Seattle warns of further budget cuts

Seattle warns of further budget cuts »Play Video
SEATTLE -- The city of Seattle is getting some more grim news about its financial situation. Mayor Mike McGinn is ordering all departments to figure out how to cut their budgets to cope with an economy that's still struggling to recover.

Projected revenue growth for 2010-2014 is 57 percent less than what the city brought on between 1995-2000, budget officials said.

McGinn says no city services are immune. He's asking essential services like police, fire, and human services to prepare for the possibility of cuts of 3-to-6 percent for 2012. And all other city departments were told to brace for potentially 4-to-8 percent budget cuts.

"We've had several years now of reductions to city government," McGinn said. "We're operating on a tight margin because we've spent down to a great degree... our rainy day fund and reserves."

The city says the tax revenue growth rate is projected at a miserable 3.4 percent, due to less sales and B&O taxes coming in. Plus, the job market remains jittery.

"This region lost 122,000 jobs in the great recession and thus far two years into the recovery, we've only added back about 25,000 jobs," said city budget director Beth Goldberg.

There are roughly 30 departments in city government, and in a new move, several of them could be consolidated or reorganized to save millions of dollars.

Under the microscope, Departments of neighborhoods, housing, economic development, sustainability and environment, and arts and cultural affairs.

McGinn insists they will not be eliminated.

"We are taking a look at, are there better ways at doing business so that we can preserve as much money as possible for direct services?" McGinn said.

Acting neighborhoods director Bernie Matsuno says the budget cuts present a challenge.

"But I also think it is an opportunity to really be creative, and think out of the box how we bring services to the communities that we serve," he said.

Recommendations will be made next month on what to do with those five departments.