Another $11 million shortfall for Seattle

The Seattle City Council got a bleak budget forecast Tuesday, as city finance staff said to expect a $67 million shortfall next year.

That's $11 million worse than previously forecast, and means Mayor Mike McGinn will propose even more cuts than anticipated, when he presents his budget in three weeks. The mayor was already warning to expect layoffs, increased fees and drastic cuts to city parks and other services.

Seattle's general fund is about $905 million this year.

"I think this forecast demonstrates that we are still in a time of volatility and uncertainty," said budget director Beth Goldberg.

King County and the state recently got the same kind of update.

Nationally, economic recovery is not happening as quickly as expected.

At a briefing last week about the state economy, chief economist Arun Raha told lawmakers that, "Economic activity has slowed to an agonizing crawl."

Voter decisions on several initiatives in November will affect Seattle's budget. If voters pass state Initiative 1107, removing sales taxes on candy, soda, gum and bottled water, the city would lose about $1.2 million next year. If one of two liquor-privatization initiatives were to pass, the city would lose between $2 million and $4 million in 2011.

On the other hand, if King County voters were to agree this fall to a sales-tax increase, the city would gain $8.7 million, a third of which would have to be spent on public safety, Goldberg said.

City Council Budget Chairwoman Jean Godden said she still hopes to balance the city budget without making cuts to public safety or human services.

"I think that understanding the circumstances of the reality the economy hasn't improved ... it's not a pleasant surprise, certainly," she said.

Besides cuts, the mayor and council are expected to approve an increase to the commercial-parking tax and car-tab fees. They are also considering forming a citywide transportation taxing district that would give them greater taxing authority.

Godden said she supports a taxing district, which has been used in other cities in the area.

McGinn is scheduled to present his budget proposal Sept. 27.

Emily Heffter: 206-464-8246 or eheffter@seattletimes.com