2020/12/16 Council Agenda Packet

Given the magnitude of the projected General Government budget deficit, we expect that additional service cuts are inevitable. • Historically slow population and job growth, and a local economy facing new threats Our discussion to this point has focused on what is happening inside City government. It is equally important to look at the external realities. For decades, the City has experienced relatively slow population and jobs growth compared to peer cities. The City has taken many steps to become a thriving urban center over the years-- supporting development on the riverfront and waterfront, promoting passenger air service at Paine Field, developing a convention center, performing arts theater, arts programs, tourism, special events, and tax incentives for multi -family residential construction in designated growth areas. But our community still lacks the vibrancy of smaller neighboring cities. Most of the job and retail growth in Snohomish County in the last two decades has happened outside of Everett. The Boeing announcement of closure of the 787 line brings much more pressure to bear on City Finances. Thousands of jobs are expected to be lost as a result of Boeing's decision with regard to the 787s and the pandemic's catastrophic impact on aerospace and the airline industry. The City estimates the incremental impact of the projected General Government budget deficit is an additional shortfall of $3.5 million each year through 2027 (this estimate includes losses across the entire business community from the ripple effect of this significant economic hit on the aerospace sector). Committee members see the current business climate in Everett as fragile. Many of us operate businesses in the community, and are particularly concerned about the detrimental impact that higher B&O, sales, or property tax rates could have on the City's ability to attract and sustain economic development, which in turn, support vital services and programs. The City's response to the budget crisis must also be based on an understanding that the median household income in Everett is relatively low, at just $57,205 per household in 20185. In comparison, peer city median income in Western Washington ranges from $66,011 to $109,7156. The reality of Everett's modest household income is in our view a blinking caution Tight when considering the need for new City revenues. In sum, development in recent decades has not positioned the City well for strong future revenue growth for the City. City Hall s options to address this crisis must include longer term thinking about our vision for the future of Everett. Where will Everett be if current trends and land use plans continue? Can the City improve the current trajectory by adjusting its economic development and land -use goals? We think these are important questions to be addressed as part of the solution to the ongoing General Government deficits. 5 www.census.gov/quickfacts 6 Id. 10