Tax and spend: Seattle outpaces other governments

The City of Seattle's operating budget has increased by 65 percent since 2000, a significantly faster clip than the jumps in spending at King County and the state.

But it still hasn't been enough.

Seattle faces a $67 million deficit next year, a situation that has led Mayor Mike McGinn to propose broad cuts to next year's city budget -- including the elimination of nearly 300 jobs and reductions to the arts, neighborhoods and human services.

Most governments are underwater due to a combination of rising expenses and tax revenues coming in at a slower than expected rate due to the Great Recession. However, Seattle has outpaced others when it comes to taxing and spending, according to a review by seattlepi.com.

King County's operating budget has gone up 32 percent during the decade, while its general fund revenues have increased 41 percent. The state's operating budget increased by about 53 percent in 10 years while its revenues rose by about 50 percent. The money the city gets from taxes, fees and other sources to pay for day-to-day services has gone up 67 percent over the past decade .

It's tricky to compare governments because they do different things and serve different populations. King County has fewer taxing resources and it's charged with providing services for unincorporated areas that are expensive to cover, for example. And the state's operations dwarf those of cities and counties, while Olympia lawmakers can rewrite tax and spending laws to help deal with downturns. And the state writes its budget on a two-year cycle. Seattle and King County operate on one-year budgets.

Seattle, the state's largest city, has a famously tax-friendly electorate. It's rare for Jet City residents to reject a tax hike, so its political leaders are less wary than their counterparts elsewhere to reach for that option.

"The vast majority of the differences between growth at the county and the city are the revenue tools allowed by state law. The city has the ability to rely on property taxes, sales taxes, B&O (business) and utility taxes, while the county does not have the B&O or utility tax," said Hall Walker of Seattle's budget office.

King County relies on the property tax for the bulk of its funds. In 2001, voters passed Initiative 747, which limits property tax growth to 1 percent plus new construction. It had been 6 percent before that. "King County's general fund revenues are more constrained than either the state's or a city's," said Frank Abe, spokesman for Executive Dow Constantine.

Walker said there were other reasons for the discrepancy in government growth. The county removed park funding from its general fund and the Emergency Medical Services levy renewed at a much higher rate in 2007, $630 million over six years. The owner of a $400,000 home is paying $120 a year for the service. The county funnels the EMS monies into a separate account, while Seattle puts its EMS revenue in its general fund. And Seattle has raised its business and occupation tax rates and added more paid, on-street parking spaces to try to bring in more money.

In 2000, Seattle's adopted operating budget was $548 million. This year it was just over $905 million. Ten years ago the city took in $542 million from taxes and other sources to pay for its daily operations. This year that figure was about $900 million.

In his budget for next year, McGinn proposed no general tax increases. But he did suggest $23 million in higher fees and other revenue-generating proposals. The business community objected to plans to significantly raise the hourly parking rate.

Last month McGinn and a coalition of city unions announced they'd tentatively agreed to forgo automatic 2 percent cost-of-living raises in future years. Previously, unions got at least a 2 percent annual bump, regardless of inflation.

Going forward through 2013, raises will track the Consumer Price Index. For next year that would mean a 0.6 cost-of-living increase and a $2.3 million savings for the general fund. Labor costs are the biggest chunk of the operating budget, and, since 2000, what the city has paid its workers in salary and benefits has gone up 58 percent -- from $733.8 million to $1.1 billion.

On Monday, McGinn, the City Council and labor leaders have scheduled a news conference to discuss potential labor savings.