Seattle’s operating budget has gone one direction in recent years: Up. And up. And up.
In 2018, it was $4.63 billion. This year, it was $7 billion.
Never in the city’s history has municipal government taxed and spent so much.
It’s not about meeting the needs of a growing population. In 2018, the U.S. Census determined that Seattle’s population was 742,889. This year, it’s estimated to be about 816,600 — an increase of about 10%. In the same period, Seattle’s budget increased by about 51%.
Yet, elected officials’ thirst for more taxes continues.
Prop. 2 on the November ballot would make changes to the city’s business and occupation tax, eliminating it for about 75% of businesses while raising it for others. A key point: B&O is levied on revenues, not profits, which is key for businesses such as grocery stores that operate on thin margins.
If passed, the levy would reduce the number of businesses paying B&O tax from about 21,000 to 5,000, raising about $80 million for city coffers.
According to the mayor’s office, about $51 million will be used to maintain programs in areas including food access, gender-based violence, small-business supports, emergency shelter, homelessness prevention, workers’ rights and protections, public health, workforce development, arts and culture, and immigrant and refugee services.
Up to $30 million can be used to offset federal cuts, including $9 million for homelessness services and $6 million for food programs.
City government folks say the budget has grown so much over the years because voters want more services and are willing to pay for them. This is largely true.
But at this moment, Seattle’s business community is gasping for air.
Overall, Seattle-area employment grew only 0.8% in 2024, compared to the 1.3% growth at the national level, according to the Office of Economic and Revenue Forecasts.
According to the Downtown Seattle Association, retail storefront vacancy in downtown neighborhoods is about 20%, with 543 vacant storefronts as of last March.
Earlier this year, the Legislature passed a $9.4 billion tax package funded largely through increases to business taxes.
“Raising a B&O tax that is already the highest in the nation doesn’t solve the city’s self-inflicted spending problems,” according to a statement from the Downtown Seattle Association on Prop. 2. “At a time in which we’re facing economic uncertainty, this measure sets up Seattle for more harm than good.”
In the next few months, Sound Transit’s Link light rail is expected to provide services across Lake Washington, increasing economic competition between Seattle and the Eastside.
Seattle employers need a shot in the arm, not a slap in the face.
Reject Seattle Prop. 2.
