Wilson budget plan wipes out Seattle’s $175M deficit — without new ‘progressive revenue’

Mayor Katie Wilson outlined a city budget Tuesday to close an inherited $175 million deficit without tax increases or withdrawals from city reserves as Seattle’s fiscal plans have surpassed the $9 billion mark.

“We cannot keep lurching from shortfall to shortfall year after year,” Wilson said in her address at the Seattle Central Library unveiling her 2027-2028 budget proposal. “We cannot keep kicking the can down the road, because there is no more road.”

The Seattle City Council will now pick up and shape the edges of the mayor’s proposed $9.15 billion budget for 2027 and $9.49 billion for 2028.

Seattle’s $175 million General Fund shortfall stems from years of spending outrunning revenue growth, worsened by pandemic economic shifts.

During the rapid growth of the 2010s, the city expanded services, staffing, and homelessness programs. Revenues did not keep pace due to state caps on annual property tax increases, job losses in the regional tech sector, and high inflation that drove up municipal operational and labor costs.

The city’s leaders have been bridging these annual gaps using one-time federal relief money, hiring freezes, and short-term transfers rather than permanent spending cuts.

To end the cycle, Wilson’s budget cuts roughly $50 million annually in General Fund spending by eliminating 128 positions and aligning departmental budgets with historical costs, pairing these cuts with $50 million in shuffled funding — primarily leveraging JumpStart payroll tax revenues to cover core services and homelessness programs — and enabling the city, Wilson says, to project balanced budgets through 2030 without drawing on reserves.

For Capitol Hill and the Central District, the spending plan directs funds to specific neighborhood programs while setting citywide policy on policing, growth of the CARE Department, emergency shelters, and transit.

In her address, Wilson explained why she decided to forge ahead without a push for new tax revenue citing the growth of new programs over recent years including the JumpStart payroll tax on large employers and last year’s B&O tax restructure approved by voters.

“All these measures asked the large businesses that benefit from everything our city and workforce have to offer to give back more,” Wilson said. “But right now, we don’t have good options to raise more progressive revenue that don’t also come with great risks.”

Those recent revenue shifts form a structural backbone in Wilson’s budget. Out of $454 million in 2027 JumpStart appropriations, the proposal transfers $173 million to the General Fund for basic operations while $65 million of homelessness response contracts are also being piled into the JumpStart Fund. Meanwhile, the voter-approved “Seattle Shield” restructure of the B&O tax generates about $86.8 million in new revenue annually, lifting total B&O collections to $495.7 million in 2027 and $520.4 million in 2028 — the General Fund’s largest tax stream.

Public Safety and Crisis Response
Wilson’s proposed budget funds police staffing targets while supporting alternative community response units, according to her announcement:

• 1,250 Seattle Police Department sworn officers funded in both 2027 and 2028 (up 66 officers from 2026 adopted levels) within a $556.5 million SPD budget, city tables show.
• 28 civilian positions cut at SPD (including 4 filled jobs), trimming $9.5 million.
• $525,000 kept in the Department of Neighborhoods for Community Safety Coordinators working in five areas, including Capitol Hill and the Chinatown-International District.
• $72.5 million for the CARE Department, keeping Community Crisis Responders in the field from 6:30 AM to 1:00 AM while leaving 14 vacant responder jobs unfilled, according to officials.
• $1.2 million moved from Human Services to CARE to set up operations for the mayor’s Gun Violence Plan.
• $5.08 million in Community Violence Intervention contracts transferred to CARE, leaving HSD with $8.3 million for school safety and violence prevention work.
• $14.8 million maintained for police oversight across the Office of Police Accountability, Office of Inspector General, and Community Police Commission.

“Seattle believes in putting the right responder on the scene when someone is in crisis, and our CARE Department is central to that vision,” Wilson said, saying the framework frees up officers “so that our police can focus on policing.”

Homelessness, Shelter, and Addiction
With the countywide Point-in-Time count at 18,365 homeless individuals in 2026, the city will run its shelter contracts in-house under a slowed homelessness plan, according to the proposal:

• $183.5 million for homelessness programs in 2027, moving roughly $65 million in program expenses from the General Fund into the JumpStart Payroll Expense Tax Fund, according to the proposed spending plan.
• $126.8 million in provider contracts and 29 staff positions returned to HSD from the King County Regional Homelessness Authority.
• $37.0 million for the Shelter Accelerator Initiative to set up 960 to 1,000 shelter beds by the end of 2027, serving an estimated 1,750 to 2,000 people each year, mayoral staff reported.
• $1.59 million annually to lease and run 60 supportive housing units for Co-LEAD clients facing behavioral health and substance use challenges.
• $1.83 million from Opioid Settlement funds in 2027 for addiction treatment and harm reduction services.

