Tim Burgess' City View

2010 Budget: Round One

The Council this morning started its formal process of adopting a City budget for 2010.  The Mayor has proposed a general fund budget of $905 million.  Today's day-long Council session includes budget review of five City departments:

• Office of Economic Development
• Seattle Public Utilities
• Office of Sustainability and Environment
• the Human Services Department
• Police Department

There are 31 budget issues/questions related to these five department. 

Round One sessions are designed to identify questions and gain insight into how council members view these issues.  Round Two follows in two weeks and that's where we will vote on dozens of individual additions or cuts to the Mayor's proposed budget. 

Budget Hearing Starts

Advocates for various interests--parks, libraries, housing, human services--are making their case to the Council tonight.

More on Employee Hours Tax or Head Tax

Several people have contacted me about my sponsorship of repeal of the Employee Hours Tax (EHT), expressing fear that important pedestrian safety and other neighborhood transportation projects will be at risk.  (Read my earlier post.)

My study of this issue leads me to conclude that repeal of this tax will not negatively impact projects.  Consider these factors.

 

When this transportation tax cocktail was conceived in 2006 the total estimated revenue from the Commercial Parking Tax (CPT) and the Employee Hours Tax for the period 2007-2015 was $183.7 million.  In the Spring of 2008, this estimate was updated based on actual performance of the taxes up to $198.7 million.  This Spring, another updated estimate was produced, again based on the actual performance of the two taxes, and showed total revenues of $212.8 million.  The CPT is driving this increased revenue, not the EHT.

 

Based on the Spring 2009 estimate, and assuming repeal of the EHT effective January 1, these two tax sources will generate $191.2 million, about $7.5 million more than the original estimate.  So, by 2015 we should be able to complete an equal amount of work when compared to what was promised the voters.  Other steps that may also be taken, such as extending bond repayments from 15 to 20 years, could also free up some cash for projects around town.

Economic Growth, City Taxes and Budget

Mayor Nickels, Council President Conlin, and I announced today that we will seek repeal of the City's Employee Hours Tax, the so-called Head Tax.  You can read the news release here: Download EHT Repeal Release 6-23-09

This tax on job creation was adopted by the Council in 2006 and first collected in 2007.  It was adopted during good economic times, but has been complicated to understand and difficult to collect.  During my campaign for the Council in 2007 I promised to work for repeal of this tax.

We worked closely with the Mayor over the past several months to identify obstacles to economic growth and we agree that repeal of this tax will encourage job growth.  The tax has generated less revenue than anticipated, but more importantly it has negative consequences because it taxes the creation of new jobs.  Repeal of this tax will signal that Seattle wants a strong local economy and will take proactive steps to create a job-growth environment where our small and large businesses can flourish.

There are other steps we can take as well.

Council Budget Criteria Decision

The Council just voted to set our highest budget priorities as public safety, human services, and housing. At my urging, we also affirmed that police staffing increases should continue until all elements of the Neighborhood Policing Plan can be successfully implemented. Also at my request, the Council urged the Mayor to increase funding for youth mentoring services in the 2010 budget.

City Budget Passes; More on Youth Violence

The Council voted this afternoon to adopt the 2009 City budget.  This document provides a summary of the various changes the Council made to the Mayor's proposed budget. 

Most significantly, the Council added funding for homeless services, domestic violence and sexual assault prevention, emergency food and nutrition services,library collections (e.g., books, tapes, videos, etc.), and youth violence prevention programs.

Stopping Youth Violence

Last January and February I spoke out about youth violence and gangs in our city.  Several of my colleagues on the Council have done the same.  Since then, I've written extensively on this topic on my blog (www.timburgess.com).  Unfortunately, this situation is spiraling downward.  There was extensive gun violence in the metro area this past weekend. 

The 2009 budget the Council passed today includes revisions to the Mayor's Youth Violence Initiative: adding police officers to select public schools, encouraging more police intervention efforts against gangs, increasing illegal gun interdiction efforts, and adding case management services for frequent offenders.  The budget also continues funding for additional police officers, part of a multi-year effort to increase the size of the police force.

Here are some immediate steps that can save lives and reduce violence in our city.

