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City of Tacoma's Proposed Biennial Budget Focuses on Everyday Services and Fiscal Sustainability

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The City of Tacoma's proposed 2027–2028 Biennial Budget, a $5.3 billion spending plan that addresses a $40 million structural deficit in the $696 million General Fund, prioritizes the services that residents rely on most every day in Tacoma.

For several decades, the cost of providing City services has increased at a higher rate than the revenues collected to pay for those services. The "Roadmap to Recovery" — a proactive, multi-year strategy to protect core services, balance the budget, and secure Tacoma's long-term fiscal health — veers away from reliance on temporary solutions to address the ongoing impacts of compounding macroeconomic pressures on municipal operations.

"This proposed biennial budget makes meaningful progress, but it does not complete the 'Roadmap to Recovery' and additional work will be required over the next several years," said City Manager Hyun Kim. "We must address the underlying growth rates of revenues and expenses, modernize service-delivery models, strengthen the City's workforce, maintain and improve critical infrastructure, and respond to emerging community needs. We will monitor implementation, report transparently on results, and adjust responsibly as financial and operational conditions change."

Supporting Community Safety and Compassionate Crisis Care

Community safety makes up $424.7 million, or 60.9%, of proposed General Fund spending. The proposed biennial budget is designed to help ensure the right responder is available when needed.
  • Improving Response Times: Utilizing the Council-approved Public Safety Sales Tax and state grants, the proposed biennial budget adds 12 new Police officers, three professional support staff members, and two youth engagement officers. For the Tacoma Fire Department, the budget provides $1.5 million per year to establish a reliable replacement cycle for outdated equipment, and a $2 million one-time allocation to replace a 1999 ladder truck.
  • Sustaining Compassionate Interventions: To continue supporting an approach founded in compassion, the City will sustain funding for the Homeless Engagement and Alternatives Liaison (HEAL) team, Building Resilience Against Youth Violence and Exploitation (BRAYVE) program, Community Court, and the Designated Crisis Responder program. Although there are approximately $1 million worth of reductions in contracted funds to align with baseline interlocal agreements and actual utilization, the City is continuing to invest more than $31 million into human service infrastructure for people who are at risk. To help fund regional efforts to address homelessness, this includes $180,000 in support of Pierce County's Unified Regional Approach.
  • Considering the End of Pilot Programs: To focus funding on 24/7 responders and established outreach teams, the City may consider phasing out two programs that were launched with temporary pandemic relief dollars which are now depleted: the Community Services Officers (CSOs) and the Holistic Outreach Promoting Engagement (HOPE) team. Operational data showed these two programs have historically experienced low call volumes and frequently required co-dispatch assistance from commissioned Police or Fire personnel to meet safety protocols. The individuals served by these programs will continue to receive necessary services from the Police and Fire departments.

Supporting Small Businesses and Investing in Transportation Infrastructure

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The proposed biennial budget recommends adding an additional business license tier for the largest businesses in Tacoma.
  • A Lower Business License Fee or No Fee Increase for 80% of Licensed Businesses: A redesigned business license fee structure will ensure lower or unchanged license fees for 80% of licensed businesses. Only the top 20% of licensed businesses — those generating annual gross revenues above $5 million — will see a rate increase, properly aligning the fee with the scale of the business.
  • Navigating City Services: A new dedicated "business concierge" will be supporting businesses as they navigate Tacoma's permitting process and regulations, and helping them understand available local, state and federal economic incentives.
  • Transportation Infrastructure Investment: A new 10% commercial parking tax on paid parking facilities is projected to generate $2.25 million. By state law, these funds will go directly toward transportation infrastructure, such as road and sidewalk repair. Other targeted capital investments include $1.3 million of Real Estate Excise Tax (REET) funds for Safe Routes to Schools improvements at Arlington Elementary and Foss High School, $230,000 for ADA improvements at Pierce Transit bus stops, and $250,000 of REET funds to support housing equity-accessibility infrastructure partnerships.

More Efficient City Operations

To help address the $40 million structural deficit in the General Fund without cutting core services, City departments identified efficiencies that led to the elimination of over 100 positions, prioritizing structural savings over time as the City looks for new ways to work and deliver value to the people of Tacoma. To minimize impacts on current employees and services, over half of those positions were already vacant due to an administrative hiring freeze.

The City merged the Environmental Services and Public Works departments into one department overseen by one department director to simplify infrastructure projects and provide easier access to services for residents, resulting in the elimination of one director position. The new Environment and Public Works Department will also begin the process of ceasing asphalt production in the City's asphalt plant as it looks for more economical asphalt prices in the market.

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The Planning and Development Services department will be doing a study on the utilization of Artificial Intelligence (AI) to see if AI tools could speed up permit reviews, alongside a new phone line offering interpretation and smoother access to development services for non-English speaking customers.

Additionally, the City's human services, housing, and homelessness response staff will work together as a unified team within the Neighborhood and Community Services department to better coordinate the City's response to both unhoused and income-constrained residents and prioritize investments to meet the community's evolving needs.

At the same time, the City is modifying how it funds local assets like the Tacoma Farmers Markets. Having served as an incubator for two markets at $13,500 per year since 2009, the City is sunsetting this specific contribution while maintaining funding for the Supplemental Nutrition Assistance Program (SNAP) Market Match program. Now that both markets have established resilient, independent financial frameworks, the City can reduce contract management workloads and redirect its resources toward emerging community needs.

A vacant deputy city manager position will also be left unfilled.

Next Steps

The City Council will review and deliberate on the proposed biennial budget in October and November 2026, with adoption scheduled for late November. There will be two public budget hearings in early November to gather feedback from community members on the proposed budget. Community members are encouraged to review the proposed budget online at tacoma.gov/budgetdevelopment and remain engaged in the budget development process.

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