tourism, and tech fields are at the root of the improved outlook for the city's 2013-2014 budget.
As a press release distributed by McGinn's office notes:
Since the end of the Great Recession, employment growth in the Seattle Metro area, which includes King and Snohomish counties, is up 6.6%, compared with the rest of the United States at 3.1% and the rest of the State of Washington at 1.9%. Taxable sales growth from the First Quarter of 2010 to the First Quarter of 2012 in Seattle is 13.2%, compared with the State of Washington at 6.3%, King County at 8%, and Tacoma at 8.2% over the same time frame. Activity in the construction, technology, tourism and the housing sectors accounts for much of this growth.
This local strength has had positive results for the City's current-year revenue collections, particularly sales tax receipts. Collectively, actual revenue collections for 2012 are trending ahead of forecast by about $7.6 million. This is driven in part by economically-driven growth such as sales tax. Taxable sales in the construction industry are up 34%, driven mostly by apartment construction. Real Estate Excise Taxes are up, as are B&O taxes. City revenue collections are further enhanced by one-time, non-economic boosts to current year revenues from things like the City's share of liquor store proceeds following the privatization of liquor stores in Washington State. The revenue picture is also helped by the anticipated increase in the county EMS property tax levy rate for 2014.
Taken together, the City's revenue forecast adds $11.4 million in additional revenue to the City through 2014. This forecast will help the City work to close the previously projected $32 million General Fund budget shortfalls in each 2013 and 2014. Other factors helping our outlook include the passage of the Library Levy, cost savings negotiated with firefighters, and the conclusion of negotiations with the Department of Justice.
"I want to be clear: we are not where we were before the Great Recession hit," said McGinn.
"The goal is to be frugal, be efficient, and make smart investments."
McGinn is scheduled to announce the details of his 2013-14 budget on Sept. 24, saying this morning that over the next few weeks he'll start talking about specifics.