Working for a safe, affordable, vibrant, innovative, and interconnected city.
Learn More

Sunny day at Lincoln Park

Photo by CityWeb Team

  • photo #1
  • photo #2
  • photo #3
  • photo #4
 
Print this Page  
logo
City of Seattle
Gregory J. Nickels (former Mayor)
NEWS ADVISORY
SUBJECT: Mayor Greg Nickels Orders Immediate Hiring Freeze as City of Seattle Faces Worsening Revenue Forecast
FOR IMMEDIATE RELEASE:
8/15/2003  3:00:00 PM
FOR MORE INFORMATION CONTACT:


Mayor Greg Nickels Orders Immediate Hiring Freeze as
City of Seattle Faces Worsening Revenue Forecast

SEATTLE — In the face of worsening revenue forecasts for 2003 and 2004, Mayor Greg Nickels today ordered an immediate hiring freeze, put restrictions on travel by city employees and told all departments to spend less than their authorized budget levels for this year. The city’s latest General Fund forecast shows an additional shortfall of about $23 million for the two-year period. This amount is in addition to a $15 million shortfall projected in April.

"These are tough times and they require making tough choices. We will continue to protect basic services as much as possible and make city government live within its means," said Mayor Nickels.

Since the April forecast, the city of Seattle’s problem has worsened. For 2003, the projected revenue shortfall has nearly tripled from $5 million in April to about $14 million. For 2004, the projected shortfall has more than doubled from $10 to $24 million. The 2003 Adopted budget is $638,723,000 and the 2004 Endorsed budget is $661,271,000.

There are three main reasons for the shortfall: for the ninth consecutive quarter there continues to be a downturn in retail sales tax revenue, another falloff in telecommunications tax revenues, and lower than expected revenue from parking tickets.

Most of these shortfalls reflect continuing weakness in the Puget Sound area’s economy. Employment levels are lower than predicted last fall. The war in Iraq hurt tourism in the spring, leading to lower hotel occupancies and tax revenues.

"This is not just a problem for Seattle. The economy in the Puget Sound region continues to bedevil forecasters throughout the region," says City Finance Director Dwight Dively.

Nickels had expected more expenditure cuts or revenue increases would be necessary for next year’s budget, but had not expected a shortfall of this magnitude. He has begun discussions to determine where cuts will be made.

The Mayor will present his 2004 budget proposal to the City Council on September 29. The Council is required to adopt a budget by
December 1.

Earlier this year, the Mayor ordered a 1.5-percent reduction in 2003 spending by the city’s larger departments, except the Human Services, Police and Fire Departments. These cuts already have been implemented and help offset some of the projected revenue shortfalls. At the same time Mayor Nickels called for Seattle City Light to cut spending by 6 percent to address the utility’s own revenue shortfalls. City Light and Seattle Public Utilities are not funded by the General Fund.

Dively emphasized the city’s long-term fiscal health is good, noting it continues to maintain significant reserves to meet its long-term obligations.

###

Mayor's Office

Back to News Release Home Page and News Release Search