Tacoma increases budget by $35 million as deficit, government shutdown looms
The Tacoma City Council has voted to approve roughly $35 million in additional expenses to the city’s budget, part of its annual mid-year budget modification effort.
The unanimous vote came Tuesday.
The changes reflect new grants, expenses and council resolutions that have been approved since the city approved its 2025-2026 biennial budget ($635 million general fund budget, $4.7 billion overall) in December 2024. Tacoma finance director Andy Cherullo told the council earlier this month that the city’s expenses and revenues are largely on track with what it projected, but the ongoing government shutdown, rising inflation, potential for tariffs and unemployment could limit consumer spending which would in turn hurt the city’s revenues – making its financial future hard to predict.
“When we look at the economic uncertainty, we think that there’s probably potential for more headwinds to cause things to be worse than the potential for good things,” Cherullo said at the Oct. 7 study session.
Among the largest of the new expenses is an additional $8 million to increase the city’s third-party liability fund.
“That fund has paid for three large settlements already this year, and more or less it’s set up to accommodate about one large payment each year,” lead management and budget analyst Jeff Upton told council members last month.
Those settlements have included $600,000 that the council approved in August to pay Timothy Rankine, a police officer who was put on trial for the death of Manual Ellis. Ellis died while being restrained by Tacoma police officers in 2020. Rankine, who was found not guilty in the trial, later filed multi-million dollar claims against city and state officials stating that they falsely accused him of criminal misconduct.
The city approved its 2025-2026 biennial budget in 2024 as it was grappling with a structural deficit – when a city’s expenditures exceed its revenues in a way that can’t be addressed with a one-time infusion of cash. City officials have warned of a $15 million shortfall in the 2027-2028 biennial budget, The News Tribune reported last year.
The additional costs that the modifications represent are covered by revenues in the respective funds that they fall under — increases to public safety expenses are covered by revenue in the city’s general fund, for example. The modifications also include areas where the city reduced spending, and it’s those savings that cover the cost of the new expenses, city spokesperson Maria Lee told The News Tribune. The money to cover the additional costs from a variety of sources this year that range in the amount of money saved, such as a reduced budget for Tacoma Arts month that saved the city $10,000.
Cherullo said at the study session that the adjustments to the city’s budget largely fall in categories like public safety, health and housing. The budget modifications that the council approved Tuesday included an additional roughly $1.2 million for police overtime, $2 million for fire overtime and $1.2 million to purchase two new fire engines. The move comes after voters in November of 2024 rejected a ballot measure that sought to raise more in local tax revenue for the Tacoma Fire Department.
It also includes about $1.1 million for the recently-approved Tacoma Police Department lateral incentive program, which seeks to combat understaffing in the department by encouraging experienced officers in the region with a $50,000 hiring bonus to work for the Tacoma Police Department.
This story was originally published October 30, 2025 at 9:00 AM.