Wilson said the planned shelter investments are “paired with the services that actually help someone rebuild a life, not just survive a night.”

Affordability, Food Access, and Community Stability
For District 3, the budget focuses on anti-displacement efforts, rental protections, and food assistance:

• $347.7 million allocated to the Office of Housing in 2027, backed by $140.2 million from JumpStart payroll taxes
• $22.0 million from JumpStart for the Equitable Development Initiative, alongside $6.8 million from Short-Term Rental Tax receipts for community anti-displacement grants.
• $16.3 million for rental assistance in 2027, including $6.5 million in 2027 and $6.5 million in 2028 pulled from Housing Levy cash balance interest.
• $791,000 from higher SDCI rental unit fees to enforce the city’s residential rental junk fee ban
• $294,000 to fund a Housing Ombud to help affordable housing builders work through city permitting.
• $10.2 million for HSD contracts to cover a 3.8% inflation adjustment for provider staff wages in 2027.
• $6.28 million to expand Fresh Bucks to 20,000 households with $60 monthly vouchers.
• $4.14 million from the 2025 FEPP Levy in 2027 and $2.1 million in 2028 to fund free breakfast and lunch across all Seattle Public Schools.

Transit and Mobility
The mayor’s transportation proposals are hoped to handle capital shortfalls by adjusting project schedules:

• $110 million three-year deficit in the Transportation Fund resolved through project deferrals and spending adjustments
• Commercial Parking Tax raised to 17.0% from 14.5%, projected to bring in $63.2 million in 2027 and $65.4 million in 2028.
• Continued funding to operate the First Hill Streetcar and South Lake Union Streetcar.
• Funding preserved for Vision Zero street safety projects and transit upgrades on major corridors, city plans indicate.
• Capital project delivery maintained under the voter-approved 2024 Transportation Levy.

Capital and Cultural Programs in Capitol Hill & the Central District
Specific line items for Capitol Hill and the Central Area include:

• $65,000 (a 120% funding hike) spread across Seattle’s five designated Cultural Districts, including the Capitol Hill and Central Area districts, according to the Office of Arts and Culture.
• $500,000 per year for a new Queer and Trans Stabilization Fund run through HSD and the Office for Civil Rights.
• $209,958 moved from the General Fund to Admissions Tax revenues to run the Teen Summer Musical at the Langston Hughes Performing Arts Center.
• $1.4 million per year to contract for up to 10 automated public restrooms (Throne units) in busy neighborhood commercial areas.
• $66.96 million in 2027 operations and capital spending under the renewed 2026 Library Levy, supporting operating hours, facility maintenance, and book collections at the Capitol Hill and Douglass-Truth branches.

Business Community Reaction
Wilson’s proposed budget seems to have cooled some of the heated rhetoric being fired at the administration over its first year running the city. Local business associations backed the budget’s fiscal stance and public safety investments. In a joint release, the Seattle Metro Chamber, Challenge Seattle, and the Washington Roundtable highlighted the decision to avoid new employer taxes while funding the police department’s 1,250-officer target. Seattle Metro Chamber CEO Joe Nguyễn called the plan a “thoughtful approach to a difficult fiscal challenge,” while Challenge Seattle CEO Chris Gregoire cited the mayor’s “pragmatism” in managing city expenses.

What’s Next: City Council Budget Process
With the mayor’s budget release, the proposal moves to the City Council for review, according to the city charter timeline:

• September–October: Council members review department budgets and question city officials during public hearings led by Budget Committee Chair Dan Strauss, council staff stated.
• October–November: The Council collects public feedback and writes amendments, Statements of Legislative Intent, and budget provisos.
• December 2: State law and the City Charter require the Council to vote on and adopt the final operating and Capital Improvement Program budgets by this date.
• Mayor’s Review: Once passed, the Mayor can sign the budget, let it take effect without a signature, or veto the package in its entirety; the City Charter does not permit a line-item veto.

Wilson’s proposal continues a run of relatively austere city spending plans from the city’s mayor’s office following then-Mayor Bruce Harrell’s proposal last year that focused on staving off cuts to departments and an overhaul of the city’s B&O tax. By the time the council was done fine-tuning Harrell’s proposal in 2025, the incumbent had lost the election and was making way for Wilson to inherit the city’s fiscal challenges.