Seattle: Smug, Arrogant, Delusional?

The Seattle P-I Virtual Editorial Board highlighted an excellent comment to an editorial about the $1.6 billion tax package. A reader going by the handle "Face Reality" made the following insightful observations:

Seattle has no coherent "tax plan": Or finance, revenue, fiscal or spending plans for that matter. It hasn't for over 20 years. A succession of irresponsible Councils and Mayors (that we insist on re-electing) seeking short term gratification has seen to that.
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Instead of a measured, predictable tax package for very specific, prioritized needs we get an endless, open ended "all at once" debacle and xmas tree wish list that still includes money for needless things like Paul Allen SLU beautification.

Reckless tax and fiscal policies make this city that much more unaffordable for all but those who can blithely pay for our "new urban" paradise while unwittingly contributing to the very sprawl they decry: When everyone else is driven to more affordable areas outside Seattle – along with many of the businesses that employ them.

There is a direct correlation between taxes, sprawl and affordability. So many people here are in denial about that reality - you can't simply tax, grow or densify your way to affordability and a quality city. The concepts are mutually exclusive if badly applied - as in Seattle.

Poorly applied and rapid ramp ups in taxes raise housing prices and mortgage qualifications, stagnant business growth and cause decline in real revenues as the increased taxes are eaten up by more service demands that density creates. If this continues, a city inevitably declines as demographics and businesses leave for cheaper pastures, ie, the 'burbs.

The real bill will come due in just a few years, when the inevitable economic downturn combined with higher taxes that narrow the base and discourage businesses will bring both an actual DECLINE in tax revenues across the board and a grinding halt in City business and population growth.

With the usual Hobson's choice of cutting services vs raising taxes even higher, setting up the potential for the classic revenue "death spiral".

An experience well documented in just about every other American city the last 30 years – including memory challenged Seattle, once again the caboose on the train of national experience.

Smugness, arrogance, delusional growth projections, pseudo - environmentalism and the attitude "its different this time" are no defense against the lessons of history.

You should really go read the entire comment.

This was cross-posted on both Seattle Bubble and Seattle Traffic.

(Face Reality, Seattle P-I (comments), 08.16.2006 )

Study Funded By Tunnel Supporters Supports Tunnel

Would building a tunnel to replace the Alaskan Way Viaduct cost insane amounts of money? Yes. But wait, according to a new "study," the super-amazing fantastic tunnel of love would return that all of that expense (and more!) back to the city . Just like magic!

Replacing the Alaskan Way Viaduct with a tunnel instead of a new elevated highway is well worth the extra cost, according to a study released Wednesday by a Seattle business group.

Tunnel opponents quickly criticized the Downtown Seattle Association study, and some were not even willing to concede that the current viaduct needs replacing. A state Transportation Department official warned that the project would soon stall without a decision on which option to pursue.

A tunnel along the downtown Seattle waterfront would cost $3 billion to $3.6 billion — at least $1 billion more than a new viaduct there, according to state estimates. But it would increase area property values by $450 million, stimulate $1 billion to $2 billion in development on "severely underbuilt" land and spur an extra $162 million to $325 million a year in tourism, according to the study, which economist Glenn Pascall presented at the Bell Harbor International Conference Center.

The association, which supports a tunnel, hired Pascall to review the effect of building one. Pointing to benefits that resulted from tearing down the Embarcadero Freeway in San Francisco and even from the construction of the notorious Big Dig in Boston, he said a tunnel would "create a magnet event."
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In response, the No Tunnel Alliance noted that the study used the low end of the state's estimated cost difference between a tunnel and a viaduct and said it did not account for cost overruns and delays that some have said would be more likely with a tunnel. The group also questioned the study's conclusions regarding increases in property values and tourism, said a lack of tunnel exits downtown would increase congestion and harm businesses and worried about delays from city efforts to find the extra money for the tunnel.

So there you have it. Now we know that a tunnel would be worth the insane cost, because a study funded by the tunnel-loving Downtown Seattle Association says so.

Bah. I still want a bridge over Elliot Bay.

(Aubrey Cohen, Seattle P-I, 08.17.2006)

The Neverending Story

I was quite surprised to read the following article in the Seattle P-I about the City Council-proposed tax package. The tone of the article doesn't really "fit" with the general mentality in Seattle—a city that has never met a tax it didn't like.

Seattle politicians can't show you a price tag for the massive transportation measure they're pitching on the fall ballot.

But this much is clear: The unprecedented proposal could boost by as much as 34 percent how much the city collects from property owners — nearly six times what current law allows.

