Welcome ladies and gentlemen, fellow Seattleites, members of the city council.

It is an honor to appear before you today to present my fifth budget. It represents a blueprint for investments in our City.

Much has changed over the last five years. We started out in a long, deep recession that required us to cut the city's spending by $120 million. Slowly we've seen our efforts to grow the economy bear fruit. We've been able to restore investments to Keep Our Neighborhoods Safe, Create Jobs and Opportunity for All, Build Strong Families and Healthy Communities and Get Seattle Moving.

The results of our actions are showing in ways big and small.

Budgets are more than numbers and ledgers. They reflect the values and priorities of the people we serve. They are investments that shape the lives of the people who live here today and empower those who come after us.

A wise person once told me: "Plan ahead: It wasn't raining when Noah built the ark."

When we have the resources to invest in our future, we must invest them wisely. Our job is to provide people with the best and most efficient services possible in good times and bad.

Highlights of 2007-2008 budget

The return to prosperity in our neighborhoods and business districts gives us the resources to improve basic services. But we must also remain mindful of the rough financial waters ahead.

The legislature passed changes to the Business & Occupation tax that will cut the city's revenue over $20 million in 2008.

Like other employers, the city faces rapid increases in health care costs for its employees. Our annual health care expenditures will grow by about $45 million between 2005 and 2008.

The national economy is slowing and our revenues won't grow as fast as in the last two years.

For these reasons the budget I bring you today plans ahead making the right investments in our future.

We are getting Seattle moving by pushing forward with light rail, building a new streetcar line, refurbishing the classic monorail and putting a plan in place to stop the backlog of transportation maintenance needs from growing.

I want to take a moment to thank the council for passing two landmark transportation initiatives last Friday that can truly change the face of this city. For more than 35 years the city has deferred needed investment in our local streets, bridges and sidewalks. For the last decade we have seen dedicated transportation revenue cut by 2/3rds. The wear and tear on our patience and our pavement is showing.

Your vote to put "Bridging the Gap" on the ballot will allow us to make the case to the public.

We can fix and build sidewalks so our children can get to school safely. We can help improve transit service, improve bike safety and trails and start rebuilding our streets and bridges.

And of course the Viaduct. Last week was interesting to say the least filled with some bad and good news, but most importantly, clarity of vision.

New estimates for replacing this deteriorating structure came in higher than previously. In large part this reflected an effort to protect against the risk and uncertainty a large project represents.

Everyone who has been working on this project over the last five years was frustrated by this news.

But we cannot miss this once-in-a-century opportunity.

The good news is that the Governor's Expert Review Panel reconfirmed last week that we have a reasonable finance plan for the cut-andcover tunnel. And the Governor herself pledged to continue working with us to move forward on replacing the crumbling Viaduct.

Your actions on Friday showed that we remain committed and confident in our shared vision to reconnect the city to a waterfront for all to enjoy and replace the dangerous Viaduct's capacity with a cut-andcover tunnel. I thank you.

Now we can immediately focus on getting this project to a higher design level and bringing down the uncertainty & costs by next summer.

One of the icons of the 1962 Seattle World's Fair, the Century 21 Exposition, is our beloved classic monorail. This vital link between the Seattle Center and downtown is long overdue for an overhaul of it's almost half century old systems. My budget provides $4.5 million for that overhaul.

Environmental Stewardship

In 2007 you will see the most significant investment in our environment upon which the city has ever embarked.

Global warming is threatening our planet. We no longer have the luxury of waiting for the federal government. The change must start here at home.

Last year I challenged mayors across the country to join with Seattle in pledging to meet the goals of the Kyoto Protocol.

Last week we passed four major milestones. Meridian became the first Mississippi city and Fargo the first city in North Dakota to sign the U.S. Mayors Climate Protection Agreement. Last week we reached 300 cities and we passed the 50 million mark of Americans living in the cities which have signed.

By taking bold action in cities across America today, we will show other communities, states and eventually even the federal government that we can choose a better future.

Restoring our urban forests is one of the most important environmental contributions we can make for our city and the health of the planet.

That is why we're going to reverse a several decades' long slide in the amount of tree cover by planting hundreds of thousands of new trees on private and public land across the city.

If we fail to stop this decline in tree cover, nature's ability to help manage storm water, reduce erosion and absorb climate-disrupting gases will be diminished.

Wednesday, I will release the Seattle Climate Action Agenda to achieve our goal of reducing harmful greenhouse gas emissions. It will provide the means for citizens and businesses to make a real difference in the years ahead.

Across America, there is a grassroots explosion of commitment to action on climate protection; it offers all of us hope. We are leading the way.

Housing the homeless

For too many people living on the streets, hope for a better life has become an illusion. That must change.

More than one in four chronically homeless persons nationwide is a veteran. Those who fought our battles abroad shouldn't be sleeping on our streets at home. They served the country in war; they have earned a measure of peace.

I am putting $3M in my budget for new housing and services for homeless veterans.

This creates new housing for our vets and services to deal with the challenges that led them to the streets including drug or alcohol abuse, mental illness and post traumatic stress syndrome.

Last year Governor Gregoire and I met a veteran named Darren Branning, a tireless advocate for homeless, especially homeless veterans.

Darren had been homeless and lived under a bridge in Renton for four years. He suffered from schizophrenia, mental illness, and he was addicted to alcohol and other drugs.

