More bad budget news for the city of Tacoma. Possible cuts being identified
Officials report that the city of Tacoma’s revenues are lower than forecasted and its expenses are higher than expected, as the city continues to contend with a structural budget deficit amid an economic downturn.
Tacoma finance director Andy Cherullo outlined for council members the state of the city’s budget as of June 2025 at a study session late last month. The council approved Tacoma’s 2025-2026 biennial budget in December 2024. The presentation came as an early step in a process of mid-biennial review and modification – a requirement cities must meet, according to state law.
Cherullo said that the city’s revenues can be divided into four categories: business tax, property tax, sales tax and utility tax. Revenue in each category is down, he said, by a total of about $3.5 million. The city’s expenses in the first half of 2025 are largely below what it budgeted for, but excluding money that is soon to be spent on neighborhood and community services, the city’s expenses are roughly $2.5 million higher than expected.
“We’re monitoring our revenues. They’re running a bit below projections. We hope that might change. We’re a little concerned given the economic uncertainty heading forward what that might mean for our revenue collections,” Cherullo said at the meeting.
The update comes as Tacoma continues to contend with budget troubles – a $15 million deficit in the 2027-28 biennial budget, The News Tribune reported in 2024.
The Aug. 26 presentation came as an early step in the modification process. Officials will discuss proposed modifications to the budget at a study session on Oct. 14, and the modifications will be adopted at a council meeting on Oct. 28, Cherullo said. The city has committed to spending millions on two additional fire engines and incentives for police recruitment, which the city will need to account for in the process of developing mid-year budget modifications. They’ll also need to set aside dollars for settlements from various lawsuits, and overtime expenses for police and firefighters, Cherullo said.
City manager Hyun Kim has directed staff to conduct a “reduction exercise” – to identify areas to reduce spending in their respective departments. Kim said at the meeting that the city has also implemented other strategies to mitigate the deficit, including a freeze on hiring for non-essential positions and a travel freeze.
“People look at their own personal budgets, and now they’re having to make these same kinds of decisions,” Mayor Victoria Woodards said at the meeting. “The community needs to understand that the city itself is going through that same exercise.”
This story was originally published September 4, 2025 at 5:00 AM.
