An unusual technique used to balance Mayor Ed Murray's recently proposed city budget encountered some pushback from the Seattle City Council on Wednesday.
Murray's 2015-2016 budget assumes that departments will underspend the money they are allocated during each of the next two years by 1.5 percent, or about $16 million annually. According to a City Council staff memo presented at a Budget Committee meeting on Wednesday, this is troublesome because there is no plan for precisely how that underspending target might be achieved.
One concern, the memo said, is that any items council members add to the budget could later be axed by the mayor without their approval. The issue has thrown some friction into the early stages of this year's budget-making process.
"I'm glad this issue has come up," Councilmember Sally Clark said during the meeting. "I thought it was going to be a quiet budget season."
Council central staff director Kirstan Arestad presented the memo to the committee.
"That decision about what gets cut, or what doesn't get cut, is not going to be decided by the Council under this scenario," she said. "There is a risk to the Council that some of its priorities could be lost."
Council members also worried that using the underspending assumptions to balance the budget siphons off a source of leeway where they can find money for initiatives that they want to see funded. "It either closes out the Council from making additions, or we have to make additional cuts in the mayor's budget," committee Chair Nick Licata said during the meeting.
"I'm not sure it was a play by the mayor," Licata said during an interview later in the day. "But I think it dawned on us that the effect would be that it would limit our ability to adjust the budget."
Typically, city departments do not use up all of the money that they are allocated in the city budget each year, and have 1 or 2 percent left over. Budget Director Ben Noble pointed out to the Council that it's hard to know months in advance where departments will end up with this financial slack. If forced to identify specific cuts now, he said, departments would probably lay off workers.
Licata did not agree that the only alternative to the underspending provision would be letting go of city employees. He also noted that past mayors had also faced tight budgets, but "they did not include the underspend as part of their balancing act."
"I think what we're seeing here is a testing between the legislative branch and the executive branch," Licata said during the interview. "Every mayor comes in and wants to leave a strong imprint on the budget and the Council also likes to play a role in designing the budget. There's always a little bit of political tension."
A spokesman for Murray's office said the mayor was not available on Wednesday to discuss the underspending issue.
When he unveiled his budget in September, Murray said that despite an improving economy, Seattle is struggling to cover the cost of basic services. Noble recently told Crosscut that the city's costs and revenues are rising at about the same rate — between 3.5 percent and 4 percent annually.
A variety of new expenditures are included in the mayor's budget, such as additional police officers and firefighters, an Office of Labor Standards that would help enforce the city's recently adopted $15 minimum wage ordinance, and programs to help the homeless.
"The mayor's adds to the budget, even though we've trumpeted them loudly, are very modest," Noble said during the Council meeting.
The memo Arestad presented to the Council outlined two additional options members could choose from if they did not want to go along with the mayor's underspending plan.
One option involves the Council working with the Mayor's Office during the next two weeks to identify specific cuts. Alternatively, the memo suggested a temporary, across-the-board spending reduction for all departments, which would allow the budget to be balanced, as required by state law. The Council would then work with the Mayor's Office over the coming months to develop a set of specific spending reductions, based on updated revenue forecasts, that would equal the roughly $16 million in proposed annual underspending.
"I don't know what more I need to say to convince you that this is just not necessary," Noble said, referring to the memo's alternatives, during the committee's lengthy discussion about the underspending issue.
Earlier this year, Murray asked city departments to underspend their budgets by 1 percent through the end of 2014 to help close a projected $25 million shortfall in the city's general fund during each of the next two years. Noble has said that this is not expected to cause any major reductions in programs or services.
Noble is no stranger to the Council. He served as its staff director from 2006 until last December when Murray hired him to be the city's budget director. Arestad came onboard as the new staff director in June. She had previously worked for Gov. Jay Inslee's Legislative and Policy Office, the Washington State Department of Transportation and Gov. Christine Gregoire's Office of Financial Management.
Licata said after the meeting that he was not entirely sure how the debate about the underspending would unfold, but that he was leaning toward the temporary across-the-board spending reduction option presented in the Council staff memo.
"It may look like we're treating the mayor unfairly," he said. "But we're just doing what we've done in the past."
