Seattle Area Braces For Long-Term Economic Impact Of Coronavirus

SEATTLE, WA — An economic forecast released Tuesday by the Seattle City Budget Office predicts widespread, long-term impacts on jobs and revenue in the wake of the coronavirus crisis in Washington.

"The COVID-19 pandemic has become one of the most consequential and transformative events of our lifetime," Seattle Mayor Jenny Durkan said. "As we expect the public health crisis to continue in our region, we know the impact on our workers, small businesses, non-profits and artists will be felt deeply for months and years to come."

Seattle's report, which also considers regional impacts for King and Snohomish Counties, shows projections for two scenarios: a rapid recovery and a slow recovery.

Both possibilities include high levels of unemployment across the region and impacts on the city's budget well beyond 2020. This year, Seattle expects a revenue shortfall between $210 million and $300 million.

Durkan said that the path forward today is very different from the one the city officials had planned for before King County experienced its first COVID-19 death, when unemployment was below 3 percent and the economic outlook was strong.

"On February 29, Seattle was a very different city," Durkan said.

Under a speedier recovery, which researchers placed at a 45 percent probability, the forecast expects 65,000 jobs lost and an 8 percent unemployment rate by the end of the year. Overall incomes could fall 5.5 per capita percent over the same timeframe.

The slower scenario, with a 35 percent probability, shows 170,000 jobs lost with an 18 percent unemployment rate, and incomes falling 12.5 percent.

National projections show the U.S. GDP dropping between 5.4 and 14.9 percent in 2020, and peak unemployment rates ranging from 10.3 percent to 22.2 percent.

Ben Noble, director of the city's budget office, outlined expected revenue shortfalls in a press call Tuesday, ahead of a formal presentation to the Seattle City Council scheduled Wednesday.

Seattle's general fund draws from several tax sources, including property taxes, sales taxes, and business taxes — all of which have been impacted by the coronavirus crisis. According to the budget office, nearly half of the city's sales tax revenue comes from sectors at the highest risk during the outbreak, including retail stores, restaurants and construction.

City officials are still working on a plan to address the revenue losses and have already taken some steps, including a hiring freeze for city employees and a pause on most new contracts. The budget office said Seattle has approximately $120 million between the rainy day fund and the emergency fund, and further spending cuts will be necessary. City departments have also been asked to identify all non-essential spending.

"As we look into recovery, one of our top priorities will be supporting our workers and businesses so our city can get back to being a booming economy," Durkan said. "I will continue to do everything possible to get the region the resources we need to get through this pandemic and build a strong, equitable city."

Learn more about resources available for Seattle residents and businesses here.

Snohomish County launches Economic Recovery Task Force

In Snohomish County, local leaders have convened a 29-member task force to develop plans to jumpstart the economy. Members of the group include Snohomish County Executive Dave Somers, County Council Chair Nate Nehring and former Everett Mayor Ray Stephanson.

Each county district will have its own advisory group and the task force will seek input from cities, Tribes, schools, labor organizations and non-profit groups.

"The wave of economic disruption from COVID-19 has hit every corner of our county and region," Nehring said. "In order to determine how we can best support the private sector and get everyone back to work, we need broad-based input from every street corner, neighborhood and office park. We want to ensure that [the] government doesn't hinder business recovery but instead is doing everything in its power to help."

Learn more about resources available for Snohomish County businesses here.