Grim forecast to bring new cuts in city budget

The city of Seattle must trim up to $17 million from this year's budget to cope with anticipated state and federal cuts and some lower-than-projected revenue forecasts, city officials said Wednesday.

Mayor Mike McGinn and Budget Director Beth Goldberg said they would direct city department heads to identify 3 percent in cuts by the end of April.

The mayor said he would consider the recommendations, but may not cut all departments equally.

The reductions would take effect July 1.

"The longer we wait to take action, the less time we have to accumulate savings," Goldberg said.

This is the latest hit to the budget since last fall, when the City Council closed a $67 million shortfall in the 2011 general fund by raising fees and reducing services.

Neither the state nor federal government has yet adopted 2012 budgets, but based on preliminary reports, Goldberg said, aid to the city could drop by as much as $4.8 million.

She said city revenues have largely stabilized, after several years of falling, but some are coming in at lower rates than projected.

Higher parking-meter rates of up to $4 an hour were projected to bring in $35 million in new money. But the City Council lowered the planned rates in a few neighborhoods, which will cost the city about $3.5 million, Goldberg said.

Utility taxes for telephones and garbage haulers are running about $4 million less than projected. The Seattle Department of Transportation spent $525,000 more than it budgeted on winter-storm response.

Additionally, a state panel is recommending lowering the caseload of misdemeanor public-defense attorneys. More lawyers could cost $333,000 extra.

Federal Community Development Block Grant money, which fund city homeless shelters, may be cut by $2.8 million, but that number is in flux as Democrats and Republicans in Congress argue over how deeply to cut the federal budget.

"There are so many uncertainties that these numbers are likely to change," Goldberg said.

In addition to the immediate shortfall, the city faces long-range challenges, including how to pay for street improvements, parks and community centers. The city's costs for pensions and health care also are likely to increase, McGinn said.

"We hope things will get better, but they could also get worse," he said.

Last year, to close the $67 million shortfall in the $895 million budget, the city eliminated about 300 positions, reduced hours at community centers, cut park maintenance, raised some fees and won wage concessions from unions.

Lynn Thompson: 206-464-8305 or lthompson@seattletimes.com