City council hears update on Seattles improving but still weakened economic forecast

Seattle's economic forecast has improved, reducing the projected budget deficit from $251 million to $143 million over the next two years. This change results from differing economic scenarios, with optimism stemming from tech stock market gains and reduced inflation rates. Mayor Bruce Harrell plans to tackle the shortfall with a proposed B&O tax overhaul, which would exempt companies earning less than $2 million while increasing taxes on larger firms. However, city analysts express concern over uncertainties, such as tariff threats and weakening employment numbers that could adversely affect revenue. They emphasize the need for caution, advising that funding decisions should account for potential downward revisions.

The current forecast indicates a recovering but still fragile economic landscape for Seattle. The city council's Finance, Native Communities, and Tribal Governments Committee received this analysis during a session on Wednesday. Analysts concluded that while there are positive signs, the local economy remains susceptible to external pressures.