Mayor Greg Nickels has just released his draft budget for the City of Seattle for 2005. In the next few weeks, the city council will review the budget, make changes, and vote on it, then send it back to the mayor for his approval. Unfortunately, there's a lot in this budget that requires closer scrutiny.

On the revenue (income) side, one issue stands out: the budget assumes that the economy will continue to grow, and that it will grow at a pace that's faster than it has this past year. Total tax revenues are projected to grow by 3.25%, yet the current revised budget for 2004 only shows growth of 1.9%. This problem becomes even sharper when we look at the budget detail. Taxable retail sales have been in a slump since the third quarter of 2000 and current national estimates of consumer spending have shown a downturn, but Nickels includes a preposterous graph that estimates a sudden and dramatic upturn in annual retail sales growth in 2005. And the same is true with his estimates of B&O (business) tax revenue.

Nickels could save the city a lot of wasted time and money if he were more realistic in his expectations about the economy. With these revenue projections, the city council will be back at the drawing board halfway through next year, writing another revised budget and asking why they need to make more cuts--just like they did this year. Do these folks never learn?

That's not the only problem with the revenue side of the budget. The local media has pointed out that Greg Nickels is increasing fees and licenses and imposing a whole bunch of new fines and fees, from requiring park users to pay for parking in formerly free city parking lots, to increases in swimming pool fees. The added fees assume that folks will have no choice but to pay; however, people tend to cut back on discretionary expenses during hard economic times. When you impose a new fee, you have to expect that people will find ways not to pay. Pay parking at city parks, for example, will drive a lot of park users to find street parking instead or ride their bikes or take the bus.

Also, Nickels assumes that the State of Washington will give the City of Seattle increased funds for operations (the state gives funds to cities and local governments all over the state). The state legislature, however, will be looking at a $1 billion shortfall in its budget next year, and may choose (as in previous years) to make cuts in what it passes to cities and local governments. The city may have trouble getting the same amount as last year, much less the increase Nickels expects.

On the expense side of the budget, nearly every category takes a cut, except for the holy trinity: Public Safety (cops, courts, and fire department), Utilities & Transportation (City Light, etc.), and Administration (money to operate the government itself). Arts and parks lose 4%, Neighborhoods & Development lose 1.7%, and Health & Human Services--the big loser, as usual--gets an astonishing 20% cut. It's criminal.

Drilling down to the details reveals interesting information about our mayor's priorities. Here's the breakdown by category:

Arts, Culture & Recreation. Community centers are cut by 4%, the Conservation Corps loses 4% of its funding, and Woodland Park Zoo loses a whopping 28% of its support from the city. Seattle Public Library will have to give up its book mobile program, which is a scandal, given that public libraries exist to serve folks who can't afford to buy their own books--and that includes the elderly and house-bound.

Neighborhoods & Development. Funds are cut for historic preservation, while zero dollars are allocated for neighborhood matching funds and implementing neighborhood plans. This abandonment of neighborhoods began with last year's budget (and, some would argue, with Mayor Nickels' tenure), and is now becoming a trend. It's time to stop that trend.

Mayor Nickels also pencilled in a 7% increase for the Department of Planning & Development, which serves--you guessed it--mostly builders and developers. At the same time, funds for low income housing were cut by 12%.

Health & Human Services. Under Community Development Block Grants, the mayor cuts funds for community building, community services, and homeownership by 7%, while funds for "Leadership & Corporate Services" are increased. The numbers for both public health and human services were zeroed out in some categories and new categories were established; in other words, the numbers were juggled around so that it's hard at first to tell where the cuts are. The presentation is dishonest, given that this part of the budget takes the biggest hit. The city council should look very closely at these numbers and make appropriate corrections to restore funding to those vital services that would otherwise fall through the cracks.

A quick cross-check of the numbers shows that the following categories take substantial cuts: family support services, HIV/AIDS programs, oral health, and school-age health. The following categories are cut completely: methadone vouchers, tuberculosis control (a community health problem that's getting worse, not better!), asthma funding, funds for chemical and physical hazards, and funds for budget and financial planning within the health department. The following categories lost funding in 2004 and won't get any new funds in 2005: child care health and safety, epidemiology (that's homeland preparedness for you!), family planning, immunizations, and interpretation services for non-English speakers.

All of these should be a priority and take precedence over, for example, upgrading parking meters or widening sidewalks.

Given that the entire budget assumes a 7.65% increase in spending, where does all the money go?

Well, there's the enormous City Light refund that has to be paid out to customers in 2005--that takes a generous chunk of change. Then Nickels wants to hire more cops and firefighters, as usual. He also ups the police pension fund by 10%, while cutting the pension fund for other city employees by 14%. Thanks, Boss. While cutting the fund for the City Auditor by 6% (simply can't allow a regular review of the finances) and the Office of Sustainability and Environment by 7%, Nickels pours buckets of money into the Cumulative Reserve, the Emergency Subfund, and into debt service on bonds. Debt service? That can't all be for interest payments on the new downtown library, can it?

Sure enough, it's not. Among the new glamour projects Nickels wants the city to go into debt for: improvements to Pier 59 and Pier 62/63, new parking pay stations (yawn), Mercer Street improvements (when did we vote on this?), and $5 million in bonds for the Alaskan Way Viaduct (ditto).

Other major projects completed in the past or currently in progress that are draining money out of the budget: University District improvements, Monorail financing, McCaw Hall (new opera house at the Seattle Center), and that wonderful catch-all category of "Various Capital Projects." All these goodies charged on the credit card will have to be paid eventually. Bond Debt Service gets a huge 60% increase in Nickels' 2005 budget.

The money that Nickels has socked away into savings--the Cumulative Reserve Subfund and Emergency Reserve Subfund--is very helpful in improving the city's credit rating, which in turn makes it easier to issue bonds for the type of big, showy projects that our mayor likes to focus on. Of course, his pals in big business seem to have already had their say in the drafting of this budget. For example, Paul Allen must be very pleased by the $1.9 million in bonds set aside for Mercer Street improvements, which will help the marketability of his South Lake Union properties. Has anyone checked to make sure this money will be used for actual street improvements and not to pay for Paul Allen's street car? Don't bet on it.

We're in an economic slump; now is not the time to cut services for the poor in order to pay for big improvement projects--unless, of course, you're a mayor beholden to developers, the police union, and ex-Microsoft billionaires.