While several other cities in Western Washington are fighting budget shortfalls, the city of Kent continues to build a healthy budget surplus with general fund reserves.
Kent has a general fund balance of $73.4 million, according to the 2024 Year-End Financial Status Report presented May 20 to the City Council by Finance Director Paula Painter. That’s up from $63.9 million in 2023 and $51.5 million in 2022, according to city documents.
“This council is very conservative with what to spend or don’t spend while other cities are making huge adjustments for a lack of focus,” Councilmember Bill Boyce said after hearing the updated budget numbers. “Kudos to my peers to sticking to the plan.”
The city of Lynnwood is one town with budget problems. Lynnwood ended 2024 with about $4 million less than projected, according to the Lynnwood Times. Lynnwood showed a general fund balance of $8.1 million, about $4 million less than the forecasted balance.
The city of Seattle is projected to bring in $240 million less in revenue over the next two years, according to the Seattle Times.
Kent’s conservative financial planning has given the city a budget surplus rather than a shortfall. The 2024 tax revenue came in higher than projected and expenses were lower than predicted by city financial staff.
Sales tax revenue came in $1.7 million more than projected, said city Finance Director Paula Painter, even though it dropped 4.5% from 2023. Sales tax revenue was $34.6 million in 2024 compared to $36.2 million in 2023.
“When we went to work on the 2024 budget, we had seen tax revenue begin to drop,” Painter said about keeping projections conservative.
Kent had $135.2 million of general fund tax revenue in 2024, including $37.9 million from utility taxes (sewer, water, drainage), $34.4 million from property taxes and $20.9 million from the business and occupation (B&O) tax. The B&O tax was $1.3 million over budget, Painter said.
Along with the higher than expected revenues were lower than predicted expenditures. Salaries and benefits were about $1 million under budget due to vacant positions throughout the year, Painter said. Service contracts were $2.6 million under budget.
“Revenues were over budget by about $6 million and expenses were under budget by about $4 million,” Painter said about the jump in the general fund balance.
It’s the type of financial numbers the council loves to see.
“We do budget very conservatively and have been able to see increases where we budgeted,” Councilmember Toni Troutner said.
The council requires at least 18% of the general fund to be held in reserve. That amount would be $22.7 million for 2024, putting the excess general fund reserves at $50.7 million. About a dozen years ago, the city barely had any reserve funds. But council members have continued to stick with the minimum 18% reserve level over the years and managed to raise the reserves much higher than the requirement.
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