Proposed city compensation agreements show bad habits are hard to change

There’s an adage: When you’re stuck in a hole, stop digging.

In the context of Seattle’s budget woes, the shoveling is just as furious as ever.

The Seattle City Council is poised to consider compensation packages negotiated by Mayor Bruce Harrell for more than 11,000 city employees.

According to City Hall’s own estimates, the agreements will add to projected deficits — deficits that were characterized back in August as a “significant fiscal cliff.”

The reason for the looming gap in the General Fund — which pays for police, fire, and other essential services — is simple. While the city is raking in more taxes than ever, it is spending even more, according to the Seattle Revenue Stabilization Workgroup convened by Harrell and the council last year.

Proposed labor agreements only make the situation worse.

This year, the proposed labor costs will exceed the budget by $10 million. That’s likely to be covered by a current hiring freeze and other measures.

But in 2025, the agreements are expected to add $10 million to the deficit, bringing the total gap to more than $240 million. The same goes for 2026, with an extra $15 million growing the deficit to more than $245 million.

For a group of some of the highest-paid city employees, increases in compensation will total $25 million in 2024 and rise to nearly $50 million in 2026. Relative to 2024, salary expenses in 2026 would be 8.2% higher for this group, which includes top officials from Seattle City Light and Seattle Public Utilities.

About 6,320 city employees have a base salary of at least $100,000 or more. That’s before overtime, which can add tens of thousands of dollars — and in rare cases, hundreds of thousands of dollars.

That’s much more than the average Seattle salary of $76,122.

The mayor could have negotiated contracts with the Coalition of City Unions that raised wages for those at the lowest rung and kept salaries flatter at the top. That didn’t happen.

Also, the mayor could have negotiated with city unions but offered separate agreements for nonrepresented employees. Historically, the city has provided the same benefits and wage increases to union and nonrepresented employees, and that holds true in the agreements now before council.

When asked why the mayor didn’t pursue separate compensation agreements, the Mayor’s Office responded: “In the past, attempts to not provide similar adjustments to nonrepresented employees have disrupted labor harmony.”

A big unknown is the Seattle Police Officers Guild contract, which is not considered in the deficit projections. When finalized, expect that to add even more to the budget crisis.

In his State of the City speech in February, Harrell said: “The fact is that passing a new or expanded tax will not address the fundamental issues needed to close this gap in the long run.”

He also said: “I reject notions of austerity,” referring to budget cuts.

“Instead, this is a chance to hit reset, to revise our budgeting practices, and to double down on the programs, projects, and policies that are effective and making the most difference for the people of Seattle,” Harrell said.

With big labor agreements now pending at council, the new budgeting practices look a lot like the old budgeting practices — kicking the can down the road and making even tougher the day of fiscal reckoning that will almost certainly include city job cuts, tax increases and service reductions.