And it might be permanent — a first in Seattle for this type of tax increase.
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City officials predict that over the lifetime of the 20-year package, the typical homeowner would see a tax-rate increase of 38 cents for every $1,000 of property value. For a $400,000 house, that would be more than $150 annually.

But that's only an estimate.

"It's an unprecedented levy in its size and duration," said City Councilman Peter Steinbrueck. "It's seriously lacking in public accountability and taxpayer accountability."
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Activists, special interests and politicians often ask citizens to agree to temporary increases to pay for specific initiatives, such as affordable housing, school improvements and park construction.

This proposed levy has two noteworthy distinctions:

• It could last forever.

Most levy increases expire in about five to seven years, although voters sometimes approve extensions. After the measure expires, the city's tax base reverts to its previous level.

In this proposal, after six years of increases of as much as 5 percent a year, the levy would not roll back. It would continue to grow 1 percent per year for 14 years. The City Council has approved a resolution stating that it wants to return to lower levels after 20 years, essentially to today's level plus the annual 1 percent increase allowed by state law, compounded over 20 years.

But future councils are not bound by that resolution.

"That was obviously appealing to many of my colleagues and the mayor — not to me, though," said Steinbrueck, who unsuccessfully tried to get his peers to set an expiration date to the tax increase. "Aside from the commitment to an oversight group handpicked by the mayor and council you don't have the same kind of broad public accountability that comes with a six- or eight-year levy, where the public has an opportunity to evaluate the promises and the results over a reasonable period of time."

Hey, if the residents of Seattle want to saddle themselves with this kind of unending overbearing tax burden (on top of the RTID, Sound Transit, and the plethora of other tax programs that have their hands in the pot), I suppose they'll get what they deserve. I still haven't been convinced that all of these additional taxes are even necessary. Isn't basic transportation infrastructure upkeep supposed to be one of the primary functions of government? Shouldn't they be spending general funds on roads, and putting things like arts promotion "affordable housing," and the Mayor's chauffeur up for public votes?

Of course, it might just be me, but it also seems like all these excessive taxes aren't going to do much to help the Mayor's plan to increase the city's population 60% by 2040. But what do I know, right?

(Angela Galloway, Seattle P-I, 08.16.2006)

City Passes Two-Pronged Roads Plan

The Seattle City Council yesterday passed a (perhaps unwittingly) clever two-pronged plan to tackle road improvement projects throughout the city.

The Seattle City Council approved a $1.6 billion transportation funding package Monday to pay for repairs to the city's bridges and roads.

Councilmembers approved a 10 percent commercial parking tax and business transportation tax that totals $18.25 million a year. Voters will decide whether to add higher property taxes to that mix in the November election.

The package is part of Mayor Greg Nickels' "Bridging the Gap" plan. He says the transportation budget has declined from $37.5 million in 1995 to $13.1 million in 2006. The city's $500 million maintenance backlog has continued to grow as a result, and it needs money to repair aging roads and bridges.

"Unfortunately, this backlog could not be addressed before tremendous holes were shot in the budget with the loss of state funding and the Eyman initiatives," said City Councilman Richard Conlin at the meeting Tuesday.

Councilmembers voted to pay for those repairs Monday through a business transportation tax that places a $25 per year tax on each full time employee. They also passed a 10 percent commercial parking tax. The funds would pay for major projects like a new rail overpass on South Lander Street and the widening of the Spokane Street Viaduct but business owner Heather Fitzpatrick says it would cut into her bottom line.
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Seattle Chamber of Commerce President Steve Leahy says Fitzpatrick isn't alone. He says this tax is a formula to drive businesses out of town.
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The funding package does not include repairs to the Alaskan Way Viaduct, and voters still need to decide on tax proposals for the Regional Transportation Investment District (RTID) and Sound Transit.

Add the taxes up, and Leahy says it sends a message to businesses that Seattle is not a "business friendly" city.

Fitzpatrick plans to pay the taxes but says she'll think twice about staying in Seattle, when the lease at her Fremont office expires 18 months from now.

The most obvious and stated purpose of this plan is that it will raise a very large pile of cash that for the city to spend (allegedly) on roads. The less apparent key to the plan is hinted at in the article: drive people away from downtown, so the roads take less abuse. That may not be an intentional effect of the plan, but it's certainly a real one, given the quotes in the above article. It's even possible that the negative effects on businesses is an intentional aspect of this plan. Maybe it is a clever part of how the plan is designed to work. Either that or the Mayor and the city council are oblivious to the likely effects of their actions. You choose.

(Akiko Fujita, KOMO News, 08.07.2006)