On Tuesday, Seattle Mayor Bruce Harrell introduced his 2026 budget proposal, which uses two new sources of revenue to avoid layoffs and major program cuts. This budget proposal marks the first time in his mayoral tenure that Harrell has championed new revenue.
Harrell offered his final budget proposal before he faces Seattle voters in November, contending with frontrunner Katie Wilson, who led by 10 points in the primary.
While the most recent revenue forecast significantly reduced the City’s deficit, Harrell was still forced to scramble to make up the difference. Earlier this year, he extended the City’s hiring freeze, along with cutting or slowing new contracts, training and travel budgets, and new technology projects. He also asked City departments to spend less than their allocated 2025 budgets. Altogether, these measures saved $30 million this year.
Harrell plugged the remainder of the $122 million deficit with $51 million from the new business and occupation (B&O) tax restructure proposal, which Seattleites will vote on in November. He also reduced total spending by around $37 million for next year.
This year, the state legislature allowed a new 0.1% “public safety” sales tax increase, which Harrell put forward last week. Sales taxes are widely considered to be among the most regressive of taxes, falling hardest on the poor and on working families, who spend a greater share of their income on taxable goods.
Should the city council approve the sales tax hike, it will allow Harrell to invest in a few new spending priorities, as will some of the new revenue from the B&O tax. Seattleites generally approve tax hikes to fund new services.
Contrasting with his initial conciliatory tone toward Trump, Harrell repeatedly flagged negative impacts from Trump policy changes and his effort to fight them.
“In the face of continued federal uncertainty, our 2026 budget reflects a commitment to our local values and building strong, resilient communities,” Harrell said. “With a focus on proven solutions for the challenges of today – from affordability and homelessness to accessible food and childcare – this budget will keep Seattle on a positive trajectory and protect our residents from the chaos and disinvestments we are seeing out of the other Washington.”
