SEATTLE — The City of Seattle is facing an expected budget shortfall of around $230 million by next year. But that deficit could increase even more by next week, if the Seattle City Council approves pay raises above what was budgeted for.
Next week, the Seattle City Council is expected to consider legislation allowing for pay raises for approximately 11,000 city employees. Although Seattle Mayor Bruce Harrell said they had budgeted for these increases, the cost ended up being millions of dollars more than expected.
“There's always concerns when looking at the budget restraints in the city. We put through adequate reserves to address this, but still there's approximately $10 million for this year that we'll address,” said Harrell.
A financial impact review done by the city stated, "the cost of the final terms of the coalition agreement, and the comparable terms to be provided to other city employees, exceed the costs anticipated and planned for in the 2024 budget process” and that there will be “immediate budgetary impacts."
Harrell sent the legislation to the council for approval, following agreements the city came to with several unions that represent city employees. In addition to the raises for union employees, the mayor’s office is also proposing those same raises for employees who are not represented by the unions. This is what the city has done in the past as well.
Harrell said these increases are needed, even if it costs the city more money. He said many employees have not received wage increases in years and the increase is necessary due to increasing cost of living and to retain employees.
“We looked at who we are competing against. We're competing against the private market. A strong component of this union are there are many jobs that are significantly underpaid,” said Harrell.
Most employees would see a 5% increase in retroactive pay for last year and a 4.5% increase for this year.
Since the city did not budget enough money for these increases, it is projected to boost the city's deficit from $230 million to $240 million dollars next year and then to $245 million dollars in 2026.
Balancing the budget is something the mayor said the city will continue to work on this year.
“This is our opportunity to rethink government, to look at past assumptions, to look at what lines of business we can stop, where we need to increase, where we need to merge, look at where we are just wasting money possibly,” said Harrell. “So we're going through that process right now.”