Seattle Faces $140M Budget Deficit

The city's financial strain stems from multiple sources, including the end of federal pandemic aid and key tax revenues failing to keep pace with inflation. A slowdown in the construction sector and weaker-than-expected revenue from the JumpStart payroll tax, which is tied to the performance of major tech employers, have also significantly contributed to the budget gap. To manage the shortfall, the Mayor’s office has diverted funds from the JumpStart tax, originally earmarked for affordable housing and climate initiatives, to the city's general fund. The 2026 budget proposal also relies on voters passing a restructured Business and Occupation (B&O) tax and a new Public Safety Sales Tax to generate an estimated $120 million in new revenue. Despite the city-wide hiring freeze announced in early 2024, public safety positions, including firefighters, were explicitly exempted to address staffing shortages. This exemption is critical for the Seattle Fire Department, which has been struggling with high vacancy rates and using overtime to meet minimum daily staffing levels. In fact, the proposed 2026 budget boosts SFD's funding to hire more firefighters. The plan allocates $2.1 million to train an additional 20 recruits, bringing the total number of funded recruit positions to 100 for the year, directly aimed at reducing department overtime. A portion of this new investment is tied to the proposed Public Safety Sales Tax, which is expected to provide $3.2 million to SFD. Beyond funding the new recruits, this revenue is also designated to expand the department's Health 99 post-overdose response team, increasing its operational hours to seven days a week.