Seattle leaders looking in every nook and cranny trying to balance the city’s budget in 2026 got some cautiously delivered good news Monday as the nation’s volatile economy and ongoing efforts at federal cutbacks under the Trump administration are whipsawing local forecasts across the country.
The bottom line in Monday’s briefing (video) to the Seattle City Council’s budget committee is a $14.6 million “upward revision” in the city’s latest 2026 economic forecast.
Seattle’s annual general fund budget is around $2 billion but nearly $15 million is the kind of revenue that can fund important social programs and services.
The new forecast part of the city’s ongoing analysis as the council takes on finalizing Mayor Bruce Harrell’s 2026 budget plan appears to be part of what will be ongoing oscillation as economic markets have experienced unprecedented volatility.
Seattle City Hall economists are continuing to forecast modest growth — but sometimes a bumpy path to get there.
The proposed 2026 Seattle budget will lean heavily on business tax and sales tax to reach its numbers.
A key component will come on the November ballot as Seattle voters will decide on a proposal that would cut B&O tax for small businesses while boosting the tax on Amazon, Starbucks, and any company making more than $2 million a year. The tax changes would generate an estimated $81 million in new revenue to help the city stave off cuts.
If approved, the new boost in the business tax would join the city’s JumpStart tax as recent new “alternative revenue” sources cobbled together as Seattle leaders have tried to find new ways to pay for social services despite cutbacks in Olympia and Washington D.C.
The 2026 Harrell plan places a priority on police and public safety spending. Transportation spending would be stable at 5% of the general fund, administration spending down two points to 19%, arts and culture spending down a point to 7%, education up a point to 15%, spending to combat displacement and affordability up to 4%, and and public safety climbing once again — up a point to 50% in the 2026 proposal.
Seattle is now spending around $490 million a year on its police department with plans to spend more than a billion total on all its public safety departments in 2026.
Monday, Council President Sara Nelson called for continued caution despite the improved forecast.
“Based on today’s revenue forecast briefing, I’m cautiously optimistic. However, uncertainty remains in Seattle due to tariffs and potential federal funding cuts,” she said. “As the Council works through the budget process, I urge my colleagues to join me in protecting essential city services that our diverse communities rely on every day. We must approach this budget with an eye towards sustainability, given the current unpredictability of the local economy.”
The Seattle City Council continues its 2026 budgets this month and next with a final vote on the package slated for November 21st. You can view the schedule and learn more about opportunities for public testimony here.
$5 A MONTH TO HELP KEEP CHS PAYWALL-FREE
Subscribe to CHS to help us hire writers and photographers to cover the neighborhood. CHS is a pay what you can community news site with no required sign-in or paywall. To stay that way, we need you. Become a subscriber to help us cover the neighborhood for $5 a month — or choose your level of support 🖤
