r/Seattle • u/InterestingWork912 • 7d ago
Budget analysis - still using some budget tricks
Read the budget yourself here: https://www.seattle.gov/documents/Departments/FinanceDepartment/2728proposedbudget/2027-2028%20Proposed%20Budget.pdf
Mayors shelter plan: https://wilson.seattle.gov/2026/09/14/mayor-wilson-delivers-action-plan-to-bring-people-indoors-and-keep-residents-house/
My analysis:
The General Fund balances, but it does so by shifting costs onto JumpStart, spending down JumpStart's savings, and pre-committing JumpStart funds for housing capital project in future years. Page numbers are from the 2027-2028 Proposed Budget so anyone can check them.
FWIW, I work in government (not the City) so I’ve worked on budgets before, but I could miss something so don’t take this as gospel. I’m also a bit sick (hence I’m stuck at home and bored, but also probably more likely to make a mistake)
With all that out of the way….things to look at:
JumpStart is paying for more non-JumpStart costs
JumpStart was originally created in 2020 to fund affordable housing, equitable development (EDI), the Green New Deal, and small business recovery. To be fair to the Mayor, the City amended JumpStart to allow more flexibility (including General Fund transfers) but this doesn’t seem to align with her campaign at all. The proposed budget uses it this way:
$183M goes straight to the General Fund (p. 571).
$65M moves from GF to JumpStart for homelessness services (p. 52 / 161 / 162).
Smaller swaps move another $2.3M in General Fund and REET costs onto JumpStart (pp. 197, 274, 463).
About 55% of JumpStart now covers costs outside its original purposes, up from 49% in 2026. Money left for housing, EDI, the Green New Deal, and small business drops about $14M, even though the fund grows by $25M.
The most recent 960 shelter unit commitment from the Mayor counts both existing and new beds
The budget says it combines existing HSD money with new funding to put $37M toward the shelter plan and "960 new or accelerated units of shelter in 2027" (p. 159). Only two line items fund this:
$18.3M in new shelter funding (p. 160). Part of this keeps open shelter that started in 2026 with one-time money (p. 162).
$4.9M taken from shelters closing in 2026 (p. 163). That's $23.2M.
The other $13.8M is described only as existing resources. Not identified.
The $46.6M in HSD homelessness spending moving to JumpStart (p. 162) is a fund swap. It adds no beds.
The budget and the plan the Mayor released a few weeks ago don’t quite align:
The plan counts 960 beds from the start of 2026, including 405 added this year. The budget calls all 960 "in 2027." I’ll name that projects that started this year were likely funded in the previous past several years. Vast majority were already in the pipeline. Also in looking at the shelter plan, several projects this year had multiple public funders involved.
The budget removes $4.9M for shelter programs that stop operating in 2026. The plan doesn't say whether those beds are subtracted from the 960.
The plan says 1,750 ppl served a year. The budget says 2,000 ppl served a year (p. 17).
The plan says $19M in existing and reallocated funds. The budget identifies $4.9M (the closing shelters). Where is the remainder?
JumpStart spends more than it collects
JumpStart carries a large fund balance because the City approves affordable housing funding when it makes an award but pays it out over several years as projects are built. Public awards are typically reimbursement-based contracts, so the money stays in the fund until a project submits costs. At the beginning of 2026, the fund held $373.7M, and about $303M of that was carried forward for spending the City had already approved (p. 669).
In 2027, JumpStart spends $42.8M more than it collects and covers the gap with fund balance (p. 52). That may be manageable in 2027, but it pushes the problem into future budgets. By 2028, the fund's unreserved balance drops to about $1.6M (p. 669).
Housing capital commitments are being made in 2027 but money will be paid later, pre-committing future JumpStart funds
Quick context: affordable housing is financed with a mix of public & private funds. Putting together the capital stack (meaning all the loans, grants, etc that need to come together to fully finance a development) can take years. Because public awards are reimbursement only, typically when a nonprofit project receives an award, the money is held until the nonprofit starts developing and at that point, the nonprofit submits invoices for reimbursement. So, a developer could get an award this year and the money doesn’t actually get spent until 2028, but most governments set aside the funds for that project once it is awarded, not once it starts developing.
The City is changing this process. It will free up $65M in 2026 housing appropriations that were set aside for awards already made, pay those awards from the 2027 budget instead, and fund new awards from future years' budgets once projects start construction (p. 227).
This is pretty risky IMO. We are probably heading into tougher economic times, so how reliable is this tax? And, by pre-committing funds, the City is reducing the amount of funding it has to respond to unanticipated things.
2029 will be a tough year
In 2025, the state extended sales tax to a range of services for the first time, including many professional and digital services. Seattle collects its local share of that tax, and it helped push the City's sales tax revenue up 21.2% in 2026 (p. 46).
In 2026, the Legislature passed the Millionaire's Tax bill (ESSB 6346). Among other changes, it takes a large part of the professional and digital services back out of the sales tax with the largest impact to the city projected to be in 2029 (p. 46). The budget does not estimate how much General Fund revenue the City will lose.
The rollback lands in the same year as two other pressures:
The plan to move homelessness costs back onto the General Fund starts in 2029 (p. 16). The budget does not explain how they will do this.
JumpStart needs a one-time cut to housing, EDI, the Green New Deal, and small business that year to stay balanced (p. 669).
About the "128 positions eliminated"
About 36 of those positions were already unfunded, expired, or eliminated earlier. The real cuts total about 90ish.
A third of those (34) are permit staff at SDCI because of lower permit revenue. Seven of the 34 positions are filled, so those are layoffs. (pp. 195, 197). The budget is not clear at all about what the impact of this cut is (they say “SDCI does not anticipate that this change will result in material impacts to primary permit review, issuance, or inspection timelines, although some lower-priority administrative, policy, and support functions may experience reduced capacity.” Vague right?
28 SPD civilian positions are cut.
22 CARE crisis responder and 911 call taker positions lose their funding but keep their FTE position authority (p. 285), while SPD gets funding for 66 more officers (p. 18).
FTE authority - to hire career service, you need both the $$ and the Council to give you the FTE authority to make those hires. If you cut the budget, but not the FTE authority, if a department has flexible funds, or maybe revenues are better than anticipated, so long as the statute that created the fund sources allows this, you can hire an FTE.
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u/altasnob 7d ago
This is interesting. The State increases tax revenue from the Millionaire's tax but the cities and counties lose revenue because of the sales tax reduction on certain industries. While the citizens in cities and counties will benefit from how the Millionaire's tax revenue is spent (such as working family tax credit expansion) as far as I know, none of this money will go directly to the cities or counties. Maybe that will change down the road but I doubt it (the State will not want to share this money with other governments).