Today, Darren is the Resident Manager at Bennett House, on the Dean's list at Seattle Central Community College and will transfer to the UW to pursue a masters in Social Work.

Darren's story illustrates another point: Homelessness is not a Seattle problem it is shared by every community regardless of size.

Seattle spends $42 per capita on affordable housing. Our neighbors in Bellevue spend $11 per person. Kirkland spend $4.32 and Redmond just $3.33.

We need more than encouraging words from neighboring cities we need allies willing to provide the resources necessary to end homelessness in our communities.

To that end, I challenge other cities in King County to roll up their sleeves and provide the same level of resources that the people in Seattle do.

Public safety

We are making our neighborhoods safer by investing in our police and fire services and by putting together one of the best emergency preparedness efforts in the country. Headed by Barb Graff, we have assembled a team that is spreading the word "prepare" like a preacher on a mission.

We are reaching out to people at work, at home and throughout our neighborhoods. We began the important work of the Seattle Fire levy to make sure when a big earthquake hits, our fire stations will not be among the first casualties.

Public safety is the principal responsibility of local government. In the last two years, we added 33 patrol officers and provided new technology and equipment to make them as effective as possible. We're going to add six more patrol officers in 2007.

We will also add 10 new patrol cars so our officers can expand coverage. And we will invest in improving dispatching, accountability and response time. Our new patrol districts will represent the first redrawing of these lines in over 40 years, increasing our efficiency and speeding help to those in need.

More firefighters will be added until each fire engine has a fourperson crew. This will improve safety and provide better, faster response to fires and medical emergencies

We're going to focus even more attention on an important indicator in our neighborhoods graffiti. One of the most effective deterrents to graffiti is to ensure its prompt removal.

We're going to go after graffiti just like we do potholes remove it from public property within 48 hours and give immediate notice to private owners to promptly remove graffiti from their property.

And we're going to add $2.5 million to fund a downtown parks initiative which will improve services and add five park rangers to increase security in our downtown parks.

Focus on our neighborhoods

We are building strong families and healthy communities by investing in our libraries, our parks and our children's education. We are challenged to make sure anyone who works in our city can afford decent housing in our city.

Through housing levies and other city resources, Seattle has added more than 8,500 affordable housing units over the past 20 years.

We're working on the most fundamental investment; our children. We must stop the cycle of families moving from the City when their children reach school age.

Our goal: to ensure that every school, in every neighborhood, is a place that each one of us would be proud to send our children.

The Seattle Family and Education Levy will invest $16 million in 2007 and again in 2008 to give every child a chance to succeed in Seattle's schools.

One beloved institution in our neighborhoods is the Public Library. New and expanded branches serve all corners of the City. More are on the way. Last year the Council provided for more hours at our branch libraries and we increased the amount spent on books and other materials in those branches.

Overall the 2007 budget for Seattle Public Library will reflect a $4 million increase. We will operate new and expanded facilities and continue the expanded hours. Most significantly, the budget will add another $500,000 for book collections to better serve our people.

Neighborhoods all over the city will see improvements through increased parkland, community centers, street improvements, youth programs and help for neighborhood business districts and cultural facilities.

This budget will focus on our commitment to South Park. This neighborhood, which annexed to Seattle on May 3, 1907, exemplifies the diversity and vibrancy of Seattle, but it has faced challenges in recent years.

One of the first things asked for back then was a library. Two weeks ago, we finally opened it.

With this budget, we will be able to repave South Park's " Main Street", fix drainage problems, buy new public computers and technology, and create a late night program for teens in the neighborhood. We will also continue to support organizations that are working to prevent gang violence and provide kids and families the support they need to succeed in school, at work and in life.

From South Park to Ballard, Rainier Beach to Broadway, Beacon Hill to Highpoint we're doing more to help our neighborhoods thrive.

Quality of life begins with a job. Today, job growth in the region exceeds that in the rest of the state and the nation as a whole. In fact only Las Vegas and Phoenix outpace our economic growth. Our work on the Center City Plan, at Northgate, the U. District, SE Seattle and Broadway is paying dividends.

Our commitment to economic opportunity has never been stronger. This budget adds a host of apprenticeship programs to provide access to family wage jobs in building trades, automotive professions, as well as other fields. We're adding support for our city's small businesses. And we're going to insure contractors are complying with wage laws. All designed to provide family wage jobs and increased access to opportunity especially for recent immigrants and people of color.

The biggest indication of economic growth is the investment in new construction. To prevent things from bogging down we're going to hire people to ensure that permit deadlines are met.

Finally, I am proposing a tax break for about 3,000 of our smallest businesses to spur economic growth and maintain healthy business districts in all our neighborhoods by raising the amount of income a business earns before paying any Business and Occupation taxes.

We have not adjusted the exemption since 1994. It's time to treat our small businesses fairly and raise the exemption.

Conclusion

You will have time in the weeks ahead to reflect on this blueprint for our future. It reflects a shared vision for our community, one that puts safety first, creates economic opportunity and jobs, reduces climate disrupting emissions, and provides people with homes.

Together we have worked hard to create these opportunities for our City and its people. And together we will have the courage and confidence to carry through and make the most of them. Today we are making a positive difference in the lives of the people of our City.

Thank you and God Bless our home, Seattle.