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City of Seattle
Gregory J. Nickels, Mayor
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NEWS ADVISORY
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| SUBJECT: Mayor Releases 2004 Proposed Budget
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FOR IMMEDIATE RELEASE:
9/29/2003 2:15:00 PM |
FOR MORE INFORMATION CONTACT:
Office of the Mayor (206) 684-4000
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Mayor Releases 2004 Proposed Budget
Nickels Pushes City to Grow Its Way Out of Recession
SEATTLE - Mayor Greg Nickels released his 2004 proposed budget today, which includes key initiatives that meet his four objectives for the city:
- Getting Seattle moving again,
- keeping our neighborhoods safe,
- creating jobs and opportunities for all, and
- building strong, healthy communities.
Seattle faces a $24 million projected General Fund revenue shortfall in 2004, which is the primary reason the mayor's Proposed Budget will focus on job growth. "This year, we've made progress on every goal, but each step brings a reminder that the strength of our city and its government hinges on an improved economy." Nickels said. "It all boils down to one thing: jobs."
There are three main reasons for the shortfall: a downturn in retail sales tax revenue for the ninth consecutive quarter, continued decline in telecommunications tax revenues, and lower-than-expected revenue from parking tickets.
Most of these shortfalls reflect continuing weakness in the region's economy. Employment levels are lower than predicted last fall. The war in Iraq hurt tourism in the spring, leading to lower hotel occupancies and tax revenues.
"This is not just a problem for Seattle. The economy in the Puget Sound region continues to bedevil forecasters throughout the region," says city Finance Director Dwight Dively. Dively emphasizes the city's long-term fiscal health is good, noting it continues to maintain significant reserves to meet its long-term obligations.
"With a continued weak economy, our task is clear," Nickels said. "The fundamental answer to our budget problems and to people in need is economic growth and jobs."
In his speech today before the City Council, Nickels challenged Councilmembers to support the creation of jobs by moving on legislation regarding Northgate. He also called on Congresswoman Jennifer Dunn to join Sen. Patty Murray, Rep. Norm Dicks and other members of Congress to break the Sound Transit logjam.
The 2004 Proposed Budget covers the second year of the 2003-2004 biennium. It is based on the 2004 Endorsed Budget approved by the mayor and City Council in November 2002. The basic structure and funding allocations of the endorsed budget have been maintained, with changes made to reflect poorer economic conditions, lower inflation, and a few significant policy initiatives.
The proposed General Fund budget for 2004 is $660 million, down from the $677 million endorsed by the City Council on a comparable basis last year. The 2003 adopted General Fund budget was $654 million on a comparable basis. The total Proposed Budget (including utilities) for 2004 is $2.583 billion, down from the $2.605 billion endorsed for 2004 by the City Council last year. The 2003 total adopted budget was $2.853 billion.
To rebalance the 2004 budget, the Proposed Budget includes cuts in almost all departments, except for small agencies whose budgets consist almost entirely of staff-related costs. Most departments were asked to reduce budgets to 2.75 percent below the 2004 Endorsed level. The Police and Fire departments were asked for reductions of 1 percent or less. Additional savings were found as a result of lower-than-expected inflation, which lowered costs for salaries and nonlabor expenditures. More than 60 full-time equivalent (FTE) positions were cut. All of these reductions are sustainable for future years. Approximately $6 million of one-time actions, such as use of fund balances, completed the process of rebalancing the biennial budget.
Budget Highlights
Keep neighborhoods safe
The 2004 Proposed Budget maintains the commitment to ensuring public safety. Uniformed police and fire staffing is kept at 2003 levels. Some reductions are made to non-uniformed positions and several reorganizations are made in the Police Department to reduce overhead.
Creating jobs and opportunities for all
The long-term solution for the regional economic slump is to create jobs to replace those lost in the 2001-2003 recession. The 2004 Proposed Budget continues efforts to stimulate economic development, including transportation improvements in urban centers, such as Northgate and South Lake Union, façade improvements and business development efforts in neighborhood business districts, and a new manufacturing and industrial business retention program in the Office of Economic Development. The budget also continues support for economic development projects in the International District, Central Area, Rainier Valley, Aurora Avenue and Pioneer Square.
Building strong, healthy communities
The Proposed Budget establishes a new account in the Neighborhood Matching Subfund to support projects in neighborhoods that have accepted growth in excess of the targets set out in the 1994 Comprehensive Plan. The budget includes $900,000 of Real Estate Excise Tax funds for projects in the 12th Avenue, Greenwood, Madison/Miller, and Pike/Pine neighborhoods. The projects to be funded were selected from high priorities identified in the neighborhood plans. The budget continues funding for other portions of the Neighborhood Matching Subfund at $3.2 million for 2004, which is the same level as provided in 2003 after mid-year reductions were implemented.
The Proposed Budget maintains the city's commitment to human service programs. No mid-year 2003 cuts were made and 2004 cuts were restricted to a small set of programs. In 2004, $450,000 of funding is added to provide replacement hygiene facilities to offset the temporary closure of the Compass Center and to expand services in at least one other hygiene facility.
Approximately $400,000 is added to the budget for community health and public health clinics in 2004 to partially offset cuts included in the 2004 Endorsed Budget. Some of this added money is due to reduced administrative expenses in the Health Department and the remainder represents additional General Fund support.
Get Seattle moving
Improving mobility and maintaining the city's transportation systems are major focal points of the 2004 proposed budget. The budget includes funding for transportation in areas targeted for growth, including Northgate and South Lake Union. The city will continue to participate in the replacement of the Alaskan Way Viaduct and begin steps to improve the Mercer Corridor. Seattle will use funds from Sound Transit and the Seattle Monorail Project to review and support development of these projects. The budget also continues efforts to improve pedestrian facilities, such as sidewalks and trails. Beginning next year, new parking meter technology that accepts credit cards and debit cards, in addition to coins, will be available to Seattle residents.
The City Council will spend October and November reviewing the mayor's 2004 proposed budget and capital improvement program (CIP). The budget and CIP must be adopted no later than Dec. 2. State law requires Seattle adopt a balanced budget.
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Office of the Mayor
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