| Shortfall in City Revenues
Dear City Employees:
Today, I met with department directors and informed them that the recession has caused a worsening shortfall in City revenues.
Despite some encouraging signs in the national economy, the Seattle area shows no sign of pulling out of the recession. We are now seeing the ninth consecutive decline in quarterly sales tax revenues.
New estimates show a growing gap between expenses and revenue projected when the 2003-2004 General Fund budget was adopted last November.
In response, today I've ordered:
- An immediate freeze on hiring by all departments, including utilities
- Restrictions on travel by city employees
- Immediate steps by all department heads to spend less than their authorized budget levels for this year
In April, we saw the shortfall developing, and we began to make budget reductions, but the gap has grown.
For 2003
In April, we expected a revenue shortfall of $4.7 million. Today, that projected shortfall has grown to $14 million.
For 2004
In April, we expected a revenue shortfall of $9.8 million. Today, that projected shortfall has grown to $24 million.
Over the next few weeks, I will meet with department heads to review options for spending reductions. These cuts will be painful, but we must get expenses in balance with revenues. City government must live within its means. We will take every step to minimize the impact on you and other employees, but some reductions in city positions may be necessary.
I realize this uncertainty is difficult for people who look to the City for services as well as you and your families. I will keep you informed as the budget process goes forward.
As always, I thank you for your hard work.
Sincerely,
Greg Nickels
Mayor
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