Seattle’s budget crunch

The city of Seattle’s budget crunch illustrates the urgency of additional billions in federal stimulus money to ease the severe fiscal problems of state and local governments.

Councilmember Nick Licata reports that the city will have to cut more than $50 million from next year’s budget. Human services and public safety (police and fire) account for 49% of the city’s general fund expenditures. Fixed costs such as debt and pensions take another 13%. Unless there’s new revenue, most of the $50 million in cuts will have to come from such programs as libraries and parks.

A steep decline in city revenue has worsened the situation. Sales tax revenues were down 18% from 2008 to 2009, and real estate excise tax revenues were down 68% from their 2007 high.

The council and Mayor Mike McGinn must soon find an estimated $12 million in mid-year cuts in the current 2010 budget. When the proposed 2011 budget arrives in September, “the only options are to cut spending or find new revenue,” Licata said.

Seattle’s plight is typical of local government finances as the deep recession continues. The states have their own serious budget problems and can’t offer much help. Without bold remedial action by Congress, the people will pay in shuttered libraries, closed parks, and city services atrophied at a time of great and growing need.