Guns are readily available to juveniles, and they are using them to kill! This problem of illegal guns must be addressed.   It is a regional problem that demands a regional and state solution.  More

The Facts About Seattle Taxes

There has been a lot of talk recently about city taxes, the need to cut back, angst over so-called "out of touch City Council members," and reports from advocacy groups that Seattle is pushing out the middle class because of rising taxes.  Of course, none of this is true.

Since, 2004, city-imposed property taxes have declined.  Take a look at the chart below which shows city-imposed taxes per $1,000 of assessed value of real property, those from other jurisdictions (i.e., Port of Seattle, King County, school district), and the combined total.  (Seattle's property tax rate is the bottom or diamond line.)

The tax rate is multiplied by assessed value to compute the actual property tax due.  For example, a property owner with a home assessed at $476,000 would pay $3,922 in property taxes in 2009 based on the rates in the chart below.  ($8.240 per $1,000 assessed value tax rate times $476,000 in total assessed value equals $3,922.)

The 2009 figure for Seattle is a projection which assumes that both the Pike Place Market and the Seattle Parks for All ballot measures will be approved by city voters on November 4. (Get the above chart here:  Download property_tax_chart_102808.pdf

So, when you hear pundits cry that Seattle city government is increasing taxes, take a look at the facts first. Remember, too, that the property tax you pay is determined by the rate (set by governments with taxing authority) and by assessed value (set by the King County Assessor based on marketplace conditions). 

Now, that being said, an argument can be made that city budgets have risen dramatically in recent years, significantly above the rate of inflation, and that the combination of taxes, services fees, and  utility rates, plus the burden of King County, Port of Seattle, and school district imposed taxes and fees, have combined to create a difficult economic situation for many.  This reality was clearly in mind yesterday as the Council considered utility rate increases proposed by Mayor Nickels. 

Council central staffer Tony Kilduff (in white shirt in photo taken from my seat on the dais) presented his thoughts on long-term City Light capital spending, warning us that capital investments today lead to higher electric rates later. 

The Council will spend all day Thursday and Friday pouring over various issues related to the city budget for 2009 and 2010.  More on all this to come . . .

Mayor's Budget Recommendations

The Mayor is presenting his budget recommendations for 2009-2010 to the Council today at 2 p.m.  Councilmember Bruce Harrell and I get to escort the Mayor into our chambers . . . we're the rookies, so we get the honor. 

After the Mayor's address this afternoon, the Council will begin a 60-day marathon of review, analysis, and modifications. For better or worse, my primary committee (Public Safety, Human Services, and Education) will focus on the following budget categories: Human Services, Domestic Violence, Criminal Justice Contracted Services (e.g., public defenders, etc.), Fire, Law, Municipal Court, Police, Family and Education Levy, and Gang Violence. 

I will be watching closely for any proposed tax or fee increases, whether core services are fully funded, and whether human services assistance funds are protected.  Thankfully, the city's economic condition is not nearly as dire as that of King County or the state of Washington, but these are uncertain times and a prudent and conservative financial management mindset is clearly the order of the day.

Read details about the Council's budget process, including schedules, glossary of terms, worksheets, and more.  You can watch the Mayor's budget address on Seattle Channel 21 or online at the Seattle Channel. 

You can share your thoughts on the city budget via email at budget@seattle.gov.   

City Budget Lobbying: Piling On

The Council is just three months away from beginning our work on the 2009-2010 city budget and we're already hearing from people who think we should spend more here, less there, cut taxes, raise taxes, save money for emergencies, and the like. We've held public hearings, invited comments, and generally started to get ourselves ready for what I understand can be a pretty fast-paced, strenuous, and contentious fall work schedule.

So, I decided to conduct a totally unscientific poll on my blog to measure what people thought was the city's number one budget priority. Well, as you can see from the results below, certain interest groups mobilized their followers to answer the single poll question. What we can discern from this exercise is that library users and supporters, as one example, are indeed very organized.

Priority/Percentage of Respondents Listing As Number One
Libraries 37.5%
Human Services 28.2%
Transportation 13.9%
Police and Criminal Justice 7.2%
Planning, Housing, Etc. 6.5%
Arts, Music and Culture 4.0%
Parks 1.7%
Fire Services 1.1%