SEATTLE – Days after passing a resolution to impose higher taxes on large corporations like Amazon, city officials revealed that Seattle is still grappling with a $150 million budget shortfall for the next fiscal year.
Deficit Outlook
Seattle’s total projected deficit for the next two years stands at $176 million, according to Ben Noble, director of the City of Seattle’s Office of Economic and Revenue Forecasts.
Noble attributed the gap to a combination of slow job growth and inflationary pressures from tariffs.
“That combination is a bit of a recipe for disaster,” Noble said.
He warned that national interest rate adjustments — intended to counter slow growth — could further fuel inflation, while holding rates steady risks economic stagnation.
Corporate Tax Changes on the Ballot
On Monday, the Seattle City Council voted to place a proposal on the fall ballot that could reshape the city’s business tax structure.
The legislation, backed by Mayor Bruce Harrell and Councilmember Alexis Mercedes Rink, would lower taxes for 90% of Seattle businesses while increasing rates on the wealthiest 10%, including major corporations.
Supporters say the change would shift the tax burden away from small businesses while ensuring large companies contribute more to city revenue.
Next Steps
If voters approve the measure, the new tax framework could begin easing the city’s long-term budget pressures. However, with the shortfall looming, city leaders will still need to explore additional revenue sources or spending cuts to stabilize Seattle’s finances.
The budget debate is expected to be a major political issue heading into the fall election season.
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